Money won’t make you work harder

If you think throwing money at people will make them work harder or stay committed for longer, think again.

A recent study in the Journal of Vocational Behaviour reviewed 120 years of research and found that the link between salary and job satisfaction is very weak – a less than 2 per cent correlation.

A number of studies reported on last year by the Harvard Business Review support this idea – that money is a poor motivator.

Research commissioned by Leading Teams Australia and conducted in April suggests that more than 60 per cent of workers see a collaborative work environment as more important than rewards and benefits.

Motivational strategist and author of The Game Changer, Dr Jason Fox, says the problem with money is that we get used to it too quickly.

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“Employers that rely on awards too much can build a rod for their back. They can create a cultural of almost entitlement, so that unless there’s a reward attached to something people aren’t going to be motivated to do the work that they’re meant to do,” says Dr Fox, who has a PhD in motivational science and has worked with huge companies like BankWest and the Commonwealth Bank.

Cash bonuses and raises can also send the wrong signal.

“It says the work you’re doing is so mundane, boring and unmotivating that employees have to be rewarded to do it. And that in turn contaminates any inherent motivation from the activity.”

Money can even have the opposite effect on motivation, according to human resources expert Karen Gately.

“Money can be a serious demotivater when people feel ripped off or hard done by. It can cause them to lose trust in their employer and their employer’s fairness,” says Ms Gately, founder of Melbourne-based HR consulting firm Ryan Gately.

“I also observe that when people are well paid – for example, paid an above-market rate – I don’t think that necessarily inspires more from them. I think they just then shift their perception to, ‘that’s now what I’m worth.’”

So if a raise isn’t going to motivate us, what will?

Strong connections

The degree to which employees feel connected to their job, colleagues and the organisation is “first and foremost”, Ms Gately says.

“People love being part of a team and if they enjoy that environment they are entirely more likely to link arms with their colleagues and buy into a shared mission.”

A sense of progress

A clear sense of progress is Dr Jason Fox’s number one tip for motivation.

“A clear sense of progress is one of the most powerful motivators at work, more so than incentives and rewards.”

Dr Fox suggests a regular progess meeting, with questions like: What did you achieve today? What are you working on tomorrow?

“Sometimes it’s just about showing people how they are actually contributing and giving people that rich and immediate sense of progress,” he says. “That can be more powerful than the promise of a reward.”

Time with the boss

Kerryn Fewster, co-director of consultancy firm Change2020, says engagement between the boss and the employees is very effective.

“For me, the absolutely number one way to engage with employees and also to motivate them is the leader needs to be prepared to spend time and face time and be present and truly be listening to people.”


Mike Symonds is the owner and co-founder of Funergizers, a New South Wales company that specialises in boosting staff morale.

Creating a fun workplace is one of his passions.

“It’s about creating an environment where people feel good, and they feel valued and feel happy and like they belong,” Mr Symonds says.

“If you do hold team meetings, you might kick things off with a five-minute fun game or some kind of fun activity. It might be that you get together once a month and actually do some kind of social event for a couple of hours on a Friday afternoon as a group.

“It’s more than just going to the pub for a drink or going out for a meal. You want to do something where everyone is interacting and engaging and connecting with each other.”

Unpredictable rewards

If you must use money as a motivator, it needs to be unpredictable.

Essentially, the workplace is like a poker machine, Dr Fox explains. If you don’t know when the next payout will come, you’re more likely to keep feeding the machine with coins.

Money is much more likely to be effective if it is “authentic and unpredictable”, instead of being dolled out at the end of every month or year.

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