How To Improve Employee Motivation in the Retail Sector

The retail sector can be very challenging for employees, customers, and organizations operating because of its unique characteristics. The retail industry is highly price-sensitive, fiercely competitive, and driven by outstanding customer service.

There are also a number of factors that can make it difficult for retail stores to retain their staff. They include maintaining employee morale, meeting multipel stakeholder expectations, and establishing a sense of purpose among team members.

This article provides an insight into what should be done by both the retail workers and as well as the human resources team and retail managers to ensure job satisfaction and motivation in the workplace.

What Is the Importance of Employee Motivation and Employee Engagement in Retail?

Employee motivation refers to the level of desire and willingness of employees to participate in organizational processes, effectively, and productively. It is a psychological state that leads to taking action. Employee engagement on the other hand is an emotional connection that inspires people and their co-workers to give their best at work.

The most basic type of motivation is the extrinsic type where materialistic gains e.g. money, facilities, rewards, or other benefits motivate an employee to put in more effort in the workplace. There are enough studies that indicate how offering monetary incentives to your employees is an effective way to increase their motivation. For employees working on mundane tasks, outside motivation can be more necessary because these tasks provide no opportunities for personal satisfaction and growth on their own.

In simple words, employee motivation occurs when employees are able to fully use their capacities and skills towards the attainment of the company's goals. When this happens, they perform better. The term 'employee engagement' was first coined by Gallup Incorporated back in 2001 and it has been increasingly used as a competitive advantage for organizations ever since then.

Numerous studies have shown that higher employee engagement leads to better customer experiences. This is especially true in retail, where the majority of staff are customer-facing. Engaged retail staff members are more likely to go the extra mile to make customers happy, which in turn can improve a retail business’s bottom line.

Even members of staff who work behind the scenes and don’t have direct customer contact can improve the customer experience when they are engaged. Highly engaged employees are 17% more productive. Shelf stackers, cleaners, visual merchandisers, and retail buyers can all contribute to a better customer experience, so it pays to keep them motivated.

This is true of small businesses and large retail chains. Motivated and engaged employees will help your brand establish a reputation for excellent customer service. And that’s what can give a retail business the edge in a highly competitive sector.

5 Different Types of Motivation and What They Mean in Retail

Before you establish a strategy to motivate your retail employees, it helps to understand the different types of motivation and how they apply to your staff.

Intrinsic Motivation

This type of motivation comes from the employee themself, rather than external factors. The satisfaction of performing certain tasks is the source of the motivation, and it is influenced by factors such as purpose, autonomy, and mastery of skills. The personal nature of this type of motivation means retail businesses don’t have much control over it. But finding the right cultural fit when hiring retail staff and giving employees a higher degree of autonomy can help ensure that this motivation is present.

For example, a shop that sells eco-friendly beauty products should always try to employ staff who are interested in both environmental conservation and personal care products. This inherent enthusiasm for the brand mission and values will result in higher intrinsic motivation.

Extrinsic Motivation

The opposite of intrinsic motivation, this type of motivation is driven by external factors, such as gaining rewards or avoiding discipline. Besides paying a decent wage, employee rewards are the most obvious way that retail businesses can boost extrinsic motivation. For example, many retail companies from small cafes to retail giants like Walmart offer employee discounts.

Competence Motivation

Also known as learning motivation, this describes a person’s desire to learn skills and improve themselves. Retail companies can appeal to this type of motivation by giving staff regular training and allowing them to learn new skills off the job. The benefits are twofold: not only will employees become more motivated, but they will also become experts in their field, leading to higher performance.

Achievement Motivation

Everyone feels satisfaction at achieving something, be it a small win or a long-term personal goal. In retail, you can increase this kind of motivation by setting ambitious but realistic sales targets and other company objectives.

Power-Based Motivation

As a type of external motivation, power-based motivation is all about having autonomy and the ability to influence people and situations. A retail employee driven by this kind of motivation will want to have a say in how the business runs, and may want to lead a team. If the person is suitable for the job, a promotion will be a strong motivator for this kind of employee.

