Unfortunately, we do not live in this world so if we are to get our best from our employees, we need to motivate them properly.

This can be a slippery slope, however, as employees who feel like they are being overworked or under-compensated are not likely to give us the level of effort required to build a small business. Finding the right mixture of motivation for your employees is critical for your small businesses' success.

Motivating your employees goes beyond financial compensation. It requires tapping into your employee's intellectual capital and incorporating them into the intellectual wheel that needs to be constantly running.

In my experience, money has always been a great motivator, regardless of the level of employee. In my consulting experience, I often see financial rewards for employees, which are not properly aligned with the best interests of the company.

You need to make sure that you're motivating your employees to improve your product or service, not just increase productivity. For example, a common financial motivator is additional dollar bonuses for work completed over the expected amount. While this will increase output, it may encourage employees to cut corners or sacrifice quality in an effort to get more products out the door.

A better reward that would behoove both the company and employees would be offering financial compensation for improvement ideas or for reducing the number of defects that leave the facility.

In addition to financial motivators, many small businesses offer some sort of party or gathering if the employees reach various targets. These parties can be great team building events, but they can also be costly and ineffective.

First, you want to make sure that your employees are actually motivated to achieve the party, which may be a free lunch or dinner. I often hear employees grumble at these gatherings commenting on the cost and how they'd rather an extra check instead. Employees can be extremely observant. You definitely want to make sure that the cost of the party is under control. There's nothing worse than a company that scrimps and saves only to throw an expensive party, which sends employees a mixed message.

In general, parties and employee gatherings are great ideas, but they need to be used in moderation and not as a primary motivational tool.

One of the most important motivators for your employees is the possibility of promotion. In some small businesses, this may be difficult, but an effort should be made to offer exceptional employees room to grow within your organization. Without the potential for promotion, your employees will hit a ceiling, which could very well result in complacency. By offering the opportunity for outstanding employees to move up in their careers, you may be able to tap into their very best performance. The concept of a promotion offers both financial gains as well as improved self-confidence.

In addition to these positive motivators, it should be noted that there are plenty of firms who use negative feedback as a means to motivate. I personally do not condone this strategy, as it can seriously hinder employee involvement and suggestions; but I have seen it work somewhat effectively.

If you choose to motivate through fear and yelling, you should be aware that your short-term productivity is at the expense of long-term improvements. Employees who are fearful of management are not likely to speak up if they observe a problem or notice a chance for improvement. In addition, those employees are not likely to make any extra effort to help out the company if the need arises.