Management Articles


It Takes More Than Money to Motivate People

By: Jane-Michèle Clark

Jane-Michèle Clark is president of The Q Group ( ), a strategic positioning and marketing communications firm that has worked with many blue chip companies over the past 30 years.  Jane-Michèle also
teaches MBA level marketing at the Schulich School of Business, is a corporate trainer and speaker, business coach and 4-time nominee for the Canadian Woman Entrepreneur of the Year Award.  Jane-Michèle can be reached atjmc@theQgroup.  or by calling 416-424-4233. 

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Look on the net and you’ll find plenty of articles saying that money is a powerful motivator.  Talk to employees, however, and you’ll find that money doesn’t always talk – or at least not the loudest.  Time after time, sales organizations put bonus structures in place that anyone should be able to attain –and yet only a handful of people make the top levels.  Usually the same people who were at the top before the new reward structure was announced, end up on top afterwards as well. 

Why don’t these potential prizes cause people to change their behavior and start producing more?  Simply put, because rarely do companies also do anything that effectively encourages  their people to work harder or give them additional training to help them perform better.  Nor do they give employees a reason that actually motivates them to work harder. 

Input from over 700 companies showed us that employees are most likely to want to give that extra 10% or more when they feel they are an important part of the corporate puzzle – when they feel that what they do does matter. 

For years, good managers have known that turnover rates are lowest in companies where there is good communication throughout the organization – especially when people are kept in the loop as to the direction the company is taking, and why.  But it goes deeper than simply telling employees what’s on the horizon.  When managers are able to let their staff members know why a specific action or change is needed – and how their contribution will make a difference, then people will usually rise to the challenge.  This is especially true when the sense of “team” can be fostered – when people feel they are working together towards a common goal.

As one noted author and speaker puts it, “You can pay people to perform.  You can't pay them to excel.” 

What are some of the other factors that motivate employees to go above and beyond?
  1. We found a second common theme running through the interviews:  People at various levels of different types of organizations, from blue collar to white collar, to no collar at all, felt more compelled to put in their best efforts when working for someone who a) appreciated what they were doing (and expressed this appreciation readily and sincerely) and b) stepped up to the plate.  The latter is especially important during crunch periods.  Said one factory foreman, “We got a rush order on a Friday afternoon to ship 1000 expansion valves on Monday morning for our best refrigeration client.  They had had a fire and needed the valves to hang on to one of their best clients.  Martin, the plant manager, called us all together and explained what was needed and why and asked us if we could do it.  We said yes and so he let them know that they could say yes to their client.  What really made us all work around the clock, not worrying about who was supposed to be on shift or not, was that Martin asked us before he committed the company.  Then he stayed with us all weekend, encouraging us and doing whatever was needed to help, even working on the line.”

    Why did the employees rise to the challenge?  Martin did all the right things:  He explained clearly what was needed and why, he created a “team pulling together” environment and pitched in to help.  He was a part of the solution.  Perhaps most important, he showed his employees true respect by asking them if they would and could help out.

  2. Respect and appreciation are integral to every solid relationship and key to peak performance.  According to the employees with whom we spoke, many mangers understand the importance of respect, but fall short when it comes to recognizing the efforts of their employees and colleagues.  Time after time respondents told us that lack of appreciation had them looking for a new job.  Research conducted by other supports this.  According to Dr. Zimmerman, “Compensation is a right, but praise is a gift.”  And without the gifts, the party is not quite as much fun, is it?

  3. Acknowledging progress also ranked high on the list; this is particularly true when a major project is underway.  When leaders break a job down into milestone sections – and reward and recognize each goal as it is achieved, employees become more motivated to reach the next milestones and complete the task.  It’s clear that it’s also important for employees to be recognized for personal progress.  Whether it’s doing a better job of getting reports handed in on time, or doing well on a training course, employees like to feel that their extra work (or renewed efforts) are being noticed and that their improved performance makes a difference.

  4. Another key point to keep in mind is that the more you believe in others (kids, employees, whoever), the more they'll do to prove you right.

  5. Demanding perfection is demoralizing.  Rewarding progress effectively produces good results.
So, if these were the top 5 reasons employees gave for feeling motivated to do a task, where did money come into play?  It was 8 out of 10 – but employees will also tell you that this does not mean that bonuses should be eliminated!!

© Copyright 2005 by Jane-Michèle Clark. All rights reserved

The author assumes full responsibility for the contents of this article and retains all of its property rights. ManagerWise publishes it here with the permission of the author. ManagerWise assumes no responsibility for the article's contents.


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