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Why Money Isn’t a Great Way to Motivate Employees

Many managers believe that money is the strongest motivator for their employees. They seem to be ignoring countless studies that show employees are not driven primarily by the desire to make more money. A 2012 study from McKinsey shows that there are far more effective ways to motivate your workers than paying them a higher salary.

That doesn’t mean that money doesn’t have a place at all. It just means that you shouldn’t make it your primary focus. Effective managers understand the role that money plays in driving employee motivation.


Why Doesn’t Money Motivate Many People?

Most studies have shown that money doesn’t increase employee satisfaction.  They show that people are more inspired by the opportunity to express their creative side. They enjoy tackling new challenges and changing the world.

These studies have shown that people working in careers involving innovation tend to be happy with their work. They tend to be happier than people working in administrative roles.

Employees also enjoy working with people that they like and respect. They will be miserable going to work every day if they hate the environment and people that they work with. There is no amount of money in the world that will change that for them. You need to make sure that they respect their leaders and the rest of the team.

Is there a Point Where Money IS a Motivating Factor?

Money may be not be the strongest motivator for most people, but that doesn’t mean that it doesn’t play a role. There is a point where you should focus on it. Here are some situations where you should consider raising your employees:

  • They are having a difficult time making ends meet. It is difficult to stay motivated at work if you are going home hungry all the time.
  • They are getting paid substantially less than the competition and there is no sign that they will ever get paid the same. Paying premium salaries may not be the most effective way to keep people satisfied, but underpaying them can create job dissatisfaction. Employees may be willing to work for lower rates for an employer that they love if the company doesn’t have the budget. However, they don’t want to work for a company that is cheap.
  • You have given them mixed messages about the way that your company rewards performance and loyalty. You don’t want them to believe that they are getting paid less because they are not appreciated. You will need to be upfront with them about the fact that the business has a limited budget, but that you still appreciate their accomplishments.
  • You are paying below market rates while making substantial profits for yourself. This is arguably the biggest mistake that businesses make. They end up making their employees feel like they are being taken advantage of.

There are better ways to motivate your employees, but that doesn’t mean that you can neglect it completely. Make sure that your employees understand that they aren’t getting gipped.

About the author: Kalen Smith is a career and entrepreneurial writer.


  1. I have lived in Asia for a few several weeks where tipping is not practiced and it is great. I recieve excellent service at restaurants, hotels etc. with no one needs any gratuities.

    So why do some cultures need money to motivate staff to set up your time and effort to perform a good job?

  2. Adding such particulars on how to proceed just in case of poor employees, The way you would handle screwups, how to handle office ‘politics’, etc.

  3. I understand it’s lengthy and that i requested earlier however i can use more solutions if you possess the time. Those earlier were so useful and I can use more insight. We have had a number of problems, starting with her feeling which i don’t earn enough and lack motivation. This is not true and that i was motivated enough to begin working full-time at 15, put myself through college and professional school, and work multiple jobs on her, all while planning romantic nights out and reading through books trying to puzzle out wrong beside me and my marriage. I understand this really is boasting and I am biased, however i really labored challenging for her from the time we met at 18.

    2 yrs back I discovered that they was thinking about cheating having a guy at her work, that has since ongoing with teasing along with other males, hanging out really late, strange sexual interests, consuming, pot, tats, insulting me like a guy and other problems. It truly triggered our marriage to consider a success. We’ve got better only one ongoing problem was she always appeared to believe that I had been a terrible husband, so when she went together with her buddies they spent considerable time speaking about how exactly I am useless. This ongoing until lately, together with her calling me drunk from bars where they spoken striking on males and saying I ought to do her chores while she was out hanging out to prove my value. I have responded when you are much less devoted to trying is the husband she would like, considering that I felt I had been unappreciated which she’d put me through a myriad of discomfort during the last few years. I essentially informed her she will leave and find out whats’ available on her if she would like but to prevent taking me as a given.

    All of this transformed lately together with her returning home with tales about how exactly great I’m, how everybody concurs and just how the different husbands of her buddies and colleagues do a myriad of awful things. I believe she recognized that I am a decent if problematic husband who’s endure a lot from her that many males might have walked from, while other husbands virtually do anything they want. For instance, certainly one of her colleague’s husbands is within his 40s and loves to collect his youthful female employees for nights out in the club until 5 am several occasions per week. My spouse was shocked with this despite the fact that she functions exactly the same way. I believe she thought all husbands were really like I had been and labored difficult to do what their spouses want 24/7 whilst buying a lot of cash. I recall declaring that that many husbands aren’t effective this tough while their spouses alter men who pump gas and otherwise just drink and sleep around, and she or he just stating that i do whatever she would like. Now it isn’t like this at least.

    Is she really altering and recognizing I am not too bad? Or perhaps is she just wishing I return to kissing her butt constantly while she does whatever she would like? Will I return to the way i was or hold on wishing she changes?

  4. Johnny Souvannakhiry

    ive been nice possess a couple of buddies at the office but a couple of people just began being rude every single day specificly in my experience and that i treat everybody like a friend, i am not likely to endure it cause im much bigger person. however i never did almost anything to them. one of these is my boss and im getting frustrated. the task does not mean much however i really like being cashier there. i cant understand why theyre beginning to dislike me

    i believe your right maybe they’re mistaking it for weakness (i am not), not a chance i havent done almost anything to provoke them.

  5. Also, why the wires in UTP cable are twisted in pair together?:

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