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There’s More to Motivating than Money

“Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort,” said Franklin D. Roosevelt. Easy for him to say – he was filthy rich. However, according to lots of research on the subject, he was right. That’s good news for employers who want their employees to be happy and motivated but don’t have a lot of money to give them.

As for the research, Warrington College of Business professor Tim Judge and colleagues reviewed findings from 92 studies on whether money motivates employees. They concluded that the association between pay and job satisfaction is actually very weak (see “The relationship between pay and job satisfaction: A meta-analysis of the literature” in the Journal of Vocational Behavior).

Ian Larkin, professor of business administration at Harvard Business School, mostly agrees. He was quoted in the article “Inside Employee Motivation: Does Money Really Make a Difference” on, as saying, “Money is highly motivational for people. But saying money is the only thing we should use is also silly. Companies probably think too much about using money as a motivator and too little about other motivators.”
So, what other motivators are there? In his book Drive: The Surprising Truth About What Motivates Us, Daniel H. Pink says that if you want employees to be happy and motivated, focus on their innate needs for autonomy, mastery, and purpose.
Autonomy: people have the need to direct their own lives. Employers can provide autonomy for employees by allowing them a say in what they do (“would you rather do this task or that task?”), when they do it (“would you rather work the day or night shift?”), how they do it (“this is the result I need – you can get there however you want to”), and whom they do it with (“you can choose who you would like to partner with on this”).
Mastery: people have the need to learn and create new things. Employers can help with this by giving employees moderately challenging tasks that allow them to extend themselves and develop more skills.
Purpose: people have a need to contribute to a cause greater than themselves. Employers can help with this by having a mission and vision for their organization (besides just making money) and making sure employees know how they contribute to making the mission and vision a reality.
In addition to those needs, people have a need to be recognized for their contributions. In response to the question “What 2 or 3 things do you most want in a job” in a Harris poll, the most frequent answers were 1) a good salary, 2) job security, and 3) recognition for a job well done.
How can employers inexpensively and meaningfully recognize employees? Check out the article “25 Ways to Reward Employees (Without Spending a Dime)” on for some excellent ideas.
As the saying goes, money does not buy happiness. Nor does it buy motivated employees.

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Disclaimer: The information and resources provided herein are not a substitute for experienced legal counsel and does not constitute legal advice or attempt to address the numerous factual issues that inevitably arise in any employment-related dispute. Although this information attempts to cover some major recent developments, it is not all-inclusive, and any recommendations are based upon HR best practices and procedures. We recommend you consult an attorney for legal guidance.

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