How to improve staff motivation

How not to motivate your staff

Wrong staff motivation! Photo: deDMazay & phodopus/ source:

I recently spoke to a young high-tech entrepreneur. He was complaining about his employees. They did not contribute, lacked motivation, but were always looking for better pay. He rolled his eyes and asked me in a depressed mood:

“All I want is to have motivated employees showing commitment. Is that asking too much? “

No, it is not. A commonplace notion states: You will only achieve long-term success with motivated employees.

As an entrepreneur or general manager you impact the staff motivation and employee commitment in your company – but in ways other than what you may think.

Could you possibly improve staff motivation?

This will work in the short-term, but it is a dangerous game. Money may be attractive, but it has no sustained impact on motivation nor on commitment!

Please do not take this the wrong way. If you do not pay your employees an adequate income, then you will demotivate your employees! They will not be commited to work for you.

But the inverse conclusion will only work on an exception basis: If you pay an above average income, this will by no means result in your employees being more motivated or more commited over the long haul.

The crux with bonus payments

Some believe that they can master and control their employee’s motivation with bonus systems. A bonus is paid if the employee attains a certain performance. – How odd. Why does the entrepreneur do this? Does the employee not have an employment contract obligating him to perform this service, while the company is paying his income to do so?

If you wish to motivate with money, then you are accusing the employee of not giving their best effort. You believe that he is sandbagging a portion of his work performance. You are therefore only paying him 80%, for example. By enticing him with a 20% bonus payment at the end of the year, you want to close this gap in his work performance, provided he performs.

Reinhard K. Sprenger accurately called this type of bonus payment a mistrust discount (from his terrific read “The Myth Behind Motivation”). By making this type of bonus payment, you are suspecting your employees of an unwillingness to perform. This does not exactly instill a trusting relationship. Does it motivate? Does this lead to real commitment?

Then what exactly is employee motivation?

Employee motivation is one of those hard to grasp concepts. When is an employee motivated?

Generally put, my understanding of motivation is:

“The force of our psyche that drives and controls our behavior.”

Motivation then is the reason behind a person’s particular behavior. Motivational science differentiates between extrinsic and intrinsic motivation.

Extrinsic motivation

If you hold a carrot to a donkey’s nose, this is called extrinsic motivation. This is how you would motivate the donkey to continue walking and carrying loads.

extrinsic motivation without real commitment

Extrinsic motivation: Photo: deDMazay & phodopus/ source:

Applied to the business world: You simply replace the carrot with a financial enticement, a bonus or a promotion, and you on your way to motivating extrinsically. By the way: if you threaten your employee with punishment, you are also motivating extrinsically, for instance:

“Mr. Smith, if you do not start showing up at work on time at 7:00 a.m., I will issue a warning!”

It does not matter if it is a reward or a punishment: Extrinsic motivations involve actions that are initiated from the outside. Put bluntly: an extrinsically motivated employee will think:

“I’ll do it because I have to, otherwise …“

Intrinsic motivation

If someone takes an action for the action’s sake, he is intrinsically motivated. He is commited to his work. He either simply enjoys the activity, he believes it is worth doing, or it represents an interesting challenge for him.

An intrinsically motivated employee thinks:

“I am doing this because I want to! “

Extrinsic motivation is a source of focus

The expectation of a reward, but also the avoidance of a punishment is always dependent on the situation. Extrinsic motivation allows you to establish a focus.

But the extrinsic motivation will only last while the reward is anticipated, or the force is applied. When you motivate extrinsically, your employees are not working for the sake of the issue! They are not really commited.

But if an employee is intrinsically motivated, no external controlling influences are needed. If you value creativity, self-reliance and reliability, then you need intrinsically motivated employees.

The anticipation of a reward or threat of punishment will only – and only then – motivate and be sensible if

  • Routine tasks need to be performed by following simple rules.
  • A clear-cut objective is set, and the path to achieving it is easily achieved.

