Many studies in the last decade show that employee motivation is based on a formula that combines financial and nonfinancial incentives.
From blog posts to lecture halls, there is a general consensus that compensation—salary, bonuses, benefits, stock options—needs to be competitive and satisfactory. Simply put: money pays the bills. If you don’t pay a fair, living wage, you risk losing your best people to a better-paying employer.
However, although almost everyone works for a paycheck, money is not the most effective driver of employee motivation; it’s not even the main one cited by employees in studies conducted. According to a McKinsey Quarterly survey, three nonfinancial motivators—praise from immediate managers, attention from company leaders, and a chance to lead projects or task forces—are no less or are even more effective drivers of work motivation than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options.
Teresa Amabile, professor and director of research at Harvard Business School, surveyed more than 200 companies and 12,000 employees on worker engagement for her book, The Progress Principle. She found that in more than eight out of 10 companies, workers did not feel as if they were making progress, which in turn creates a motivation problem. In a nutshell, according to Amabile, of all the things that can boost emotions, motivation, and perceptions during a workday, the single most important one is making progress in meaningful work.
If workers do not feel like they are making progress, they are unhappy and less motivated, which means less creative, less productive and less committed to their jobs.
In fact, statistics suggest that a lack of employee engagement is a multi-billion dollar problem. According to a 2013 Gallup study, actively disengaged employees are costing U.S. companies around $450 billion to $550 billion in lost productivity per year.
Why we do what we do
Lindsay McGregor and Neel Doshi, authors of Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation, surveyed over 20,000 workers worldwide, analyzed 50 major companies, conducted scores of experiments, and scoured academic research in several disciplines. They came to one conclusion: why people work determines how well they work.
If you ask your employees why they work, you will probably get as many answers as your company has types of employees. For some of them, working is about being part of something bigger than themselves. Others are seeking personal and professional fulfillment. Some love what they do, whereas they may have colleagues who love working with others. All of these reasons can be leveraged by organizations and their managers to motivate workers.
Based on McGregor and Doshi’s research, if we can understand why people work, we can understand what really motivates them, and implement initiatives that will foster workplace motivation and help employees to work better.
Types of Work Motivation
McGregor and Doshi’s work builds on the six main reasons people work, which first classified by University of Rochester professors Edward Deci and Richard Ryan: play, purpose, potential, emotional pressure, economic pressure, and inertia. The first three—play, purpose, and potential—are direct motives. The latter three—emotional pressure, economic pressure, and inertia—are indirect motives.
The indirect motives are types of work motivation that psychologists call extrinsic motivation, such as a higher salary or raise, more vacation days, a promotion, or a better office space or parking spot.
While extrinsic rewards can increase motivation and productivity, their effect is generally short lived. Employee satisfaction and productivity will increase after the reward is received but eventually the newness of the reward wears off and employees inevitably return to their prior level of productivity until a new extrinsic reward is handed out.
So better pay, bigger benefits, more status, higher commissions, while powerful motivators, they are not enough in today’s modern organizations.
In contrast, intrinsic motivation is the drive that comes from within an employee. It is a psychological reward that comes from an employee feeling satisfied with their work and proud of what they do. Examples of intrinsic rewards include the following:
Motivated employees are happy employees, which leads to greater productivity, happy customers and increased profitability. In fact, consulting firm Korn Ferry found that firms that engage and enable their employees post up to 4.5 times more revenue growth than companies that don’t. The opposite can be said about unmotivated employees, which result in high employee turnover and low productivity.
The perks of work motivation
So, how do companies—and employees—build a motivating work environment?
Managers play a key role in delving out nonfinancial or intrinsic motivation. In fact, they have direct control over one of the greatest motivational tools: their relationship with each employee.
But no manager works in a vacuum. They need tangible ways to motivate employees. They require a work environment and organizational culture that foster employee motivation and engagement.
From June 2015 – March 2017, Mental Health America (MHA) surveyed over 17,000 employees across 19 industries in the US. Overall, results from the Workplace Health Survey confirm that employees are motivated by an increased trust from management, more control over their work/schedules, and accessibility to job skills and responsibilities. The Workplace Health Survey findings show that non-financial perks are more important than financial compensation, can foster positive attitudes and perceptions, and increase employee engagement.
Across all 19 industries surveyed, the following ‘perks’ were associated with the healthiest workplaces:
- Flexible work arrangements / workday flexibility: by giving employees ways to structure their work schedule that leave room for personal demands and needs.
- Open door and relaxed work environment: by encouraging accessibility to management; two-way communication (feedback).
- Opportunities for professional growth: by providing training to enhance their company knowledge and employment skills; increasing responsibilities/duties; continuing education.
Technology solutions to motivate employees
Technology can give organizations the tools they need to foster motivation at every level. Whether it’s data analytics used by management to assess employee adherence to initiatives like an employee well-being program, or a platform that makes it possible for employees and managers to exchange feedback and ideas, no matter where they are on the organizational chart, technology can empower leadership, managers and employees to create a highly motivated workplace culture.
Here are seven technology-based motivation initiatives organizations can implement:
- 1) Mobile-optimized technology have a positive impact on productivity, enhancing more flexible work arrangements.
- 2) HR software can ensure employees get the feedback they need in real time. Instant feedback mechanisms can significantly improve engagement and motivation by consistently guiding employees in the right direction.
- 3) Cloud-based file sharing tools can keep track of who’s working on what and encourage collaboration among coworkers.
- 4) Managers and leaders can use data to identify employees that are key, positive influencers within an organization.
- 5) Platforms that give employees the ability to offer suggestions directly to management. Showing that your organization values employee input is yet another motivational tool.
- 6) Platforms for employees to share photos of significant moments and events can build comradery among coworkers and a sense of belonging.
- 7) Distribution of critical information to employees in a timely manner ensures all of your employees are on the same page.
Motivation in the workplace: it’s cultural
By taking tangible steps to give your employees good reasons to work, ensuring they feel like they are making progress doing meaningful work, your organization can build a strong corporate culture that increases employee motivation.
An organizational culture that fosters employee motivation will have a positive impact on employee productivity and business profitability. The motivation for companies to engage and motivate their people is simple: lower employee turnover and a better bottom line.