How much does money matter? What really motivates employees.

My first job was working as a sales assistant for a retail store. The pay was good; the benefits were even better, yet I was still miserable. I distinctly remember waking up to go to work at 8:00 am and immediately thinking of excuses to leave work early, without arousing suspicion. My many excuses were not limited to: diarrhoea, food poisoning and the tragic demise of a fictional pet. I could not wait to leave. 

Now fast forward 4 years. 

I was working as an assistant psychologist for the National Health Service (NHS). It was an unpaid placement with no tangible benefits (unless you count the occasional biscuit raid from the adjoining department), yet I was thoroughly enjoying working life. I was excited about helping clients, enjoyed tackling challenging tasks and never once thought about leaving work early. 
What was the difference between these scenarios? I was a more loyal and engaged employee working as an assistant psychologist than I was a sales assistant, despite the lack of salary, bonuses or benefits.

It turns out I am not the only one. Time and time again, employees have claimed that extrinsic rewards such as money do little to motivate or engage them enough to retain their loyalty. In spite of this, businesses regularly spend up to $43 billion and £36 billion in the USA and UK respectively, trying to motivate employees through extrinsic rewards. As a result, just 13% of employees in the workplace remain loyal and actively engaged.  

This suggests a new era in considering unconventional ways in which employee loyalty and engagement can be harnessed. Lets explore three of the most important.

Our definition of purpose in business is “An inspirational reason for being which acts as a call to action for an organisation, it’s partners and stakeholders and provides a clear benefit to society.” Although purpose sometimes seems a ‘fuzzy’ concept, infusing your business with purpose is a measurable business strategy that can lead to a range of positive outcomes, including but not limited to, high levels of employee engagement and loyalty.

As such, it makes sense to hire people that share your company’s sense of purpose, as everyone in the business has a shared sense of identity and common goals. 

Acumen, the non-profit investment fund, is one example of a company who are living their purpose through their recruitment process.  The organisation asks candidates for responses to a series of short-essay questions that relate to the ethos of the business. For instance, "How would you describe your interest in ‘impact investing’ (which is what Acumen does) versus private equity or venture capital investing?" Those with poor answers to the question are deemed unsuitable for a position with the company.
Subsequently, it might be wise to consider the purpose of your business and create a robust process that allows you to gauge a personnel fit, prior to making a hiring decision. Hiring the right people is difficult; but firing the wrong people is even more so. 

Values are best when they are action statements that tell people how a business plans to fulfil its purpose. It has been extensively shown that personal commitment to an employer’s values is a significant driver of employee loyalty and engagement, especially so when the values of a business align with the personal values of employees

One way to ensure a good fit between business-employee values is to collectively decide on the values of your business with your employees. DecisionWise, a management consultancy firm, have adopted this approach. The company held a meeting to discover what the values the company and employees believed in and stood for. To reinforce these values, a reward program was developed to catch people living the company values.  The results? An increasingly loyal and motivated workforce leading to a 150% growth rate, in the past three years alone. 

Consequently, it might be beneficial to takes some time to assess the values of your business to and determine see whether they match those of your employees. Although time consuming, this process will shape the decisions that your business makes and determine it’s future. 

Culture in its simplest form can be defined as ‘the way things get done around here’, in other words it refers to how values are practised within the business. If for example ‘excellence’ is a business value, one of your cultural practices might be to encourage employees to informally peer assess work before it goes out, to reduce the chance of error. 

There has been significant research demonstrating that having a workplace culture whereby employees feel valued and inspired leads to high levels of loyalty and engagement. Ella’s Kitchen, is an example of a company that have been successful in promoting such a culture through initiatives, such as ‘Thinking Days’. Thinking Days allow the opportunity for employees to take time off work in order to develop new ideas on how the business can progress. This has not only led to innovative ideas (Ella’s post-exercise snack) but it has also led to employees feeling cared for and inspired, as evidenced by several GlassDoor testimonials. Consequently, the levels of employee loyalty and engagement at Ella’s Kitchen are at an all-time high. 

As such, it could be valuable to ponder on how your business culture could be improved or changed. A good place to start would be to actively involve collaborate with your employees, whereby they honestly disclose what it feels like to work for your business.
In modern business, we’re familiar with the truism “a business is only as good as its people” yet how many leaders are willing to invest their time and money into the less tangible elements of a business? 

Until we have leaders who acknowledge the crucial importance of intangible elements such as purpose, culture and values to inspire a loyal and engaged workforce; we’ll have to accept that many employees are likely to be disenchanted sales assistants looking for a way out. 

This blog was contributed by our brilliant intern Melisa Pinto.