How to Motivate Employees: Don’t Pay Them More


Does pay motivate employeesI was recently at a wedding where I didn’t know anyone. I did as I do and waited for the extroverts to come find me.

A guy came over. He was there with his wife and three kids. Seems like a great dad.

We hit it off and got to talking. I learned that he’s in the manufacturing business. From what I understood, he’s part of a team that makes a single part of a machine.

That’s what he does. A single part of a single machine.

He loves his job. Loves his company. He’s been working for them for a long time. It didn’t sound like he got paid all that well. But….

I had never heard of the company he works for. So, he told me all about them. I now know what they sell, their history, their aspirations. He’s not an owner. I don’t think he was even in management. Yet his enthusiasm was catchy.

Why was he so excited about his company? He felt valued by them. He felt they were the best at what they do and he got to be a part of making that happen. He respected the management and leadership. He seemed to like his team. He felt part of a team. A winning team.

Pay Wasn’t the Motivator

One of the questions I’m asked most frequently by those in supervisory roles is, “How do I motivate my staff?”

Nearly always, they lump their entire situation into one of three buckets:

  • “We can’t pay people as much as the competition, there is no way to compete.”
  • “We have too much to do. Everyone is stressed.”
  • “Millennials.”

I’ll try to say this as carefully as I can: Nonsense. All three statements are excuses. All three are ridiculous.

Employee engagement or staff motivation issues can be turned around, quickly, by leaders who are willing to lead differently.

In fact, I’d put money down that your average supervisor can turn around employee engagement within 90 days. This can be done simply by changing his or her leadership behavior.

Take me up on this bet. I’m serious. You can’t lose whichever way it goes.

Why am I so confident? Mostly because of a little thing called social science. Also, because I’m involved in more workplaces in any given year than most people are in their entire career.

Lastly, because I’ve been an employee too.

But let’s go through them one by one:

“We Can’t Pay Enough.”

As it turns out, compensation is a topic that has been heavily studied for over 120 years. The studies show that there is very little relationship between pay and performance or employee satisfaction. [i]

I know. No one believes this. We could all do with making a little more. Or a lot more.

However, brutal, brutal studies seem to show that in some cases higher pay is actually linked to lower performance[ii].

There are some exceptions. People need to have their minimum needs met. So, having a job that allows them to do this is helpful. But people can still hate their job, perform poorly and like their pay.

People can be incentivized by financial rewards. But, especially in cases where the highest performance is sought, financial rewards on their own will prove insufficient.

We Have Too Much to Do. Everyone Is Stressed.”

I just spent a couple weeks around a lot of retired people. Talk about people who constantly talk about how they have too much to do. Yet, they can never tell you what they are so busy doing…

I understand being busy. I work with a lot of people who are very busy. The very busiest people are usually either leaders, self-employed or volunteers. Typically, people who are driving themselves. When our employees experience this “busy-ness” it nearly always the result of the following:

  • A lack of clear priorities from leadership.
  • Shifting leadership priorities.
  • No connection to the work to purpose or value.
  • Leaders who confuse working a lot with doing the right work.

Focused, visionary, outcome oriented leadership judo flips all of this on its head.


Most of what you read about Millennials is nonsense. They aren’t an alien race that just dropped on our planet. I get especially frustrated when Baby Boomers complain about Millennials. Didn’t there used to be something called, “The 60’s?” Weren’t hippies and communes and flower power a thing?

If you want deep, profound insight into Millennials just think this: They are young people. They are acting like young people. Like most of us when we were young people. Most aren’t yet saddled with life’s bucket of cold water: Mortgages and a stack of kids.  Most don’t own their own businesses. Most are still trying to differentiate between the irrelevant information they were given in school and this thing called, “Life.”

They’ll figure it out like everyone else. In the meantime, show respect and be a mentor. Don’t act like smartphones are intrusive new technologies. There is no one alive, in the western world at least, who hasn’t experienced rapid changes in technology their entire life. No one. We landed on the moon nearly 50 years ago. I mean, come on. That’s old now.

