I’ve been having conversations lately with people about compensation and reward systems, and the role that money plays in motivation.
All the research I’ve seen concludes that–for most people–money becomes the primary motivator at work when there are no other salient motivators. What might those other motivators be? Sense of purpose, pride in work, belief in the mission of the company, to name a few.
But many managers assume that money is what motivates people (though they themselves are motivated by more lofty goals). Not so. Most people start new jobs highly motivated. They want to do well. But the organizational road blocks (some of which are thrown up by well-intentioned managers) sap that motivation. As managers, we need to let go of motivation myths, understand what really motivates people, and then stop doing things that demotivate them.
A few key readings on motivation:
Teresa Amabile and Steven Kramer: Do Happier People Work Harder? (may require registration)
Katzenbach and Khan: Money is Not the Best Motivator.
You may also find Pfeffer and Sutton’s book Hard Facts interesting. (Probably my favorite business book.)