Motivating employees in spite of budget constraints

Whenever I tell someone that I work for a state agency it inevitably comes up, even when I mention that the job is perhaps not the best fit for me, that at least there are great holidays and benefits. This is true. I don’t pay for health insurance and I get to take days like Texas Independence Day off from work. From what I’ve seen, though, this isn’t really leading to a motivated workforce. At least not in my agency; but then, I’ve only worked for the state for a couple of years.

I decided that I might get a better perspective from someone who has been working for the state a little longer that I have. So, I turned to a manager at a larger agency who has worked for the state of Texas for about 25 years. Our conversation was centered around three questions: I asked about the importance of having motivated employees, whether or not the reward systems at state agencies were set up to promote employee motivation, and what changes mangers might make to increase motivation.

In the interest of anonymity, I will call the manager I interviewed, MD; here’s what he had to say on the subject of motivation. MD agrees that motivation is an essential element to an organization’s productivity (Heymann & Barrera, 2010). MD stated his belief was, “the better the morale, the higher the production for any company” (personal communication).

However, MD also agrees with Nohira, Groysberg and Lee (2008) that motivating employees can be challenging. This is especially true at state agencies, he said, given the current economic climate (personal communication). MD explains, “Unfortunately, working for the state in these budgetary times, it is nearly impossible to reward all employees who deserve pay bonuses or pay raises” (personal communication). While he recognizes that money is not the main motivator for some employees, that “there are others that rank higher,” he clarifies that because of budget constraints imposed on state agencies it has been several years since his agency has been able to provide merit raises of any kind (personal communication).  

MD believes that this is leading to a high level of dissatisfaction in agencies, which, in turn, is negatively impacting morale. Martin & Schmidt (2010) propose that negativity felt by some employees may be due to the high, unmet expectations they hold and the fact that there are many employment opportunities available to them. It appears that this may be true for the employees at MD’s agency. In fact, MD states that within the past year, two of his top performing employees left his agency (personal communication). Both of these employees stated in their exit interviews that their main reason for leaving was because they could get a higher salary elsewhere.

With this in mind, MD says that managers at state agencies must turn to other means, such as praise for a job well done and giving recognition in front of peers, to motivate employees (personal communication). This idea is supported by Heymann & Barrera (2010) who give examples of successful organizations utilizing similar nonmonetary to motivate employees.

It’s clear that state agencies are facing many challenges. In MD’s opinion much of this comes as a result of the budget cuts and having to “[do] more with less” (personal communication). MD maintains that the issue of salaries has gone too long without being addressed and this makes it difficult to motivate employees year after year (personal communication). Still, MD believes that managers can do in spite of the limitations of the state budget. Mainly, he says, agencies need to foster better communication with employees and set realistic expectations (personal communication).

Although the suggestions of increasing transparency and managing expectations may seem obvious, I can attest that they are lacking in my own agency. From this interview, I think state agencies would do well to start by following MD’s suggestion. Perhaps this would help agencies that are limited in their ability to change reward systems to focus on other elements that promote employee satisfaction. The question is, would be enough to help agencies retain their talented employees in spite of their inability to offer competitive salaries?

References

Heymann, J., Barrera, M. (2010). Engaging employees in the company's profits and their own. Harvard Business School, 1-28.

Nohria, N., Groysberg, B., and Lee, L. (2008). Employee motivation: A powerful new model. Harvard Business Review, 1-7.

Martin, J., and Schmidt, C. (2010). How to keep your top talent. Harvard Business Review, 3-9.