There’s always been this world-wide belief that offering more money to people at the workplace will bring in better productivity and superb performance. And so, you’ve got bankers, lawyers, and business executives receiving such gargantuan paychecks you’d think they were the only children of God. On an annual basis, these peoples’ wages most times amount to a small fortune it’s almost criminal! One head honcho running a large international bank gets something like forty million dollars ($40,000,000) a year. Going by the computed figures of a leading trade union, it’s enough to pay for an extra 1,019 nurses, 859 social workers, and 2,165 caregivers. No wonder, issues of morals and ethics (if not legality) get into the picture.
Of course, most of us in this highly competitive world have this pre-conceived idea that offering people bigger money rewards lead to them trying harder. But, guess what? There’s a steadily growing bunch of research and data in the fields of psychology, economics, and even neuroscience that is suggesting a more complex picture of the connection between money, motivation, and job performance.
What The Studies Say
In the early 1970s research work in this field was trail-blazed by Edward Deci, a psychologist in New York’s Rochester University. What he found was that students who were offered cash to solve certain puzzles tended to discontinue working on them once payments were made versus students who weren’t offered any cash prizes. What this observation says is that there are two sides to motivation: Doing things because you enjoy doing them, or doing things because you want to get that offered financial reward.
In a lot of other past formal and informal surveys, asking respondents to check their top reason for motivation in a list of ten, only a few selected financial rewards. The top ones were appreciation of management and peers for the work they do and enjoyment in what they do.
Psychologist Edward Deci further contends that people have generally three psychological needs: 1) the need to feel independent and autonomous, 2) the need to feel able and competent, and 3) the need to feel related to others. When one is offered an over-emphasized financial reward, it undermines one’s autonomy and leaves a negative impact on one’s intrinsic motivation. In other words, while you need top-quality performance from bankers and business executives, you’ll need thinkers, people who can solve problems, and can be creative. Offering money to motivate them won’t get you that.
Continuing research work along this vein by noted and respected psychology professors and experts from a few other universities in the states and the UK tend to show the workings of money relating to motivation are far more complex than what we generally assume. The one strongly-suggestive take away from these observations though is that… in motivating people, money isn’t everything.