Article - Inspiring People Beyond Financial Rewards

Project Description

TTM associates Article

David Rowlands
David is a senior human resources manager with extensive experience in personnel and training over a twenty five year period.

Inspiration Generates Motivation

In this article we aim to discuss motivation, how it fits into an organisation and to explore a selection of non-financial ways of achieving it including inspirational leadership.

Every organisation, as a basic goal, intends not only to stay in business but also to make and maximise profit.
It’s also still largely true to say that an organisation’s greatest asset is its people and no organization is greater than the people who run it. The inescapable truth is that every organisation is, to a large extent, in the people business and must spend time carefully hiring, training, and managing people in order to deliver its product or service and remain competitive.
So, if people are the driver of your success, to be an effective leader, you must attend to your people, make the most of them and inspire them.
So how are people motivated? Is there one definitive way to motivate everyone? Can motivation be quantified in a useful way? Can it be measured?

Well, motivation is complex. It is not something which is obviously externalised. As a result it is therefore very difficult to test, predict or affect in a controlled way. After all, no-one remains consistently motivated about everything all the time. Motivation is highly personal and it fluctuates. Nonetheless, nowadays we know much more about what motivates people than ever before.

In order to comprehend how our understanding of the psychology of motivation has developed and to appreciate how much work most organisations still need to undertake to properly inspire and motivate their staff, we shall first take a brief look at some of the major milestones that have lead from an initial ignorance about employee motivation to today’s richer and more functional realisation of the nature of motivation.

Some History

Starting in 1911, we encounter one of the earliest motivational theories – “Taylor’s Motivational Theory” which simply states that people work purely for money. Remember that this theory, like so many, is specific to its time. During this era, which involved a great deal of manual labour in (relatively) low-tech factories, the people whom Frederick Taylor observed and drew his theory from, were predominantly occupied with basic, repetitive tasks involving little cognitive effort.
The resulting approach of paying workers based upon results was good for the business. The output was increased but little opportunity, time or encouragement was available for employees to think for themselves which of course, limited people’s development and usefulness to the company.

maslows hierarchy of needs

A few decades later, the famous Abraham Maslow proposes the “Hierarchy of Needs” in his 1943 paper, “A Theory Of Human Motivation”; the premise being that we all have the same, hierarchical set of human needs, some being the most basic and therefore the most urgent.

The second most fundamental of these is the notion of safety, including security of employment.

However, many of the more developed, abstract needs are also directly affected by a person’s perception of their job.

In 1950, Henry A. Landsberger coined the term “The Hawthorne Effect” after studying workers in a factory of the same name.

This effect is also known as the ‘Observer Effect’ for good reason because monthly_article_inspiring_observer_effectan increase in productivity was noticed in workers while – in fact, because – they were being observed. The important learning from this, although not fully realised at the time, is that people are motivated if they feel they are appreciated or that an interest is taken in the job they do.

A few years later, and within only a few years of each other, both Frederick Herzberg and David McClelland developed separate theories posturing explanations about employee motivation.
Herzberg’s “Two Factor Theory” (1959) extended Maslow’s earlier work by finally asking the question, “What really motivates someone?” and he found that there are certain factors (called “Motivator factors”) in the workplace that motivate people, while there are also separate factors which can cause dissatisfaction (“Hygiene factors”).

hygiene motivational factors

The idea is that “hygiene” factors don’t motivate, but if they are absent from the workplace, they will likely lower motivation. Such factors are broad and varied but viewed today as being the basics of most employment packages, for example clean toilets, comfortable furniture or job security and a satisfactory level of pay.
“Motivational” factors however, do not necessarily lower motivation in their absence but they could increase motivation if applied correctly. These factors might be recognition and appreciation for work performed, likelihood of promotion or even the work itself which is involved in the job.
McClelland based his theory on Herzberg’s work and his theory of motivation identified three motivators which he believed we all learn as we grow and develop: a need for achievement, a need for affiliation, and a need for power.
Everyone has a dominant motivator (dependent largely on our culture and life experiences) and each person will have different characteristics depending on their dominant motivator.
McClelland’s theory helps to identify the dominant motivators of, for example, the people in your team at work. This information can then be used to influence how their goals are set, how to provide feedback to them and how to better design jobs around team members.

Where Are We Today?

As the timeline above progresses and the theories develop, we can see that financial rewards are only the tip of the iceberg. So what are the commonly accepted models and approaches of today?
As Dan Pink explains in his talk at the RSA, financial rewards have their place but once money is no longer an issue, the following three factors become key to developing employee motivation:

hygeine motivational factors
  • Autonomy – the need for an employee to feel self-directed. Self-direction is one of the foundations from which genuine employee engagement can be built – which can be far more productive than mere compliance.
  • Mastery – the desire to get better at doing something and the satisfaction and enjoyment that arises from self-improvement and from overcoming a challenge.
  • Purpose – the urge to feel that we are somehow relevant and “making a difference” through our work.

