How To Motivate Employees without Spending Money

Motivation is the slippery slope of business management. In this week’s blog we’re going to mix a little bit of psychology with business!

In order to understand how we can motivate employees, we need to understand what Motivation actually is. So let’s start with a basic dictionary definition:

Motivation is the act or process of giving someone a reason for doing something.
(Merriam-Webster.com)

Now that we have that solid base, let’s break it down a bit further.

There are two types of motivation

Intrinsic Motivation and Extrinsic Motivation.

Intrinsic Motivation (Think Internal) refers to a reason for doing something that is driven by internal needs, desires or rewards.

Extrinsic Motivation (Think External) refers to a reason for doing something that is driven by external rewards.

Typically in business the most familiar method of motivating employees is through Extrinsic Motivation, usually in the form of money.  When you receive a commission, a bonus, a pay raise or even a paycheck, you are receiving external rewards.  By providing your employees with these, you’re giving them Extrinsic Motivation to continue to perform well.  Now, don’t get me wrong! We all want a little bit of extra money, but if you’re looking for ways to motivate your employees in the long term, short-term monetary rewards may not be enough.

So how do you motivate your employees without spending money?

Well if money is associated with extrinsic motivation, then the answer is to encourage more intrinsic motivation!

Getting the employees in your company vested in the interest and success of your business is probably one of the easiest ways to help improve intrinsic motivation.  Some of this will still come with external encouragement (such as praises and mentions), but by showing your employees how their work is contributing to the direct success of the business, they’ll begin taking a vested interest in the work that they’re doing.  This in turn will help establish more intrinsic motivation for your employees.

Four Intrinsic Rewards

  • Meaningfulness – Motivate your employees by showing them how the individual work they’re doing has meaningful impact on the business – everybody’s job should be important and impact the success of the business.
  • Choice – Employees are intrinsically rewarded by having choices.  Setting expectations on what the final outcome should be is important, but allowing employees the freedom to get from point A to point B is highly motivating.
  • Competence – This intrinsic motivation reward is entirely internal, but it can be countered by negative external motivation.  If an employee does not feel competent in the work they are doing, they won’t be as highly motivated to continue it.
  • Progress – It’s important for people to see the progress of the work they are doing.  That internal sense of accomplishment, by reaching milestone goals, helps motivate people to keep going.

For more in-depth reading, you can click here to learn about these four intrinsic rewards in greater detail.

Our Number 1 Tip for Increasing Productivity

Turn the entire motivational structure upside down!  Start first with the individual employee and the work that they’re doing.  If you can see the impact of their work and the success it is having on the business, make sure they see it as well!  With employees that are intrinsically motivated, they will work harder, be more productive and more innovative.  In the long run, this will help steer your business in a more successful direction.  This greater success will give you more freedom to raise employee salaries and provide bonuses.  Let the External Rewards come After the Internal Motivation has been established.