What does your handbook say about phone use?
I have a 3 strikes your out policy on everything. First time I make sure you know it’s a problem. The second time I remind you I told you already its a probelm and the next time I catch you, you are fired.
I also make them sign stating they have been warned twice and the next time they are fired.
FEAR. My guess is they are fearful of their ability of being able to manage past a certain level.
A lot of small biz people either dont have or dont think they have the ability to manage a business over $x revenue or X number of employees.
Happyness could be the other. If they are content and happy with what they are making, they may have no desire for more.
I would have a hard time not rolling that $50k back in and seeing what happened.