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Last Updated: Friday, 13 June, 2003, 15:01 GMT 16:01 UK
Lunch Lesson 20 - Motivating your staff
Motivated staff are crucial to SAP

SAP is the largest producer of business software in the world.

Motivating its staff is a big job as it has some 29,000 of them in 50 different countries, and yet it claims to be among the best at doing this.

Indeed SAP has won awards for its innovative ways of keeping its staff happy.

It starts with the most obvious incentive of all - money.

After all, ask most people why they work and they'll answer in order to get paid and make a living and at SAP the staff are very well rewarded indeed.

"Our average basic salary here is around 45,000," says Adrian Farley, human resources director at SAP.

"It's a very good package and our staff enjoy exceptional benefits, as well as a bonus scheme, but we're competing for the very best people out there and often they will dictate their own terms."


Unlike a manufacturer which may see its machinery or equipment as its most valuable asset, SAP's success as a business depends fully on the brainpower of its employees and their ability to serve its clients - hence its efforts to keep them happy.

Lunch is on the house at SAP
SAP has tried to create a flexible working environment and an incentive-based pay structure is designed to improve overall operational performance and productivity.

To motivate and encourage, every employee's package includes fixed, flexible and incentive-based portions.

The flexible portion of each salary can be used to buy and sell annual leave, for dental or medical services, for pensions, life assurance and concierge services.

Pleasant offices

Furthermore, workers are provided with free lunch in the top-class restaurant, and the building is designed to encourage team-work and creativity.

Lunch is on the house at SAP
Staff and their families are given private dental and health care, and access to other services like dry-cleaning.

"The coffee lounges and workspaces are nice and bright throughout the building and this is good for teamwork," says Rachel Cortes, a customer relations manager.

"It cheers you up, and we've also got flexible benefits so I can buy holiday time or choose to contribute more to my pension, and a lot of the benefits are extended to family too."

But what if you're not a giant software conglomerate, and still want your staff to enjoy working for you?

Taking pride

Take Savoir Beds in west London for instance,

It's a much smaller, more traditional manufacturing business, but still has its own unique ways of motivating its workers.

Savoir has been making beds since 1905; each one costs 6,000 and it produces only six a week, so speed isn't the priority, quality is.

Rather than have a production line with workers just operating on one part of the bed we actually encourage them to do the whole thing
Alastair Hughes
Managing Director

Workers here don't get bonuses for making more beds quicker, and the firm could not afford to match the salaries that SAP pays for example.

"Bonuses don't work here; instead we want the staff to take pride in what they do by working on the product from start to finish," says Alastair Hughes, managing director of Savoir.

Work of art

"Rather than have a production line with workers just operating on one part of the bed we actually encourage them to do the whole thing, and then when it's finished we ask them to sign the bed. Customers come in and meet the staff."

Customers write thank you letters to the person who made their bed, and everyone in the business has a sense of pride in what they do.

Two very different companies, but what they both make is an effort to motivate their workforce.

The success of both businesses genuinely depends on it.

Student Guide

Whatever the business, the customers matter - or else!

Businesses large and small must look after their employees if they are going to meet the needs of customers.

Different businesses go about this in different ways.

SAP is the largest producer of business software in the world.

It has a large human resource department which works on schemes to keep motivation high.

Savoir Beds is a small firm which produces handcrafted, high quality, personalised beds.

It's found that money isn't the chief motivator.

The product needs care and attention so it doesn't want staff to rush things.

Just think...

Why is it important to motivate the staff?

Why can it be easier for a big company to motivate staff than a small one?

How does a business you know set about motivating its staff?

The personal approach

SAP and Savoir Beds both believe in the personal approach. Staff are human beings whose needs differ - so the approach needs to be flexible.

SAP has a flexible remuneration package, a mix of fixed, flexible and incentive based parts.

The flexible part allows people to choose from these benefits:

  • choice to take pay instead of holiday and visa versa
  • dental care
  • medical care
  • pensions
  • life assurance.

    It allows people to start early, finish late, work part-time for a period, have a sabbatical or take periods of unpaid leave.

    The organisation is "flat" so there are few layers of management.

    Benefits packages are common to all. The best benefits are not reserved for the top level staff.

    The difference comes from salaries and bonuses - which are earned through incentive schemes.

    Lunch is on the house at SAP
    The business has a strong bonus/reward culture so people expect those who do well to be paid well.

    There are no "fat cat" secrets. Everyone is on the same terms. They each have a contract - and no more.

    If senior management fail they won't get a big pay-off when they are pushed out!

    The staff have asked to see how the system works and SAP is working on making everything as transparent as possible.

    Just think...

    How does the choice of benefits give opportunities to different sorts of people, young and old, married and single, parents and non-parents?

    How does the mix of incentives to earn greater financial reward and the non-financial rewards stimulate staff to achieve?

    Making beds

    Savoir Beds is concerned about quality not speed. Each bed is made by one person - who, like an artist, signs the product.

    Customers visit the factory to discuss their beds.

    Afterwards, they often write thank you letters to the person who made their bed.

    Everyone in the business has a sense of pride in all they do.

    Staff are encouraged to contribute their ideas. They even come back from holidays with bed catalogues!

    Just like SAP, Savoir Beds has a flexible approach to work. Flexible working for people with families is the norm.

    The needs of the multicultural workforce are also well catered for. All religious requirements are respected.

    Just think...

    What benefits are there for staff and the business when one person makes a product from start to finish?

    In what sort of business does this system work well?

    In what sort of business is it not possible?

    Why do staff find a thank you letter rewarding?

    What evidence is there that staff have "ownership" of the product and their role in the business?

    Work out how both businesses fit into Maslow's triangle.

    The BBC's Dan Roan looks at what motivates staff

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