When Money Isn’t the Motivator for Employees

Motivation is nebulous, complex and sometimes confusing.

It’s a subject I’ve taken great interest in, particularly as it relates to the workplace. Motivation means different things to different people in the workplace; while some prefer cash bonuses, others would like recognition or are satisfied with a simple ‘thank you’.

Because of this, employers often struggle with understanding motivation and developing strategies to keep their employees engaged and performing to their full potential.

My interest in understanding motivation was born from my experience working in a sales environment. There, the formula seemed simple: money was the motivator. The better the sales person performs, the more money he or she earns. In this role, my performance was tied to achieving my own revenue targets.

At that time, I was a top performer, very well compensated, and was a recipient of various rewards and recognition. But I always had this nagging feeling that I needed more than money to incent me to go to work everyday.

Something was missing; I just didn’t know what. I had to figure this out. So I spent some time reading and learning about different theories of motivation.

Maslow’s Hierarchy of Needs

Abraham Maslow was an American Psychologist and professor who was best known for creating Maslow’s hierarchy of needs: a pyramid of human motivations which require your most basic needs to be fulfilled in order to move on to more complex needs.

At the bottom of the pyramid are your physiological needs (food, water, shelter, sleep), followed by safety (protection, security) and then social needs (belongingness, love, relationships). These are also known as extrinsic motivators.

The top two tiers of the pyramid, referred to as intrinsic motivators, include esteem and self-actualization. Esteem includes achievement, status, responsibility, and reputation, while self-actualization includes personal growth and fulfillment.

In North America, we are lucky in that most of us are able to satisfy the basic physiological, safety, and social needs. But perhaps esteem and self-realization – the more subjective and elusive elements – were missing from my experience.

Financial rewards only work in certain roles

To explore this further, I will refer to one of my all time favourite explanations of motivation by Daniel Pink. Pink argues that financial rewards and contingent motivators (if you do this, then you get that) succeed in driving performance for mechanical, simple, straightforward tasks.

But when more cognitive skill and conceptual thinking are required, financial rewards no longer incentivize. Following this further, science has proven that when you remove the carrot and stick as a motivator for tasks that require cognitive skill, and introduce practices that build engagement and that promote autonomy (self-direction), mastery (challenge and improvement) and purpose (transcendent, higher level greater good), both the employees and the company achieve higher levels of performance.

Should sales environments focus on monetary incentives?

So then was the sales system of financial rewards and contingent motivators, (i.e. the carrot and stick method), embraced by my previous employer and many others used to drive performance? Absolutely.

Did it provide a path to achieving intrinsic rewards such as autonomy, mastery and purpose for my personal career interests? To a degree, but I believe this was mostly driven by my own intrinsic motivators. Without the support of a system that recognizes and values autonomy, mastery and purpose, something was left on the table.

There was potential for much more. So in pursuit of that, I moved on.

I don’t disagree that in a sales environment, money is a motivator. It is the ultimate reward for driving bottom line revenue. It is a symbol of esteem and self-actualization for a sales person. Yet, many organizations use financial rewards to drive behaviours for other non-sales contributors in the company. I agree that financial rewards need to be there.

However, as Pink states, you need to pay people enough to take the issue of money off the table. Inherently, people will realize satisfaction and find motivation to perform at high levels when there is a means to achieve autonomy, mastery and purpose. And as such, I have realized that the singular focus on money as a motivator ignored all the other potential for achieving these intrinsic rewards and as a by-product, greater performance.

So next time you are at an impasse, and have reached the salary and bonus threshold, but feel you need a way to retain and incentivize your employees, try involving your team in building and executing a strategy to create the conditions for achieving autonomy, mastery and purpose.


If you aren’t sure how to effectively motivate your employees, Business Sherpa Group HR consultants can help. Learn more about our Human Resources practice here.

About the Author

Alison Rae is an HR Associate with the Business Sherpa Group. Her interest in Human Resources Management began early in her career as she held progressive leadership roles in the various organizations in which she worked. For the past 16 years, Alison has successfully sourced, screened and hired talented and experienced individuals within private, public and not-for-profit organizations.

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