At a recent seminar hosted by Loncom True Vision, a group of executives engaged in a thought-provoking discussion about the role of money as a motivator for employees. The key question posed was: Is money a long-term motivator?
At the start of the conversation, opinions were evenly split—50% believed money was a long-term motivator, while the other half disagreed. However, by the end of the discussion, there was a unanimous consensus: Money is NOT a long-term motivator.
The Myth of Money as a Sustained Motivator
Many small business owners believe external motivation isn't necessary if they hire the right people. High performers naturally push themselves to excel, regardless of monetary incentives. While competitive salaries are essential, these individuals are internally driven and don’t rely on financial rewards to stay engaged.
That said, most companies still need strategies to motivate their teams. Compensation is often the go-to incentive, and it can drive short-term behaviour. However, research shows that financial rewards only have a temporary impact—usually lasting no more than a week. To influence behaviour, incentives must be at least 10% of an employee's base pay for the period.
Beyond Money: What Motivates Employees?
While financial rewards play a role, employees crave recognition, purpose, and a sense of belonging within an organisation. People want to see how their contributions impact the company's success and be acknowledged for their efforts.
Effective non-monetary motivators include:
· Public recognition in front of peers
· Personal acknowledgements from leadership
· A culture of celebrating achievements
· Clear communication about how an individual’s work contributes to company goals
While salary is crucial—especially for young professionals managing student loans or financial responsibilities—seasoned employees often find purpose-driven motivation more fulfilling than a paycheck alone.
The Executive Takeaway: Recognition Matters
The executives in our seminar found that one of the most potent motivators was taking time to understand and appreciate employees’ contributions. Simply acknowledging a job well done fosters engagement and loyalty.
A simple yet effective leadership strategy is "catching employees doing something right" and recognising their efforts. Rather than only offering feedback when correcting mistakes, leaders should provide specific praise and make recognition visible across the organisation.
So, what did our executive group do? They took time to thank each other for their hard work—proving that a culture of appreciation can be just as impactful as financial rewards.
Final Thoughts
While money is essential to employee satisfaction, it’s not the key to long-term motivation. Authentic engagement comes from recognition, purpose, and a culture of appreciation. Wise leaders understand that taking the time to acknowledge and celebrate their employees' efforts can drive lasting success—without relying solely on financial incentives.
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