Motivation and Money

motivation2Most of us know the feeling of having to strengthening our resolve to do something that we dread. As a student, it may be completing homework that holds no interest to us, attending a class that lulls us to sleep no matter how much caffeine we consume, or spending the evening with an unwanted guest. As adults, the sources of dread many times only expands. The workplace holds its share of dreads, including work assignments, interaction with the boss, or team meetings with no real purpose other than to waste time and inflate egos. While it is easy to point to motivation when recognizing desirable outcomes, it also plays a role in helping us overcome the undesirable moments that we have to push forward if we want to be successful.

Given this duel importance, you would think that motivation skills would top the arsenal of things that a typical manager or leader has access to and utilizes. Nevertheless, most experiences point to an awareness of the importance of motivation, yet a lack of skills and application. Moreover, most of us believe that the best method of motivating someone is money. In other words, we assume that monetary rewards will help us influence individuals to exhibit the behaviors that we desire.

Increasingly, research is finding that money may afford some short term change in behavior, but the most may be greater than we think. So, let’s talk a little about motivation.

What is it? According to Deckers (2010), motivation encompasses the process whereby a person is moved to take action. The process begins with an unfulfilled need that creates a sense of tension that leads to drive. The drive results in behavior to reduce the tension from the need. As most of us know, incentives are key to accomplishing the desired outcome since the two become directly linked together.

What are the sources? The sources of motivation arise from internal (intrinsic) and external (extrinsic) factors. Some of the internal sources include evolutionary prompts, psychological states, emotional cues, self-esteem, and relative experience. External sources typically involve incentives and goals. For those of us that lead, if we could unlock the formula to motivate people, we would do that. However, research demonstrates that individual response to internal and external factors vary, considerably. While some may be motivated by money, others might desire recognition of their peers, personal satisfaction, autonomy, or emotional validation.

Most of as leaders look to money as a motivator since it is easier to understand than more internal factors to influence behavior. Although ease of application should surely play a role in managing motivation, outcome should be just as, if not more important. As Frederick Herzberg made clear, how we feel about our work has more to do with outcomes that how we are rewarded. In other words, most of us can be “bought” to do work we do not want to do for a period of time, but it is unlikely we be exceptional at someone we hate for the long term, regardless of the rewards.

Research repeatedly demonstrates that money assists with attracting and retaining people, but loses it impact very quickly at influencing their behavior. Recent work by David Rock and Jeffry Schwartz found that autonomy, status, fairness, and relatedness pay larger roles in successful motivation. A 2012 study by Galaxy Research found that only 22 percent of employees were motivated by money and bonuses, while 26 percent gained motivation from peer support and interaction and 22 percent from challenging duties or learning new things. One of the most comprehensive examinations of pay and motivation was conducted by Tim Judge reviewing 120 years of research to synthesize the findings from 92 quantitative studies that combined data from over 15,000 individuals and 115 correlation coefficients. The combined result found that pay and satisfaction possess a very weak correlation, approximately .14.

So, what happens when we focus on extrinsic rewards besides not always receiving the outcome we desire? A big bi-product can be reduced intrinsic motivation. Edward Deci found that regardless of the reward type, extrinsic rewards reduce intrinsic motivation and cumulative motivation. Specifically, he found that for every standard deviation increase in reward, intrinsic motivation for interesting tasks decreased by approximately 25 percent. When the employee knows the actual value of the potential reward, intrinsic motivation decreases by about 36 percent.

What does this mean? Basically, monetary reward is one method of influencing behavior, but there are hidden costs. In addition, the benefit to the organization can be much greater when we address those more intrinsic factors that require us to understand those that work for us.

This entry was posted in Performance, Workforce and tagged , , , , . Bookmark the permalink.