Plus: What it means to feel valued at work and the secret to success inside your company’s DNA
When the money stops working. Four new ways of thinking. And making the world a better place. There is some amazing international research on employee motivation that shows we may have been thinking about it all wrong.
WATCH: THE FREAKY SCIENCE BEHIND EMPLOYEE MOTIVATION
In this video:
- A US Federal Reserve-funded MIT study shows there’s a point where money no longer works to motivate employees
- Money works to motivate workers who do repeatable mechanical tasks (manual labour), but not for those who have to employ even rudimentary thinking
- Several US universities replicate the same study in India and get the same results
- Dan Pink suggests some alternatives for motivating employees: autonomy, mastery and purpose
This video features an MIT study that found, as soon as an employee has to use their brain or creativity, not only does monetary rewards and incentives stop motivating them, it actually leads to worse performance. It sounds so weird, we had to go look up the original study – and here it is.
This doesn’t mean money is not a motivator, just that there’s a point where it stops motivating us. And LifeXchange has tested some of these ideas on a few large local companies (more on that later), with equally astounding results. So what gives?
To look at this properly, we have to ask ourselves: What is employee motivation and why it’s so important. Then we look at the types of employee motivation and what employees are really looking for in a company before asking the important question: How does it affect your business?
WHAT IS EMPLOYEE MOTIVATION?
Employee motivation is broadly defined as that which drives an employee to complete tasks at work. Some definitions say it’s about the levels of energy and creativity an employee brings to the table. Others say employee motivation is all about what the company actively does to keep its employees sufficiently motivated to keep up or improve productivity.
Either way, employee motivation is an important and ongoing concern for management in any company, because our employees are our most important resource.
WHY IS EMPLOYEE MOTIVATION IMPORTANT?
Having motivated employees is linked to positive employee engagement, which impacts a company’s performance, growth potential and ultimately profits.
There are numerous scientific studies that link employee motivation to organisational performance, effectiveness and success. And there’s also reason to believe that the company’s efforts to motivate employees is an important part of company culture (see: What is company culture?, the importance of understanding what causes employee withdrawal and discover the link between recognition and productivity).
THEORIES AND TYPES OF EMPLOYEE MOTIVATION
There are broadly two ways to think about employee motivation, based on different theories:
This is the traditional way of thinking, where we use external factors to motivate employees, such as rewards, benefits, salary packages etc. It’s often based on the simplest economic theory: reward the behaviour you want, punish what you don’t want.
This is when a company focusses on stimulating the employee’s internal drives to motivate them. It’s rooted in some inherent human desires: feeling accepted in an organisation, being creative and feeling connected and valued.
But, as the Dan Pink video clearly shows, the old-school extrinsic rewards-and-punishments motivation doesn’t work at all anymore.
THE TIPPING POINT: WHEN MONEY STOPS MOTIVATING PEOPLE
The MIT study shows that when a person or employee’s tasks mainly entail mechanical work, like physical labour or repetitive tasks, money and incentives is a powerful motivator. But, as soon as they need to start using their brain, more money stops motivating them and leads to poorer performance.
And it’s been proven again and again. For example, Tim Judge and colleagues showed how weak the link between salary and job satisfaction is in this study. In fact, there were over 100 studies on this topic done over the last 30 years. And a big analysis of all of them showed that monetary rewards and incentives don’t intrinsically motivate employees – see the results here.
“It seems to be linked to an almost survival mindset,” says LifeXchange’s Dr Cobus Oosthuizen, a PhD on mentoring and human behaviour. “Employees who do manual labour’s tasks are easily measurable, repeatable and directly linked to monetary gain. If I do X, I get Y, and Y is what I need to survive. So, the more I can increase my productivity, the bigger the guarantee that I will survive.”
“It can be the same for any job type if your prime drive is survival. But, once you’ve passed that basic level, the science shows that if your tasks require cognitive function, your motivations change.”
THE LOCAL PICTURE: EMPLOYEE MOTIVATION IN SOUTH AFRICA
And it’s not just internationally. LifeXchange helps local companies navigate complex organisational change. And we see the exact same trends inside companies right here in SA.
“We’ve done numerous surveys on employee well-being and sentiment for local companies,” says Dr Cobus. “And it’s clearly divided into business units and function, so we can see the results based on the types of tasks and employee performs.
“In the feedback we get from inside several companies, those who are primarily involved in manual labour consistently rate salary as the biggest motivator for staying at or leaving a company.”
