This article is from https://www.theglobeandmail.com/report-on-business/careers/leadership-lab/why-money-is-not-an-employee-motivator/article33755286/
Why money is not an employee motivator
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED JANUARY 30, 2017
UPDATED APRIL 14, 2017
In today's fast-paced world, you'd expect that biggest workplace challenge for leaders in organizations would be the rapid advance of technology, or the need to maintain market share, or seeking out venture capital. Yet when I put this question to the managers I work with in my leadership practice, I hear a different refrain: how to motivate employees, today, and in the long-term. Bottom line, all the other challenges are important, but if you are having trouble inspiring the troops, everything else can become secondary.
Money isn't a motivator
Believe it or not, when it comes to employee motivation, money isn't as important as you might think. Sure, you need to pay your employees fairly and competitively. If people working in your sector in your area of the country are paid on average $18-$20 per hour, you won't be able to get away with paying your employees $14 per hour. But once you pay competitively, it's not wages that keep your employees going above and beyond every day, it's something else. And interestingly enough, even if you paid your employees more than the average in your region, you still wouldn't keep them motivated on an ongoing and sustainable basis.
Focus on intrinsic factors
Now before I incur the wrath of many, let me explain: lack of money is a de-motivator, but money is not a motivator. This somewhat puzzling statement makes a lot of sense if you consider a now-classic study conducted by Frederick Herzberg in 1968 (which was subsequently revalidated in Harvard Business Review in 2003).
In his research, Dr. Herzberg discovered that the factors that produced job satisfaction were separate and distinct from those that led to job dissatisfaction. In other words, job satisfaction and job dissatisfaction are not opposites of each other. Instead, the opposite of job satisfaction is no job satisfaction; and similarly, the opposite of job dissatisfaction is no job dissatisfaction.
He called the factors that led to job satisfaction intrinsic factors (or motivators) and those that led to unhappiness on the job extrinsic factors (or de-motivators). Salary is an extrinsic factor, so poor wages will result in job dissatisfaction, but reasonable wages can only achieve the somewhat neutral position of no job dissatisfaction. In other words, once you offer a "fair wage", for your employees to be inspired to go above and beyond on a long-term basis, you need to focus on intrinsic factors.
So what are these intrinsic factors? Dr. Herzberg identified some of them as achievement, recognition for achievement, the work itself, responsibility, growth, and advancement. Extrinsic factors, those that lead to job dissatisfaction, were company bureaucracy, a lousy immediate supervisor, unpleasant working relationships, poor working conditions, status, job security, and money.
So, as a leader, what does this mean when it comes to inspiring the troops? There are two things to consider. First, appreciate that extrinsic factors must be addressed before you can realize any value from focusing on the intrinsic factors. Bureaucracy, poor leadership skills (on your part), employees who don't get along, wages that are not competitive, and poor working conditions will all lead to poor morale and cause staff to jump ship as soon as they get the chance. You've got to get these (at least partially) fixed first.
Second, once the extrinsic de-motivators have been lessened, shift your focus to using a variety of intrinsic motivators. When it comes to motivating employees, there's no such thing as one size fits all. Different people are motivated by different things.
Having said that, the top two intrinsic motivators are a sense of achievement, and recognition for achievement, so these are a reasonably good place to start. A sense of achievement often comes from the ability to take something from start to finish and observe the final outcome. So ask yourself - what can I do to get my people participating and involved from beginning to end? Recognition for achievement is valued differently by different employees. Some people prefer public recognition, others favour a private "thank-you". Take the time to find out what your individual employees are inclined towards; the impact of any recognition you give will be much greater.
If you have employees who are apathetic and uninspired, then throwing more money at them isn't the solution. Sure, none of them are going to turn down a raise (they're not stupid), but if you're seeking to build highly-motivated and high-performing employees, your greatest return on investment will come, once you pay them fairly, in two steps. First, focus on removing from your work environment as many extrinsic de-motivators as you can. And then second, concentrate on amplifying individually what intrinsically motivates each one of your employees.
Commentary for Long Article
1. This article delves into extensive details that explain the various reasons that make money not to be the ideal motivator for employees at the workplace.
2. Most people working for different organizations always cite their low remuneration as the reason for their job dissatisfaction. I read through this article to understand the fundamental differences of money as an element that may demotivate but not lead to job satisfaction.
3. The text is awash with various motivation theories that enable employees to have the zeal to perform their tasks thus improving their work output. Most of the motivating factors used by employees include both financial rewards and benefits in kind towards employees as a gesture of motivating them to increase their productivity (Zimbardo et al., 2012). The text also touches on Dr. Herzberg hygiene theory of motivation that looks at both the intrinsic and extrinsic factors that motivate workers to perform their tasks. Intrinsic factors are the motivators that make the employees experience job satisfaction with their work while extrinsic factors are the de-motivators whose absence leads to job dissatisfaction.
4. The article goes straight to the point by stating that there is more to motivating employees than just remunerating them fairly. A fair compensation is desirable by each employee, although this does not mean the end of the incentives that will make their jobs more fulfilling (Gupta-Sunderji, 2017). Money is just an extrinsic factor whose absence will only demotivate the employees but its presence is not guaranteed to give job satisfaction to the workers. Workers would prefer getting intrinsic incentives that will make them experience job satisfaction in terms of growth and development. Such intrinsic factors include expanding the job responsibilities of the employee, recognizing their achievements, and career growth.
5. Both the article and the text are on the same in recognizing the need to motivate employees and the unanimous agreement that money is not a just reward that guarantees employee motivation at the workplace. The book touches on Dr. Herzberg's theory of motivation based on the hygiene factors (Zimbardo et al., 2012). These sentiments are replicated in the article only that a complementary version from Harvard researchers agrees on the same theory of motivation that ropes in the intrinsic and extrinsic factors of motivating employees. Money is an extrinsic factor that is likely to eventually lead to job dissatisfaction, while intrinsic factors like more responsibility, achievement, challenging job, and potential to grow career wise are likely to lead to the job satisfaction of the employee.
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