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Interesting fact. Decades of research and dozens of studies show time and again that increased salaries can surprisingly demotivate employees. While many business owners believe that if they pay their employees more, those employees will work harder, longer and better, most often this is simply not the case.
Consider this. Johnny Business Owner had an employee who consistently showed up late. Johnny had a conversation with the tardy employee and offered him a dollar-an-hour raise as a motivator to show up on time for work. For the first couple of days the employee was punctual, but then on the third day… well, you guessed it. The employee was back to his tardy ways, while Johnny Business Owner was bleeding productivity and even more money than before. The problem persisted until the employee eventually quit. While this may seem extreme, it is more common than you think and is a great example of how more money isn’t always a motivator.
Get me right. I’m not saying you shouldn’t develop compensation and incentive systems built around performance – individual and company-wide. But what truly inspires people to excel and to perform is work that is interesting, challenging, meaningful and appreciated. Employees want a sense of accomplishment, they want personal growth; and you need to put the systems, processes and messages in place that empower your employees to act, think and feel like business owners or partners.
The following are a few things to consider from a leadership-based perspective:
- Review your current systems and processes. Poorly designed processes won’t motivate your employees.
- Have collaborative relationships with your employees. They have great ideas.
- Remember to get input from your customers, suppliers and other key stakeholders. They bring a different lens to the situation.
You should already be paying your high performers well, if you are a high performing organization. Make sure that the incentives are fair and equitable. Remember, it isn’t about using money as a carrot to get people to perform. Rather, it is about developing a culture of performance; and recognizing and appreciating people for their efforts.
By Blair Koch
