Small Business: Motivating your employees
The performance of your employees has an impact on your bottom line and here are 11 useful tips that can help.
Numerous studies have suggested that highly engaged employees are more likely to exceed performance targets and achieve success. As not every employee shares the same personality type and not everyone is motived by the same incentive, how you should go about motivating your employees is an interesting subject worth discussing.
Why do employees work?
Before you start providing incentives to your employees with an aim to motivate them, it is worth asking the question – why do they work and most specifically, why do they choose to work for you at this point in time?
Undeniably, the need for financial security plays a big part but it is not the whole picture. Factors that lead employees to show up for work may include:
- This is a place where they belong
- The job may be a reflection of their self-worth
- The work may be fulfilling and rewarding
- They may enjoy exerting control
- They may like to be challenged
If you are interested in delving deeper, both Maslow and Herzberg have theories of motivation and the internet is flooded with articles about these two scholars which can help you to understand human needs.
The idea is that once you have profiled each person and their traits, you can then start to personalised motivation.
11 effective methods of staff motivation
Individualised motivation
Individualised motivation is a scientific step that can help to motivate individuals to the maximum of their abilities. To do that, you must first understand their individual needs.
Create a safe working environment
Under the health and safety law, business owners must provide a working environment with little or no risks to the health and safety of their employees. That aside, most people tend to prefer working in an office that is quiet (particularly in an open-plan office), tidy, well-lit, has adequate ventilation, has access to clean drinking water and toilets, as well as has sufficient work areas where they can perform the work comfortably. If your office environment ticks all the points above and they are important to an employee, then you will have a happy and engaged employee.
Create a positive office culture
Creating a morale-boosting office culture does not always mean providing free doughnuts and coffee. In this instance, we are talking about projects that have an impact on the wellbeing of your employees, their relatives or even strangers. For instance, having a scheme that allows extra holidays if an employee needs to care for a sick relative or a project that involves your staff to help out those less fortunate in your community.
Listen to your employees
No one likes to be ignored. Be an active listener to your employees and allow them to share ideas, ask questions, or discuss anything that is important to them. When they speak, give them your full attention and maintain eye contact. If they are giving you an idea that will help your business, let them know accordingly.
Have a dialogue
The other side of listening is sharing. Talk to your staff frequently, involve them in your company vision and tackle any potential issues that may lead to disengagement.
Set meaningful goals
Believe it or not, most people actually love a challenge so using goals to motivate employees are not new. The crux of the matter is the goals must be meaningful – while they can be challenging, the goals should be attainable if one puts in the appropriate time and effort.
Timely recognition
When a job is done well, a sincere thank you, positive feedback or a token of appreciation often will make the employee feel positive and appreciated, though it must be done soon following the task rather than a few months later.
Social recognition
More and more companies are using social media to give a shout out to their star performers.
Encourage learning
We live in a world that is constantly changing, primarily shaped by the evolution of technology, globalisation of commerce, social and political landscape, among other factors. To help make your business more agile and competitive, encourage your employees to keep learning and challenge themselves.
Promote from within
Most employees like to progress as an individual and as an employee. When there are new opportunities, consider to promote from within and create a smooth transition.
Build trusting relationships
Relationships often outlast companies so it is wise to invest time and effort to build strong relationships with your staff.
Tax Agility supports small businesses in London
Every small business owner knows the importance of having motivated employees. At Tax Agility. While our small business accountants may not be able to help motivate your staff specifically, we can help you tackle your accounts, bookkeeping and tax issues, giving you peace of mind so you can concentrate on running your business and providing motivators that matter to each individual staff.
We provide the following services:
- Accounting and bookkeeping specific to small business
- Tax and VAT for small businesses
- Payroll services
- Small business management consulting
Call us today on 020 8108 0090 or get in touch via our contact page to arrange a complimentary, no-obligation meeting.
Other useful articles pertaining to small businesses that may interest you are:
- Small business: 5 ways to get new customers
- Small business: managing rising costs
- Accounting tips for small businesses
This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.
Tax guide for Christmas gifts
Non-cash Christmas gifts cost less than £50 an item can be considered as ‘trivial benefits’.
As the calendar year comes to an end and Christmas approaches, many small business owners in the festive spirit enjoy giving a token of appreciation to the team members. But before you go and splash out, here are the tax rules you need to be aware of.
- Cash or vouchers which can be converted to cash are not considered as trivial benefits. They are subject to tax and National Insurance.
