Money Doesn’t Motivate

If you pay employees more money, will they do what you want? According to Drive author Daniel Pink, the answer is, “no.” In fact, he suggests that “a larger reward [money] leads to poorer performance.” In this video, Pink explores “The Surprising Truth about What Motivates Us.”

If your responsibilities include leading and motivating people, formally or informally, you can’t afford NOT to watch this video. It covers some crucial contrary-to-popular-belief ideas on how to motivate employees and get maximum contribution from each person. This is a key function of my role at Mudd Advertising and this video has shaped and driven my entire approach in motivating people to do what this company needs them to do.

There are two points in particular that should mold your approach:

  1. At about 1:50 Pink says, “As long as the task involved used only mechanical skills, bonuses worked as expected. Once the task called for even rudimentary cognitive skills, a larger reward led to poorer performance.” By about 4:50, you’ll see Pink suggests that if a task requires problem-solving, creative thinking or conceptual ideas, increased compensation as a motivation simply doesn’t work. Nearly all the work we need from our teams in a service-industry require that exact type of thinking. So how will we motivate them if money doesn’t do it?
  2. Starting at about 5:05, he starts discussing three factors that lead to better performance: Autonomy, Mastery and Purpose. This point should significantly influence the way you structure and set expectations for your team. Pink provides examples of companies who have implemented these strategies and seen significant success. How are you creating opportunities for your employees to direct themselves, get better at something or have a purpose?

The things we’ve executed at Mudd after understanding Pink’s method range from very basic steps, like creating job descriptions, to much more advanced decisions like analyzing structure of every single team. By reviewing and updating job descriptions for every single position within the company, we ensured two things. First that we are asking each person to do things that contribute to our ultimate goals, and secondly that each person understands his or her position’s expectations in relation to company goals.

From there we’ve started discussing a more honest review process. We use a tool called Threads that allows us to review each person based on their contribution to company values (loyalty, teamwork, etc.) as well as position goals (driving revenue, managing workflow, etc.). Although we’ve had this tool in place for some time, I’m not convinced that every manager has been using it to its potential. We’ve set up additional training on how to use Threads, but also how to honestly evaluate each person’s contribution. According to Pink, everyone wants to do well in their job, and unless we are honest about how well they’re doing today, they’ll never know how to reach that goal. That alone has gone a long way in motivating people to do what we want them to do.

We’re also working on clearly communicating how people can achieve the autonomy, mastery and purpose that this video (and our experience) says they desire. We, of course, need to create those opportunities, but we’re simultaneously making it clear to people what we expect them to do. For example, rather than vaguely talking about future opportunities, we blatantly tell people we expect them to explore a given topic and then create and execute a plan based on that exploration. We make it clear that it is now in their hands and that we expect them to get it done. Over time, we have to give this direction less and less; each employee learns that this is what’s expected of them every day and they do it on their own.

Pink provides a critical method to help you get what you want out of today’s (and tomorrow’s) workforce. It’s no longer realistic to think your team will do you what you want them to just because you “said so.” Sure, there are employees here and everywhere that might respect your authority “as the boss” and do what you say. But to truly get them invested in their job – and more importantly, in your company – you have to do much more.

People who are paid enough not to care about money and people who feel they can influence your company’s future are more than just “employees.” They’re a much more effective part of your team and will ultimately drive your company to its goals.

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