I touched money and motivation subject recently. Since the post generated quite a discussion it seems the subject is important for many. It also seems many people disagree with the opinion that money doesn’t really motivate which is nice since it gives me excuse to beat the dead horse again.

In short my points were:

• Money is more a hygiene factor than a motivator.

• When you pay less than some healthy level expected by people they start looking for a job.

• As long as you match people’s comfort level they get, or don’t get, motivated by non-monetary factors.

I received a number of counterarguments in comments, which I’ll try to address here. I’m aware I overstate bit here and there but that (hopefully) doesn’t change validity of arguments.

Money does motivate people (and go sell your crap somewhere else)

A nice thing about Dan Pink’s TED Talk is that he’s making a case. He brings arguments – studies made all over the world – to prove the point: money doesn’t seem to make people work better. Now, I haven’t looked very hard to find research studies which prove the opposite, but maybe you can redirect me to them. For now I consider it is 1:0 for Dan’s team.

I saw teams whose productivity increased significantly just after bonus money was promised. The problem is usually they were just tricking the system. They knew they could do the job in given time but it was better to slack at the beginning waiting for the magic wand of extra money to be used. Then everybody got at full speed to save the project. The only thing which surprises me is where the hell the management was and why nobody did anything about that sick situation?

I know lots of examples of people working their asses off because project required their extra effort. Usually they got a big bag of money at the end and everyone was happy. Does it mean money motivated them? Well, I think we’re messing the cause with the effect here. They didn’t start discussing with their managers how much they were going to get. They just gave more, because they thought it was a right thing to do (I know I totally oversimplify here, but we won’t discuss everyone’s individual drivers here, will we?) Then the effect usually was they got some extra money, which was of course completely fair.

And for the end, if money motivates people my question is: why they don’t get more and more motivated as they get more and more money? I gave quite a lot raises and huge piles of extra money in my career and my observation is it makes people happy. Happy, not motivated. They’re engaged as they were. They give a lot, as they did. But somehow they don’t seem to be motivated better.

Of course sometimes they consider the money they got as an insult and their motivation fall flat in its face but we’re talking about motivating, not de-motivating, here.

Companies (and villains running them) want to have engaged people but only to exploit them (that’s what villains do after all)

That’s true for some companies and some villains running them. But if that is your only experience with your employers please accept my humble condolences. There are toxic companies out there. There are normal companies with toxic managers as well which, from employee’s perspective, is no different. The world however isn’t inhabited with villains only. There are superheroes as well. If you’re sick of work among bad guys maybe it’s time to join Rebel Alliance, La Resistance or other good guys of your choice.

I know it’s easy to generalize basing on your own situation and experience (that’s what I do on the blog virtually all the time), but be sure to check what’s happening out there in other organizations, especially when your experience is limited to one or a couple of teams/companies.

Because of rapid development of IT industry we face deficit of good, experienced leaders and managers. It’s even truer in countries where the industry is even younger, like in Poland where I live. But still, that’s not a reason to dismiss the existence of healthy companies or decent managers.

People should earn amount they expect or they get frustrated (which is bad since frustration is such a nasty word)

Well, yes. Sort of. We come back to the discussion over a healthy level of salary. If I get paid above some expected minimum, which is a very individual thing, I could always use a raise but I don’t get frustrated about money. However if you asked me how much I wanted to earn my answer would be likely something more than I get. That’s how humans work – we always want more than we have.

And now that you asked me, yes, I do have a pitch to ground why I should earn more. But don’t be stressed, I’m not going anywhere only because my pitch doesn’t convince you. See? I’m not frustrated.

However I do agree that once we don’t get the amount we expect there’s always a risk that the other company would offer us more and then we’d be really incentivized to make a move. But I guess that’s the risk most of companies tend to accept. After all last time I checked running a business was about earning money and not spending everything just to pay people more.

Best moment of motivation is when you see the money on your bank account (let’s switch to weekly wages, shall we?)

OK, I admit, I don’t get this. At all. You mean once you see a bunch of money on your account you’ll be coding like crazy till the night? Would it be a better motivation to earn weekly wages than monthly salaries only because they’re um… more frequent?

It’s difficult for me to address this argument but I guess we define motivation differently. As industrial bloodsucker I consider motivation as something good not because the word sounds nice but because motivated people tend to produce better results when they work. Call it a better productivity, bigger involvement or whatever.

I understand people are happy when they see salary on their account but if we can build no connection with their work quality whatsoever let’s not call it motivation, OK? Of course feel free to correct me if I’m missing something here.

Over time people get more experienced so they should get raises (like levels in RPG games)

Um… no. Next please!

Well, actually that’s the tricky one. Once we get more experienced and more knowledgeable it’s a natural thing we tend to want more, thus expected raises. The problem is employment isn’t an RPG game and our contracts aren’t a leveling system.

Contract and salary represent a result of a kind of compromise. It’s about how much specific employee is worth for specific employer. It means that the same employee would be judged, and paid, differently depending on the hiring company. And yes, it does mean your salary depends on company’s clients, hiring strategy, specific managers you’ve been talking with, shape of the industry, organization’s career paths and a hundred of other factors which are completely independent on you.

Sometimes getting more experience and/or knowledge doesn’t make you more valuable for the company. So maybe it’s time to learn what makes one a more valuable person for the specific organization instead of waiting for a reward for seniority?

There are many jobs which can’t be loved which means people do them for money (after all love and money are the only motivators in the world)

True. There are many jobs which can’t be loved, especially in the corporate world. But that doesn’t mean people do them for money and for money only. If they hated virtually everything about their jobs they would be looking for new ones like crazy. Somehow vast majority of them do not. I assume it’s not that bad then.

We don’t get frustrated with our jobs in a second or after a single issue. Frustration grows over months, possibly years. Then yes, it is about a single problem or a single situation but it’s just the last straw.

Our happiness with our jobs is a complex thing. I could count multiple things I’m happy with and multiple of those I’m definitely not happy with. However the overall mark is pretty good so I’m not going anywhere and probably one new ugly thing isn’t changing this attitude.

I think it works pretty much the same with jobs which are considered as, well, not-so-nice. Corporate world is the one where conditions are usually less humane but then majority of corporations don’t deal with the risk of being extinct in a few months – something which is pretty common among startups. It’s of course only one of examples but the theme is similar in many cases. After all, when the company offers only jobs which are totally hated they’re going out of business soon as CEO won’t deliver all the projects single-handedly.

Now, I’ve shared my arguments a little less briefly but I’m sure I haven’t convinced everyone (that wasn’t the goal by the way). Let’s get the heated discussion started.