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Motivating Without Money

Motivating Without Money

By Matthew Boyle | BusinessWeek

Globoforce’s programs allow employees to choose a reward they want rather than co-workers or managers making the choice for them. A music lover in accounts receivable, for example, might choose tickets to a concert, while a foodie in sales might choose a $50 gift card to Whole Foods. Such freedom of choice can be much more effective than the scattershot, ad hoc recognition (think: pizza parties) that normally takes place in corporations. “Think of it as employee intimacy,” says Linda Amuso, president of workplace consultancy Radford Surveys + Consulting. “You hone in on what they value and get it to them.”

Such programs are more valuable than ever in a recession, according to a study conducted last fall by Towers Perrin that polled more than 10,000 respondents in 13 countries. (Globoforce, whose U.S. headquarters is in Boston, has closed several deals in the first quarter of 2009 with clients like Celestica and The Hartford.) Nearly half (49%) of U.S. companies have recognition programs, according to a May 2008, study from Watson Wyatt. But those programs only target 10% of employees in the U.S., compared with 36% at European firms, the survey found, so there’s an opportunity to enlarge their scope and effectiveness. “This is a very simple way to motivate,” says Elton.

There’s a risk associated with rewards, however. Charles Jacobs, author of Management Rewired, argues in his new book that when managers dangle monetary rewards, employee motivation can actually suffer. It all has to do with how our brains are wired, he says. When we’re focused on the work we’re doing now, an area of the brain called the nucleus accumbens releases dopamine, which pumps us up and gets the brain working quickly. Focusing on an extrinsic reward, though, rather than work can be counterproductive, according to Jacobs, as it diverts the brain’s bandwidth from the task at hand. “We like rewards and they work,” Jacobs says. “But rewards can distract us.”