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3 Leadership Mistakes that De-Motivate Small Business Employees & How to Turn Things Around

Small business owners with companies that have between three to 30 employees can’t afford to accept under-performing personnel.

Yet, in a recent survey 44% of small business owners reported being unhappy with the performance of some of their employees.

To solve this problem, employers need to first identify the cause, then create viable options for applicable solutions.

There can be many reasons employees under-perform. My clients often point to negative attitudes, entitlement mindset, low motivation and individuals’ inability to work with others, or accept and adapt to change.wussleader21

Although those reasons may be absolutely valid on the surface, there are always underlying issues that have led to the causes identified by the business leader.

(Learn how small business leaders can communicate to motivate employees with the The Employee Motivation Equation.)

The good news is that there are only two aspects to evaluate with under-performing employees. Poor performance can only be due to, either:

  • Their ability, or
  • Their attitude.

And, it also may be both, because an inability to do their job can cause a poor attitude. And, a poor attitude will prevent them from wanting to acquire the ability. In either instance, the employee is not at fault.

Now before you come looking for me, read on for my reasoning. It is important for the small business owner to look at it from this perspective.

Every small business client with whom I’ve worked since 2002, the owner or company leader felt they did everything they knew to motivate their employees and create that motivating environment. And, in every situation I’ve found one or all of these three mistakes being made:

  1. The employee has not been given a reason to be motivated or to contribute beyond minimum effort.
  2. The organization has created an environment that is de-motivating.
  3. The employer failed to hire the right person for the job.

Small Business Leader Mistake #1: Not Giving Employees a Reason to be Motivated

Many business leaders mistakenly believe that providing someone the privilege of a steady income should be enough to create a motivated employee.

Yet, studies continue to show that salary and benefits, although important for providing base levels of motivation, is not enough to generate higher levels of engagement. Many managers and leaders say they are frustrated with feeling they have to continually find ways to light a fire under their people to get them to do what needs to be done.

Instead they should be investing energy in connecting to their employees on a personal level to instead find ways to light a fire within them.

Daniel Pink, in his 2010 book Drive: The Surprising Truth About What Motivates Us identified three concepts the 21st Century work environment must provide employees: mastery, autonomy and purpose. Or what I’ve renamed the Motivational M.A.P.

A good start towards understanding and implementing the Motivational M.A.P. is something  called The Employee Motivation Equation. It’s a 3-part formula small business leaders can apply to create a more motivating work environment.

You can download the 1-page overview free at this link.

Small Business Leader Mistake #2: Creating a De-Motivating Environment

In any new relationship there is always a honeymoon period where all the parties have good feelings about the possibilities moving forward. It’s the same when a new hire joins a company.

Unfortunately, a survey of about 1.2 million employees at mostly Fortune 1000 companies in the early part of this century conducted by Sirota Survey Intelligence, and revealed in 2005 that in 85% of companies, employee morale sharply declined after an employee’s first six months on the job, and continues to fade in ensuring years.

In a significant number of companies, as this Sirota research shows, something is occurring in these work environments that causes an enthusiastic and engaged employee’s attitude to change. Many factors can be attributed to this drop off, such as:

  • Poorly communicated job descriptions and responsibilities causing uncertain performance expectations for the individual,
  • Managers inconsistently addressing inappropriate behaviors and poor performance of co-workers,
  • Managers playing favorites and/or communicate disrespectfully in the workplace,
  • Lack of positive feedback for employee contributions and effort.

With the 21st Century workforce, across generations these four factors will de-motivate and sometimes even de-moralize employees. To learn a 3-part formula to better be able to “communicate to motivate” download The Employee Motivation Equation here.

Small Business Leader Mistake #3: Making a Wrong Hiring Choice

The #1 complaint I hear from small business owners today is how hard it is to hire good employees. No doubt in this 21st Century environment hiring is tougher than ever. There are a lot of reasons for this, too many for this article. But, suffice it to say that is the new normal.

Small business owners will need to have different expectations and be more patient and do more due diligence.

Unfortunately, in the haste to fill positions, often those making the hiring decisions fail to invest enough time in making sure the new hire is a good fit for the position.

A “good fit’ includes assessing skills, knowledge, and education and job experience, plus assessing an individual’s attitude and talents (the S.K.A.T.E. Hiring Profile). Hiring employees is a contact sport. It is getting harder and harder to find employees that are a good fit.

It is going to take more time to hire the right person and small business owners continually fail to do enough due diligence. Interviewers are often less prepared than interviewees and are just as uncomfortable with the interview process.

Hiring managers in small businesses, which is typically the business owner, must become masters of “behavioral interviewing” skills. They will help narrow the field and raise your odds of hiring a good fit by providing insights into how prospective employees would handle real-life situations presented to them.

Small business owners are often too fast to hire and too slow to fire. And, then, due to unforeseen circumstances employees are asked to fill roles not originally intended, and for which their skills and talents are not the best fit.

In these situations, despite the employees’ best efforts they are unable to meet desired performance expectations. Ultimately the employee and the employer both become disenchanted with the relationship. Yet, the onus must be on the employer to get it right when inviting someone into his or her work culture.


Before proclaiming employees are unmotivated, and/or unwilling, to perform to expectations and bring positive attitudes to the workplace begin by evaluating these three small business leadership mistakes to see where your company can improve. Before you leave be sure to grab the one-page Employee Motivation Equation overview here.


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