Sterling Performance

Is Cash the Best Motivator?

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Management
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In straitened times, perks are a tricky area for employers looking to buoy spirits without busting out massive bonuses.

It would be disingenuous to say pay doesn’t matter. But engaging anyone — from board members to employees — is better done by allowing them to take ownership of strategies, says Richard Donkin in the FT.

The psychology of motivation can elude employers because it taps into irrational behaviour. Financial wins work on a different part of the brain to that controlling altruism and social interaction, according to Ori and Rom Brafman’s book, Sway, the Irresistible Pull of Irrational Behaviour.

They quote a study at Duke university in North Carolina, where two groups of students took the same business exam, but one group was offered 2.5 cents for every correct answer.

The unpaid group scored higher on the tests — the reward in this case acted as a disincentive, probably because it was a risible amount. It would be like a friend offering you money to help them move: you’d probably be insulted rather than grateful.

It’s a question of what your incentives tap into — someone’s financial interests or, say, a sense of loyalty. Sometimes the most simple perks work just as well, if they play on the non-financial motivations.

Donkin also notes the value of “speedy recognition” through relatively low-cost rewards — breaks, use of the company Jag, a bottle of wine. This is still money, in some cases — he quotes Projectlink Motivation, which offers vouchers and ‘supercheques’ to high performers as part of its service. But these tend to be more affordable one-offs that presumably give still someone the gambling-high of a big financial win.

I was intrigued by the national differences between gifts people award themselves via Projectlink vouchers. According to the company’s managing director, Stephen Humphreys, the French like a good bottle of wine, the Spanish a cured ham. And the Brits? We slap ourselves on the back with brand new paper shredder.

posted by Joanna Higgins
July 3, 2008 @ 10:28 am

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