A few people have left. Or I should say a few good people have left. Yes, the company has tried to stop them but well, when people decide to go it’s usually way too late.
The next station is realizing that people are gone. Well, they will still come to the office for a couple of weeks but they are gone. Gone. If you wanted to change their minds you should have worked with them a few months earlier.
And then there comes the idea that you should at least take care about those who are still here. When people leave, their colleagues start thinking about leaving too. That’s how it works.
So we come to the point where most of managers use tools they have to keep retention on reasonable level. Quite often they use the only tool they think they have, which is money. “That should keep them motivated for some time. And they won’t leave either.”
Yes, except it isn’t true.
As I think more about money and motivation I’m closer and closer to Dan Pink’s approach: pay enough to get the money off the table and then focus on things which really motivate people. By the way if you haven’t seen Dan Pink’s TED talk about the subject you really should do it now.
OK, so what kind of effects you should see when you throw more money at people? For some of them it would take the money problem off the table. Will it keep them in the company in the long run? I don’t know. You are either able to build creative, motivating work environment or you aren’t and raise won’t change anything in the long run.
For others money wasn’t the issue in the first place. They will happily accept raise, that’s for sure, but is it going to change their approach? Not so much.
Now you can point a number of examples when someone you know has changed jobs purely for money. I think they fall into the first group. The only difference is in their cases money was a major problem and not a minor one. Bigger salary doesn’t make them motivated – it just gets the problem off the table. It isn’t guarantee that they won’t eventually leave. If your organization suck they will. You can buy a few months but the outcome is going to be the same – they will be gone soon.
In short: if you have a big bag of money you can make people stop complaining about their salaries, but you won’t make highly motivated top performers out of them.
I know people who are leaving with no change in remuneration whatsoever. Heck, if you look for people who changed job and got lower salary in the new place I’m one of examples. And yes, I’d do it again. I’ve never left any organization (or project) for money, even though sometimes it was an issue.
If all you have is a hammer everything looks like a nail. If the only tool you have is money, every problem seems to be solvable with cash.
But then you see teams which don’t get any bonus money whatsoever and they’re motivated and those which spend days complaining about lack of bonus money. All in the same organization. They are even paid basically the same. I see two possible explanations: one supports argument above and the other includes words “black magic.”
If people go, you won’t change that if the only thing you can think of is throwing more money at them. Unless you’re paying peanuts, that is.
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19 comments… add one
Money… It is always about money people say. My good friend told me that only thinks that his favourite moment of a motivation is when he looks on his bank account and see his last salary. I agre with him, but I must to say that people are motivated by clear and simple rules when is no place to cheats, when what the manager promises is really true and you can expect that he keeps his promises. Worst moment is moment of negotiation when manager proposes a lower salary. I know that in lives you should be a shark if not another shark eats you. And in that opinion its always about money :).
Well, I don’t agree with this approach. Personally I never treated money negotiations as the crucial or the most important thing when discussing new job.
What more, I talked with a few people who got big bonus and their answers for the question whether it motivated them were “no, not really.”
When you see your salary on the account it makes you feel nice, but are you working better, trying harder after you get the salary? I mean, really?
I don’t know what managers you’ve met but I always try to get the money problem out of the table. It’s not always possible, but pretty often it is. I don’t want my people to start looking for another job the day after they join my team only because I pay them so little that it becomes a major issue. It is a lose-lose.
And if I as a manager am able to take the money problem out of the table it becomes mostly about what kind of work environment I can build. Is this comfortable enough? Does it keep people happy? If so, they don’t think about verifying whether grass on the other side of fence is greener.
There are certainly some people, who get their motivation purely based on money. Then again, they’re not the people you want to have on your team, do you?
I thought about it for a while and I’m not so sure. Yes, I know people who work purely for money and they hate their jobs, but first, none of them works in IT, and second, they usually chose that way because they couldn’t earn enough from their passions. Then they choose a well-paid job they don’t like to earn enough to pay for something which makes them happy.
Of course if you come to me and offer you double my salary even though the job won’t as cool as my current one you’re putting me in a difficult situation. Probably vast majority of people would go for bigger money. But as long as we don’t discuss golden handcuffs I’ll leave eventually and it would be rather sooner than later.
But of course you’re right – if someone works purely for money we probably don’t want them in the team anyway.
Hi Pawel
You probably want to check out this version of what Daniel is talking about as well
http://comment.rsablogs.org.uk/2010/04/08/rsa-animate-drive/
The animation really works well.
