Employee Motivation in Startups 

Employee motivation should be on par with the growth and development of a startups.

The CEO of a  startup company has to play the role of HR till he can afford to have functional heads. Had the startup entrepreneur been a corporate executive earlier, his experience may not entirely help in motivating employees.

 Is there a difference in approach to employee motivation between a startup CEO and that of a large company CEO? A large organization can afford to have a few employees who are not on board. An autocratic CEO can still deliver results based on well-established systems and processes. The fact of corporate world is that the longevity of CEO is limited.

“Whether startups should devote precious time and money to staff training (yes, because one of the main reasons great people leave jobs is that they feel they are not learning anything.)-Ben Horowitz

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 Employee  Motivation-Pitfalls to be avoided

1.    Employees involvement in decision making

A CEO of a large organization launched a massive expansion program in one  of the factories. A project team was formed with the GM of the factory as a coordinator to finalize the specifications for equipments, installation and commissioning of the project.

The project team recommended purchase of  equipments considering the current performance of existing equipments.

The factory head was shocked to find that orders for one of the crucial sections was placed on a foreign vendor. This particular vendor’s equipment has not been working satisfactorily and had always resulted in poor quality. It was 20% cheaper than similar equipments from reputed manufacturers. Over a three-year period ,the extra cost could have been recovered, due to higher yields.

 When this was discussed with the CEO  he replied  as the  capital was short he could not accept the recommendations. He retorted, that at his level, he had to take ‘a helicopter view’

The equipment gave poor quality products and the market acceptance from that factory suffered, eroding the brand value.

 A startup entrepreneur is a lifetime CEO.As such, he should not emulate the CEO under reference but listen to his employees’ 

2.Honesty & Integrity

Employees look up  to the startup CEO, as a role model. He has to walk the talk.

A CEO of a large organization, with operations spread across the country had functional heads reporting to him,  The team at HO of HR & Internal audit  got information, from anonymous sources, on short receipt of materials at factory stores and the factory placing orders at a huge cost for routine jobs like maintenance and other services. This was  brought to the attention of CEO. Instead of taking action, the CEO lost his cool. He asked an irrelevant question if he sacks the Manufacturing Head would these two could  run manufacturing and manage unions. Finally, when things went beyond control he had to sack the head of  manufacturing.. 

The CEO of a startup has to set high ethical standards and any information on integrity should not be pushed under the carpet.

3..    Preparing future leaders

A Director ,Manufacturing Operations, had five factory heads across the country reporting to him. One of the factory heads brought to his attention the conflict of interest issue of the local IR& Personnel head supplying materials to the factory canteen. He asked a few questions and after satisfying himself he instructed the IR head  to be fired  immediately. 

The factory head, who had never sacked anyone, requested the Director’s presence at the factory. The Director agreed on the condition that he would only be a silent spectator. According to him if the factory head had aspirations to grow, he had to take tough decisions on his own. 

 This incident gave confidence to the factory head  who eventually went up the corporate ladder. 

Conclusion-Employee Motivation

A startup CEO needs to encourage, motivate and build trust in his employees.

Startup entrepreneurs should give autonomy to employees if they want to grow leadership pipeline. This will help the startup CEO to focus on future growth and strategic issues that cannot be delegated.