More Money = More Motivation?
6 min read

More Money = More Motivation?

More Money = More Motivation?

There’s a common misconception about the relation between motivation and money. People often believe paying their employees more will also raise their level of motivation in the long run.

It has not been proven yet that you get a more motivated employee when targeting a higher experienced, higher cost developer. It could have something to do with alternatives: in every salary category (junior, intermediate, senior, …), there are a plethora of job alternatives and the people who are motivated by money will always have the equal number of alternatives at each pay. If you start paying a developer two times more than when they started working with you just to get them motivated, they might as well look for another job that pays the same money.

Paying your employee significantly more than anyone else one the market would pay them for the same seniority level and skill set can be an exception. But then, their motivation becomes linked to an existential need: they only work because they don’t want to lose their job. When people have something to lose, particularly if they have a mortgage to pay, a family to provide for, etc, they will be more likely to be assiduous at work. But this type of motivation is far from being healthy.

Another problem one can think of about incentivizing with money is the problem of creative jobs. How are you supposed to evaluate how much money their work is worth? Can you pay them as much, if not more than other employees? And how would these employees react to this pay, considering they might not fully comprehend the importance of creative work?

A few examples of better drives than money for work include:

  • VISION: you want your employee to feel like they’re doing something that will make a difference in the world. That they are working for a good cause, for something that animates them (like working in healthcare, helping animals…).
  • GROWTH: when working for you makes your employee feel good about themselves, when they know why they are with you and why they are doing what they do with you. For instance, if they know they are developing new skills, or strengthening their knowledge.
  • SOCIAL: being part of a cool and interacting team can be quite uplifting. Sitting in the same room as your colleagues, feeling the energy of some common deadline… If you make your employee feel at ease, feeling they are working as part of a special group of individuals can only be beneficial in terms of intrinsic motivation.

Let’s illustrate how you can work on these drives within your company: building motivation can start during the interview session. When talking with candidates you’ll potentially hire, you can explain your purpose to give them a sense of mission (VISION). You can also focus on the abilities they will learn and develop while working with you. Make sure you know where employees will move to next and think about how the work they do at your company is going to help them accelerate their future career (GROWTH). During onboarding and especially the first few weeks or months, make sure your new employee knows what they are doing and why they are doing it. Do not let them feel alone, because this can drive workers away and push them to quit. Be there for responding to their questions, and constructively commenting on their work, to put them on the path of improvement.

During the pandemic, the SOCIAL aspect is obviously harder to reach, but you can try to find alternatives to recreate the atmosphere of a working community with “off moments” where you can just have a laugh together and share your daily stories. Human contact and interactions are more important than ever.

If you haven’t read Daniel H. Pink’s book on the matter, Drive: The Surprising Truth About What Motivates Us, there are a few lessons to learn from this interesting read. The book aims for business but also self improvement, it’s fast and easy to read, but more importantly, it’s really edifying.

Drive: The Surprising Truth About What Motivates Us, Daniel H. Pink, 2009

It is about this theory of carrots and sticks. What we learn and think is true in the business world, is that the good must be rewarded (carrot), while the bad must be punished (stick). Roughly, this means if you want your employee to work better, you’ll have to promise more money, whereas if the work is not done properly, you can threaten to fire them.

The problem with making an extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road. Indeed, most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts.

While this approach was the main one to keep your employees motivated to work was the most well-known, it started encountering resistance in the 50s. Indeed, this reward/punishment system not only does not work, often it even does harm. Experiments like the “candle problem” were conducted, in which groups of people were asked to perform certain tasks, some were promised lots of money in exchange, some only a little amount, and some weren’t promised anything. When the task was only involving mechanical skills, rewards worked as they would be expected: the higher the reward, the better the performance. But as soon as the task was calling for the slightest amount of cognitive skill, a higher pay led to poorer performance.

That’s what Pink highlights in his book: for straightforward and repetitive (or algorithmic) work, this reward system can work (but not even in the long run), but for any creative and innovative (or heuristic) work, it is more counterproductive than anything else, as it can destroy creativity. Instead, the secret to high performances would be the intrinsic drive to do things for their own sake, because they matter.

When the reward is the activity itself -- deepening learning, delighting customers, doing one's best -- there are no shortcuts.

Pink goes on to explain 3 gifts you could give workers outside money:

  1. Autonomy

If they can direct themselves and organize their work the way they want, this flexibility will encourage them to be creative, and stepping outside of the framework of conformity a superior would impose on them.

2. Mastery

If they have tasks they can get better at, they might want to become the best at it. It might sound a bit dull, but see it like this: would you feel more satisfied and fulfilled working for a tyran/a boss giving you more and more things to do without taking time to give you feedback on your work; or for someone coaching you, supporting you, and giving you the keys to improve in what you do for them? Seeing you’re getting better at what you do can eventually make you believe you’re actually working for no one else than yourself.

For any manager, boss, CEO or whoever thinking they are not praising their employees’ work properly, have a look at this video on growth mindset. Sure, the video is about kids in school, but the lessons you can learn from it can be adapted to any work relation between an employee and their superior: asking for quick results will have a negative impact on the employee’s creativity, and will put pressure on them. Sometimes, this can even lead to leaving the tasks incomplete, or poorly done. So instead, it is suggested to praise their work process (their effort, strategy, focus, perseverance and progress).

3. Purpose

No employee desires to be a money-making machine for a company that has no bigger purpose than just making money, especially if this money is not theirs at the end of the day. Your employee must feel what they do is important, meaningful. Your company doesn’t necessarily have to have the ambition of saving the world (although that doesn’t sound too bad), having a project a bit deeper than gaining new customers and making money is likely to uplift the employees. They must be able to see the long-term goals, and to know why they are actually working with you.

One key element you must retain: workers are humans, not machines. Psychological rewards matter, although they are often overlooked. There are other ways than money to get them motivated, just like a CEO, an entrepreneur, an artist or a professor appreciate recognition, validation, that their work has purpose and is doing well, that it inspires, gets talked about, bought or used. Stepping forward, seeing things working, receiving positive feedback… Each phase of the working process can be enlightening and filled with positive thinking.

Now this does not mean you should pay your employee less than their work is worth, but keep in mind this kind of incentive is not necessarily what is more likely to motivate your employee and to encourage them to work better.