Employee Compensation Part Two: Is Salary the Real Motivator?
And so it begins—the debate over whether or not salary is the real motivator for employees. In Part Two, we argue that other factors, not salary, are the key to keeping your employees engaged and motivated. Stay tuned for part three, coming next week, where we argue the opposite.
I read an interesting Forbes magazine article stating that most successful entrepreneurs say that their primary motivation has been to build something lasting, not to make a lot of money. Research shows that when money is the primary motivator, it typically feeds self-serving, short term results; none of which a business owner wants their employees to display.
I will use a popular memoir/movie as an example to make my point. Have you ever seen or read "The Wolf of Wall Street"? What happens in the story is a perfect example of what can happen when money is your sole motivator.
Jordan Belfort started a company based on fraud, corruption, and scamming. Granted, most people motivated by money do not engage in this type of activity, but for the sake of my argument just hear me out. Belfort and his employees were swimming in money, they had so much money they had no clue what to do with it all—and making more was their only focus in life. Suffice it to say, the business had a very quick run and ended in total disaster. There were no values, no real qualities to the company—its sole mission was profit by any means necessary.
As I stated before, when it comes down to it, most successful entrepreneurs are aiming for longevity; money is a just byproduct of their hard work.
When an employee is motivated by money only, it seems the value and quality of their work, as well as their loyalty, engagement and concern about the company's values and well-being gets lost. It becomes a "do my job, make the money, go home," type of situation, rather than putting all of his or her focus into truly growing with the company, collaborating with their coworkers, and feeling emotionally connected to the organization.
While money is a great way to attract and retain employees, research shows that the best way to motivate and engage your employees involves indirect compensation, other perks not associated with money. Recognition and praise of employees' accomplishments and daily tasks can elevate their self-worth and make them feel the work they are doing is contributing to and positively affecting the business' growth. Don't you want your employees to feel emotionally connected to your company's mission and values?
A few key motivators that influence behavior more effectively than money include:
- Autonomy-the perception he/she is executing their own decisions without much oversight
- Status-perceived status is important, and can be elevated through praise and recognition; a promotion is not the only way
- Emotional connections and sources of pride in what he/she does for the business
These motivators instill an emotional commitment that is never self-serving or short term and always energizing and engaging. When an employee loves what they do and feel as if they are making an imprint by doing it, oftentimes this has a bigger impact than making more money would.
In fact, Harvard Business Review explains that some have argued that financial rewards can have a tendency to drown out "intrinsic" goals, such as:
- Sheer curiosity
- Personally challenging oneself
Money certainly plays a role in motivation, just as lack of money plays a role in demotivation. The argument I'm trying to make is that there are other key factors that contribute greatly to job satisfaction—some that have a greater impact on the employee than a simple monetary reward would.
Keep an eye out next week for Part Three: "Salary is the Real Motivator."