The short answer is no!
For the long answer, keep on reading and it still gets to a no!
There have been tons of surveys, polls and studies made by Gallup to psychologists and behavioural scientists over the years to try to answer this question. The answers are always mixed but one thing appears to be certain and that is that whilst money does motivate people up to the point of looking after the basic necessities of life, it’s not the most important factor for an employee.
In my experience of managing employees and businesses over the last 25 years, there are a multitude of factors that motivate people and money isn’t at the top of the list. In a large company where I worked, we introduced a bonus scheme for all staff and over some years the amount of bonus reduced per person due to profitability but I found that everyone still had the same motivation or lack of it in some cases! That’s been true in my experience of consulting over the last few years as well.
One of the most interesting recent articles (in April 2013) on the subject in the Harvard Business Review was by Dr Tomas Chamorro-Premuzic, Professor of Business psychology at UCL London, based on various studies and Gallup research. I recommend reading it for a full analysis of how money does not motivate employees http://bit.ly/16v3G2G
The key conclusions in Dr Tomas’s article were that money actually demotivates us and that one size does not fit all. He also cites a previous paper which stated that up to a $75,000 salary, emotional well-being levels are satisfied and after that it plateaus.
Different employees have different values and companies must find what really motivates their people to get them engaged. The final premise in his paper was that the “biggest organizational cause of disengagement by employees’ is incompetent leadership”. This pretty much validates my own experience.
So here’s my 5 key tips to get your employees engaged:
1. Be fair – make sure people are paid the right salary for the job they do and pay the market rate or more. Nothing puts off employees more than a company being unfair in their pay scale compared to both inside and outside the company.
2. Be patient – even if you’re a tech genius not all your employees maybe and you must give them time and space to learn their jobs.
3. Communicate – you must communicate the company objectives and where you want to take the business. Include the bad news as well as the good and if your employees don’t know any of this, how can you get the best out of them? Listen to staff as well since communication has to be both ways, you’ll be surprised at how many good ideas they generate for your business.
4. Say thank you – it’s too easy to focus on what’s going wrong and forget to recognise when someone has done a good job. Make sure you praise them and publicly acknowledge it.
5. Act fast – if there are any staff issues, act fast. The longer you keep things, the worse it will get and you’ll lose credibility.
With experience you realise that money isn’t everything and if you have enough to look after your basic needs, your motivation will be elsewhere – as Arnold Schwarzenegger once said “Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million.”[Contributed by Asoka, an Independent Finance Director and Management Consultant based in London. He works with growing companies as their part time Finance Director and is the Founder of AKCA Consulting, which helps companies improve their financial health.]