• Managing people

Complex Drivers of Employee Motivation

Columbia’s Stephan Meier on why motivating employees is more complicated than you think

Tuesday 17 March 2020


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Consider this seemingly puzzling pair of reports from the front line of work in two very different spheres:

After a full day of attending to customers frustrations, concerns, and needs, a shoe company’s customer service representatives say they leave the call center tired but fulfilled.

After a full day of attending to the sick and wounded, emergency room physicians leave the hospital weary and a little bit jaded.

How is it that customer service representatives for this shoe company recognize the value of their jobs, while these emergency room physicians feel their work has little meaning?

The increasing role of nonmonetary incentives in motivating employees is well-documented in many research findings, including my own. Today’s employees don’t just want to work for a paycheck. They are also looking for jobs that add meaning and purpose to their lives. They want to be fulfilled, and they want to feel they are making an impact.

Despite a general awareness and acceptance of the importance of nonmonetary motivations and incentives, low or average employee engagement continues to be a recurring challenge. By questioning many of the assumptions related to nonmonetary compensation, academic research can help organizations design highly motivating jobs and work environments that will attract and retain the best and brightest employees.

It’s Not a Matter of Generations

For a number of years, the topic of nonmonetary motivation in the workplace was framed within the concept of motivating younger workers, notably the millennial generation. New research shows, however, that other factors, including past economic conditions and gender, play a defining role in how much importance employees place on nonmonetary compensation and rewards.

The job climate in the formative years of an employee—generally between the ages of 18 and 25—is a key factor. If the formative years occurred during times of prosperity, then purpose and meaning in the workplace are important. If, on the other hand, the formative years occurred during an economic downturn, employees might remember how their family or others around them were negatively impacted by unemployment, or how as recent college graduates they and their classmates struggled to find interesting jobs. People whose formative years occurred in tight labor markets are more likely to emphasize monetary compensation.

This research illustrates why generations, which are broad and imprecise to begin with, are poor guideposts for different compensation schemes.

How Men and Women Differ

While the desire for purpose and meaning and nonmonetary rewards crosses generations, my current research reveals that it does not necessarily cross genders. My colleagues and I are seeing indications that women tend to care more for nonmonetary rewards, while men tend to be motivated more by financial compensation. This research is based on survey data from around the world, as well as that collected from MBA students at Columbia. It shows that while the different gender preferences are not impacted by age, they are more pronounced in rich economies and among more highly educated cohorts.

This dichotomy explains some of the segregation in industries—why, for example, women don’t enter the finance industry as often as men. That men and women are motivated differently also has implications for efforts to diversify the workforce.

More generally, not all employees (within or across gender lines) care the same about meaning at work. Understanding the different motivations of a workforce is a good starting point when thinking about how to design the workplace.

The Mission Is Not Always Enough

Instilling meaning and purpose in a job might seem less challenging for a nonprofit organization or a company in a sector with a societal mission. However, the mission of a company alone is not always enough to motivate employees, as I found when working with a health-care organization, whose emergency room physicians were jaded by the piecemeal, ‘one-and-done’ nature of their work.

Typically, an emergency room physician works with a patient once, and then the patient moves on. In serious cases, the patient is stabilized and then moved to an intensive care unit. But many of the patients that emergency room physicians see have much less serious injuries or ailments. Thus, the doctor might set the broken leg of a young soccer player and send him on his way. In the future, the doctor’s expert work with the broken leg allows the young soccer player to return to the field completely healed—but that will occur far outside the emergency doctor’s field of awareness.

If emergency room physicians have a challenge seeing their work in a larger context, imagine administrative assistants or accountants inside a large corporation. Not every organization has the level of impact of a hospital. So, how can every organization create meaning at work?

Human Needs and Desires

There is much talk of meaning and purpose in the workplace. However, the human desire to ‘have an impact’ or ‘make a difference’ needs not be so narrowly defined as employees making the world a better place in the immediate here and now. It can also mean that their skills and attributes are being used to the fullest. Employees who feel that anyone could do their jobs, that they are interchangeable parts (the proverbial cogs in a machine), are going to be demotivated and disengaged.

In any businesses, the answer is in the job design—for example, enabling people to work in cross-functional teams and workspaces so that the functional work can be seen within the context of the entire group’s strategy and mission.

Companies will benefit if they pay attention to the human motivations that enrich the working experience for their people. For example, autonomy is a major motivator for many employees. It not only offers employees a sense of independence, but also increases the feeling that they as individuals are having an impact on the company’s success. Autonomy is the magic ingredient that Tony Hsieh of Zappos famously brought to his mail order shoe company. Rejecting the call center rules of strict maximum time constraints and adherence to scripts, Hsieh lets Zappos customer representatives handle their calls as they see fit to best serve the customer.

The importance of nonmonetary rewards and motivation will only continue to increase. Focusing less on platitudes about generations and perhaps more on understanding the diversity of your employees is a good place to start. Recognize also that the mission of the organization alone may not be enough to drive employee motivation, so look for sources of motivation in human needs and desires, such as autonomy and the wish to help others. Addressing this new mix of motivational drivers can help companies design better (and broader) compensation and reward packages and assist in creating a meaningful work environment, one primed to motivate and incentivize your workforce.

Unselfish Rewards

Human beings can be motivated in the workplace by unselfish rewards. These rewards are based on the desire to do something good for the benefit of others. For most people, finding the perfect gift for someone is as fulfilling as receiving it. A collaborative environment is motivating because it offers the opportunity not simply to work for your own success, but for the success of others as well.

According to recent research, compensation can undermine the positive effect of unselfish rewards. If I offer to get you a cup of coffee, I feel good about myself. If you offer to pay me a dollar to get you a cup of coffee, I feel like a servant. Likewise, if you help someone with a project for the good of the team or company, you are fulfilled. If you are paid to work for at least one hour a day on a project not your own, chances are you will work that one hour and no more because you aren’t intrinsically motivated to collaborate, as you might have been if compensation had not been put on the table.

In short, companies that create a collaborative environment by encouraging and enabling the exchange of information, for example, are more likely to be successful than those that use financial enticement to push collaboration.

Columbia Business School is the only Ivy League institution that delivers a learning experience where academic excellence meets real-time exposure to the pulse of business in New York City.

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