Motivating employees

There are all sorts of books and blogs that cover the topic of motivating employees. From experience, these two items caused me to be highly motivated.

Being part of a small company

It was hugely important for me (as a software engineer, as opposed to a manager) to be working for a small company.

In a large company my efforts were diluted by the performance of large number of other people. Therefore even if I did a tremendous job it usually did not "move the needle" very much in terms of overall company performance. In a small company, however, my performance has sometimes made a dramatic difference.

Having Skin in the Game (Part Ownership)

When you are an employee with no stake in the company you're a cog in a big machine, you come to work, you do your job, you leave, etc. You are basically working to make somebody else rich. If you do an outstanding job you might get a slightly higher than cost of living raise (or in these troubled economic times, you may get the privilege of keeping your job). On the other hand, if you have ownership in the company the decisions you make feel more tied to your own personal success.

How can a company share ownership with their employees? Two ways that I can think of:

1) A yearly bonus tied to individual performance (good)
2) Shares of the company (best)

In particular, item 2 was important to me. Knowing that my performance at work could lead to a payout at the end that could significantly change my life has been highly motivating. If I feel like I own a part of the business then I am more likely to make decisions as if they affect my own personal profit and loss (because, in fact, they do).

I am not sure what motivates others, but these two items have worked for me.

-BT