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Is Money Really a Motivator?

Updated on March 9, 2010

During a team meeting some time back, there was some general grousing about the stingy raises being handed out. Our supervisor explained that business was off some and we should all consider ourselves lucky to have a job. “Besides”, she then proclaimed, “it’s been proven that money does not motivate people”.

I waited for an outburst of laughter, but there was none. Maybe my associates were thinking the same thing as I: Is she serious?

If one digs deep enough, I’m sure one can indeed find studies which indicate that more money, as in a raise, does not motivate a worker to increase their productivity proportionally. And, there is probably some truth to that, given that many if not most employees feel that an annual increase is justified. It’s something they feel they’ve earned based on the previous year’s performance. In their defense, it follows that if someone has performed the same duties for a year, they should have become better and more efficient.

But, that is not always the case. In many positions, it’s difficult to measure a person’s output. If my job consists of auto repair, for example, I can only repair what comes into the shop. If business falls off, my numbers are going to be down. It’s as simple as that. I can certainly become more adept at my craft; I can do things faster, more efficiently, and with higher quality, but I can’t go out and break cars in the hopes it will increase business.

So, getting back to the “money doesn’t motivate” comment. It reminded me of another comment someone once made: “Figures don’t lie, but liars figure”. In other words, the validity of any study is relative to the observer. I seriously doubt that any study funded or endorsed by a corporation will conclude that money does in fact motivate people. And, if it did, the results would likely be quashed. On the contrary, that study would more likely conclude that employees would much prefer praise and recognition. An occasional “atta-boy”, if you will. An “employee of the month” kind of thing.

So, the answer to the posited question is - in my opinion - usually. People are different. Some will recognize that in order to receive regular salary increases and bonuses, they must constantly endeavor to do their job better. And, some won’t. Some understand that a company’s outgo cannot exceed it’s income. At least, not for very long. Others feel they’re due an increase simply because they’ve kept a seat toasty for a year.

Many companies do self-evaluations, wherein the employee will list their achievements, etc. for the previous year. Maybe those assessments should conclude with the following essay question: “What have you done to deserve a salary increase?” The answers should be interesting.

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