Non-monetary motivation

Tom Anastasi

Non-monetary motivation

Many entrepreneurs ask how important money is for motivating employees. That’s a more than fair question because all small business people want the best from and for the people who work for them.  They also have to watch the bottom line.

The short answer is that money is not the most important motivator under most circumstances.  If people’s basic needs remain unmet – those that that Abraham Maslow called lower-order needs, like food, shelter, safety — then extrinsic rewards, things we get from others, like money, can, in fact, be great motivators.  However, once our basic physiological needs are met, then money’s not a great motivator — unless someone is rich.

Most entrepreneurs will never have to deal with this, but money can be a motivator to the people at the high end of the earnings scale, but not because there’s anything the high earners need to buy since they are well-heeled and want for nothing.  For them money becomes a scorecard.  They want more so when they compare themselves to others, they come out on top. 

Monetary rewards can be motivators for very repetitive, non-skilled jobs.  “Do this and I’ll give you a monetary reward,” will motivate people in these jobs.

If we’re looking at the employees of most entrepreneurs – we’re not talking about minimum wage earners, or overpaid workers, but the people who just want to earn a living, money is not a great motivator. They have enough compensation for basic needs with some extra for savings, fun, and creature comforts. 

These people are motivated by the opportunity to do a good job, a job worth doing.  They are looking for an employment situation that allows them to do that.  That’s ultimately what motivates them.  They are looking to be motivated by rewards such as recognition, job satisfaction, and praise. 

Meeting people’s psychological needs is highly motivating and costs you little or nothing. We’ll look at that next.

McClelland’s theory of needs

Harvard University and Boston University Professor David McClelland found 150 human needs and focused  on 15 needs most important to business. I’ll look at the top 5 for entrepreneurs: achievement, power, autonomy, affiliation, and change.

The Achievement Need.  People with high needs for achievement want to accomplish substantial goals, and they want to be recognized for their successes.   To motivate these people, set realistic targets for them, targets that require them to work hard, but are achievable. Once they accomplish the achievement, recognize it — let the person know in a public way you’ve noticed what they’ve done. This will motivate them to further achievement.

Not everyone has high achievement goals. Some people want to keep a low profile. They hate the spotlight. They’re satisfied with the opportunity to do their best work without a lot of fanfare. Respect that. If achievement alone becomes the centerpiece of motivation, these people will be put off by constant calls for greatness.

The Power Need. People with a high need to exercise power need to be in control. Give them something of which they can be in charge. Put them in charge of a project or make them a team leader, or let them manage a small group of people. They’ll thrive.

People with a low need for power may want to be told what to do. When they’re given a clearly defined task, they’ll achieve it. These people will often surprise you because they don’t fit the mold of the go-getter. They tend to get frustrated when they’re asked to do a thing for which they’re not ready.  They may also not be ready to tell you they feel that way.

The Affiliation Need. We spend more awake time at work than any place else. When people who work for small businesses are queried on what they like about their jobs, they often mention the relationships with customers and workers.

Make it a point to have lunch or dinner as a team as often as you can.   Sponsor or encourage outings and get-togethers.  This will make a difference.

The Autonomy Need.  People with high autonomy needs want to do things with little to no supervision. “Tell me what needs to get done, and I’ll make it happen,” is their rallying cry. They gravitate towards jobs that allow them to do their thing, which is why so many people with high autonomy needs choose entrepreneurial companies – the boss is too busy running a business to constantly check on them.   Leaving people with high autonomy needs alone can be more motivating than pretty much anything else.  And as long as they’re doing their jobs, it’s a great strategy.

Sales, especially outside sales, is a natural fit for people with high needs for autonomy. As long as your reps are making their numbers, give them wings to fly. But if they are underperforming supervise them more closely. Have them start and end every day in the office, make them do detailed logs of where they went and with whom they spoke. Their performance will improve as they seek to regain their autonomy.

The Change Need. People with the high need for change want new and different challenges. People with a low need for change hate anything different and seek routine and predictable tasks. People who have a low need for change would flourish on an assembly line.

Consultants are usually on the opposite end of the spectrum.  They love change. They work briefly with companies and then move to a new environment and task. They thrive on the newness.

Most people are neither consultants nor assembly line workers.  They like a bit of a routine and a job they know they can do well.   They also like to try something new every now and then.

Many companies have introduced “innovation days,” in which for a day or two every quarter everyone just focuses on ways to improve the company.    There are meaningful rewards for ideas that improve the business. 

Innovation days offer many benefits.    They break up the routine for a few days a year and encourage employees to make the business more efficient.  They can encourage people to really care about the success of their company. 

Meeting people’s psychological needs can be a no-cost to low-cost way to motivate them to be the best they can be.   It’s more than just a handful of techniques.  You need to instill a culture of motivation within your venture.    That will be discussed next.

A motivational culture

You need to develop a motivational culture to nurture and inspire.     People are drawn to entrepreneurial businesses even though they know they can expect below-average compensation because they want to be part of something special and because of the camaraderie that comes with a small venture.

In baseball, they say that a team develops the personality of the manager, and that is true for small businesses as well.  Joe Torre was manager of the Yankees and LA Dodgers and was one of the most successful managers ever.   He had six lessons for baseball managers that can apply to entrepreneurs as well.

  1. “Put the best people around you.”   Your business is your dream.  Find the people who share your passion, and make your vision a reality.  
  2. “Failure is part of the process.”   If you are a baseball player and fail 7 in 10 times, what do they call you?  A superstar with .300 batting average.   Championship teams win about 6 in 10 games, which also means they lose 4 in 10 games.   Failure is part of the process.  Learn from it, and move on.   You don’t want to be reckless, but companies that never fail probably aren’t taking any risks, and forego that potential.
  3. “Find the positives.”   This is an ongoing job.  Some feel that handing out paychecks every couple of weeks is enough.      Once or twice a year, they gush on about how much they value someone’s contributions.   People need to hear it more often.   Find the positives in people’s service and recognize it frequently.  Some will want the praised publicly, while others will prefer it be done privately.
  4. “Recognize effort.”   Business is all about results.   But smart entrepreneurs also recognize effort, even when results fall short.   Let them know that you know they’ve been trying.
  5. “One game at a time.”  Don’t get too high in the good times or too low when business is slow. Every business has peaks and valleys.    Sometimes these variations are due to seasonality or the overall economy.
  6. “Know what success is.”   Many businesses are successful and don’t know it because they never defined what success is.    Do that.  Write it down.  Better yet,  frame it and hang it on your wall.   Make success be measurable and achievable.    When you hit an important milestone celebrate it.   You and your company have earned it.

Final thoughts

As entrepreneur, you are the motivator-in-chief.    You’re not rich enough to motivate with huge amounts of money.    That’s not really a handicap, since money’s not the most important motivator for most people.    Motivate by meeting people’s intrinsic needs, and by creating a culture of motivation within your company. 

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