Motivation: it’s not all about the money

The conventional wisdom is that money is a prime motivator for employees. But, depending on context and the type of employee, other factors can have a greater effect on motivation for most. This is the view of well-known management author Daniel Pink, who was a keynote presenter at the 2012 World Human Resources Congress, held in Melbourne on 25 and 26 September 2012.

Only effective at ‚ basic survival levels

Pink questioned the view that providing rewards produced more of the same behaviour and punishment produced less of it. He claims this approach is sometimes true but happens to a lesser extent than many people think, and he referred to several research experiments to back this up.
An Indian study found that providing financial bonuses to employees only worked if the tasks involved simple mechanical skills only. But if even ‚ ≤rudimentary cognitive skills’ were required, pay increases surprisingly resulted in performance decreases. The conclusion was that financial rewards were only effective for simple, short-term work tasks, but unfortunately they are widely used (often under the guise of ‚ ‘contingent pay’) for all types of jobs and work tasks. One theory is that contingent rewards tend to lock in a mindset with people so that they ignore everything except the basic task at hand. This approach will not work for complex jobs that require creativity and judgement from employees to perform them well.

Another experiment involved artists who were asked to produce examples of their work ‚ some of which were commissioned (i.e required to meet various specifications) and others allowed the artist to do what he/she wished. The non-commissioned works were judged by experts to be of better quality than the commissioned ones. Pink suggested that the commissioned works were held back by boundaries, rules and constraints, and the artists may have felt that they did not fully‚ ‘own’ the works. The message for management of workplaces appears to be that too many constraints prevent greatness, yet almost all work performed in most places is ‚ ‘commissioned work’ (i.e subject to significant direction and supervision by management).

Fairness matters more than actual dollars

Pink argued that the best use of money as a motivator is to pay people fairly, and to pay them an amount sufficient to remove money as an issue of concern. It is better to have employees thinking about their work instead of thinking about payment for it.

Perception of fairness with remuneration is extremely important. Lack of pay equity is a very demotivating issue for employees and almost all workplace grievances relate to some perception of unfairness (whether involving pay or various other factors).

Another issue of unfairness occurs if intrinsic motivators are used mainly as an excuse to underpay people ‚ Pink used the term ‚ ‘units of bliss’.

In summary, money does matter, particularly in circumstances where employees are struggling to survive financially (e.g in developing countries), and not paying attention to it will demotivate employees. However, its threshold of effectiveness is quite low and, for most jobs and employees, other motivational factors are likely to have a far greater impact on performance.

What are the most important motivators?

Pink nominated three crucial factors, which he described as:




1 Autonomy

Pink described‚ ‘management’ as ‚ ≤just a technology for organising people in order to gain compliance’. Compliance falls well short of, ‘engagement’, which requires an element of self-direction (or autonomy) to achieve.

Pink added that if people were asked to describe the best boss they had ever had, most would describe someone who gave them autonomy with respect to tasks, time, techniques and working within teams. The message for organisations therefore is to find ways to provide greater autonomy, in particular to provide opportunities for ‚ ≤non-commissioned work’ (see above). The approaches taken by some companies include the following:

  • Atlassian (a software company) provides employees with one day per quarter to perform whatever work they choose to, but they are required to present it to their peers the next day. This step has already resulted in several new products, fixes for problems and enhancements to products and systems.
  • Other companies, including Google and Intuit, allocate employees a set percentage of their work time to work on any project they wish (eg 5‚ ¨10%).
  • A US home loans company provides one hour per week ‚ ≤thinking time’ for workers to come up with new work-related ideas.

Pink claimed that these types of initiatives will become the norm in organisations within the next decade. He has also developed a tool for organisations to conduct their own ‚ ≤autonomy audit’, see Pink’s website (note: registration will be required).

2 Mastery

Mastery is broadly defined as continually getting better at the work you do. Pink said that the biggest motivator on a daily basis is ‚ ≤making progress in meaningful work per day‘.

Progress also depends heavily on receiving feedback. Pink used the analogy of driving a car, where all decisions result in immediate feedback. A problem here is that many employees use technology outside work to gain ‚ ≤instant’ information and feedback, but then enter the workplace to find there is an anachronistic formal performance appraisal system conducted annually, which is quite ineffective at providing timely feedback. Pink recommended the following alternative strategies:

  • Some managers ask their employees ‚ ‘how was your day’ every day, and keep a diary of the reactions. It quickly identifies which issues are motivators or demotivators.
  • ‘Do-it-yourself’ supplementary performance appraisals have potential. Members of high-performance teams already give each other regular feedback, and self-assessment is also common among high-profile sportspeople.
  • Line managers should make themselves available for, say, two hours per week for the sole purpose of handling employee enquiries and receiving feedback.

Pink was less enthusiastic about weekly one-on-one meetings between line managers and employees, claiming that they tended to lose popularity after around 4 to 5 weeks.

3 Purpose

Pink claimed there is too much emphasis on how things are done instead of why they are done. There should be more work conversations about ‚ ≤why’ and fewer about ‚ ‘how’.

In another experiment, staff at a charity fund-raising call centre were divided into three groups, with each group receiving different instructions on how to spend the five minutes immediately before they commenced work each day. One group was allowed to do whatever they liked in that time, while another had to read letters from ex-employees that described the personal benefits they had gained while working at the call centre. The third group had to read letters from beneficiaries of money raised by the charity on how they had benefited from donations and assistance. This third group subsequently raised more than twice as much money from donations as the other two, because the purpose of their work was much clearer to them.

Basically, employees will do things better if they like doing them, are interested in them, because they are the right things to do and/or the benefits are evident to them.

A general rule is that people are more likely to achieve work goals that they set themselves or at least have significant input into setting.

Implementing change in organisations

A common mistake is trying to change a whole organisation in one go. Pink recommended setting small goals, making changes in single areas. For example, the, ‘thinking time’ initiative could initially be trialed in a single work section, preferably one where line managers and employees are receptive towards it. The level or scale of the initiatives can then be gradually expanded as the benefits start to surface.

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