Interesting Post on why money is not the best motivator…
1. Industry Standard Salaries
Every so often, people look at the web sites that show the industry standard average salaries for their job. When you see that you are earning the average (or perhaps a little more), does this motivate you to work harder? The answer is probably not, but if you see that you are earning less than the average, this can be a real de-motivator.
2. Postponed or Cancelled Raises
Many employees scour their contract looking for the clause that indicates that they will get an annual pay review. If every year you get a raise then this is unlikely to motivate you when it arrives. However, on the odd occasion that the pay review does not provide a raise the motivation drops very quickly. This is especially the case when the biggest de-motivational force, fear, appears because the reason for the raise not being given is the under performance of the company.
3. Other Peoples’ Salaries
Usually companies are very secretive about the amounts that people are paid. Your salary is based upon experience, length of time at the company, skill sets, personality and the supply and demand for your skills at the time of employment. All of this can lead to serious discrepancies between peoples salaries. When two similar posts have different salaries, this de-motivates the person with the lower salary but has no real positive benefit for the higher-paid employee.
4. Salary Grades
To avoid the problems of item 3, some companies will use salary grades. This means that everyone with the same job gets paid roughly the same. Again, welcome de-motivation for the person who works doubly-hard with no return for their efforts.
5. Somebody Else’s Bonus
When bonuses are handed out to specific people in an organization; usually management or salespeople, does this motivate them to work harder? Probably not as they are generally working to a target and over-performing does not give any additional benefit. In fact, their over-performance could offset their next target and be a definite disadvantage. However, look to the people who feel they add as much to the business, if not more, and the bonuses of other people can soon kill their motivation.
6. Paid Overtime
Once in a while, paid overtime can be a good tool. It is a way for an employee to make a little extra and maybe buy that new TV they were hankering for. However, when paid overtime becomes a regular occurrence, it may as well be unpaid. The energy levels of people working too many hours drops, their concentration becomes poor, they make errors, lose contact with friends and family and become very unhappy. This really is not a motivational factor.
7. Performance Related Pay for Teams
There are many occasions where I have been involved in a project with a bonus to be given to the team on completion. This initially motivates people to work very hard indeed, usually hitting the same problems as with unpaid overtime. Once the bonuses are handed out though, the team may start to examine why they each received the same monetary amount when some worked harder than others and some ‘did not pull their weight’. This can soon destroy motivation. As another by-product, the quickly-produced results may well be at the expense of quality.