Many business leaders will agree with the song lyrics ‘money makes the world go around’. After all, in most businesses, revenue is the final measure of success or failure, and also the key incentive used to hire and reward talent. Because at the end of the day money ‘talks’, it’s what motivates people to aspire and want to achieve more… right? It turns out, the truth is far from it. While research suggests money is what gets many workers in the door, it’s not what then makes them go the extra mile.
Dan Ariely, a professor of behavioural economics, recently conducted an experiment in which he promised different rewards to different groups of people doing the same job. The three rewards were a cash bonus, a ‘thank you’ from the boss and a voucher for a free pizza. It revealed, surprisingly, that employees are more motivated by compliments and pizza than they are by money.
Similarly, career analyst Daniel Pink is a huge advocate of a softer approach that goes against the traditional approaches to incentivising teams. In his famous TED talk, Pink argues that leaders need to rethink how they run their businesses, and move away from contingent motivators that take a ‘reward and punishment’ approach. Social sciences instead, show that the best way to get the most out of your team is through intrinsic motivation, instilling the desire to do things because they matter or are interesting to them. According to Pink, those can be broken down into three key areas that business leaders need to consider as part of motivating their workforce: autonomy, mastery and purpose.
1. Autonomy – trust your employees
Many leaders are guilty of trying to build compliance across their organisation by micromanaging employees; strictly controlling budgets, schedules, resources and how they do their jobs. But if you want your people to start using the left part of their brain, if you want them to thrive and engage with your company, you need to set them free. Autonomy and ultimately trust – within well-defined parameters, of course – is the fastest track to self-accomplishment and overall happy employees.
In a study carried out at a health centre in Taiwan, employees were given greater control of their jobs. The results showed happiness and morale improved dramatically and resulted in a huge drop in the number of employees leaving. The reason – it’s human nature, we’re happier when we feel trusted and have greater autonomy.
2. Mastery – let them become amazing at what they do
Pink argues that people have an intrinsic motivation to become better at whatever they do. If they’re coders, they will want to become the best at coding, and if they’re in sales, they’ll want to blow their sales targets out of the water. Channelled correctly, this will not only drive employee satisfaction but also greater productivity.
If people plateau, they get bored and lose motivation. But if you encourage and develop a learning culture in your company, you will create room for improvement as well as opportunities to learn new things in which your workers can thrive. This is key to keeping employees stimulated and encouraging an ongoing desire to keep developing.
3. Purpose – Serving a greater cause
Most employees understand the importance of making a profit. It’s what helps pay their salaries, that pays their domestic bills and keeps their fridge stocked up with food. As a point of focus however, it’s not what gets them leaping out of bed each morning with a strong sense of belonging and desire to serve.
Research shows that, particularly among Millennials, they want to know what they do matters, that it serves a greater cause and that they are part of something bigger. They need a purpose. As a business leader, you need to remind them what you stand for and why you do it. How does your company help its clients? Does it make lives better? And if you can, let employees meet the people they are serving and show them the result of their hard work. And if you can’t explain that purpose to your workforce, you might need to evaluate your business for yourself and make sure there is a purpose, and that it’s infused into both your services and your culture – and that you and your workers are living, breathing examples of it.
In summary, money does talk, but it doesn’t always say the right thing. Pink argues that financial incentives can often do more harm than good. Instead, business leaders should focus on an entirely new system using those three elements as the building blocks to motivate teams. It’s one that moves away from outdated extrinsic rewards and instead focuses on intrinsic values. Social sciences show that employees in today’s workplace need to feel that they have a greater control and autonomy over their own lives, that they want to become better at their crafts, and that their work is part of a greater purpose, beyond just making money.
By instilling these notions into your corporate culture, not only will it motivate your teams to want to do more but also strengthen your business and its successes in the process.
Andrew Filev is founder and CEO of Wrike.