Paying More Doesn’t Always Get More

If you want employees to work harder, you have to pay them more, right? The answer to that question may surprise business owners, especially when you look at what really motivates people.

One popular theory on motivation suggests the money isn't necessarily the answer to more productive employees.  Frederick Herzberg1 found that employees tend to be influenced by two things:

  • External Factors: salary, working conditions, company policies
  • Internal Factors: recognition, responsibility, achievement, growth

External factors are related to dissatisfaction. For example, a low salary or poor working conditions will make people dissatisfied with their job. But the surprising part is that a high salary doesn’t necessarily make people satisfied with their job.

So, if it’s not a raise that motivates people, what is it? Herzberg said it’s internal factors.  These are the rewards that make employees feel good about what they do. It might be recognition for a good job or a challenging new job responsibility.


Want to motivate your employees by increasing their satisfaction? Consider these low or no-cost rewards that appeal to their internal needs:

  • Employee of the week program
  • Designated parking spot near the front of the business
  • Ask employees their opinion on a problem facing the business
  • Service awards based on years employed
  • Provide opportunities to train other employees
  • Recognize an employee’s accomplishment in front of their peers
  • Mentor a promising employee

If you’re looking to increase productivity, don’t automatically jump to paying more. It might prevent employees from being unhappy but it won’t necessarily result in engaged employees. Look for ways to meet internal needs too and their satisfaction (and production) are likely to increase.

1Herzberg, F., Mausner, B., Synderman, B. The Motivation to Work. New York: John Wiley 1959.

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