Money is often considered to be a primary motivator in the workplace, and for good reason. It provides us with the means to fulfill our basic needs as well as the ability to pursue our wants and desires. Money can also be a symbol of success, status, and security.
However, money is not the sole motivator. Other factors, such as intrinsic rewards, recognition, and a sense of purpose, can also be just as important, or even more so, in driving employee performance and engagement.
Intrinsic rewards are those that come from the work itself, such as the satisfaction of completing a challenging task, learning a new skill, or making a difference in the world. Intrinsic motivation is often seen as more sustainable than extrinsic motivation, as it is not reliant on external rewards.
Recognition is the acknowledgment of someone’s accomplishments or contributions. It can be in the form of praise from a manager, a public announcement, or a tangible reward, such as a bonus or gift. Recognition can help employees feel valued and appreciated, which can boost their morale and motivation.
Sense of Purpose
A sense of purpose is the belief that one’s work is meaningful and has a positive impact on others. When employees feel like they are making a difference, they are more likely to be engaged in their work and motivated to perform well.
Introduction to the research
The relative importance of money and other motivators can vary depending on the individual and the job. However, research suggests that intrinsic rewards, recognition, and a sense of purpose are becoming increasingly important to employees, especially younger generations.
Effectiveness of Money as a Motivator
Money can be an effective motivator in the short term, but its effectiveness can diminish over time. This is because people tend to adapt to their financial circumstances and quickly become accustomed to a higher level of income. As a result, money may not be as effective in motivating employees to maintain high levels of performance over the long term.
To sustain employee motivation, it is important to focus on a combination of intrinsic and extrinsic rewards. Intrinsic rewards, such as providing employees with challenging and meaningful work, can help to foster a sense of purpose and engagement. Extrinsic rewards, such as recognition and financial incentives, can provide additional motivation and reinforce positive behaviors.
Creating a Motivating Work Environment
In addition to providing intrinsic and extrinsic rewards, there are other things that employers can do to create a motivating work environment. These include:
- Providing employees with opportunities for growth and development
- Empowering employees to make decisions and take ownership of their work
- Fostering a culture of collaboration and teamwork
- Recognizing and rewarding employees’ accomplishments
- Creating a work-life balance that allows employees to meet their personal needs
By focusing on a combination of intrinsic and extrinsic rewards, and creating a motivating work environment, employers can create a workforce that is engaged, productive, and motivated to achieve success.
The Research Details
A 2018 study by SHRM, the Society for Human Resource Management, found that 52% of workers were primarily motivated by financial rewards, while 48% were motivated by non-financial factors such as work-life balance, career growth, and a sense of purpose.
Another study, conducted by Deloitte in 2020, surveyed over 10,000 workers and found that money was not the top motivator. The top 10 motivators in order of importance were:
1. Making a difference (52%)
Employees want to feel like their work has a positive impact on the world. They want to know that their contributions are making a difference in the lives of others.
2. Having a sense of purpose (49%)
Employees want to feel like their work is meaningful and has a purpose. They want to know that their work is important and that they are making a contribution to something larger than themselves.
3. Being recognized for their work (48%)
Employees want to feel appreciated and valued for their work. They want to know that their efforts are being noticed and that their contributions are being recognized.
4. Being part of a team (46%)
Employees want to feel like they belong and that they are part of something larger than themselves. They want to feel connected to their colleagues and work together towards a common goal.
5. Having opportunities for growth and development (44%)
Employees want to feel like they are learning and growing in their careers. They want to be challenged and have opportunities to develop new skills and knowledge.
6. Being able to balance work and personal life (43%)
Employees want to have a healthy work-life balance. They want to be able to fulfill their professional and personal obligations without feeling overwhelmed.
7. Financial rewards (42%)
Employees want to be compensated fairly for their work. They want to feel like their financial rewards are commensurate with their contributions.
8. A flexible work environment (41%)
Employees want to have some flexibility in their work arrangements. They want to be able to work from home, set their own hours, and take time off when they need to.
9. Opportunities for feedback and coaching (40%)
Employees want to receive feedback on their performance and have opportunities for coaching and development. They want to know how they are doing and how they can improve.
10. A positive and supportive work environment (39%)
Employees want to work in a positive and supportive environment where they feel respected and valued. They want to feel like they can be themselves and that their colleagues are there to support them.
* These motivators are not mutually exclusive, and employees may be motivated by a combination of factors. However, the Deloitte study suggests that the top 10 motivators are the most important factors for employees in today’s workplace.
Putting it all together
These studies underscore the importance of considering both financial and non-financial factors when designing employee motivation strategies. By creating a workplace that offers a combination of competitive compensation, opportunities for growth and development, a sense of purpose, and recognition, employers can foster a more engaged and productive workforce.