A classic example for this is piece-work on an assembly line. It is quite possible to motivate employees to do such work extrinsically.

But extrinsic motivation squelches creativity!

However, extrinsic motivation will not work with any task

  • that is not routine
  • requires thought
  • to which the solution is not clear-cut
  • that calls for creativity

It may even be counter-productive. The anticipation of a reward or threat of punishment will cause the employee to focus strictly on this reward or punishment. But the focus should be on creativity.

If you need commited, creative employees, you should not put them under pressure. Pressure kills creativity, regardless of whether it is in negative form as a punishment, or in positive form as a reward.

What motivation do I need in my company?

Under normal business conditions, intrinsic and extrinsic motivation works in parallel. But the higher the intrinsic motivation, the better.

Why? For the most part, routine activity has fallen by the wayside in most companies. In today’s environment, most routine activities are being performed by machines, not employees. This is why you need people who contribute, who work independently:

  • Employees who operate your expensive equipment.
    Or are you able to specify each manual intervention and to show your employees in detail how the equipment must be operated?
  • Employees who call on your customers on your behalf.
    You do not want them to sell as many of your products at all costs. You need them to serve your customer in such a way that he will buy from you again.
  • Employees in the R&D department.
    If they are not creative and develop new products, what will your company sell in the near future?

How can I motivate my employees intrinsically?

I my opinion, Daniel H. Pink put his finger on it quite pointedly. He states that intrinsically motivated people have the following characteristics:

  • The desire for self-determination
    They want to work independently on a task with the greatest possible elbow room.
  • They strive for excellence
    They want to grow with the task. They want to continue improving themselves on an issue that they feel is important to them.
  • Purpose
    The things they do must have a purpose. In performing their task, they want to be part of something larger than themselves.

Watch that great video of Daniel H. Pink about intrinsic and extrinsic motivation. Awesome!

What are the implications for you as the entrepreneur?

Do not spend so much time thinking about how to motivate your employees. But instead, spend time making sure that you do not demotivate the employees.

  • Do not skimp on their pay!
    Pay your employees adequately and fairly.
  • Be consistent and predictable.
  • Do not micro-manage!
    Give your employees decision making authority and manage with objectives and trust.
  • Support your employees in their personal development and their desire to improve themselves.
  • Answer the question why your company is a great place to work.

If you behave in this way, you will get motivated and commited employees.

I am keen to hear about your experience.
Please leave a comment.


Other articles you might find interesting:

  • You should be flexible and straight forward with your employees. You should treat them better and get the work done on time and budget. Good post

  • Sarah

    Useful post, thanks. We recently published a guest post by a UK managing director and his advice is pretty much in line with what you have said.


    • Dear Sarah,

      Thanks for your feedback and the link. I just read the article you mentioned.
      I very much like what John said:

      “Whenever someone comes to me with an intractable issue I will ask them, “what is the right thing to do?”
      and they go away and do the ‘right thing’.”

      Very true.


  • Great post, thanks. We recently published a guest post by a UK managing director and his advice is pretty much in line with what you have said.
    Thank you

  • Great Information ! As leader and Business coach as well as Athletic coach I agree 100%

    • Bernd Geropp

      Dear Tommy,


  • Naveed Gilani

    Agreed. Great information given in

    Few possible words. Thanks Nameed Gilani

  • Fred

    This is a great post with uncommon insights-not the usual cookie cutter arguments about motivation.
    When it comes to motivation, I default to soldiers; and their circumstances are pretty unique in garrison as well as in combat.
    I can say that they are a separate area when it comes to leadership and management theory and practice-for many unique reasons that, I believe, can only be clearly understood when you are in their domain-through the experience of directly dealing with them.
    I believe it’s crucial in the beginning to recruit intrinsically motivated employees to reduce the necessity of trying to motive them from scratch-diverting limited resources.
    I found this article very interesting and eye-opening and decided to make this instant comment. Otherwise, I hope to follow up with more insights in the future, here.