Years ago, I was surprised when a group of sales people I was working with made a bet on who would earn the most money for the year. The losers had to chip in to buy the winner a Porsche.
Countless times since, I've heard colleagues talk about leaving their jobs because they could make more money elsewhere. And as I mentioned in Eliminating Performance Reviews, even some of the best companies tie money to performance and vice versa.
Is money really the big motivator? If we pay our team members more, will we see a corresponding increase in productivity and creativity?
In my post Managing the Best of the Best, I discussed my philosophy in managing a startup team. In that and subsequent posts, you can probably see that I'm really focused on motivating a team. For me, the team is the company, and keeping that team motivated is the most important part of my job as a CEO and for all managers in the company.
If money were the answer, I would have done my best to make sure my team members were paid more than they could receive anywhere else. Of course at one point, I was competing for engineers and Cisco had over 5000 reqs out. There's no way I could compete with the compensation packages that some of the industry giants offered. I certainly hoped money wasn't the primary motivator for engineers. If it was, my startup was doomed.
So how can a startup compete?
To be successful, we need to know what it is that motivates our team members. At first glance, it may appear that people are motivated primarily by money, or for those who join a startup, by the promise of future money. To some degree this is true. Everyone needs to make a fair wage to work productively. I have argued that eliminating things that interfere with a person's ability to do their job, whether money issues, healthcare expenses, or inflexible schedules, will certainly improve productivity and build team members' loyalty to the company. But if another company can offer similar things, how do we motivate our team members to stay with us and do their best work?
Although the research has been around for years, most organizations and managers fail to realize that promising rewards or compensation for creative tasks actually decreases creativity. It appears that having a dangling carrot causes people to focus on how to get to the carrot, not on doing the best job possible.
So ultimately, once a team member's basic needs are met, compensation will not be the primary motivator. What is?
It's tempting to say that motivation is different for different people. But aside from the salesperson who wants to make the most money possible, if we think about engineers, construction workers, healthcare professionals, CEOs, lawyers, pretty much any profession, it certainly seems like there are common threads that motivate these people to pursue their careers:
Making a difference - whether it's the engineer creating the next great thing, the nurse helping the sick or injured, the construction worker building something to last, the CEO founding a company, or the lawyer pursing a case, all of us want to make a difference.
Be challenged in their daily work - mundane work is boring and can be the quickest way to lose a team member. Of course there are always tasks that we don't want to do. But as long as they're complemented by challenges that make us stretch, we remain interested in our work.
Opportunities for Growth - Most of us do lose interest if our job never changes, if we never learn anything new. Hand-in-hand with being challenged is that we need to see that we can grow as professionals in whatever we do. The French have a word that describes this best: épanouir. There really isn't an English equivalent. It's kind of a combination of enrich, grow, and blossom. That's what we all want to do.
Recognition - While there are some of us who can work tirelessly with no one ever noticing, the vast majority of people work better if they know that their efforts are appreciated. I have a former employee who received a small plaque nearly twenty years ago recognizing his achievements. It still sits on his desk. Cash bonuses he received were spent long ago and I doubt he can remember what the bonuses were for or where the money went. Recognition doesn't have to come in the form of money.
As CEOs and Managers, we can motivate our employees. If we take care to ensure that their basic needs are met and then focus on keeping them challenged, offering opportunities for professional growth, showing them that they are making a difference and recognizing their efforts, we will help them grow as we ensure the success of our company. To me, this all comes down to that basic philosophy that IBM championed many years ago: Respect for the Individual. Respect them and they will give you their best.
As for the salespeople who are only motivated by money? Well, maybe there's actually more to it for them too. I suspect that if we look closely, behind all the bling, we'll find that each and everyone of them is motivated by exactly the same things as everyone else. For them, like the rest of us, money is just the frosting on the cake.
Countless times since, I've heard colleagues talk about leaving their jobs because they could make more money elsewhere. And as I mentioned in Eliminating Performance Reviews, even some of the best companies tie money to performance and vice versa.
Is money really the big motivator? If we pay our team members more, will we see a corresponding increase in productivity and creativity?
In my post Managing the Best of the Best, I discussed my philosophy in managing a startup team. In that and subsequent posts, you can probably see that I'm really focused on motivating a team. For me, the team is the company, and keeping that team motivated is the most important part of my job as a CEO and for all managers in the company.
If money were the answer, I would have done my best to make sure my team members were paid more than they could receive anywhere else. Of course at one point, I was competing for engineers and Cisco had over 5000 reqs out. There's no way I could compete with the compensation packages that some of the industry giants offered. I certainly hoped money wasn't the primary motivator for engineers. If it was, my startup was doomed.
So how can a startup compete?
To be successful, we need to know what it is that motivates our team members. At first glance, it may appear that people are motivated primarily by money, or for those who join a startup, by the promise of future money. To some degree this is true. Everyone needs to make a fair wage to work productively. I have argued that eliminating things that interfere with a person's ability to do their job, whether money issues, healthcare expenses, or inflexible schedules, will certainly improve productivity and build team members' loyalty to the company. But if another company can offer similar things, how do we motivate our team members to stay with us and do their best work?
Although the research has been around for years, most organizations and managers fail to realize that promising rewards or compensation for creative tasks actually decreases creativity. It appears that having a dangling carrot causes people to focus on how to get to the carrot, not on doing the best job possible.
So ultimately, once a team member's basic needs are met, compensation will not be the primary motivator. What is?
It's tempting to say that motivation is different for different people. But aside from the salesperson who wants to make the most money possible, if we think about engineers, construction workers, healthcare professionals, CEOs, lawyers, pretty much any profession, it certainly seems like there are common threads that motivate these people to pursue their careers:
Making a difference - whether it's the engineer creating the next great thing, the nurse helping the sick or injured, the construction worker building something to last, the CEO founding a company, or the lawyer pursing a case, all of us want to make a difference.
Be challenged in their daily work - mundane work is boring and can be the quickest way to lose a team member. Of course there are always tasks that we don't want to do. But as long as they're complemented by challenges that make us stretch, we remain interested in our work.
Opportunities for Growth - Most of us do lose interest if our job never changes, if we never learn anything new. Hand-in-hand with being challenged is that we need to see that we can grow as professionals in whatever we do. The French have a word that describes this best: épanouir. There really isn't an English equivalent. It's kind of a combination of enrich, grow, and blossom. That's what we all want to do.
Recognition - While there are some of us who can work tirelessly with no one ever noticing, the vast majority of people work better if they know that their efforts are appreciated. I have a former employee who received a small plaque nearly twenty years ago recognizing his achievements. It still sits on his desk. Cash bonuses he received were spent long ago and I doubt he can remember what the bonuses were for or where the money went. Recognition doesn't have to come in the form of money.
As CEOs and Managers, we can motivate our employees. If we take care to ensure that their basic needs are met and then focus on keeping them challenged, offering opportunities for professional growth, showing them that they are making a difference and recognizing their efforts, we will help them grow as we ensure the success of our company. To me, this all comes down to that basic philosophy that IBM championed many years ago: Respect for the Individual. Respect them and they will give you their best.
As for the salespeople who are only motivated by money? Well, maybe there's actually more to it for them too. I suspect that if we look closely, behind all the bling, we'll find that each and everyone of them is motivated by exactly the same things as everyone else. For them, like the rest of us, money is just the frosting on the cake.
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