Vistage Research Center

Get actionable, data-driven insights and expert perspectives from our global community of CEOs and thought leaders. Led by Joe Galvin, Chief Research Officer

It’s Not All About the Money: 3 Ways to Motivate Employees

It’s Not All About the Money: 3 Ways to Motivate Employees

Have you noticed how oftentimes, managers believe that money is the best way to motivate their employees? They assume a well-paid employee will be a productive employee. But, in fact, evidence points to money being among the worst motivators. The Harvard Business Review recently reviewed the existing research on the subject and determined that “there is little evidence to show that money motivates us, and a great deal of evidence to suggest that it actually demotivates us.”

It’s Not All About the Money: 3 Ways to Motivate EmployeesSpecifically, the HBR cited the study by Tim Judge and his colleagues in which it was found that there is a less than 2% correlation between pay and job satisfaction. Additionally, Gallup’s 2013 State of the American Workplace study found that only 30% of the American workforce is motivated, and there is no significant difference in engagement between pay levels.

So how can you motivate your employees? The answer lies in the difference between intrinsic and extrinsic motivations.

Employees who work because they love their job (intrinsic motivation) are three times as engaged as employees who work for money or rewards (extrinsic motivations). So rather than focusing only on pay raises and bonuses, managers should work to develop their employees’ connection to and satisfaction with their work.  Here are 3 ways to motivate employees:

Foster a Supportive Work Environment

Employees are more likely to be motivated if you provide them with a workplace culture that supports their efforts. As a leader in your business, this positive environment starts with you. 67% of employees are “very motivated” or “extremely motivated” by receiving praise and commendation from their immediate manager. Additionally, 63% are very motivated by receiving attention from their leaders.

This supportive environment can also be fostered through small, close-knit teams. The aforementioned Gallup study found that smaller teams (five to nine employees) had higher levels of engagement than teams of 10 or more. Smaller teams allow each employee to have a voice and a role within the group, and employees are more likely to feel like their work is validated.

Allow For Growth and Flexibility

Employees are also more likely to be engaged if they feel like they have room to grow. This growth doesn’t have to be directly tied to financial benefits; employees often just want the opportunity to develop as workers and as people. According to the aforementioned engagement study, 62% of employees are very motivated by the prospect of leading projects or task forces.

Another way to allow employees to develop is to give them the flexibility to work when and where they want. The aforementioned Gallup study found that employees are more engaged when they are given the chance to work from home or a place of their choosing.  However, this doesn’t mean that all employees should work remotely all the time. The study found that employees who work remotely only part of the time (less than 20%) were the most engaged (35%), perhaps because they get both the flexibility of remote work and the camaraderie of office work.

Make Work into a Game

Gamification, the business practice of using game mechanics to boost user engagement, has proven very successful to inspiring employee engagement. A recent Forbes article describes how the consulting agency Deloitte was struggling to encourage their employees to complete a leadership training course. So, they implemented a series of game elements, including badges and status symbols. Afterwards, certification time was reduced by 50 percent.

So how can you turn your employees’ work into a game?

One way is to track each employee’s profitability over time. First track employee time for each project and the costs of each project, and then you can determine per-employee profitability. Each quarter your employees can compete against their own former productivity score. Much like a runner trying to beat her previous time, your employees will be more engaged in their work and more motivated to improve their productivity.

The motivation of your workforce is directly tied to the success of your company. And so instead of relying on salaries and bonuses to drive employee engagement, make sure your company is a place where your employees actually want to work.

Your employees and your business will thank you for it.


Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *

Predefined Skins

Primary Color

Background Color

Example Patterns

demo demo demo demo demo demo demo demo demo demo

Privacy Policy Settings

  • Required Cookies
  • Performance Cookies
  • Functional Cookies
  • Advertising Cookies
These cookies are essential in order to enable you to move around the Sites and use its features, such as accessing secure areas of the Sites and using Vistage’s Services. Since these cookies are essential to operate Vistage’s Sites and Services, there is no option to opt out of these cookies.
These cookies collect information about how visitors our Sites, for instance which pages visitors go to most often. These cookies don’t collect information that identifies a visitor. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.

Cookies used

Visual Web Optimizer
These cookies remember information you have entered or choices you make (e.g. as your username, language, or your region), and provide enhanced, more personal features. They may also be used to provide services you have asked for such as watching a video or commenting on a blog. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.

Cookies used

Google Analytics
Gravity Forms
These cookies are used to make advertising more relevant to you and your interests. The cookies are usually placed by third party advertising networks. They remember the websites you visit and that information is shared with other parties such as advertisers. If you do not allow these cookies, you will experience less targeted advertising.