Why Money Is NOT The Key To Employee Happiness (And What Really Is)

Every business leader knows this one simple truth: Happy employees are productive employees. The question is: How do you keep your staff happy?

On the surface, one might easily believe money is the key driver for motivation. But recent studies suggest otherwise.

Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us, likens money and other external rewards to a jolt of caffeine. Assuming the worker makes a fair wage to begin with, these things work for a short period of time—pumping the employee up with artificial stimulation—but the effects eventually wear off. Afterward, the employee experiences a “crash” and, just like all addictive substances, it soon takes more and more to get that same high.

Tempting employees to work harder for the sake of the almighty dollar may indeed yield positive short-term results. But over the long haul, you’re not creating a sustainably happy, self-motivated workforce. Your team is simply chasing the carrot you’re dangling in front of them. And sooner or later, you’re going to run out of carrots.

Pink suggests the far more effective, sustainable motivation comes from the employee himself, not from you (management) or anything you can give him. Internal motivation is the true source of employee happiness and, ultimately, long term employee productivity.

As a manager, this might make you feel somewhat helpless. After all, if you can’t rely on the old carrot and stick model to keep your staff members rocking and rolling, what else is there?

In truth, management can play a large roll in helping to develop internal motivation within their employees. It takes a more nuanced approach, but the outcome is well worth the time investment. Consider the following tips:

• Help employees understand that their work is meaningful; show them how their role impacts the bigger goals of the organization.
• Help employees feel a sense of accomplishment; acknowledge when projects are complete.
• Help employees take ownership; give them a voice in the decision-making process and responsibility to determine how things are done.

Employees want to feel invested in their work and the organization. They want to feel purposeful and empowered. When employees are internally motivated, they want to work hard and succeed because it feels good and it makes them happy, not because it adds a few extra pennies to their paycheck.

If you’re struggling to keep your staff motivated, drop the carrots. Focus instead on helping your team tap into their own source of internal motivation.