How (not) to motivate your employees

By: Paul D Foster

Date: 08 May 2012

Happy employees{{}}Shocking news for most small-business owners – it’s not about the money. In the discussions I have with the majority (but not all) of small-business owners, there is an assumption that employees are motivated most by money. “If I give them a pay rise, they will work harder”. Unfortunately, I have also heard, “I gave the employee a rise and they didn’t work any harder!”

In his great book Drive, Dan Pink explores the rift between what science says and business does.

The reality is, money is more a satisfier than a motivator. Every person needs enough money for their basic needs and comfort. Until they meet these basic needs, money is a motivator. But in looking to obtain extra efforts or performance improvements, money has been proven in research to produce the opposite results – negative performance improvement!

When you think about any employee bonus plans that you may have had yourself or for your employees, did they ever actually motivate anyone? Was the bonus calculation even tied to activities they had control over? Usually, it is a mystery what the bonus is, right up until they get it.

If an employee makes a complaint about ‘not enough money’, there is another assumption that this is the actual problem. This is a great example of ‘the problem is not the problem’.

A complaint about money is usually a way of saying there is some other unhappiness or unfairness. If an employee feels there is unfairness between pay rates, this could be a result of a number of factors, including a simple misunderstanding. If an employee is unhappy, there is a natural tendency to ask for more money to compensate for the unhappiness. If the employer could explore and determine the cause of the unhappiness, the money problems may disappear.

What are your thoughts? Do your employees care about money more than respect, opportunity for advancement or flexibility? Have you ever had a bonus plan that motivated employees?