Adrian Furnham, a professor in psychology, believes that an effective motivation strategy should have clear targets, offer valued incentives and be linked to performance, says Amanda Wilkinson
Throwing money at a problem does not always help to solve the underlying issue. When it comes to motivating employees, that is certainly the view of Adrian Furnham, a leading expert in organisational behaviour and a professor of psychology at the University of London.
He says that the impact of money as a motivational tool can be shortlived and even act as a demotivator where the cash reward on offer is not competitive or equitable. “Money can be a much more powerful demotivator than motivator. It is effective because it gives people feedback on their performance, [it] gives them recognition on how well they are doing and it gives them an opportunity to spend money in the way they want. Money is useful, but its power wears off quite quickly. If you think money is the only motivator then you have to go back to the drawing board.”
He says that people are motivated by factors that are intrinsic to their jobs, such as interesting and worthwhile work, and responsibility, rather than those that are extrinsic, such as money, holiday and their working environment. “Most people think that extrinsic is more important than intrinsic, [but] actually it’s the other way round. The problem, however, is that some jobs are very difficult to make intrinsically satisfying. That’s why you have compensation and benefits. You compensate people for their time and energy,” he explains.
When it comes to reward, employers should always keep two key points in mind, says Furnham. “First of all, market forces. If other people are paying much better rewards than you are, then you are in trouble because people compare themselves. And second, the rewards have to be relevant; they have to be valued by the individual. This can become a problem for managers because what motivates some doesn’t necessarily motivate others. Work-life balance, for example, is a big thing for women, but it doesn’t necessarily motivate men.”
Many employers turn to performance-based bonuses or simple recognition schemes to help motivate their staff.
However, even where huge cash bonuses are paid out to high performers, the impact of money can be limited. Not only can a bonus be quickly spent and forgotten about, but any recipient may even end up feeling dissatisfied with the amount if their employer has not been careful to structure the scheme correctly and to communicate the goals clearly.
“If you look at the City of London at bonus time, all you ever get is fury. You never get joy, you get fury. And the reason is that peoples’ satisfaction with their pay and bonuses is not a reflection of how much they get, but how much they get compared with other people. If they believe – rightly or wrongly – that they have been inequitably dealt with, it usually leads to great anger,” says Furnham.
Any performance-based reward or motivation scheme that appears to be unfair or worthless runs the risk of demotivating staff. “With some employers, there is an employee of the month where it is a different person each month. In other words, ‘it is Buggins’ turn’. That is not real reward – people see through it. If a scheme is seen to be dishonest, if it’s seen to be unfair, if it’s seen to be useless, then it doesn’t work,” he explains.
Schemes can go wrong in other ways as well. For example, employers may fail to recognise the right behaviour in tying performance to reward. “You have to be very clear because, once you start measuring and rewarding things, then people will only jump to doing those things that are measured and rewarded,” says Furnham.
He cites the example of traffic wardens who have been rewarded for handing out tickets rather than keeping the traffic moving, as they are meant to do.
Employers would be wise to assess the full impact of their scheme and not be blinkered to other consequences. For example, bus drivers who are rewarded for being punctual can end up driving dangerously, says Furnham. Instead, he suggests, that they should be rewarded not only for arriving on time but also for delivering revenue and driving safely.
Employers should also think about whether they should structure a reward scheme to recognise the performance of individuals, that of a team or a combination of both.
Ultimately, employers should ensure their performance management system is consistent, that managers understand it and that employees are made aware of any goals and are given feedback on how they are doing, says Furnham.
Another issue for employers is the nature of the reward itself. While any incentive should be valued by staff, what it is can often depend on the industry sector and the type of scheme that has been put in place. Cash is not always king. “Some organisations use vouchers instead of money, because although people have more choice with money it doesn’t always mean they get more enjoyment out of how it is spent,” he says.
Others may simply hold an award ceremony or make a presentation to an employee of the month. This is something that doesn’t necessarily have to cost a great deal of money, but the recognition can be immensely motivating for the recipient. “People can be very powerfully motivated by little things. They are rewarded by [the] recognition,” he adds.
Recognition is just one factor that actively contributes to employees’ intrinsic satisfaction with their job. Furnham says this can also be improved by increasing the level of control and accountability employees have over their job, or by making it more personal to them by providing opportunities for social interaction or to tailor their daily working structure through flexi-time.
Personalisation can extend to the reward package, for example, by allowing staff to select their own perks through a flexible benefits scheme. This also takes into account the fact people have different priorities at different stages of their lives and have different motivational profiles.
“People’s motivation and their needs change over their lifetime. I say to businessmen ‘would you rather have three thousand pounds worth of cash or a week of holiday’ and they will say a week’s extra holiday. You say that to my students and they will say ‘three thousand pounds cash’,” concludes Furnham.
- Adrian Furnham has been professor of psychology at the University of London since 1992 and was previously a lecturer in psychology at Pembroke College, Oxford University. He has also been a visiting professor of management at Henley Management College. He was founder director of Applied Behavioural Research Associates (ABRA) a psychological consultancy.
- He has written more than 700 scientific papers and 55 books including The Psychology of Behaviour at Work (1997), The Psychology of Money (1998) and Personality and Intelligence at Work (2007).
- Like NoŒl Coward, Furnham believes work is more fun than fun and considers himself to be a well-adjusted workaholic.
One way of identifying an individual’s motivational profile is through psychometric testing.
This is an area Adrian Furnham is exploring in a book he is writing on the use of the discipline to select individuals for jobs on the basis of their ability and personality. “If I knew your personality and your intelligence, demography and age, sex, class and personality then I would know that this [factor] would be more of a reward than others,” says Furnham.
When it comes to extroverts, he says they are more sensitive to the promise of reward, while introverts are more sensitive to the threat of punishment.
“Punishment doesn’t work so well with extroverts, it works better with introverts. Extroverts will do much more for a reward,” says Furnham.
Employers will, of course, also have to find out what specific rewards are worth to people. “That’s why, for example, all sales people are motivated by a reward system and technical workers are motivated by threats of a punishment system,” says Furnham.
The latter can take the form of a clocking in and out process for work, where if the employee is not on time their salary is docked or holiday curtailed, he says.
Psychometric testing is only effective if the “right tests are being used for the right things”. Otherwise, says Furnham, “they are terrifyingly reckless”.