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When it comes to hiring, developing and retaining the best talent, small businesses seem destined to lose to big corporations. After all, larger companies can usually offer more money or a wider range of incentives to attract and hold on to top performers.

But money isn’t the only incentive employees care about.  

A survey conducted by McKinsey revealed that non-cash motivators can be even more effective motivators than earning more money.

These non-cash motivators include:

  • Praise from immediate managers
  • Leadership attention
  • A chance to lead projects or task forces
  • Flex time
  • Work from home days

Ongoing performance management can help address all of these motivators because it puts employee performance, satisfaction and wellbeing at the heart of a company’s talent management. Supporting employee performance on an ongoing basis also brings to the forefront two key factors in determining the success of the manager-employee relationship: understanding what motivates each employee and establishing a culture of feedback.

When managers get to know each of their team members, they gain a better understanding of what will inspire each individual to be a top performer. And managers will be able to tailor feedback and recognition in the best way possible so employees feel valued and appreciated for their work. After all, when employees see the purpose in what they do and are recognized for a job well done, they become more motivated and engaged in their work.

Here are three ways managers can help motivate employees and improve engagement for your business:

1. Hold regular one-on-one meetings

Regular one-on-one meetings give managers and their direct reports the opportunity to:

  • Update the status of projects
  • Identify work challenges
  • Discuss career development opportunities
  • Clarify expectations
  • Give feedback on performance
  • Talk through new ideas

In addition to keeping managers and employees up-to-date on current projects, one-on-one meetings show employees they are valued and supported. These meetings are a clear sign to employees that their manager is invested in their success, satisfaction on the job and wellbeing.

2. Set, manage and monitor goals together

The purpose of setting goals is to motivate employees and drive performance. However, according to Gallup, many employees – about 50 percent – don’t know what’s expected of them at work. To be effective, individual goals must align with company objectives. This helps engage employees – after all, who doesn’t like to succeed in their role and feel like they’re contributing to the company’s success?

Goals should be SMART (Specific, Measurable, Attainable, Relevant, Time-bound). Managers should also regularly discuss goals with their employees to ensure they understand what’s expected of them, have the skills to meet expectations and are recognized for their contributions. Having a system where feedback and progress can be tracked also gives managers and employees insight into the employee’s performance.

When goals are discussed regularly, it gives managers and employees the flexibility to adjust or shift priorities if there’s been a change in direction. Adapting to change helps keep employees focused on the big picture, which is important to maintaining high levels of engagement.

3. Supporting employee development

Some employees want to be on the fast track up the corporate ladder. Others are happy in the role they have. No matter what their intentions are, employees need to be supported and offered opportunities to learn and grow. Research from Aon Hewitt shows that career development discussions keep employees motivated and engaged.

To support employees, managers can:

  • Assign an employee to a new project or role where they can learn on the job
  • Pair an employee with a mentor
  • Consider rewarding great work with time off

In large corporations, employees may only see one small piece of what keeps the business running. There can be more opportunities for employees at smaller companies to learn new skills or get involved in different aspects of the business. Encouraging employees to learn how other departments work can help build engagement.

Keep the conversation going

According to another Gallup report, managers account for 70 percent of variance in employee engagement. This means it’s critical that your managers make it a priority to build a relationship of trust and respect with each member of their team.

To be effective, conversations about performance, goals and development need to happen throughout the year. It doesn’t matter how often these conversations happen, as long as both managers and employees are getting what they need from them.

By investing in ongoing performance management, companies show they’re invested in their employees’ future and in their development. They may be small changes from what you’re doing now, but they can make an enormous difference in employee engagement and retention.