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Pay for Performance?

Pay for Performance?

Despite what many of us might think, the hard truth is that money is not actually a major motivator for most employees. According to an article in the “Annual Review of Psychology,” “There is surprisingly little evidence about the performance implications of adopting, or not adopting merit pay programs.” And in national survey, the prestigious consulting firm Towers Watson found that pay is not even among the top 10 drivers of employee engagement, which is defined as “an employee’s ability and willingness to contribute to company success.”


Drawing on four decades of scientific research regarding human motivation, my colleague Daniel Pink clearly exposed the mismatch between what science knows and what business does—and how that affects every aspect of life. He demonstrates that while carrots and sticks worked successfully in the 20th century, that’s precisely the wrong way to motivate people for today’s challenges. In his newest book, “Drive – the Surprising Truth about What Motivates Us,” he asserts that the three elements of true motivation are: autonomy, mastery and purpose. Although I strongly agree with Dan, I’d like to add three more elements that I believe are also key motivators for nearly every employee.


From my experience, another set of key motivators are the three things people look for in the most important relationships in their lives, and because most of us spend more time at work than we do with our family, our job is obviously one of the most important “relationships” of our adult life. So, what do people strongly desire in these critical relationships? They want safety, belongingness and appreciation.



People not only want to feel physically safe – that they can go out to their car in the evening without feeling anxious – but they also want psychological and emotional safety. They want to know that their opinion will be listened to and respected, that they will have a voice and that they are safe to express their feeling and ideas. They also want to know that their job is safe; that they won’t walk in one day to surprise layoffs or a termination for no reason at all. So the first challenge as a leader is to make your people feel as safe as possible.



Everyone wants to feel like they belong to something bigger than themselves—a team, a family, a company, or as some people like to call it today, a tribe. They want to know they are valued as a member of that group, that the people in that group accept them and that the people in the group care about them as an individual—that they truly belong to the tribe.


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Once people feel safe and that they belong, the next thing they strongly desire is to be genuinely appreciated—not only for the work they do, but for who they are as a person. They want to know that they’re not just the cog in the machine, but that they are appreciated as an individual and truly appreciated for their work, ideas, diversity, values and opinions.


So, it is my strong feeling that in addition to autonomy, mastery and purpose, you should also flood your organization with safety, belongingness and appreciation. The exciting thing to me is that all these things are what I call “atmosphere issues”; it does not cost any money at all to shower your employees with safety, belongingness and appreciation—and to give them autonomy, help them gain mastery in their work and see that there is a greater purpose to what they are doing than just making money.


John Spence is the author of “Awesomely Simple – Essential Business Strategies for Turning Ideas into Action,” and has been recognized as one of the top 100 business thought leaders in America and one of the country’s leading small business influencers.

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