Shocking news: Money isn’t the best motivator

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This seems to go against everything that made America what it is today – for better or worse – but John Jack says spending money is a lousy way to get what you want.

Jack, a senior vice president for BI Worldwide (the BI stands for Business Improvement) in Minneapolis, was in town last week to speak at a breakfast meeting.

Now, he’s not really taking a stand against money in general; his focus was on motivating employees. To accomplish that, Jack recommends that managers look beyond the “something extra in your paycheck” approach.

Why do 20 percent of your employees produce 80 percent of the results? “The conventional wisdom is that it’s a compensation issue, so we construct elaborate compensation systems, and the ratio doesn’t change a bit,” Jack said. “Compensation doesn’t beget inspiration.”

For example, when he worked in New York City, Jack assumed that it was hard to get a cab during an afternoon of bad weather because all of the drivers were busier than usual. But he finally decided that it’s because the cabbies make so much money in the morning, they decide to knock off early.

You don’t want your sales staff or anybody else in your company to think like that.

With this problem in mind, Jack began to study incentives about 12 years ago and has since tested his theories with major corporations. He contends that you’re likely to get better results with non-monetary rewards than with cash bonuses because the human brain responds so differently to the two options. A cash offer causes the left hemisphere of the brain to run a strictly analytical assessment, devoid of emotion. But a chance at a trip to Hawaii zips directly to the right hemisphere, triggering vivid images and powerful emotions.

“Superior performance stems from emotions,” Jack said. “Money is a path, not a destination; it’s the anticipation of pleasurable things to come that makes us tick.”

Also, if the leader of an organization dreams up a goal for the company and hands it down from on high, he or she shouldn’t count on the rank and file getting too excited. Employees need individual goals to pull them into the game. And “all true goals are risky,” Jack said. The employee needs to put time and effort into achieving the goal while facing the risk of falling short and gaining nothing at all.

One more point: Too many workers are like Alice in Wonderland, in Jack’s view. They don’t have a particular destination in mind; they just want to walk to get “somewhere.” “Focus is the biggest problem in any organization,” he said.

So Jack recommends that a manager give employees a choice of three “all or nothing” goals; make sure the rewards resonate emotionally; and keep the incentive program short-term, probably no longer than 90 days, so the excitement doesn’t drain away.

If it works, it pays off for the manager. “Our success,” said Jack, “hinges on our ability to influence the behavior of others.”