Despite a large body of evidence showing there are inherent problems when financial incentives are used as performance motivators, we are still not heeding the message. For example, a recent headline in the Globe and Mail read: “Employers dangling more carrots to boost performance.”
So why does this myth persist?
Although it seems organizations are the easiest targets to blame, employees may also share part of the responsibility. What struck me most about the above piece were the comments left in response to the article. Here is a sample of some of the most highly rated:
• “While I’ve had jobs I enjoyed, my sole purpose in working was to earn money... If an employer wants more work out of me, paying me more is the way to get it.”
• “HR folks think we value ‘non-cash’ recognition, but the truth is we all value cash rewards most so give us what we really want.”
• “Quote of the day: ‘I work for money. If you want loyalty, get a dog.’”
These extracts provide colourful examples of employees who are engaged in their work on a “transactional” level. Recent research from Kingston Business School at Kingston University in London and the Chartered Institute of Personnel and Development (CIPD) suggests there are two types of employee engagement — transactional and emotional.
The transactional, engaged employee wants to make a living and is predominantly concerned with meeting the minimal expectations of the employer. Emotionally engaged employees, however, have a profound connection to their place of work. They are inspired by the community at the office and driven to routinely go above and beyond what is expected of them and do more to help their colleagues and their organization.
Now, consider both of these employees from the point of view of a leader. Which attitude would you rather have at your organization? How confident are you a transactional employee will treat customers and co-workers well? How confident are you she will do the right thing when cash incentives are off the table?
Another powerful finding from the research out of the United Kingdom was transactional, engaged staff are significantly more likely to engage in deviant behaviours, such as disappearing from work without explanation or taking suspicious sick days. In addition, they experience much higher levels of stress than their emotionally engaged counterparts. Undoubtedly, these behaviours exact tremendous costs on both their fellow co-workers as well as the organization at large.
So, how can one inspire employees to become emotionally connected to their work? And, similarly, how can employees become less reliant on cash as a motivator?
As Dan Pink notes in his book Drive, you need to pay (or be paid) enough to take money off the table as a form of motivation. Once employees are well-compensated, the focus can then be on connecting people to the work they do.
Another thing to watch out for is “work intensification.” In other words, if we feel job demands continually exceed our abilities, we are at much greater risk of being or becoming transactional in orientation. So make sure people have the support and resources necessary to do their work.
Money is an important aspect of our working lives. We need money to live and work provides us with a means to survive. However, if it is our only motivator, then the satisfaction and motivation we have from our jobs will only surface when we receive our paycheque.
When we are emotionally connected to our work, we can experience this sense of satisfaction and motivation in what we do every day.
Which would you prefer?
Craig Dowden is the managing director at the Toronto office of SPB, an organizational psychology consulting firm. He can be reached at email@example.com, (416) 506-1809 or visit www.spb.ca for more information.