We’ve heard time and again that people don’t leave because of money. We’ve also heard that money is a hygiene factor and not a motivator (i.e. not enough will make people leave, but its presence will not attract). Employee surveys put money below job satisfaction, empowerment, opportunity and culture, when ranking why they are engaged at work. All HR teams now focus on boosting engagement, adapting environments and enhancing ‘life at work’ as the path to talent retention and acquisition. Many executives say that ‘it’s not about the money’ when they talk about their level of satisfaction (or dissatisfaction). Some even say they ‘would work for free’ if they could afford to. I’m not sure they are being totally honest.
Ultimately we all go to work for the same reason; to achieve our own personal goals. The thing is, all our goals are different. We want different things. We NEED different things. Furthermore, these wants and needs are fluid and change over time. Money is a constant for everyone; a Euro in your pocket has the same intrinsic value as in mine, but our subjective value may be totally different. If I am raising a family and struggling to pay the bills, that euro is now more valuable than when I was carefree and single, perhaps because its value is situational. We value things through our own lens of the world. No reality exists except the one I perceive and experience… but I deviate.
Money in business is an enabler. It allows companies to purchase things that motivate employees beyond their pay cheque and bonuses. It pays for training and development, perks, time off, holidays, good HR support, coaching, team building activities, incentives and much more. These motivators, alongside fair and equitable pay, lead to more engaged employees and higher retention rates. However, they may also be ineffective if not coordinated in a strategic manner. It is futile to have a fancy performance management system if there is no trust between leaders and employees. There is little use of a huge training budget if the skills can’t be put into practice or are not adding value to the business. There is no point in creating innovation drives if people are afraid of making mistakes.
There is no point in creating innovation drives if people are afraid of making mistakes.
People are motivated through extrinsic rewards and recognition, as well as through intrinsic satisfaction, personal growth and achievement. As organisations, we need to ensure that both are balanced well. It is up to the business as a whole, not the HR team, to ensure that this balance is achieved. Many CEOs don’t involve HR in top level strategic thinking, or give them equal space at the boardroom table. They are often regarded less important for business success than the CFO or Sales Director. Often because the latter can justify their importance with hard numbers and other factors that can be more easily proven at board level. Yet CEOs publicly state that their most important asset is their people… I’m not sure they truly believe it, or why wouldn’t they make employee engagement their number one KPI and design their strategy around their HR team’s goals?
Perhaps we need to simplify what it is that makes people want to stick around and take responsibility for their performance. If we could understand the dynamics, we could perhaps ground otherwise ‘intangible’ ways of measuring dedication, commitment, drive and passion in people. In reality, these are simply outcomes of a series of conditions that we should be able to control. The result of these behaviours should be business success. Perhaps a ‘balance’ can be found between the following aspects of working-life (highlighted in the above diagram) that somehow frame the ‘self-at-work’ issue more clearly. I’ve explored it with a few executives and it seems to make sense. Obviously the simplicity implies a great deal has been overlooked; I am aware of that.
The Skills to Challenge ratio is a Flow State trigger, as highlighted by Kotler & Wheal in their work on flow states in high performance individuals. Top performers get into flow when they are exiting their comfort zone on a regular basis, stretching their skillset into unknown capabilities, learning and growing in the process. The balance is important, as too high a skill with low challenges will lead to boredom. The reverse; stress, burnout or paralysis. For performance, we need to make sure that individuals have the right opportunities to challenge their skillset in order to be excited about work and grow through experiences.
Confidence is the result of sequential ‘proof’ that boosts our motivation through increased ambition. As motivation increases, people stretch further, building their confidence. Furthermore a motivated individual will fail forwards if the challenge was too big, realising that they have room to grow in order to attempt it again. The balance between Challenges and Motivation is important, as imbalances cause people to either give up or not bother trying. For it to work, we need to have clarity about our performance and understand that we are overcoming challenges and progressing. Unclear goal-posts are confidence killers.
Money as a reward for effort is an extrinsic motivator that has an important role in business performance. It is not necessarily about the intrinsic value of money, but what it means to the individual. Less pay than expected will diminish motivation, whilst unrealistic expectations may be just as detrimental. Motivation is driven by WII-FM (not a radio station, but What’s In It For Me). If I am getting what I expect and what I expect is fair, I will be motivated to continue striving. If I am comparing with others in a meritocratic environment, I will be motivated by fairness and equity. The return for my efforts is recognised by the value the company is prepared to reward me for it. This needs to match the individuals self-worth. If I feel I am bringing in more value to the company than I am being paid for, my motivation will be low. If I am being rewarded fairly for my efforts, I will be motivated to perform. In this aspect, expectation is the key focus for clarity by all concerned, which needs to be updated from time to time in accordance with changes in the individuals role and work flow. Different perceptions of expectations from the company and employee, is the main cause of distrust and disengagement if not managed properly.
Human beings are more likely to tolerate low pay if everyone around them has the same, yet get very upset if someone is getting even a tiny bit more than them or more than they deserve! Knowing this, we need to make sure that the reward for skills is clear and transparent. I have refused pay-rises to executives that expect more because they ‘work as hard’ as everybody else, if their effort is not adding as much value as their peers. Skills, (being clear to include leadership skills, management skills, decision making skills, strategic thinking, empathy, emotional intelligence, collaborative and other ‘skills’ alongside technical and hard skills in this model) should be rewarded for their usefulness in adding value to the business. They should be supported with the right development tools and enhanced through opportunities to practice. Self-assurance comes from the verification of our skillset through rewards and recognition. Self-worth comes from living to your potential, believing in yourself and meeting your own expectations.
If people are ready to pay for my skills, I can be assured of my position of strength as a valuable asset and contributor.
The interplay between these areas of performance need to be balanced out. Over-skilling leads to boredom if they cannot be utilised to add value. Intrinsic motivation isn’t sustainable if we are not challenged or feel we can grow. Reward justifies our effort as recognition of value and contribution. To get into flow, the challenges must be just outside of our comfort zone; more will lead to burnout. In essence, all aspects are important and the business needs to manage these in synchronicity.
This isn’t the domain of just the HR department, but the whole team. Setting of the business strategies, budgeting plans, commercial goal setting, marketing and communications, operations and processes as well as the HR function need to play an integral part in employee engagement and creating a performance mindset within an organisation. Money is important as a measure of value, as much as it is necessary to give people a sense of self-assurance, self-worth and a sense of fairness in an organisation. It is also an enabler to invest in the right motivational activities within your company, such as coaching and personal development. Spend it wisely, not just on raises and bonuses.
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