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How to Motivate Minimum Wage Employees

How to Motivate Minimum Wage Employees

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By Steven Cooke
Assistant Professor, School of Business at American Public University

Recently, while teaching a capstone course, a student asked, “How do I motivate minimum wage employees?” The student is currently working as a manager in an independently owned restaurant. Immediately upon hearing the question, I thought the perspective was not quite right.  The desire to motivate employees is easily justifiable, but the characterization of “minimum wage” already minimizes the value of the worker.

The result is that you are asking how to get more work out of those who are financially valued the least. Even if you do not have this intention, the negative connotation remains and creates an unconscious bias that limits your response. The designation of “minimum wage” for employees does not account for their reasons for working and related needs, thereby mitigating the effectiveness of motivation, and leaves them susceptible to other sources of motivation that may draw them away from your organization.

A significant result is that an organization is also left susceptible to turnover. The hospitality industry in general has high turnover for entry-level as well as managerial positions.

Using my own field as an example, the restaurant industry is notorious for high turnover. Year after year, the National Restaurant Association provides statistics of the restaurant industry that exceed other industry types in turnover.

Annual-employee-turnover-rates

Following the ongoing debate on increasing the minimum wage, experts argue that turnover is linked to low job satisfaction, caused by earning a wage at or below the established minimum wage.  The Bureau of Labor Statistics (BLS) supports this argument through an  industry analysis of 2014 where food preparation and serving jobs were the highest percentage of workers earning at or below minimum wage. The service industry in general was the highest turnover rate overall as reported by the BLS.

Longevity and perseverance will likely lead to raises on a structured plan as well as increased responsibilities if those workers remain at the organization. However, nearly every worker starts at a “minimum wage,” whether that is the actual hourly minimum wage or a salary commensurate with first-tier management. New employees and new managers are arguably the most likely to turn over, voluntarily or involuntarily terminating their employment.

What are the Right Reasons for Motivating?

As a manager, the question you should ask yourself is “How do I motivate employees to stay and perform well?” Two specific implications with this question is an acknowledgement of the transient nature of the entry-level workforce or their job mobility. The question of motivation is generalized to all employees, not segregating employees based on compensation.

Restaurants, for example, not only compete in a saturated market for customers, but they also compete in a much broader market for workforce talent. Entry-level workers have a variety of options to pursue within the industry or in another field, so low job satisfaction, low morale and low motivation easily spurs an employee to look elsewhere.

Workers can easily leave and choose another employer, taking any investment in their training as well as ongoing experience, to benefit the new employer. Managers are therefore motivated to maintain workforce integrity to not only reduce costs related to turnover, but also to realize the gains from workers who continue to learn and develop.

These entry-level employees serve as the foundation or the front line for sustaining operations and guest interaction. In addition to the financial costs of turnover, the creation of gaps in service and familiarity with guests are additional effects that affect a hospitality organization.

Some turnover is unavoidable as many employees in the restaurant industry are merely “passing through” — waiting until they graduate school, find their preferred job type, or until some other event happens, allowing them to leave the industry or just the job. The transient nature of restaurant employees means that management is already hindered in retaining talent and reducing turnover costs.

Positive motivation becomes more vital in encouraging workers to remain. As these employees “pass through” the organization, they may have needs unrelated to earning a wage that may be fulfilled through other means.

For example, a business student working through college may see benefit in providing supervision in the training and development of newer employees.  The already expected turnover provides opportunity within business administration for young, new leaders, as well as the increased capability to meet the changing needs of the workforce. These needs include flexible scheduling around school and family life, for example.

As managers, if we lose these developing employees, we lose talent assets. We can also expect prolonged, diminished returns on investment as we build up their replacements. Like revenue for a hotel room that remains unsold for a given day, the loss of talent is never recoverable. Other workers may fill the void, but they will be replacing, not supplementing, lost employees.

Getting Started

Focusing on positive motivation versus negative motivation [awarding good behavior v. punishing bad behavior], the first step is identifying what the employee needs or wants. Having worked with many students, flexible scheduling was a “go-to” job benefit to enable scholarly and social activities, but flexible scheduling is an industry standard. Failure to provide flexible scheduling was perceived to be a punishment by not providing what students expected.

It is necessary to go further than the minimal expectation. Discovering what “further than the minimal” entails means interacting and talking to the employees.

We must learn what is important to them in order to offer something to meet their needs and wants. A business student could participate in management activities.  A marketing student could help you develop and sustain a social media presence.  A parent working part-time may appreciate bringing in the family for a guest experience. The part-time worker who works full-time as a tax accountant may enjoy cooking and the high-energy “on the line” food preparation.

Each of these examples offers a different experience for an employee.

There is no “catch-all strategy” for motivating employees. The only commonality is taking the time as a leader to know the employee and understand them.  Classifying them as “minimum wage” hinders that understanding.

By addressing the motivation of all employees, you can use that knowledge to develop a broader strategy and determine how to motivate employees to stay, those earning minimum wage and those that have been on the team for several years. By expanding the question further than motivating the minimum wage employee, the wants and needs of all employees are more likely to be considered.

“Minimum wage” implies that employees want more than the minimum. This could easily be true of many workers, only inasmuch to enable employees to meet their financial and personal development needs.

The burden is on the person who asks “How do I motivate employees?” to explore why employees are working and what their needs are. Using the descriptor of “minimum wage employee” reduces employees to how much they earn, rather than what they can contribute to the organization and how we can motivate them to want to contribute.

About the Author

Steven Cooke is an assistant professor within the School of Business and Hospitality Management program, teaching several classes related to operations management, hospitality law, and management theory.  Prior to teaching, Steven worked in operations management for several well-known restaurant brands and served in the United States Army.

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