Is money a motivator? Absolutely not!
I know many of you will disagree with that so let me explain.
It’s about what people need.
You may be familiar with Abraham Maslow’s Hierarchy of Needs. At the bottom of his hierarchy he lists basic survival needs; what he called physiological needs such as food, water, and shelter. As leaders we need to look beyond those very basic survival needs and understand that in reality, survival needs are an individual perception.
Each of your team members may have a different idea of what their basic needs are. A person with a large family will see their needs differently than someone who is single. None of these perceptions are right or wrong but they do drive an individual’s motivation to meet that perceived need.
That’s where money comes in. Money is the tool we use in our society to acquire what’s necessary to meet our own perceived survival need. Our motivation is to achieve our survival needs. Money is the tool we use to satisfy that motivation.
But, money can’t buy happiness, can it?
There have been multiple studies showing that more money doesn’t improve performance. Everyone seems to have an amount of income that satisfies their basic needs. Anything above that is certainly appreciated but the extra doesn’t drive better performance. In fact some studies have shown that at some point, the extra compensation can have the opposite effect.
Those perceived needs are a powerful motivator. If employees don’t make enough money to acquire those needs they will likely find some other way to get that money. That might mean working a second job or leaving the company.
However, higher pay is not always the way to keep a team member. An employee might leave the company and take another position that offers less pay because they like the leadership better or see better opportunities. Pay people what they are worth and treat them well.
Another use for money
Although money is not a motivator, it can be a valuable award. If the team has gone above and beyond resulting in success for the company, it is appropriate to share some of that success with the team. This award must be presented as leadership’s appreciation of the great work the team did. Avoid attempting to use money as an incentive to work harder.
If not money, then what?
If leaders can’t use money as a motivator, than how do they motivate team members? By creating a motivational environment.
• Make a genuine effort to understand each of your team members. What are their strengths? What are their weaknesses? Do they have personal goals that you can help them with?
• Ensure you have an inclusive team culture. That means ensuring everyone is given an equal chance to contribute and succeed.
• Make sure team members understand their importance to the team’s mission. Show them that you understand and appreciate their impact. (This doesn’t mean money)
• Challenge them to develop new skills and become more capable.
Leaders cannot buy motivation.