“Everyone likes money. Let’s offer a modest cash bonus,” said one manager.
“I think employees would appreciate a pizza party after a good week of production,” said another.
And a third manager commented, “I always felt good when I got a nice note of appreciation from the boss.”
Economist Dan Ariely, in a study of factory workers, found that pizza worked better at first. But after a period, the boss’s complement had more impact.
Pay-for-performance plans tend to work when employees are doing routine, repetitive-type work. However, financial incentives actually tend to dampen performance in jobs that require employees to observe, think and decide. People lose focus on how best to achieve an outcome; rather they twist their thinking into pretzel-like behaviors to do only what it takes to capture the “brass ring.”
Forget all of the convoluted motivational theories and financial schemes for tricking employees to strive. Remember three things.
One, to attract good employees, you have to pay competitively. Two, the greatest motivator is the internal satisfaction that humans receive from doing something well. Three, when you add a dose of sincere appreciation to the employee who is already glowing from a job well done; you have discovered the elixir of human motivation.