Motivating Employees – Does Money Matter?
Whether money really motivates employees has been questioned for decades. HR people might say no, it is a hygienic factor, but employees say yes, it is essential. However, the answer is straightforward for me; yes, it does act as an important motivator, but under certain conditions and for certain periods.
When it comes to salary, the increase pleases everyone. Who doesn’t want some extra bucks? As Maslow stated in his very well-known theory, the first level of needs, like food and shelter, must be met before other stages emerge. However, any fulfilled need loses its motivational aspect. Our needs are limitless. Once we have an income to satisfy our fundamental needs, the extra income goes to less important temporary factors. Assume that your salary is doubled. Obviously, doubling your salary will increase your motivation, but it is temporary. Consider your credit card statement shows you spend 30% of your monthly expenses on groceries, 40% on rent and 20% on others.
These percentages will shift significantly with the increase, and you will spend the extra income on many postponed expenses. You will buy a long-required shoe, replace the kid’s raincoat, and take the family to a nicer dinner. However, these ratios will slowly return to their original values over time, usually in three months or so. As everything settles down, you will normalize the new income and accompanying lifestyle. Now you’ll be questioning when the next increase will come.
Employee satisfaction surveys worldwide reveal that employees prioritize job enrichment, equal treatment, personal development, participation and teamwork over money as the top five motivation factors.
People want to know that their pay is not less than others doing the same thing. It is possible to have a transparent grading system linked to a transparent salary strategy aligned with the market actualities. This will create a feeling of justice.
Recognize exceptional results with special treatments, such as parking someone’s car next to the CEO’s, expressing personal appreciation, or granting an extra day off as a reward for a unique solution. Praise serves as an effective external motivator.
Developing a Culture that Values Delegation and Job Enrichment
Creating a coaching culture can increase individuals’ inner motivation and growth potential. Utilizing Daniel Pink’s three inner motivational keys is a great way to help guide this process.
To foster success, promote a culture that values delegation and job enrichment instead of micromanagement. Train your managers to stop carrying all the monkeys on their backs and encourage them to delegate more.
However, especially the last three changes require a sound leadership approach meaning the decision-makers themselves should change. It may look simple, but accepting the need, learning better ways and adapting some long-held habits is a significant mental and physical effort. So, in many organizations, leadership comes
together and decides to increase the salaries a bit due to budget restrictions, preach about the hygienic nature of wages, increase or add gym membership to compensate, hang motivational posters all around, and expect the people to get motivated and retention rate increased.
Does this sound familiar?
Authored by Eren Ikiz, Founder of Improva Inc, a leadership development, talent management, and coaching company.