Is money a motivator?

- Now finally I just want to address the question of money. Is money a motivator? A lot of people say yes, but I really don't think it is. If you look at Maslow, he doesn't mention money. You could argue you need some money for security, you could argue that money gives you status, but I would argue it's the status that people want, not the money. And self-actualization's got nothing to do with money. So I just want to say a bit about why I don't think money's a motivator. Or to be a bit more specific, money is actually a push motivator, not a pull motivator. So what do I mean by push versus pull? Well, money will make you do things, it won't make you want to do things. And a true motivator, a pull motivator, makes you want to do that thing. So if somebody said drive to Scotland and back, I'll pay you a thousand quid, you'd do it, and it would push you into doing it, it would make you want to go to Scotland to get the money, but it wouldn't change how you feel about Scotland. It wouldn't actually make you want to go to Scotland. If they could convince you that Scotland was brilliant, which it is, by the way, then that might make you want to go there. But just paying someone to go there doesn't make them want to go there. In fact, it almost makes you think it must be bad 'cause they're having to pay me to do it. Now, there's been some studies done into this, and one of the things they found is that money's a motivator below a certain point, money will make you happier and will make you enjoy your work, or at least, if you're paid less than a certain point, you start to be less interested in your work and to enjoy it less because the money has gone so low. It's sometimes called a hygiene factor. So if you give somebody a pay cut, they will be less motivated. But if you give them a pay increase, then they just think, mm. Now, a pay increase actually does have a short-term effect, because you think, well they're giving me more money, that must mean they think I'm doing a good job. So it's actually the praise implicit in the pay rise that's the motivator. If the money went into your bank account and nobody said anything, then that would be far less effective than, well done, here's some money, 'cause the money's just the proof of what they really think. So below a certain point it's a problem, and if you take it away it's a problem, but adding it on is only good for a certain amount and then you don't get any more benefits. Now, a recent study went into this in a slightly more sophisticated way, and what they found was that for mechanical tasks, if you pay somebody more, they'll do more, because they'll do more to get the money. So it is a motivator for repetitive, non-thinking tasks. But for any non-mechanical task, like creativity or something, they actually found not only was the money not a motivator, but it was actually reverse. If you paid people more, they would do the task less well. And that's amazing, isn't it? Now, why would that be? Why would money be a reverse motivator for anything non-mechanical? And I think that's because the money distracts you from the task. So if you take, for example, selling, which is a non-mechanical task, requires creativity and effort and belief and all sorts of stuff. If you pay people more if they sell more, it starts to distract them from what they're really doing and they're doing it for the money rather than the fact that they actually believe in the product. So it replaces the motivation in their mind, and they start to think only about the money. And of course the money will always be unfair. So if you pay sales people by results, some people will have an easier patch than others. Some will just have some better customers or whatever than others, it's always going to be unfair or perceived as unfair by the various salespeople. What about the guy who's improved a lot but still hasn't overtaken the others? Should he be paid more or not? If you pay him more, the first person's going to think it's unfair, if you don't, he's going to think it's unfair. You can never win if you start trying to use money as a motivator. And it will escalate as well. You got to pay people more every year, 'cause the year they don't get an increase, they're thinking oh, well why did I bother then? So it's a road to nowhere. It's far better to motivate people with all those other Maslow things about overcoming challenges and making a difference and helping people's lives, there are lots of things other than money which you can motivate people with. And I'd just like to finish this with a little question, which is, if I paid you more, if I just arranged for a bit of money to silently go into your bank account, and if I was your boss and I just paid you a bit more, would you improve the quality of your work? Because if you're going, well yeah I would, then I think that's a disgrace, 'cause then I think that means that you're not doing the best job you possibly could at the moment. And having decided that it is worth doing the job for the money that you're paid, and I do agree. There are some jobs you wouldn't do unless you were paid lots, but having decided to do that job, surely you would just do the best job you can. You wouldn't withhold some of the quality 'cause you weren't paid a huge amount. And similarly, if I arranged for a bit of money to sneak into your bank account, would you work any harder? And I would hope that you're not sitting there going, well yeah, I would. So I think the quality and how hard you work shouldn't really be connected to money. And if they are, I think it shows that you're not really motivated. You're only doing it for the money, you don't really care about your work. And that means you're doing the wrong job, and it means your boss has failed to motivate you and I think that's a real shame. So if you are thinking that, I think you should consider changing job or trying to find a job that you really believe in, 'cause you've got to, if you're going to work for five days a week on something, you might as well make it something that you believe in. So I think when you really think about it, money isn't a motivator. It makes people do things, and it's perhaps proof that they're doing well, but really, the bottom line is it's other things that are motivating you, not the money itself.