I knew it prior to Dan’s TED talk, but thanks for the link anyway. I highly recommend it to all readers who haven’t seen it yet as it covers more content than TED talk. And it is fun too.
Herzberg’s motivation theory comes to mind. Salary is in the Hygiene factors group meaning they are not motivating if they are present but they are demotivating if absent. I completely agree and to put it in different words: if someone’s salary is below a certain level of acceptance it’s demotivating but when you’re already significantly above that level, further increase does not motivate.
That’s the point. And I’m not sure if it has to be significantly above the level of acceptance. However it is often forgotten that the level of acceptance is changing over time. Pretty frequently if we talk about people just starting their professional careers.
I guess ‘significantly’ is for those who do it mainly for the money. BTW there are plenty jobs in IT that are impossible to love and people do them only for the money. Especially in the corporate world.
I agree there are plenty of jobs that it is impossible to love. But I don’t agree people do them only for money. I think most of people, especially in IT, like their jobs to some point. For vast majority it isn’t a dream job of course but how many people who have dream job do you know?
I know very few people who hate their jobs and do them purely for money. On the other hand I know plenty of people who aren’t fully satisfied with their jobs but they can’t say they hate it. Even more – it doesn’t require much effort from management to make those jobs likable.
It basically means there are some features which people like but there are also those which builds frustration. Usually it’s enough to add one to the former group or remove a couple from the latter and suddenly people like their jobs again.
Even if those jobs are in the corporate world.
I was once on an XP team in which many of the team members took pay cuts in order to join the team. Yet, over seven years the atrrition rate has been very low. No environment is perfect, and this one had it’s issues as well. But those people really wanted to work in a good XP team that cared greatly for good software craftsmanship.
Therefore, I think there are two degrees to which money is taken off the table. The first is when a company pays enough for the employees to live comfortably, but that level could be below market rates. The second is when a company pays above market rates. The closer you are to the 1st level, the more important are environmental factors.
Also remember the each individual is motivated differently. Some have a bigger range between those 2 levels than others.
Also note that part of a really rockin’ environemnt may be the ability to work with and learn from a really stellar, bright and joyful teammate. So it may be wise to totally take money off the table for this individual and to focus on making the environment ideally suitable to this worker that others are drawn to.
Andrew,
You’re right – the level at which money are taken off the table differs. It is a very individual factor. What more there are people who want to earn more than they are worth for the specific company. My point wasn’t to convince anyone that they should be paid what they want. If they aren’t worthy the money they just shouldn’t get it.
Eventually they would leave, that’s for sure, but I wouldn’t consider it as a problem. When someone isn’t worthy to get paid minimum they expect it’s a win-win situation when they leave. Probably both parties are happy in the long run.
I know situations can be very different. Also I know that many companies very much likes involved employees. But when someone tells me that loves work that has or I see someone that it is very involved. I know that it is nothing good.
I know that company likes that kind of employees. I know becouse I did the same. I always give what is needed. But sometimes after some time salary must be increased. Many domestic companies always waits for someone who will came and asked about increase salary. This person is in very poor position for negotiation. Many times conversation about salary gives a strange feels. And many people start understood that involved for a work it is very good for employer and not for theirs.
I know personally many people that try work harder becouse they want a salary increase. And I read sometimes opinions like your Paweł. So, if money did not motivate people why so many wants honors and awards and earn more?
My good friend told me. “Time is a money. Who loses your time seems your money.” Every kind methodologies is about decrease of the time and increase level of goodness. So maybe it is time for elaborate Increase Salary Methodology :).
And at last I disagree completly that money did not motivate people. Maybe young after studies with head full of dreams. Work is like a kind of business and every business should increase profits. So if someone was increases level of knowledge then should earn more. And if that did not motivate something is wrong.
Jacek,
Thanks for a comment. I agree with you in one point. I believe an employee shouldn’t be forced to ask for a raise before they get one. I believe it is manager’s role to take into consideration what a specific person gives the company and whether it is a time to increase salary or not. This is how I understand taking money problem off the table.
However I’d discuss with your other points.
First, involvement. I recently got a new role and although my remuneration hasn’t changed for a penny my engagement and enthusiasm skyrocketed. Does it depend on money? No, not at all. It’s not only me – I see this patter over and over again.
