In a nutshell, you should hire bright, energetic, innovative employees. Then offer them the right incentives--the ones that will impact their personal brain and personality types--to keep them mentally and emotionally invested in doing their best.
(Read About Emergenenetics, The New Science of Success")
It's impossible to talk about motivation without mentioning Drive, a book by best-selling author Daniel Pink. (His TED lecture was turned into a fabulous video.) Pink notes that people perform best when they are given autonomy, opportunity for mastery, and the belief that their task is meaningful. He says money is not the best motivator, and that employees want to be "players, not pawns."
Pink believes Google's "20% time," in which employees may spend one day a week on whatever they want is a shining example of how allowing intrinsically-based motivations (a sense of accomplishment or purpose) can flourish. Personal endeavors from "20% time" resulted in Gmail, Google News, Orkut, and AdSense. Long before Google--back in 1948--3M instituted the "15% solution" or "dream time," which yielded both Scotch Tape and Post-It Notes.
There's no question that intrinsic motivation is essential. However, I do not agree with Pink that all extrinsic motivation (raises, bonuses, commissions, awards, titles, flex time, and other perks) is harmful. A skillful entrepreneur keeps employees motivated with a combination of both.
That said, there is no cookie-cutter approach to motivating your people. What inspires one person may leave the next cold. When you understand an employee's thinking and behavioral preferences, you'll be able to maximize his or her enthusiasm. This will help you get your workforce aligned and moving in the same direction, and you'll see incredible returns.
1. Analytical types want to know that a project is valuable, and that their work makes a difference to its success. They need a leader who excels in a particular area, and whose expertise they believe benefits the group. They prefer compensation that is commensurate with their contribution. If they have done a tremendous amount of work on their own, don't expect them to be happy if you reward the whole team.
2. People who are "structural" by nature want to know their work aids the company's progress. They prefer a leader who is organized, competent, and good with details. They like to be rewarded in writing, in a timely manner, in a way specific to the task. An encouraging email is appropriate to communicate with them.
3. Social people want to feel personally valued, and that what they are doing has an impact on a project. They go the extra mile for a leader who expresses faith in their abilities. They prefer to be rewarded in person with a gesture that is from the heart. If your own preference is for written communication, send a handwritten note to a particularly social employee.
4. Innovative employees must buy into a cause. To them, the big picture matters more than the individual who is leading the charge. They prefer to be rewarded with something unconventional and imaginative, and would find a whimsical token of your esteem very meaningful.
5. Quiet staffers don't need a lot of fanfare, but they appreciate private, one-on-one encouragement.
6. Expressive people feel more motivated when assignments are openly discussed and an open door is available. They like public recognition, with pomp, and ceremony.
7. Peacekeepers hope everyone will move in the same direction. They'll never demand a reward or recognition, so it's up to you to offer it.
8. Hard-drivers are independent thinkers. If they agree with you, they'll be highly motivated. They will let you know what they'd like as an extrinsic reward, and they tend to want whatever it is right away.
9. Those who are focused team members must have confidence in the leader and in the project, or their motivation may falter. They want know up front what kind of reward they can expect. Make sure you follow through on whatever is promised.
10. Flexible people go along with the team, as long as a project does not contradict their morals or beliefs. They're also happy with any kind of recognition.
(Interested in the Emergenetics: "Meeting Of The Minds Seminar" )
Watch for the weakest link among your employees. If you have a slacker who consistently does less than everyone else but seems to get away with it, this can dampen the motivation of everyone else.