Does money actually motivate employees? Pizzas surely do.
Money has often been regarded as a motivator for employees, but does it actually motivate?
To explain this, it is better to start by talking about motivation.
Motivation, in simple words, is that drive or desire that one feels inside them. Motivation to accomplish or commit something.
When it comes to employees, motivation is what makes them work towards the goals of the company. But are the employees purely motivated by the salary (extrinsic) or do they feel that want to be a part of achieving the goals of the company (intrinsic)?
According to a recent study by Yoon Jik Cho and James Perry of 200,000 employees, intrinsic motivation is 3 times more effective than extrinsic motivation.
While well-funded startups are throwing money to get the best possible employees, the factors that lead up to these employees joining these startups are questionable. Are these employees joining for the extrinsic gifts in the form of money and stock options provided to them or is it because they believe in the vision of the company?
Daniel Kahneman and Angus Deaton reported in a research that in U.S, the emotional well-being increases with increasing salary levels up to $75,000, it’s a level field after that. In other words, if you make more than $75,000 dollars a year you are not any happier than if you make $10 million a year.
But what does?
These are some of the factors that can intrinsically motivate your employees:-
1. Learning and Development
2. A Clear Path of Progression
4. Autonomy and Responsibility
5. Work Environment
Hiring employees who look out for these factors rather than extrinsic gratification also tends to add more value to the company over the long term. These employees are often intrinsically motivated enough that they won’t be needing extrinsic motivators to push them forward towards working harder.
Some of the motivators that we feel have worked in favor are:-
Forcing the employees to be a better version of themselves. By giving them exposure to new skills, developing and honing these skills in them, we have seen them building motivation slowly in themselves to master these skills.
Entail a career path for all your employees making sure that growth is promised in it. Almost 58% of people moving to new organizations is to face new challenges which they did not think they would face if they stayed in their previous organizations. A career path filled with growth is sure to add motivation to an employee.
Recognition is important. It is something which if not offered rather than not adding any motivation, something which can actually demotivate the employee. Be sure to add those small praises, because those can often make an employee go out of the way to perform.
Extrinsic motivation, from research and from personal experiences has often been demotivating employees. It adds a negative pressure on them to perform so as to get that reward.
Ultimately trail and error methods should be used to find out what actually motivates your employees.
A Worldwide research actually found out that pizzas add more motivation to employees than extrinsic motivators like money.
Dan Ariely in his book “Payoff: The Hidden Logic That Shapes Our Motivations” talks about hidden motivators in everyday lives. When an experiment was conducted in 2 controlled groups, where one was promised pizzas and the other was promised cash rewards.
The group that was promised pizzas, increased its average productivity by 6.7% while the productivity of the second group fell by 13.6% in two days.
Motivation is a important factor. For a business owner himself and for all his employees. Overtime spreading motivation should be imbedded in the values of the company.