RSS Feed


More Articles: Latest Popular Archives

Money as a Motivator – why it’s intrinsically meaningless

Stuart Hearn

Modern psychology supports the increasingly widespread view that intrinsic human emotion and behaviour cannot be positively affected by monetary reward in any sustainable way. It’s a topic that The Beatles referenced as far back as 1964 in the song, Money Can’t Buy Me Love – and is something that can be extended to people motivation too. Contributor Stuart Hearn, CEO – Clear Review.

The notion of performance related pay is so deeply and long ingrained in business practice that in years gone by, few questioned whether this premise was actually delivering improved motivation and performance outcomes. More recently, however, research from leading motivation experts such as Dan Pink have rightly cast doubt on the perceived link between pay and performance.

Of course, from a workforce morale perspective, pay rises can be great, and they’re certainly an important part of overall employee reward and recognition. The trouble is that their effect is often short lived and has no beneficial impact on self-motivation.

To achieve self-driving, intrinsic motivation, Pink outlines three essential components that need to be present:

  • Autonomy – enabling employees to be in control of their own work by giving them the freedom to be creative.
  • Mastery – instilling employees with a desire to improve by ensuring their potential is limitless, and giving them the tools they need to hone their skills and continue learning.
  • Purpose – emphasising the importance of the employee’s role, ensuring they understand how they are contributing to the end objective. This will promote engagement and motivation via a feeling of inclusivity.

The Exception of Extrinsic
In contrast to intrinsic motivation, ‘extrinsic motivation occurs when we are motivated to perform a behaviour or engage in an activity to earn a reward or avoid punishment’.[1]  In this instance, employees are coerced into behaving in a specific way, not because they want to, but because they either want something in return (most often monetary reward), or because they want to avoid something unpleasant such as being reprimanded or losing their job.

Therefore, unlike intrinsic motivation, extrinsic motivation can actually be bought with monetary reward – and indeed, it can offer a short-term solution for organisations when the going gets tough and they need to give people a boost in order to get a job done. Organisational leaders should not be looking to this as anything but a necessary survival strategy however, and it should only be deployed when absolutely necessary. Why?

It is simply not sustainable and will eat into your hard-earned profits in the long term as HR teams have to keep doling out pay rises and bonuses in order to maintain the same level of performance. The key word there being ‘same’ – because employees will never be self-motivated to work harder or exceed upon immediate performance objectives in this scenario. Interestingly, there is even evidence to suggest that motivating people with reward can result in employees losing interest in their work over time because, ironically, their need for ongoing reward can cause their intrinsic motivation to wane.

Furthermore, HRs who now rightly steer away from reward-to-motivate strategies, have even cited instances whereby offering money for the completion of a task can render a person less likely to perform. For instance, if you offer to wash an elderly neighbour’s car as a good will gesture but they offer you £1 to do so, most of us would immediately feel that is insufficient reward for such a task, therefore diminishing the intrinsic motivation that was initially there.

Basic Satisfaction, Not Self-Motivation
Leading psychologist Fredrick Herzberg’s ‘Two-Factor Motivation Theory’ is another long-standing model that makes a lot of sense and further disassociates money from intrinsic motivation. According to Herzberg, employee satisfaction can be categorised by ‘hygiene’ factors and ‘motivation’ factors, with hygiene factors being pay, working conditions, relationships with colleagues, and core motivational factors being level of responsibility, interest in work, and recognition.

The model below shows that ‘pay’ is very much a hygiene factor and can therefore create employee dissatisfaction if employees go unpaid or experience a delay in receiving payment. The opposite of this is only basic satisfaction however, something that does not extend to the deliverance of any sort of self-motivation. Significantly though, pay can de-motivate the workforce if dissatisfaction relating to pay is present.

Separate to his ‘hygiene’ factors, Herzberg’s theory points to identified ‘Motivation’ factors as the only true motivators – the involvement, interest and autonomy elements that very much reconcile with Pink’s three-step model.

Self-Motivation: Why Money Is Meaningless
Money is important, there’s no doubting that. Employees have bills to pay and inappropriate remuneration will dissatisfy and de-motivate if not managed well. But, as outlined above, monetary reward – whether that be salary or bonuses – is not able to motivate people in any sort of intrinsic, meaningful manner. Even as an external motivator, its benefits in performance terms are short lived, which draws the conclusion that employees need much more than just compensation in order to achieve and sustain self-motivation.

Hand in hand with Herzberg and Pink’s motivational factors, business and HR leaders looking to foster intrinsic motivation should also seek to be transparent by sharing information and enabling employees the flexibility they need to identify what really interests them as an individual. This instantly lends more meaning to their work and enables people to better understand, and become invested in, the ‘bigger picture’ end goal. Only then can intrinsic motivation be enabled, and only then can the benefits in performance terms be realised.


Receive more HR related news and content with our monthly Enewsletter (Ebrief)

Receive more HR related news and content with our monthly Enewsletter (Ebrief)