Money is a motivator… but not how you think

Now, there is little denying that as an industry recruitment is seen to be largely motivated by money. That is why our recent post Recruitment needs to move beyond carrots and sticks stirred up quite a bit of conversation both among our own consultants and within our wider network.

A recruitment consultancy suggesting that money isn’t a motivator in the workplace…what’s that all about?

Let us be clear, money matters and money is a motivator…but not necessarily in the way that you think.

Firstly, science tells us that money can act as a positive motivator for more routine, algorithmic tasks where there is an established process to follow down a single path. However, once the task gets more complicated and requires greater degrees of creativity and problem solving, a carrot and stick approach can encourage wrong or even immoral behaviours, as well as a decline in performance.

At Head Resourcing our focus is in IT and business change, where roles that we discuss with our candidates can be highly complex, and it goes without saying that skilled people are required to do the jobs. It is still the case where if employers don’t pay enough, or if the pay is not adequate compared to others doing similar work, then it will distract them from the work at hand and people won’t be motivated. However, once a threshold is met, it takes the issue of money, pensions, other benefits etc. off the table, so an individual can focus on doing what they are there to do. Once this happens, the real intrinsic rewards come from the job itself.

It is important to note that this ‘money satisfaction check’ is not a one-off event. J. Stacey Adam’s Equity Theory articulates something that all recruitment consultants and hiring managers know only too well.

Employees are constantly assessing their personal rewards vis-à-vis their personal inputs with the rewards of others in relation to their inputs to ensure equity.

If there is a perceived inequity the employee will look to remedy the situation by:

•  Changing  their inputs – reducing their effort (e.g. refusing to staying beyond their contracted hours)
•  Change the rewards received – requesting a raise
•  Change the comparison points – beyond just base salary
•  Change their situation – look for a new job

While money is a part of it, as we say here, the problem itself isn’t money. The problem is that too many businesses and business leaders cannot move beyond the simplistic idea that motivation = payment. To be able to tap into the amazing rewards that intrinsic motivation can bring we need to add meaning, creation, challenge, ownership, identity and pride, to name but a few, into the equation.

When we focus our effort here we change the comparison points so that it becomes about so much more than money. This is one of the main reasons that many candidates will not move to another company even for a significant salary increase.

The good news for businesses is that this approach is also the cheapest option in the long term, but it does require time, effort and energy invested into your people and their work. If you are not willing to make this long term investment then you are likely to face short-term pain.

Don’t let money be the motivator for people leaving your organisation.