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Better Than Money: 3 Ways to Motivate Today’s Workers


Money might make the world go round, but does it motivate employees? Yes – and no.

Yes, because employees need to be paid reasonable salaries to motivate them to come to work each day. And yes again, because research (and our own experience) has shown that, for relatively simple, repetitive, short-term tasks, offering monetary rewards encourages people to work better, faster or smarter and increase productivity.

Offering financial rewards to influence results follows the traditional carrot and stick model – what author Daniel Pink calls “If…then” motivation. That is: “If I promise to pay you more, then you will be motivated to work harder or better.” But it’s also a model that is no longer effective for encouraging great performance in today’s high-tech, highly creative jobs, he says.

Pink is the best-selling author of Drive: The Surprising Truth About What Motivates Us. In the book and his lectures across the U.S., he explores what really motivates employees to achieve.

His conclusion: When tasks are simple and short-term, financial rewards are a great motivator. But for complex, long-term projects that require creative output and problem solving – more money is NOT a motivator. In fact, it can have a negative influence.

One example Pink gives is the research done by Professor Edward Deci at the University of Pennsylvania more than 40 years ago. In a series of studies of people solving puzzles and word problems,i Deci and his colleagues discovered that offering monetary rewards actually reduced the puzzle-solvers’ motivation. In contrast, the people who were not offered any monetary incentives were more interested in solving the puzzles and worked harder and longer on them.

More recently, a group of researchers from MIT, Carnegie Mellon and the University of Chicago produced similar results in the U.S. and India.ii Their findings: Very high monetary rewards in today’s workplace can actually decrease employee performance.

For Pink, the research confirms that “intrinsic motivation” – the motivation that comes from within each of us – is more powerful and longer lasting than monetary incentives. He believes that employers can encourage this type of self-motivation by focusing on three factors: Autonomy, Mastery and Purpose. 

Allow for autonomy

We are happiest when we’re self-directed, says Pink, as anyone watching children play and explore on their own can see. In the business world, he offers the example of a company that gave employees one day each week to “do their own thing” and independently pursue any work they liked. The result was a huge spike in performance and job satisfaction.

What can you do in your workplace to foster autonomy? Consider giving people more control over their work. Let them decide what to do and when to do it, Pink suggests.

Encourage mastery

Inside each of us is the desire to do things better, whether it’s perfecting a new golf swing or speaking a new language. We get additional motivation as we make progress and gain knowledge and skills. This sense of accomplishment and pride in our abilities feed our inner drive, says Pink.

What can you do to encourage mastery? Take a closer look at matching tasks and talent – aligning what people must do with what they can do well. Make sure tasks are challenging but achievable and include “stretch goals” that encourage growth and skill building. If tasks are too difficult, people will become discouraged. If tasks are too easy, they’ll get bored, Pink reminds us.

Instill a sense of purpose

This may be the most important factor for fostering intrinsic motivation, says Pink, because knowing that what you’re doing really matters can be so empowering.

People who are connected to something bigger than themselves and see meaning in their work often achieve remarkable things, he says. Steve Jobs, for example, aspired to “put a dent in the universe” – and that drove an astounding list of accomplishments.

When they care about the outcome, workers are also more likely to tackle complex, difficult problems and make the effort to meet ambitious goals. A clear sense of purpose can keep employees motivated when the going gets rough and the challenges seem insurmountable.

What can you do to instill a sense of purpose? As important as KPIs and metrics are, make sure you take the time to talk with employees about the “bigger picture” too: how the work that they do connects with what the company is trying to achieve and how it ultimately brings real benefits to real people.  

As employees respond less and less to financial-based incentives and conventional “carrot and stick” rewards, it’s time to find other ways to motivate the people who are so vital to your success. In today’s world of knowledge workers – where creativity, problem-solving and innovation are critically important – consider ways to foster the intrinsic motivation that ultimately drives all of us.


For a quick summary of Daniel Pink’s ideas on motivation, take a look at this video.

You may be interested in other Pink presentations such as:

Driving Employee Engagement

Drive: The Surprising Truth About What Motivates Us

iIntrinsic Motivation: Perspectives in Social Psychology, Edward L. Deci, Department of Psychology, University of Rochester, 1975 http://www.amazon.com/Intrinsic-Motivation-Perspectives-Social-Psychology/dp/1461344484

iiLarge Stakes and Big Mistakes; Dan Ariely, Uri Gneezy, George Loewenstein, and Nina Mazar; Federal Reserve Bank of Boston’s Research Center for Behavioral Economics and Decision‐Making, Pub No. 05‐11, July 2005 https://www.bostonfed.org/economic/wp/wp2005/wp0511.pdf


Reed Wellman

About Reed Wellman

Reed Wellman serves as Senior Vice President of Product Development at XTRAC. Prior to XTRAC, he was Vice President of Product Development within the webMethods BPM division at Software AG. In this role, he led the integration, process modeling, execution and monitoring, and analytics and reporting teams. Reed has managed multi-site (national and international) development teams, leveraging Agile methodologies to deliver highly-complex software solutions on time, within budget and with high quality. Full Bio