Why Money Is Not A Motivator
Or Why You Cant Get Blood From A Stone.


We all know what employees want right? Just ask them. More money. Why else do we work? I am fascinated that companies continue to poor good money after bad on incentive schemes and pay rates in order to be come ‘employer of choice’ when money is not the primary motivator.

Many of us have played the hypothetical game of what would you do for a million dollars. At some point we reach a point where we say "No I wouldn’t do that!" Sure money is very important to people, it makes the world go round. But money is only the symbol of the transfer of energy. Energy can take many other forms.

The Hygiene Factor
Frederick Herzberg, a psychologist who went on to become a noted management consultant coined the term Hygiene factors with regards to explaining employee motivation. These are the factors when absent have a huge de-motivating effect on employees. However, if in abundance they have no real long-term positive effect on satisfaction.
    
Hygiene factors include:

    

On the other side of the coin is the motivation factors. These are the delivery of elements that appeal to peoples innate rational self-interest. As opposed to hygiene factors they have a long-term positive effect on employee motivation. If they are missing, they have little effect on dissatisfaction.

Motivation factors include:        

If you were to pay unhappy people more what will you get? A richer, unhappy employee. This doesn’t mean you should pay peanuts. As previously stated it is a hygiene factor and the absence of which, or if the pay is no longer commensurate then hey employee performance is likely to deteriorate if left unchecked.

I have been involved in property development for many years, and there I cut my teeth as an entrepreneur so to speak. In the property game when doing a renovation one has to be very careful not over-capitalize. If you do the highest end-plumbing job, the buyer’s just don’t care. They can’t see it. They just expect plumbing to be there. They want floorboards and granite bench tops. Now even then it depends on which niche market you are selling (there is no accounting for taste).

Similarly when it comes to motivating employees, this is exactly what companies do. They over capitalize on benefits, which just don’t matter.

But you have a gym, and pretty coloured offices, and all of these employee discounts. All of which are nice but don’t really make the employees any happier.

Most of you are spending way to much in these areas in an attempt to garner more goodwill and productivity from your people. The point of diminishing returns will be very quickly reached.

Now don’t go screaming down the halls, especially if you supply these benefits. I don’t mean to be inflammatory, however the bulk of the money being spent in these areas is not yielding results.  If you were to focus on the core leverage areas on a collaborative level with the business, the value received would far out way the investment. The challenge here is to think creatively.
    
Alternative rewards
    

   
Focus on Leadership.
Remember the number one reason cited for employees leaving organizations is they didn't like their boss. Once you have the basics in place focus on the leadership, right down to the front line.

The best ROI from all your efforts are from your efforts to grow and develop leaders with in the company.

What are your doing to cultivate leadership within your business?

The values of your organisation and those of you leaders will determine the productivity and loyalty of your employees. If you have a great boss, having opportunities to learn and grow professionally and are being paid properly with appropriate conditions, why would you leave?


7 Ways to Show Appreciation to Staff

Think of staff as EVERYONE who contributes to the bottom line!

(C) Daniel Lock 2008. All rights reserved.