- November 3, 2020
- Blog
In the previous article on motivation, we saw how to destroy motivation. In this article, we discuss what fosters motivation – but from the predominantly material side.
I have run teams that have measurements of performance being very easy: sales; very difficult: teachers; and every other type in between: software engineers and data scientists. I am sure, many of us consider money as the prime mover for performance or output. Is there a proof? Does it really happen so? Let us examine an experiment. I have again taken some creative liberties:
The Experiment:
The experiment was conducted in a semiconductor manufacturing facility. To that extent, it was not a lab setting that most managers have a gripe about. All employees worked in a 12-hour shift of four-day work cycle and took the next four days off.
The employees were randomly divided into any of the four groups:
- Money: On the first day of the work cycle, the employees were greeted by the manager thus: “Good morning! If you reach or exceed X chips today, you will receive Rs. 1,000 in cash. Good luck."
- Pizza Voucher: On the first day of the work cycle, the employees were greeted by the manager thus: “Good morning! If you reach or exceed X chips today, you will receive a voucher for pizza. Good luck."
- Compliment: On the first day of the work cycle, the employees were greeted by the manager thus: “Good morning! If you reach or exceed X chips today, you will get a text message from me: “Well done!”.
- Control: In this case, the employees received no note and were offered no cash or kind bonus.
I am sure most of us are thinking that the largest production came from Money, Pizza, Compliment and doing nothing was disastrous last. That is true.
The Money, Voucher and Compliment did far better than doing nothing. But the magnitude was somewhat surprising. The pizza voucher (6.7%) did as good as compliment (6.6%)! Cash came third with 4.9%. But hey, what about the performance in day 2, 3 and 4?
On day 1, 2, 3, and 4, influence of money on production was like my current Airtel signal: fluctuating erratically between 4G, H+, G, E and nothing. As I said earlier, it had increased by 4.9% but dropped by 13.2%, 6.2% and settled about 2.9% lower than control over the next three days. Overall, there was a drop of 6.5% over control.
Compliment had an increase in production on day 1. But it drifted lower towards the base.
Pizza voucher too dropped but it settled somewhere between Money and Compliment.
Clearly and surprisingly, the winner is Compliment.
Money as a Motivator:
I always had reservation about cash as a motivator for increasing output. In my personal experience, over the long run, cash brought the productivity to pre-cash levels. If pressed for techniques to increase productivity, managers would suggest throwing even more money. Innovation here is pathetic. Managers try lots of variations: hourly bonus, daily bonus, weekly bonus, along with monthly bonus and what else not – they never let money go from thinking that it was the prime mover of productivity. It rarely produced lasting change in attitudes and behavior.
Managers behave as if they have caught a proverbial tiger’s tail. Any amount of cajoling to drop money as a motivator would come with threats of “then don’t ask me for numbers”. Is it that bad? It appears not. A US midwestern company suddenly eliminated money as an incentive that was in place for several years. Expectedly, productivity dropped in the short run. But over a period of several weeks, the productivity climbed back to old levels and sometimes even exceeded it.
Too little money does irritate. But that does not mean more and more of it is good.
Here is a very interesting article in HBR on why money as a reward is such a bad idea!
Pizza Voucher:
That it languished alongside (ok ok: slightly above) Money as a motivator is to me really surprising (but still does not work). Some of my managers have tried gifts of all kinds: Amazon Vouchers, Tupperware, Clocks, and what else not. While the administration department worked more and spent more to ‘innovate’ in type of Gifts, the productivity rarely went up.
I must also inform you all one small experiment that we did. We asked what employees wanted and was in the range of the budgets that we had in mind. We bought them up as non-cash incentive and it appeared to work. We thought it helped the employees visualize what they have wanted, asked and would get. But strangely, the administrative pain made managers drop the program.
The dark horse: Compliment:
But what is surprising is the performance of mere ‘Compliment’. But this should not have surprised me for whenever, I have chats about past glories, employees had always remembered what compliments they got and not what money they earnt.
We have been wanting to come up with some really genuine expressions of ‘Compliments’. I have maintained that what comes from the heart as a true word on the floor, in a town-hall meeting and in personal notes go a long way. Unfortunately, most managers don’t seem to believe in the power of compliments.
And most corporates spend over 5% of the topline on just Money as a motivator. Clearly, the material side of the equation is zero.
