We have all heard that “money doesn’t motivate”. I’m not sure I totally agree. If you can’t afford your weekly food bill then I suspect that making money comes high on your list, but I guess we pass that point fairly quickly.
What I do believe is true though is that money can de-motivate.
As Professor Noriaki Kano of Kano model fame would say, money is simply a basic need. Or to use an old gag, you have two hopes of delighting your entire workforce with your compensation and benefits strategy:
- No Hope
- Bob Hope
So how do you meet those basic needs?
In his book Drive the author Dan Pink puts the case for three compensation and benefit rules.
Rule 1: Treat people fairly
If people within an organisation feel that they are all paid equitably for their contribution then they will be happy with what they are paid.
Rule 2: Pay slightly over the average
If your staff feel that your company pays well for the industry then they are less likely to leave and they won’t be disgruntled.
Rule 3: If you must pay bonuses don’t pay much
Make your incentives small (if you are paying above average they don’t need to be large) and make sure you link them to a variety of performance measures. That way your staff are less likely to cheat, and if they try, it becomes far harder to game the system.
Now you don’t have to believe any of this
So where is my evidence?
Well it comes in the form of a monkey. I did promise you one. Watch the video and then let me know what you think inequitable pay schemes do for morale.
Still not convinced? Read another opinion
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Image by kevin.j