Think, would you be twice as engaged as you are now if the company offered you twice as big salary? OK, I know this dependency isn’t linear. So consider you get a raise. How long you are happy about it? How long the “I got a raise” effect lasts? Three months? In majority of cases I think not even that long. Then you’re back to normal commitment.
By the way, salary reduction works similarly. Few-month long hit on productivity and then everything is back to normal. But I digress…
Second, salary and skills. You say the salary should reflect one’s knowledge, skills and experience. Well, I’m not so sure. Salary is a part of the contract between employer and employee. If we talk about healthy relation between those two salary usually reflect how much employee is worth for the company. Now, increased knowledge or bigger experience doesn’t automatically mean the employee is worth more for the company. That’s basically the reason why different companies would pay you different salaries – your value for them would be judged differently.
Then, there is whole dynamics of the organization. New people join the company. They show how much they’re worth. People change their attitude for different reasons, company being unfair being not so rare. Value of specific person is fluctuating. It isn’t going up all the time. But well, you don’t get pay cut then. Unless there are some serious troubles that is.
Third, money as a motivator. This is something I give a lot of thought for a couple of years already. I saw exactly the same people working for the same base salaries in a couple of organizations: one being pretty unhealthy in terms of work environment but they did have bonus money (pretty significant) and the other being very nice place to work but no additional money whatsoever. Guess which one they liked more. Guess which one they changed for which. Note: they weren’t fooled about bonus money in the latter organization.
Then you have people who get huge raises. And you know what? They motivation doesn’t change for a bit. They’re working as well as they were. Sometimes the raise is a matter of keeping them in the company, but then we get back to taking money problem off the table. If someone earns less than they expect we don’t talk about motivation but about hygiene factor.
You’ve definitely seen people who aren’t happy with what they earn. That’s a blind shot but you seem to know the situation from your own experience. That’s exactly when hygiene factor kicks in. If I’m not happy with the money I get it affects my motivation in negative way. But that’s the only effect you can see. If my manager gets my money problem off the table my motivation is back to normal (whatever normal means in this case).
However there’s one trick here. Sometimes the company won’t be willing to pay the amount the employee wants to get. Then probably leaving the organization is the way to go. Usually it ends up as win-win. Be careful though, I’ve seen a number of people who decided it’s time to go but no one was willing to pay the salary they expected so they stayed. It seems these were more of a pumped ego issue than a salary problem.
Money can make me happy and help me buy more books but it cannot motivate. A company might pay more money for insignificant work because it suits their business interests but I will not get experience to sustain me in the industry in the long-term.
Great article – well written, and we’re on the same page about the subject! I linked it to Money Motivation Mythology on ADDandSoMuchMore ( #2 in the What Kind of World do You Want series) – along with a comment that you had Pink’s Ted Talk here.
I welcome links to related content on blogs of like-minded spirits, btw. I don’t always have time to “make the rounds” before I post, so if you write something related to what I’m writing (or wrote previously), feel free to leave a link in the comments section. I’ll approve it, even if Akismet marks it as spam (as soon as I have time to sift, that is). Eventually, when I have the time for blog housekeeping, I’ll put the link IN the article (not everyone reads the comments).
Madelyn Griffith-Haynie, SCAC, MCC – (blogging at ADDandSoMuchMore and on ADDerWorld – dot com!)
“It takes a village to transform a world!”
Hi
Its very interesting subject. Just wanted to know how money motivates the people.
Why people are after money so much?
Regards
Harshad
@Harshad – Money, at least for knowledge workers, doesn’t motivate people. If I offer you twice as much money for twice as much productivity or effectiveness would you be able to do achieve such goal? I mean given that you aren’t a total slacker at the moment.
People want more money because, well, that’s how it works – more money usually means we can afford on new things (and the more we have the more we want) and our life can be more comfortable (and who doesn’t want comfort). Thus we want more money.
Actually money can demotivate you. If you earn less than some sort of comfortable level you feel treated unfairly. The funny thing is that it’s more connected with your feelings than with you real value for an employer. It means that your employer might not want to give you a raise even if you show demotivated attitude (but that’s a different story).
In short: money can make you happier (in short and middle perspective, definitely not in the long run) but won’t make you more productive.
it is true people want to jobs of their dreams but the situation in most cases dictates what job to go for. I will give a lively example of a certain guy i know who finished a bachelors in information technology but as i talk now is a teacher. he could not go the job which took him at campus because in teaching they are giving him a lot of money.