Today we publish an abridged version of a leadership article by training consultant John Bland – in particular on the role of money in motivation.

moneyPeople often put a lot of money and energy into their hobbies and interests, sometimes more than they put into work.

Why is that, and what are we missing in the world of work?

Key software programmes such as Linux or Mozilla Firefox were (and are) developed by IT specialists, unpaid and in their spare time.

Just think about that. They spend their day doing normal work and then in the evening and at the weekend they spend their spare time ‘working’  for free.

In his book “Drive, the Surprising Truth about what Motivates us”, Daniel H Pink forcefully challenges our understanding of rewards, and specifically the role of money in rewarding and motivating.   (See more on YouTube:  http://www.youtube.com/watch?v=u6XAPnuFjJc .)

His jumping-off point is that the academic work done over the past few decades consistently shows that financial rewards hinder creativity.

Think about the world of art, or music to realise the truth of this statement. Many of the World’s greatest artistic contributors lived and died in relative or abject poverty.  Their creative urge was not driven by, or rewarded with money.

Returning  to the research – in one study on rewards at MIT, students were given tasks and three levels of monetary reward according to performance.  If the tasks were mechanical, then the higher the pay the better the performance. By contrast, as soon as rudimentary cognitive skills were involved, larger rewards lead to poorer performance. So it seems that monetary rewards are ineffective if the work requires a part of the creative brain.

Another study was done in India where the rewards were made much bigger.  Here, those who were rewarded the most highly did worst of all.  And those who received middle level rewards did no better than those receiving the lowest rewards.

The implications are enormous. The startling conclusion is that higher monetary rewards lead to, at best equal performance, and potentially to worse performance.  It’s worth reading that twice – research shows that higher monetary rewards lead to at best equal, and often worse, performance

Let’s be clear: I don’t work for nothing, and neither do you.  Nor do I expect people to do so (and you shouldn’t either).   But equally, as the recent financial crisis has demonstrated repeatedly, an over-emphasis on money creates major problems.  Financial rewards MUST be coupled to something else, otherwise organizations  are in really dangerous territory.  There has to be a bigger vision, or the only reason anyone worked at a given organization would be for the money – at all levels.  Just think what an organization would look like if the only reason people worked was for money, doing only what earns them more,  avoiding  anything that earned them less.

There is probably truth in the old   “Pay people peanuts and you’ll recruit monkeys” so, firstly, it is crucial to pay people enough to get money off the table as an issue  – and then forget it. A compensation and benefits package will drive the way people work, but it will rarely motivate them.

So what is it that inspires people in their hobbies?  Why do people really work?  What really does motivate?  Great leaders, great managers, focus on the things that do get people up in the morning.

About the author:

John Bland As a former Olympian, senior Global Integration Director, John Bland, inspires people to follow their passions and achieve at the very highest levels. He combines this with a vast understanding of cross cultural issues. Company profile: John Bland.

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