Why You Shouldn’t Use Money to Try to Motivate Your Employees

    Slide Show

    Third-Quarter IT Reality Check — Budgets, Hiring, Trends

    If you’re trying to use money to motivate your employees, you’re fighting an uphill battle. What you need from your employees is engagement, and money isn’t going to buy that. It’s very easy to give an employee a $25 gift card, but that’s not going to create a motivational climate. Such climate change is only going to come with time, effort and energy.

    That’s the advice of Anne Grady, a corporate leadership consultant and author of the book, “52 Strategies for Life, Love & Work: Transforming Your Life One Week at a Time.” I had the opportunity to engage Grady on the topic of what motivates employees in an email interview earlier this week, and I found her advice to be eminently sensible.

    As you might expect, one of the first things I wanted to know was whether she has found any differences in what motivates IT professionals, compared to people in other professions. Grady said that because most IT professionals are typically more analytical, they want motivators that are practical.

    “I’ve often worked with IT professionals who would prefer one day a month to work on what they deem to be most important, rather than receiving a gift card or coffee mug,” she said. “When given the autonomy to choose what they work on and how they work on it, they are often able to come up with solutions to problems that they never would have arrived at before.”

    At the same time, Grady said, you need to be careful not to make the assumption that they’re all the same. “Regardless of their career,” she said, “people are people, and we all have different motivators.”

    So do men and women tend to be motivated by different things? Grady doesn’t think so.

    “Motivation is not gender-specific, but rather based on the individual,” she said. “Men may be from Mars and women may be from Venus, but individual motivators span gender, culture and everything in between.”

    Regarding generation differences in what motivates employees, Grady said that while job security and money may have been primary motivators in years past, millennials are different.

    “The up-and-coming millennial generation is motivated by work/life balance, autonomy, recognition, and personal growth,” she said. “Millennials seek mentorship, development, and a feeling of belonging. Money can’t buy those things.”

    It seems to me, though, that money can buy a lot. I mentioned to Grady that employee engagement is obviously contingent on feeling valued and appreciated, and I noted that my experience, both as an employee and as a manager, has been that compensation is a huge factor in whether a person feels valued and appreciated. So in that sense, isn’t money a driver of employee engagement? Grady said money is a motivator until you pay people enough to meet their needs.

    “While some are still motivated by money, it is not universal,” she said. “Once people can meet their basic requirements, they look to other intrinsic and extrinsic motivators. A lack of money is absolutely a de-motivator, but more money and motivation are not necessarily directly correlated. Money can’t buy a feeling of pride or fulfillment, or fill the need to belong. People want a purpose. They want to feel part of something bigger than themselves, to know they are making a difference, to be challenged to grow, and to have the freedom to work in the way that makes most sense for them. Money just can’t buy that.”

    I asked Grady if she was distinguishing what motivates rank-and-file employees from what motivates executives, given that executive compensation almost always takes the form of a base plus bonus. Is that bonus not a key driver of executive engagement? Grady said it depends on the executive.

    “Research has demonstrated that while money is a motivator for basic, monotonous tasks, it often fizzles as the job requires more thought and creativity,” she said. “It’s not to say that money won’t motivate, but it is typically not sustainable. Once people get it, they expect it, even to the point of entitlement. Flex time, opportunity for advancement, the ability to work at home, and a feeling of personal satisfaction are extraordinary motivators.”

    ROI Value

    So what’s Grady’s response to an employee who says that “money can’t buy engagement” is management-speak for “we’re not giving raises again this year?” She said it depends on the types of motivators that have been used before.

    “It takes time to create a motivational culture. As long as managers are taking the time to understand what truly motivates their employees, the money issue isn’t as great,” Grady explained. “Don’t get me wrong—I’m not suggesting people don’t want raises. But if other needs are being met, money becomes much less important. People want to be treated fairly and compensated well. But paying well without providing a climate that taps into employees’ motivators, won’t create the engagement you are looking for.”

    Grady said that while it requires more deliberate work and effort, you need to take time to learn what motivates the people you work with, for, and around.

    “Sometimes it is as easy as asking; other times being observant is your best bet. And if all else fails, identify what de-motivates them and stop doing it,” she said. “We need money to survive, pay our bills, and live a comfortable life. With that said, if you had a choice to work for an organization that paid really well but required you to work 80-hour weeks, vs. one that paid a little less and allowed you to have more time to spend on whatever you enjoy most, which one would you choose?”

    Grady said the answer might differ based on the individual. And that’s the point.

    “Not everyone is motivated the same way or by the same things,” she said. “Recognition, autonomy, and time for what’s most important don’t come with a dollar sign.”

    A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.

    Get the Free Newsletter!

    Subscribe to Daily Tech Insider for top news, trends, and analysis.

    Latest Articles