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Alternatives to Financial Motivators

Topic: Entrepreneur Evangelist,Managing Your Business | Comments (1)

Posted on March 3, 2010 by admin

There is an article on FreelanceSwitch that raises an interesting point. It’s called, “Keeping Yourself Motivated” and it discusses intrinsic versus extrinsic motivation.

Intrinsic motivation are your own internal motivators — a need for success, a desire to make an impact, your own craving for perfection, contribution or collaborative connection with other talented people.

Extrinsic motivation are the outside motivators — money, praise, recognition, bonuses, perks, etc.

There is a statement in the article, however, that gives me pause:

“Extrinsic motivation (namely money) is often the primary basis for our motivation. Everyone needs money, and wants as much of it as possible. That’s no secret.”

Now, if the audience of FreelanceSwitch were all cubical dwellers who hated their jobs and worshiped at the alter of Office Space, then I might be more inclined to concede some validity to that statement. But given that FreelanceSwitch’s reader-base consists of freelancers and solopreneurs, I actually disagree. I also think it’s a dangerous assumption to make.

Yes, of course we all need money. And yes, even the least material of us probably want more of it than just the bare bones basics we need to survive. But is money really the primary external motivator for most people?

I don’t actually think so.

Most people who quit a job, quit because of their direct boss. This isn’t a money reason, this is an interpersonal reason. Feelings of being unappreciated, disrespected or ignored are all extremely damaging to employee morale, and are frequently at the heart of what someone dislikes about their boss — and ultimately their job.

Conversely, how many people have ever taken a paycut because they either wanted to work for themselves (most of us who strike out on our own start off with a significant financial dip, before we ever stand a chance of recovering and making more money), or they were offered an opportunity that offered some other type of benefit that money couldn’t beat? It happens all the time.

Most importantly, though, I think for entrepreneurs, there is danger in assuming that money really is the biggest extrinsic motivator for potential staff. I think it limits your thinking and boxes you into a set of dangerous and unhelpful assumptions.

Back in November, I wrote about a local entrepreneurial event I attended. One of the most memorable moments of the night was when a young entrepreneur asked the panel of seasoned veterans, “How do I convince my successful friends to give up their $150k/year salary to join me in my startup?”

The answer he got from the panel was unanimous: “If you have to convince them, then they are not the right people.” This answer is dead-on — even if it wasn’t the one the poor guy wanted to hear.

When I think back to the different bosses I had over the years, one thing is clear: the great ones were the ones who quickly (and intuitively) understood my extrinsic motivators and then understood how to keep me motivated by giving me what I was looking for. The bosses with whom I never developed any kind of important or meaningful relationship could never figure it out.

I have a newsflash, though, my extrinsic motivator is not money. I had a six-figure job that made me so miserable that I quit with nothing else lined up; and I’ve worked 80-hours a week at another job that was paying me barely enough to live above the poverty line.  In each case, aside from my own intrinsic motivators, the extrinsic motivators of the situation were omnipresent and impossible to ignore — and they made all the difference between when I was happy to compromise versus when I was unwilling to put up with a situation that I disliked.

Entrepreneurs need to remember that there are other ways to motivate. Sure, for some people, money matters more than it does for others. And, when that’s the case, then that certainly isn’t the right person to bring onboard for your business — especially if you are just getting things started. So keep looking.

For some people extrinsic motivators could be a title, a new area of responsibility, the chance to travel, or getting to say they were part of a founding team that was doing something entirely new.

Do you want to know a secret, though? Most often, the thing that study after study says is a truly important and valuable extrinsic motivator for most of us, isn’t a title or perk, either. It’s recognition. Having our contribution respected, appreciated and then directly noted is the thing that makes the biggest difference to most of us. Sometimes that can be a public event, but more often than not, it’s private.

So if you own a business and are worried that your staff is burned out or losing motivation, ask yourself, “When was the last time I let them know how much I respect their talent and appreciate their contribution?” And then, go do it.

Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas