7 Ways to Motivate Without Money

Today’s guest blogger is Dr. Todd Dewett. You can learn more about him at the end of the post. He covers the importance of non-monetary ways to motivate your people (and we’ve talked about it NOT being about the money in this prior post – CLICK HERE to read why Nelly is wrong). Here’s Dr. Dewett:

Money does not matter nearly as much as you think it does. At home or work, no amount of money replaces great relationships. Leaders generally like money more than the folks whom they lead. The fact that money motivates leaders more is not a bad thing per se. The problem is that leaders too often assume that money is a prime motivator for others.

Employees, of course, do like money and want to continue receiving their paychecks. Yet, when you go ask them what really makes them happy, they will say things like being appreciated, being in the loop, and having good relationships. Money is rarely near the top of the list.

If you want more bang for your buck, you actually have to stop spending so many bucks. There are many potentially useful monetary motivators that serve as a financial “thank you,” such as a day of paid vacation, tickets to a sporting event, gift certificates of any form, simple cash payouts, and more elaborate efforts such as gain sharing.

Gain sharing deserves special attention because it represents the best and the worst of the monetary approaches to motivation. Gain sharing involves measuring some aspect of performance over time. When a group or unit performs above some historical standard, that is a “gain,” and it is financially quantified and shared with the workers according to some agreed upon formula.

Unfortunately, this often leads to myopic views of the organization, employees questioning management decisions based on how it affects parameters in the formula, and in general, moves the employees’ focus from the work to the formula. If you overindulge in monetary approaches to motivation – whether it is gift certificates or gain sharing, the following ugly outcomes are likely:

– People begin to expect more monetary rewards. They never expect less, always more, always bigger.

– People feel left out. If someone does not receive a reward, even if they do not honestly deserve a reward, they often feel resentment.

– Your thinking becomes less productive. As a leader, you stop thinking about people and processes and begin instead thinking about new possible rewards that will motivate your employees.

– Employees stop thinking as much about the work.

The more financial motivators are present, the more they become the focus instead of the work. Monetary motivators are not improper. They simply cannot be your major approach to motivating others. If you do use them, make sure:

– The performance in question is amazing. The instance of performance being rewarded cannot be average or a little better than average. It must be spectacular.

– You provide a great public explanation. This helps others understand the nature of the rewarded performance, thereby setting expectations as to the level of performance required to be so honored.

– You provide the reward immediately. The time when the reward is viewed as most justified and when it is most understood by all observers is immediately following performance, not weeks or months later. Periodic, formal ceremonies can be nice, but do not lose your opportunity to motivate, “in the moment.”

Not only are non-monetary motivators free or cheap compared to financially-oriented rewards, but there are many more of them. Imagine the unlimited versions of these common examples:

1. Recognition for their work. A pat on the back, “job well done,” “congratulations,” “great work,” etc. Public or private, to an individual or group. Genuine positive comments are terribly useful. The two most important words in business are, “Thank you.”

2. Recognition concerning work efforts. This is a neglected tactic. Great outcomes only materialize once in a while. In the meantime, thanking people for their efforts is invaluable. Do not drown them in praise, but do not forget to recognize the efforts and the outcomes.

3. Non-financial benefits or perks. These refer to non- monetary (though not cost free) efforts to support quality work-life balance such as: flex-time, in-house valet services, or health club memberships.

4. Awards. Awards are a physical reminder of a particular achievement. Common awards involve certificates, plaques, or any number of other objects deemed to represent the achievement symbolically.

5. Celebratory ceremonies. Ceremonies are the actual events surrounding the delivery of awards. When creative and thoughtful, they can be as meaningful as the award itself.

6. Provide autonomy. One of the greatest rewards is to be treated like a capable professional. When provided with reasonable liberty at work, employees feel much stronger ownership over their work.

7. Connect to the outcomes. Give employees purpose while saying thank you: if they work to support a much larger process or some faraway final product or service, help them understand their contribution. Use pictures, videos, or share a customer “thank-you” letter with the entire group.

Finally, you must recognize that the problem is not finding ways to say thank you. The problem is that we usually recognize and reward people too much! Since we all recognize the importance of the basic notion of motivation, it is easy to over recognize. We send out emails touting others’ successes, we select the employee of the month, we have quarterly recognition ceremonies with food or gifts.

The profound rule we too often neglect is that all recognition and rewards should be provided contingent on performance. Not for showing up. Not for average performance either, but for providing clearly above average efforts and for achieving clearly above average outcomes.

Be creative and heartfelt but don’t reward mediocrity or you will get more of the same!

– Dr. Todd Dewett is the President of TVA Inc. and a Professor of Management at Wright State University. He regularly blogs about leadership at Just Dewett – Fuel for Leaders.