Over the last decade or so the majority of businesses have been guilty of the same thing. They all assume that when it comes to employees, money = motivation. The idea is that if you pay people more as an incentive, they will perform better for you. And while that approach may work in some cases, it’s often only for a short period of time. Then productivity drops back to baseline levels, and you’re at square one again. It’s an expensive way to run a business!

If that wasn’t enough, the Covid-19 pandemic has fundamentally changed the attitude and priorities of the workforce in a significant way. So while monetary compensation and incentives are important, it’s only one piece of the puzzle. Which leaves business owners asking one thing – how do you motivate a modern employee?

The Roots of Motivation

A few years ago a brilliant book by Daniel Pink came out, called Drive: The Surprising Truth About What Motivates Us. Inside, he talked about the studies he had done and the things they revealed about motivation in general, but specifically at work. He found that there are generally 3 things people are motivated by, and spoiler alert – none of them are money! Instead, they were:

Autonomy: People want to have control over their work.

Mastery: People want to get better at what they do and progress.

Purpose: People want to be part of something bigger than themselves.

Notice that money, salary and bonuses didn’t make the cut. In fact, he suggests that money has no positive effect on increased performance at all, and leaves us with this powerful statement:

“The best use of money as a motivator is to pay people enough to take the issue of money off the table.”

So, if it’s not about money, how can managers motivate their employees to improve performance?

Professional Development

One of the biggest things you will hear both employees and HR professionals talk about here is career progression. Your employees are a critical part of your business, and if you want them to stay with you long term then you need to provide them with chances to grow and develop. After all, no one wants to stay in a dead-end job forever! Invest in the development of your team at every level, continuing education and progression when you can. This provides motivation for employees and means you have a pool of highly skilled and loyal workers.

There are a lot of different ways you can do this. You could design professional development plans for each role you hire for, or you could create a general pool of resources, including a budget per person per year for personal development. That budget could cover attending training and events, online courses and any other relevant development opportunities for your field. We like the second one best, as it gives employees control and autonomy over how they want to grow their skills and progress in their career.

Recognition And Praise

Everyone loves being recognised for the hard work they put in. Not only does it give employees that warm, fuzzy feeling, but it provides a level of encouragement and positive reinforcement. People respond well to positive praise, and the more specific you can get, the better. Interestingly, how often the praise and rewards are offered is more important than its size, so you may find regular, smaller acts of recognition provide more motivation than annual, big ones. Something as simple as taking an employee out to lunch because they hit their sales target, creating an ‘employee of the month’ system of publicly thanking people can all be great motivators. Recognition can take on many forms, and it’s essentially down to your management style and skills to decide how best to do this for your team.

Pleasant Working Environments

Psychology 101 – happy employees are much more motivated than unhappy ones. So take the time to create a working environment that people enjoy spending time in. Believe us, the effort will go a long way to keeping employees happy. As well as the basic requirements like space, light, air, heat and hygiene, try and add extras into your office to make it a nice place to be. Comfortable office furniture, attractive interior décor, lush indoor plants, good meeting facilities, a breakout room full of wind-down activities and even a well-equipped kitchen all contribute towards happier, more productive employees, who don’t just watch the clock so that they can get out the door. If you’re not sure what would make your employees happy, ask them to help with an office revamp!


Go right back to basics, and remember that employees want autonomy over their work, and over their working patterns. This means no micromanaging, and instead giving your employees the chance to make decisions about what they do. This could be anything from choosing their own targets and career progressions to creating a flexible working schedule to help them achieve a better work-life balance. What topics are covered in meetings, how meetings take place, what projects they take on and even what snacks are kept in the office kitchen. All of this adds up to employees who feel that their opinions matter, and that they can voice their preferences and actually control their own work life. Just don’t go overboard with this one – your employees need you to make decisions too!

At the end of the day, it’s easy to assume that just giving people more money will motivate them in the way you want. But sadly, it’s not very effective, and often only leads to short-term change before going back to the status quo. But by investing in motivational methods that are more about encouraging and supporting the people who work for you (and not their wallets), you will see long-term positive results, and find that your business becomes a popular place to work because of it. If you would like some help and support in motivating your employees or putting any of these suggestions into practice, we’d love to help. Just get in touch with us today to book your free consultation.