Why you shouldn’t assume money won’t motivate

Cross-posted from LinkedIn.

How many workers are going around, saying, “You know, I don’t need any more money”? Only a few of us since the recession. And as employment has returned,wages have struggled to keep pace.

Money alone is insufficient to motivate employees, the popular literature says. There is more to a happy, productive employee than compensation, so explore those other paths. This is correct as far as it goes — and I’m in agreement with Dan PinkBut I think many of us make an incorrect assumption — that we already, in Pink’s words, “pay people enough to take the issue of money off the table” for talented, high-potential employees.

So let’s undo that assumption. Instead, ask, “Where is our organization impeding the progress of talented, ambitious people — thus underpaying them and creating a dual risk to retention and morale?”

Why that question? These talented and ambitious employees are probably worth more money (their performance recommends it and such people are difficult to replace) but easy to miss because they lack the right job title of higher-paid co-workers, often through no one’s fault. And, when you have a group of employees feeling underpaid and constrained on opportunity, you have a retention and morale crisis waiting to happen.

Fulfillment, progress, development and opportunity are crucial to employee happiness, productivity and retention. The forms those conditions take depend on the situation, of course, but I’m not going to get into those today. Instead, let start with this quote from Fast Company:

“People work because they need to make a living. However, if people are paid enough to take money issues off the table, they’ll be able to focus on the work and find the best solutions, which results in higher performance.”

No disagreement there. And, to make clear that the burden for development and opportunity is not just on employees, this quote from SmartBrief contributor Mary Jo Asmus:

“If your employees are making a good, competitive wage and are doing work they enjoy, it only makes sense for you to listen beyond the requests they make for money and promotions to figure out what really brings out their best work. “

That also makes sense. Now let’s consider the following employee story:

  • Skilled at the work, bolstered by initial and continuing training.
  • Has taken and succeeded with greater responsibilities, project oversight, etc.
  • Works well with co-workers in and out of the department.
  • The path forward (and/or upward) is blocked.

That last point is what I’m getting at. This worker is good at the job, takes initiative, and contributes in ways measurable and intangible. This person has relative autonomy, is encouraged to offer ideas and insights, is respected and is a part of the company’s vision.


But without an obvious path of advancement, what are this worker’s options?

  1. Try to do more with the current job.
  2. Try a different job at the company, assuming there are openings or the possibility to create a job description.
  3. Find another job.
  4. Hope the roadblocks clear (a superior leaving or being fired, most likely).

Each of these options, I believe, has distinct drawbacks.

The first option should always be tried, but its effect is likely to be limited if said employee is already exploring greater responsibility, autonomy and/or opportunity in the current role without much of a corresponding increase in compensation. At worst, the employee may feel taken advantage of — doing the work of a higher-paying job without the benefits.

The second option is enticing and should also be explored, but not everyone can craft a job out of thin air, get it approved, perform well at it and get more money for doing so. And the risk-versus-reward calculation will not always just justify this step. Here are a few questions to ask if you’re at this point.

The third option could be great for the worker but seems to offer little for the company. Losing great people because you’re blocking them is essentially rewarding stasis and a “getting in the door first” mentality. Sure, job-hopping is a modern reality, and many people “graduate” out of jobs and organizations. But, obviously, people should leave your company to pursue great or new opportunities, not because they are trapped.

The fourth option can be the most dangerous for the organization, because the best-case scenario is having an unambitious employee who will continue doing the work without scheming, complaining or leaving. Such a worker won’t deserve more money, but also won’t grow professionally or help your organization meet new challenges.

So back to our difficult question: “Where is our organization impeding the progress of talented, ambitious people — thus underpaying them and creating a dual risk to retention?”

Better pay isn’t the final answer, but in many cases it can be an acknowledgement of an employee’s success — a temporary motivator, but one that encourages further development and effort even if promotion or being granted greater authority isn’t yet possible.

So, how do you determine which of your people deserve and require this step?

Here’s the tricky part — there isn’t an easy answer. And you may not be ready to even address the question.

If you’re not aware of how people are performing, what their abilities and potential are, and what they wish to achieve, you can’t begin to answer that question. If your organization has no ability to compensate outside of a rank/longevity formula, you can’t begin to answer that question. If your organization hasn’t begun to think about career pathing, you can’t begin to answer that question.

Financially, improving compensation for people down the ladder can be a risk. How much is enough money? A surprisingly difficult question. Are some of these people genuinely unhappy or just playing you for more money? Good for those people, by the way, but that won’t always fit with an organization’s plans.

Most importantly, I think, there will be mistakes. Tackling that question is risky, can lead to hurt feelings and, inevitably, a misjudgment or two. So, are you or your organization prepared for moments of failure?

Thanks for reading this far. This is a difficult issue that’s been on my mind for months, and this post is far from the end of the conversation. I’m open to suggestions, both on tackling this question and, more importantly, if you think my premise is wrong. Leave a note in the comments or e-mail me.

And, while I have you, please consider SmartBrief’s daily e-mail newsletter on leadership and management, which I edit.

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