Motivating with money: People & Companies

Over the years, I’ve come across many seminars, webinars, books and other presentations about motivating employees without money—a relevant topic and appropriate for any business. I’ve even incorporated some of these techniques at my shop because a company cannot continuously throw money at employees in an attempt to keep them happy and productive. There are times, however, when motivating with money can be the ultimate inspiration and, if managed properly, can literally generate the best bang for the buck.

Money as a motivational tool can take the form of an employee’s pay rate, commissions, bonuses and, perhaps once a certain level of seniority is reached, paid health insurance premiums. Not only do employees like it, but it’s often a simpler solution. Adding a few bucks to a paycheck is a lot faster and easier than establishing many other incentives.

Of course, increasing compensation usually means greater productivity and higher expectations. I’m not big on increasing pay just for time served, especially when a skill set hasn’t improved. If an employee is performing at the same level for 2 or 3 years and shows no initiative, money probably isn’t the answer. For most, though, additional compensation generates more enthusiasm and a higher level of motivation than a company shirt, award or the occasional day off.

The most effective way to use this technique is to compile a list of employees’ accomplishments and the expectations that would justify additional compensation. When they see you’ve taken the time to put these expectations in writing, it has more impact than a conversation. This could be called “an evaluation,” and employees normally assume an evaluation means a pay increase.

While it’s common to reward employees at evaluation time, it’s not guaranteed. Employees that are not improving may not deserve additional compensation. Also, monetary rewards may be justified at any time throughout the year for outstanding work, not just during annual evaluations. Employees must understand they’re expected to meet your standards all year long, not just at evaluation or bonus time. When they know you’re willing to monetarily reward them throughout the year for excellent performance, they tend to maintain their enthusiasm and, hopefully, take on more responsibility and improve their skills along the way.