There you go. Deep thoughts. It isn’t complicated enough to write a book about it and create my Ted Talk. But it is simple enough to apply to nearly every Millennial that you meet. Millennial work ethic, and needs, and resistance to structure and whatever aren’t the problem.

Exit Interviews Are Stuffed Full of Lies.

When people quit sometimes they are given an exit interview. Unless they are leaving due to a move, or to stay home with kids, they’ll say something like, “I can get paid better somewhere else.”

This is true-ish. If they are smart, they found a job with better pay.

However, better pay is probably not what motivated them to look around for a different job. But these folks are not the only people not telling the truth.

Management and HR love to hear the “pay” excuse. Because it means they didn’t say what they were really thinking. Which was one or more of the following:

  • “I don’t feel valued.”
  • “I don’t feel cared for.”
  • “I’m bored.”
  • “I’m not challenged or growing.”
  • “I’m controlled.”
  • “Our work seems pointless.”

Managers and HR don’t want to hear this. So, they hear, “We can’t pay enough.” They lie too.

What Does Motivate People?

  • A Compelling and Unifying Sense of Purpose. When people can see that they are working for something that is bigger than themselves, that they care about, they’ll be motivated.
  • Feeling Appreciated and Valued. People want to feel valued. Appreciation must be demonstrated in a way that makes sense to them.
  • Opportunities for Growth. People want to learn, have new experiences, to grow.
  • Challenge and Creativity. Starting from age 0 people hate being bored.
  • Respect for Management: Jerks lose traction. They just do.
  • Enjoy Co-Workers: Most people spend more time at work than with family or loved ones. They want to like the people they are around.
  • Progress or Accomplishment. People want to feel like they are moving something forward. That they are accomplishing a goal.

Some of the above happen at recruitment. Some of it happens in orientation and expectation setting. Some of it happens during the normal work week. Some of it happens at reviews.

Basically, when all the above is integrated into your leadership practices, you’ll have motivated employees.

So, all the above costs a lot less than paying more. But it might mean that you need to change something in how you lead.

Unfortunately, many leaders would rather just try to pay more.

What about you?

Take good care,


Would You Like to Take Me Up on My Bet? I’m not joking. If you’d like to take me up on my bet that we can start turning around your employee’s motivation within 90 days give me a call 907 522-7200 or shoot me an e-mail at We’ll discuss details. You can’t lose.

Special Fourth of July Offer!

During the month of July, I’m celebrating the volunteerism that is unique in America. I know that many of my readers lead non-profits as executives or board directors. So, this is for you.

During this month, I’m making a special, free, offer to a limited number of non-profit boards. The offer is my services for a one-day board retreat that can include:

  • Board training on board best practices.
  • Strategic planning.
  • Board development and recruitment planning.
  • Executive Director succession planning.
  • Mentoring for board president, chair or executive director.
  • Or…any other topic relevant to improving the performance of your organization through your board.

This retreat can be scheduled for any mutually convenient date in 2017.

To Apply:

  • E-mail a Letter of Interest: I need to receive a one-page letter signed by both the executive director and board president expressing interest. Please e-mail a copy of this letter to me. In it address the topics below.
    • Describe your board’s current practice and willingness to fully step into their board roles. Preference will be given to active boards.
    • Describe your mission and primary opportunities and challenges.
    • Provide a thumbnail sketch of your organization: # of staff, # of board directors, years in operation, website, etc.
    • Communicate how you intend to use this investment of your time to further the mission of the organization.

I’m looking for motivated boards and leaders to support. If you feel like that describes you or your board, please respond.

I will receive applications through the month of July and announce recipients in August. Contact me at


[ii] Cooper, Michael J. and Gulen, Huseyin and Rau, P. Raghavendra, Performance for Pay? The Relation Between CEO Incentive Compensation and Future Stock Price Performance (November 1, 2016). Available at SSRN: or

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