Money as a Motivator: Miracle or Misfire?

I hear time and again from managers everywhere how “My employees are only motivated by money.” When I ask how they know, the usual reply is “When I ask what motivates them, they always say ‘Well, a raise would be nice.’”

While people SAY they are motivated by money, study after study on employee recognition and engagement have proven that employees ARE motivated by money — for the short term. What motivates them for the long haul is usually something else — and that something else differs from employee to employee.

A recent article titled What Motivates employees? It’s not just the money in The Globe describes this “something else” in handing_moneydetail

More facts about cash rewards:

According to The Carrot Principle:

  • A reward of less than $1,000 never makes the best rewards because it is so easily forgotten
  • One third of the employees to whom you give a cash award will use that money to pay bills
  • One in five employees won’t have any clue in a few months where they spent that money or even how much they received

Two other problems with cash are that it is limited and strictly controlled. Depending on an employee’s position and duties, some employees have little opportunity for variation or bonuses.

Conversely, when employees are given something useful and tangible — something usable and valuable — the chances are high that they will still own it and can picture the award in their mind.

So, how do you know what rewards employees REALLY want from their job?  It’s not an easy answer.

Some employees want more challenging work assignments. Some want flextime. Some want to be cross-trained. Some want time to volunteer in the community. Some want extra work hours. Some want to attend management meetings. Some want to develop their presentation skills. And the list goes on and on.

Strategies that Turn it Around:

  1. Get to know your employees — their hobbies, whether they’re married or not, do they like dogs or cats, what’s their favorite kind of food, and so on.
  2. Meet with your employees, one-on-one, on a regular basis — at least once a month. This not only allows you to nip performance problems in the bud, but it shows to the employee that you care about them as a human being.  (Studies have shown that the number one reason people quit their job is they have a poor relationship with their immediate supervisor.)
  3. Realize that motivators change. What motivated someone last year may or may not work this year — especially if life circumstances change. For example, when an employee was single, what motivated her was flextime so she could spend more time at the beach. However, when she married, her motivation was to work more regular hours so she could spend quality time in the evening with her husband. That employee is now pregnant. Do you think her motivator might be changing soon?

Remember: Money is a short-term motivator.  Learning about your employees can help you to reward them with longer-term and changing motivators.

What motivates you? Please share in the comments section below. I look forward to engaging with you and your comments.

3 Responses to “Money as a Motivator: Miracle or Misfire?”

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