Climbing Mountain

We believe we know what gets us up in the morning and rearing to go – don’t we?   If someone asked you what motivates you, you would be able to tell them – right?  Our ability to reflect on our own motivations is a belief that we all think we do well.  I would argue that we are fooling ourselves and we really aren’t as good at it as we think.

Case in point, research has continually shown that when asked what type of reward employees think would be most motivating or that they would most want, they choose “cash.”  Our own research shows that when asked, 70% to 80% of employees  typically listed cash as the top reward.  However, when you actually look at studies that show performance lift, non-cash awards have a greater impact.  Dr. Dan Ariely, the author of Predictably Irrational recently blogged about this (See  He cites an experiment done with Goodyear Tire company in which non-cash rewards improved performance more than double what the cash rewards did.  In fact, there are numerous studies that support this idea.

So how can it be that if asked most people would state they prefer cash incentives but perform better when offered non-cash incentives?  Part of the reason is because we don’t really understand what drives us?  Cash is easy.  We understand it.  Economists point out that cash has “utility” – in other words it can be used to purchase any number of items that we desire.  Non-cash is not so simple.  We might not like the choices we have or feel limited by the selection.  So what gives?

Dr. Scott Jeffrey’s has done much work on understanding this phenomena  (see  Much of it comes down to how we evaluate, separate, justify and are socially reinforced by each incentive.   In other words, we evaluate the value of cash and non-cash differently resulting in a higher value placed on non-cash elements do to affective factors (we can visualize ourselves with a new 56” TV and that gives us a good feeling – this is one step removed with cash).  We also tend to lump cash bonuses in with our paycheck and it isn’t seen a separate, special reward.  We have to justify spending our cash awards on luxury items such as the above mentioned TV instead of paying down the mortgage – not so when we are only offered luxury items.  And finally we tend to not talk about the cash we earn to our peers and friends – but we do tend to talk about that new TV (or trip to Hawaii, or new Golf Clubs, etc…) and are socially reinforced by the bragging rights of those conversations.

So back to the initial question of understanding our motivations – we can see that there is much more to the story than asking people what motivates them.  The fact is we don’t always consciously know what motivates us (think Freud).  So while asking your employees what  they want is a good first step, make sure it isn’t your only step.  You need to dig a little deeper to get at their underlying drives.

Kurt Nelson