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My two cents about money as a motivator, once again

Let me start this by saying that I am a fan of Clark Howard, the consumer empowerment guru.  However, he just wrote a piece titled, “What makes workers happiest?  It’s not money!”. I think he is quoting (paraphrasing would describe it better) from a book by Elizabeth Dunn and Michael Norton titled,  Happy Money: The Science of Smarter Spending.

While I value what Clark has to say about how to spend my money, I do not place the same value on what he says about human motivation.  How does he jump, all of a sudden, from being an expert on how to save money to a behavioral guru?  Check Google for a rash of studies that have discovered that money is not the primary motivator for work behavior!  I am not surprised by this because I have been making this point in my writing and speaking for 40 years.

While few people can afford to work without money, it is only one of many things that motivate people at work.  Money is almost never at the top of the list on surveys on that subject.  As a matter of fact, money satisfies few of the criteria about what the science of behavior has discovered about what makes behavioral consequences effective; money is not immediate, personal, nor frequent and rarely contingent on performance.  When it meets these criteria, it is very effective – think hotel bellman.  When it does not meet those criteria, it doesn’t.

Clark says, “One of the greatest motivators is flex time. It reduces absenteeism and boosts morale.”  Where does he get that?  Flex time can be a motivator for most people when it is properly used, which is rare, but believe it or not there are some people who like the consistency and structure of 8-5 with an hour for lunch.  What it boils down to is that each person is different in what motivates him or her.  Anything, including money that is done across the board, will be less effective than something that is personal, be it comments, privileges, or a million other things that are meaningful to a particular individual.

When people don’t understand behavior, which is most of the time, money is very often wasted in business (See OOPs! 13 Management Practices That Waste Time and Money).  When you understand behavior scientifically, money assumes its proper role as only one of many things that can be used to motivate people.

For more on this topic, take a listen to the Oops #6: Salary and Hourly Pay podcast.

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