In fact larger rewards often do not translate directly into increased motivation and stronger performance and as a recent article by Harvard Business Schools hows, we must be extremely careful in how we design and implement incentive schemes within the organisation as they can easily backfire for the following interesting reasons:

  • Employees end-up ‘gaming’ the program. For example calling in sick to avoid losing points because they were originally going to arrive late for work.
  • Although performance may initially improve at the start of the program, old undesirable patterns of behaviour (typical of demotivated individuals) return towards the end or directly after the end of the program.
  • Highly motivated, productive employees can lose motivation or feel unappreciated if the incentive they are offered only rewards those employees who are less motivated than them and less productive and who subsequently change their behaviour. Essentially, this appears like others are being rewarded for fulfilling a basic job expectation.
  • As a result, having top performers being demotivated and less productive can cause a bigger loss of productivity than the marginal increase from a few lower performers will compensate for.
  • Let’s not forget that some programs, such as ‘employee of the month’ may provide recognition but the way they do it produces one winner and defaults all other staff into the position of ‘loser’ which can split teams and create an ‘us and them’ situation.

Are We Using This Knowledge?

Today’s business environment is tough. Competition has never been fiercer and budgets remain cautiously tight. Organizations face the ongoing challenge of dealing with an apparently global drop in employee motivation and are struggling to retain talented people amid layoffs that unavoidably damage morale.
In fact, top performers are often the first to leave for greener pastures and they take their motivation with them.
Despite this, organisations are cutting their financial incentive schemes but not replacing them with new ways of inspiring and rewarding their talent. Doesn’t this seem like there has been little real change from the days of Frederick Taylor’s motivational theory?

Considering the scarcity of cash at the moment, the circumstances would seem ideal for organisations to begin making use of cost-effective, nonfinancial motivators.
However, organisations may be hesitant to challenge the traditional managerial wisdom which states that ‘money talks’. They may also find that nonfinancial approaches to motivation take more time and commitment from senior managers, in order to successfully implement.
Nonetheless, some organisations are transitioning gradually and this can be done using simple approaches which satisfy the key motivational factors discovered over half a century ago and which have since been developed as illustrated above.
Examples of non-financial motivators, which furthermore are also inexpensive to implement are:

  • Providing praise and recommendation from an employee’s immediate manager
  • Providing employee’s with (positive) attention from leaders
  • Providing employee’s with opportunities to lead (for example, projects or task forces)

Inspiring Behaviours

And this is also where the notion of ‘inspiring people’ comes in to play.  As a leader, it is your job to translate your skills and experience into valid, external behaviours which will support and inspire your employees.  Such actions shouldn’t only be direct, discrete individual engagements; they should also include ongoing, pervasive elements, i.e. your “leadership style”, as below.

  • Be realistic – have a clear goal with a sensible approach to achieve it. Your team needs confidence in your plans in order to become inspired.
  • Be positive and build on what’s working rather than dwelling on negatives.
  • Be enthusiastic about contributions and hard work from team members.
  • Develop a culture of ownership and autonomy to empower your team.
  • Encourage people to achieve and recognise and reward achievements.
  • Communicate clearly and regularly with employees (not just at milestones) and ensure mutual consent when setting tasks and performance metrics.
  • Be the example that you want your team to follow. Set a positive, strong example and others will be inspired to follow – and will better understand how.

The list can continue indefinitely but the message is clear: financial rewards, these days are only one way to motivate and engage people. Leaders must leverage a combination of factors including non-financial rewards, many of which emerge directly from the inspirational nature of their own behavioural leadership.

 

References

  • “How to Demotivate Your Best Employees”, Dina Gerdeman, Harvard Business School (2013) [Link]
  • “Motivating People: Getting Beyond Money”, Martin Dewhurst & Matthew Guthridge & Elizabeth Mohr, McKinsey & Company (2009) [Link]
  • “How Google Motivates Their Employees With Rewards and Perks”, Joshua Cook, thinkingleaders.com (2012) [Link]
  • “10 Ways to Inspire Your Team”, Michelle LaBrosse, projectsmart.co.uk (2008) [Link]
  • “The Surprising Truth About What Motivates Us”, Dan Pink, RSA (2010) [Link]

 

Read more about employee motivation and inspiration and learn how TTM associates is helping organisations to genuinely inspire their employees using non-financial strategies.