At the same time, employees also indicate that feeling valued by the company is of slightly lesser importance and they overwhelmingly do not like to be mentally challenged in their daily tasks.
“On the other hand, those who are involved in management, finances, administration or any other specialised non-mechanical daily tasks consistently rate being valued by the company as their highest motivator. These employees like to be challenged. And salary is consistently the absolute lowest motivator for them,” Dr Cobus says.
And this is important because as we progress further into the 21st century, many manual labour jobs are being automated. That means that more of the workforce will fall into the second category, where money has limitations and intrinsic motivations become more important.
SO WHAT REALLY MOTIVATES EMPLOYEES?
In the video we showed earlier, Dan Pink highlights possible alternatives:
1. AUTONOMY AT WORK
We assume autonomy refers just to how much freedom an employee has at work: how and when they perform tasks etc. But there’s so much more to it. It’s been linked to greater job satisfaction, and it can be tricky for some companies to navigate properly.
To get an idea of just how important autonomy is, discover why employees perform or move on in our post on mental pushback.
2. A DESIRE FOR MASTERY
Work mastery refers to an employee’s desire to achieve new levels of skill and proficiency. Upskilling and continuous professional development are examples of mastery initiatives.
3. A FEELING OF PURPOSE
This one is strangely linked to autonomy because when an employee is too strictly controlled at work they don’t see the benefit or difference of their own individual efforts. They feel easily replaceable and as if they don’t make a difference. And finding one’s purpose is traditionally left to the individual, but a new of thinking could be: how do we make this employee feel and live their purpose here at the company?
And then we’d like to add our own fourth alternative:
4. FEELING VALUED AT WORK
“In our work with employees in South Africa, the idea of being valued by your employer comes up among all employees, working at every level and performing every kind of task in the company,” Dr Cobus says. “And the concept of feeling valued seems hard to pin down at first, but really it’s a combination of all the other motivating factors we talked about here.
“And, importantly, this one goes deeper into the DNA of your company than most of us expect.”
One of the most important ways to create a feeling of value is by investing in trust. Here are 5 ways to build trust in a team, 6 Ways to build trust in leadership, 7+ steps to foster trust in your company and all the vital science behind workplace trust.
See more: Check out the concept of “Belonging” in the Circle of Courage, “Being Valued” described in Erik Erikson’s theory on human development and “Connection” in LifeXchange’s own Human Development Cycle.
WHAT THIS MEANS FOR YOUR BUSINESS
There’s plentiful solid science around employee motivation that, even if the results seem surprising at first, actually makes a lot of sense when you think about it. But Dr Cobus warns that there’s no one-size-fits-all solution and there’s more to it than just programming yourself to pat your employees on the back every now and again.
“When it comes to employees feeling valued, it’s about how you appreciate people. It’s about creating a culture of appreciation, which has to do with your company culture.”
Now, company culture is the things that naturally happen in your company without you even having to think about it. “So, a culture of appreciation needs to be so deeply instilled in your company that not you or any employee even has to think about how they show their appreciation for someone else’s work.
“That goes very deep and it often has to do with your company’s entire organisational structure.”
Fortunately, though, helping companies navigate those complexities is exactly what we at LifeXchange Solutions live for.
It’s our purpose. What’s yours?
LifeXchange specialises in helping businesses, HR and teams navigate change and maximise employee motivation. Discover our unique methods in neuromanagement and our specialised neuroscience-based organisational management services.
Questions about employee motivation? Contact LifeXchange here.
The value of fairness and positivity: Explore the latest SA research on how to boost job satisfaction in low-income workers.
Did you know that “conscious businesses” perform 10x better on financial indexes than their peers? It’s because they focus on building relationships. See how to do it with conscious contracts.
See why it’s so crucial that you invest more in your company culture in South Africa.
See 14 years’ worth of experience across two continents on how to manage your team’s productivity when working remotely.
Also discover the similarities and differences between mentoring and coaching.
Understand how people think in business with our look at Erikson’s Theory on Human Development.
PLUS: Want to know why employees start looking for another job? Discover the mechanics behind mental pushback.
You might also like to discover the value of resilient teams in your business with our look at the Circle of Courage.
And discover more refined insights specifically for growing your business with LifeXchange’s unique Human Development Cycle.
There’s also some amazing NLP and organisational goalsetting insights for teams on how to rewire your brain for success.