8 Ways To Motivate Your Retail Employees With Examples

Once you’ve understood the different types of motivation, it’s time to implement a strategy that keeps employees engaged. Here are some ideas and examples to give you some inspiration.

Plan Retail Shifts Properly

The first step is to get the basics right. Shift planning is one of the most important factors here. Make sure that employees know what is expected of them in each shift and provide sufficient support so staff are not overworked. Communicate work schedules in good time so you don’t disrupt the personal lives of your staff. Shift planning software, like flair, can help you streamline shift planning, assign employees to the right shifts, and give employees a clear overview of upcoming shifts.

You can also use time tracking software to keep track of overtime and compensate your staff properly for the extra hours that they have worked.

Offer Sufficient Incentives

The retail sector is known its relatively high employee turnover rate. One of the reasons for retail staff quitting their jobs is that they’ve been offered better wages elsewhere. Ensure that hard work is rewarded by offering bonuses for achieving targets. Other incentives and perks can include employee discounts, gift cards, additional paid leave, and contributions to insurance and pension plans. IKEA is a great example of a retail employer that offers attractive employee benefits.

Give Employees Responsibilities

One of the best ways to motivate retail employees is by giving them autonomy. Employees who feel like they have a say in the company are much more likely to be engaged. Not only will they feel more empowered, but it also encourages accountability, which leads to better performance and higher productivity.

Create a Culture of Recognition

A healthy company culture should always include employee recognition. When an employee has gone the extra mile, hit or exceeded their targets, or simply brightened a customer or coworker’s day, make sure you show your appreciation. Recognizing such behaviors helps to reinforce them, giving employees more motivation to do their best. You can use HR software or an employee recognition platform to establish a culture of recognition in your retail company.

Encourage Feedback & Communication

Another way to create a motivating company culture and positive work environment is to encourage feedback, open communication, and collaboration. Retail employees need to feed comfortable sharing their ideas, suggestions, and opinions. This way, you can gain insights into what factors are influencing employee satisfaction, but also identify sources of discontent before they lead to employee turnover.

Setting targets, such as sales goals, can add more substance and objectivity to retail staff appraisals. Rather than evaluating employees on subjective criteria alone, you can compare important metrics to see how performance has developed over time. Using performance management software can help you to plan and structure regular feedback meetings and analyze the results.

Empower Employees Through Learning and Development

As we saw earlier, learning can be a motivation in itself. Professional development is something close to the hearts of employees in all industries, retail included. This starts with establishing a clear and rewarding career path for your retail staff. To help employees along this journey, provide plenty of opportunities to learn new skills or hone existing competencies.

Target, which placed second in Fortune’s ranking of Best Large Workplaces in Retail 2023, does this well. To encourage continuous learning, the retail chain set up Dream to Be. This program gives full- and part-time team members access to a selection of over 250 business-aligned programs, with no tuition fees.

Organize Team-Building Events

There are times in retail when work can become quite stressful. Busy weekend shifts and the build up to holidays like Christmas can be hard work for your staff. This makes it especially important to give employees opportunities to wind down as a team and socialize with one another. Something as simple as hiking together or going to an escape room can strengthen the connections between coworkers, relieve some stress, and boost employee retention. Additionally, capturing these moments through event photography can create lasting memories and further enhance team bonding.

Offer Spaces for Taking a Break

During a long shift, it’s important that employees have a designated and appealing space to take their break. Whether this is a break room or a canteen, you should make the area comfortable and attractive for employees. Break rooms and canteens can serve as a place where employees can chat and socialize with one another and restock their energy for the rest of the day.

If you have a company canteen, make sure the food is healthy, tasty, varied, and affordable, and don’t forget to cater to any dietary requirements your staff may have. Providing free healthy snacks and drinks, such as fruit, coffee, and boxed water, can also be a small but important perk for retail employees.

IKEA Belgium, for example, has a separate co-worker restaurant for its employees with an affordable, rotating menu.

Solutions for Employee Motivation in Retail

flair can support your HR team in creating a culture that motivates employees. From flexible shift planning and self-service time and attendance to collaborative performance reviews, our solution comes with all the tools you need to improve the employee experience in retail.

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