Corporate lies that support mediocrity: People are motivated by money

I will be the first to declare myself guilty of living corporate lies. I have both received the lies as an employee and passed it on to subordinates. 

The lies are about the concept of work and reward and have not changed much over the last decades despite huge leaps in technology and understanding of human decision making processes.

This series of posts are not about bad companies doing bad things, nor is it a post of lazy employees that cannot handle the truth. Rather it is a series of posts that look at the lies that companies and employees are sharing. Lies that keep businesses and people locked in mediocrity.

It is also a call for a new way of collaboration between humans and corporations that benefits both. A way that is not based on wrong assumptions and that creates value for all parties

Corporate lie: People are motivated by money

The economic theory of the economic man that is rationally trying to maximize utility has been a foundational principle of modern society together with Milton Friedman’s theory of shareholder value: Businesses and people alike only behave in rational and selfish ways and are trying to maximize monetary return. We have accepted this as a fact in business despite the world being full of unselfish and irrational behavior

“We care about you and we are going to reward you with promotions and pay increases”

With the introduction of scanners able to record brain activity, there have been advancements in understanding of how humans are making decisions. This has confirmed that humans are not rational - but we already knew that.

If humans were rational there would be no obesity, smoking or alcohol and drug abuse. There would be no wars, crime, hate and violence. Human decision making are affected by emotions, bodily states, chemistry, social settings and sensory input.

Plenty of research as far back as Maslow motivational models has documented that money is a hygiene factor that needs to be satisfied to prevent demotivation. More money does not create more motivation once that point is reached. As the author Daniel Pink puts it: “Get money out of the way”.

Despite the overwhelming evidence that money does not motivate, companies and employees are conspiring to pretend that it does. Companies pretend they will pay more for more effort and employees pretend they work hard and will work harder for more money. Both are lies.

“What people think they deserve is different from what motivates them”

Gallup has demonstrated that despite high satisfaction rates, only 13% of worldwide employees are engaged – that they give their best at work. Most employees just do enough to not get fired. Gallup has found no link between pay and employee engagement whatsoever.

“You can be satisfied with what you get at the same time as wanting more”

Most employment is firmly within companies in mature industries. They are locked in a fierce commodity battle with similar looking competitors in a race to zero.

They cannot afford to give automatic pay rises, especially when they know they get nothing in return.

At the same time the command and control hierarchy with promotions and pay based on seniority does create not many opportunity for promotions – unless somebody dies.

In the US this is very visible. For 15 years there has been no growth of median household incomes, even though the economy as a whole has grown.

You cannot blame companies for not paying people more when they don’t get anything in return.

“Employees are just plankton for the corporate whale”

The sooner this false assumption is addressed the faster the company and its people in it can rise above mediocrity. When you truly motivate people you also create financial results.

Engagement research shows that employee motivation is created by:

1. Purpose. Not only the purpose of the company but also the department and the employees ability to make a significant contribution. Are we successful and making the world a better place. Are we proud of what we do.
2. Fairness. How the company treats its stakeholders. How fair is the distribution of value. How fair are promotion and pay processes.
3. Culture and leadership. Creating no blame learning environments where mistakes are ok. A non-conformist innovative environment where it is ok to challenge status quo. A low command and control structure.
4. The way work is organised. Can the employee chose, influence and design the job? Does the employee have influence, responsibility and autonomy.
5. Personal Growth. An environment of challenges, honest feedback and opportunities for personal growth.