Paying extra cash to motivate employees says: ‘I am not paid enough in the first place’

March 6th, 2018
Paul Gadie PhD by Paul Gadie PhD


You may be familiar with Daniel Pink and his work on business, management and the changing face of the workplace. In his best-selling book, Drive: the surprising truth about what motivates us, (2009), he focussed on three intrinsic elements to motivation at work: autonomy, mastery and purpose.


Cash as a motivator doesn’t work

For Pink, research on motivation suggests that, for jobs involving more than the most basic intellectual challenge, offering a financial reward to boost motivation does not work. Indeed, trying to use cash as motivation for your problem-solvers can lead to poorer performance. For him, this is one of the most replicated yet ignored research outcomes of the last forty years.

This research[1] continually proves that giving someone money works only when rewarding simple, routine left-brain work. Cash is useful to motivate people involved in this level of work and only this level. But what about everyone else?


Motivation for your problem-solvers and your movers and shakers

Employees involved in problem-solving, in right-brain work, do not respond to cash as a motivator because it does not engage them. Why is this? Once employees understood that they were receiving a fair salary/wage, they became motivated by other, intrinsic elements – such as autonomy, mastery and purpose. (Pink’s book goes on to explore these three intrinsic motivators.)


Think beyond cash to motivate and engage

Too often I hear HR people saying: ‘Cash is King’; or: ‘They [employees] only want money!’ But if you want to motivate and to engage employees who are your problem-solvers and your movers and shakers you need to think beyond CASH.

This bears repeating: once employees feel they are paid fairly, they are not looking for more MONEY. If you give them more money as a form of motivation – as a means to engage them, it won’t work. This approach is interpreted by employees as an admission that: WE ARE NOT PAYING YOU ENOUGH IN THE FIRST PLACE. Offering money once again becomes a demotivating factor. Again, this is not new information: it has been replicated across many research projects. When it comes to motivation, cash is NOT king for all employees.


How can we apply this lesson in the workplace?

What is my take on this? If you want to motivate employees do not give cash, or the closest alternative to cash – pre-paid credit cards or multistore vouchers. Motivation at work is delivered via real (tangible) actions from peers, from their managers and from the company.

Treat people like people and give real recognition to motivate and engage your employees.


When giving recognition remember: people like gifts

To enhance your recognition, you can offer all employees real gifts rather than cash. Choosing gifts that recognise the workforce for milestone events or to acknowledge work success, becomes a lasting experience, shared with family members. The gifts are abiding reminders of a company’s recognition. What’s more, their motivational effect is long-term – cash or vouchers are gone in the blink of an eye with little or no real benefit to the recipient.


The Takeaway

Cash as a motivator has its place. However, for most employees, a more complex structure of recognition will offer real benefits in terms of employee motivation and engagement. The company that recognises the need for real recognition has already set out to motivate its workforce and reap the benefits. These include deeper engagement and motivation, decreased staff turnover– and recognition of you for building a great, workplace culture where recognition is king, not cash.


[1] For example Forbes, J.B., and D.R. Domm. 2014. Creativity and productivity: Resolving the conflict. SAM Advanced Management Journal 69 (2):4-27.

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