- Christmas gifts that are less than £50 per head (inclusive of VAT), not considered as a reward for their work or performance, and not stated in the terms of their contract, can be considered as trivial benefits. In this case, they are exempted from tax and National Insurance.
Christmas gift examples
Some thoughtful Christmas gifts that are below the £50 mark and can be considered as trivial benefits include:
- Something traditional: a bottle of wine or a box of chocolate
- Something more personalised: a scarf, a pair of gloves or a personalised mug
- Something popular like small electrical items, anything from portable power banks for phones to adapters.
What about Christmas bonuses?
HMRC is clear on Christmas bonuses – any cash you give to employees as a Christmas bonus means earnings. This means you have to add the value of the bonus to your employee’s other earnings, pay PAYE tax and also National Insurance through payroll.
What about gifts from a third-party?
It is possible for your employees to receive gifts from a third party. For example, you run a bakery and your employees may receive a gift from a flour manufacturer. The gift can be cash, vouchers, cheques or items. What you have to report to HMRC depends on what kind of third-party reward your employee receives and whether you are involved in arranging the reward.
The rule of thumb is that if the cash or vouchers are involved, the third-party must deduct PAYE from the reward and you must deduct National Insurance on the combined value of the reward and the PAYE tax paid on it by the third party.
For non-cash goods, the third-party must account for the tax due on the reward and pay tax and National Insurance. However, if you are involved in arranging the reward, the third party will pay for the tax due and you are responsible for the National Insurance.
As this can get complicated quickly, the best approach is to talk to your tax accountant.
Tax Agility can handle your taxes
At Tax Agility, our small business accountants can provide tax advice concerning Christmas gifts and trivial benefits to all small business owners in London, Richmond and Putney. You can count on us to provide honest tax advice pertaining to:
- Corporate tax
- VAT
- Employers’ PAYE
- National Insurance
- Business rates
- Income tax (for directors and shareholders)
Give us a call today on 020 8108 0090 or get in touch with us via our contact page to arrange a free, no obligation meeting.
If you enjoyed this article, you might also be interested in:
- Tax rules for staff parties and annual events
- Accounting tips for small business
- Small business: managing rising costs
This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.
Tax rules for staff parties and annual events
Beware of the £150 per head exemption before organising your office party.
The idea to get your team members away from work and their daily routines for a social function is sound and meaningful. Rightly so, HMRC recognises the importance of such social event and allows tax exemption to small business owners who look to reward their employees with a staff party or a social event.
Important tax rules on staff parties and annual events
HMRC is stringent when it comes to the extra perks you provide to your staff and the perks are subject to PAYE tax and National Insurance.
But once a year, HMRC allows you to spend £150 per employee which is an exemption, meaning you can claim them as a business expense. To qualify, the event must:
- Occur annually. It can be a Christmas party or a summer event.
- Cost less than £150 per employee. This cost includes VAT and other related expenses such as the event itself and transport.
- Available to all employees.
- Available to their partners, meaning their partners are also subject to the £150 per head limit.
- Applicable to shareholders who are also directors or employees.
What happens if my event costs average more than £150 per person?
If your annual event exceeds the £150 tax exemption per person, you cannot claim the first £150. Instead, you must report the whole amount to HMRC and pay National Insurance on the full cost of the event accordingly. In this instance, it is best to get help from your accountant as you will also need to complete form P11D for each employee.
Can I host more than one annual event?
Yes. Employers can host multiple annual events but must ensure that the combined cost of the events is no more than £150 per employee for the year. However, to make it easier, most business owners choose to use their tax exemption budget during a single occasion.
Let Tax Agility manage your taxes
Tax is probably not the favourite subject among many small business owners. In the UK, tax is a complicated subject and how much tax your business has to pay depends on its structure, the VAT option it chooses, and how much money it makes. We understand that not all small business owners can keep abreast of the latest tax changes, which is why our accountants for small business owners are here to assist.
When it comes to taxes, you can count on us to provide services pertaining to:
- Corporate tax
- VAT
- Employers’ PAYE
- National Insurance
- Business rates
- Income tax (for directors and shareholders)
Whatever you need, we are committed to making your business a success - contact us today on 020 8108 0090 or get in touch with us via our contact page to arrange a free, no obligation meeting.
If you enjoyed this article, you may also be interested in:
- Accounting tips for small business
- Small business: managing rising costs
- Five ways to improve your company’s cash flow
This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.