Eager to succeed, proactive planners, and resilient to challenges. The mindset of a motivated workforce.
At the CHRO Summit 2021, Prof. Dan Ariely, Professor of psychology and behavioural economics at Duke University, showed Chief Human Resources Officers how to harness human motivation to improve business performance.
This article will recap the key points.
"Human motivation is magical"
Most people hate working, and only do so for money, according to the long-held stereotype.
Our lives and work experiences tell us a different story. From learning a new language to starting a family, people are motivated by a series of emotional and psychological factors.
A thirst for challenge, the need for mental stimulation, the desire for accomplishment and the joy of team camaraderie are just a few examples.
Goodwill drives people to do their job well. Employees that are utility embracing, go the extra mile. They go beyond their job description to help the whole company succeed. The intern that helps her colleague who has fallen over in the hallway, or the sales executive who mentors new graduates from underprivileged backgrounds are prime examples.
What drives employee motivation?
Prof. Dan Ariely shared insights from an experiment to see if offering a cash bonus to factory employees would improve their productivity. The workers made computer chips for 12 hours a day, four consecutive days a week.
During the study, employees that made 1,300 computer chips on their first day of work would receive either:
- No reward (the controlled condition)
- A $30 cash bonus
- A voucher for free pizza
- A personal text message from senior leaders saying ‘Thank you’ or ‘Well done'
There was no incentive or target set for the second, third, or fourth days of their working week.
The cash bonus led to a 5% increase in productivity on the first day, compared to those offered no reward. The pizza voucher and thank you message scored a 1% rise, respectively.
On the second day, employees, who had received the cash bonus, were 12% less productive than they were on day 1. In total, their productivity was 7% lower than those who had received no reward.
At the end of the study, the personal text message was the winner, with the free pizza offer second and the control group in third place. The financial reward was last.
Prof. Dan Ariely explained that the monetary reward reframed the way employees viewed their jobs and when the cash bonus was taken away, so was their motivation. Instead, social compliments kept employees motivated and productive for longer than any other reward.
How does employee motivation impact the stock market performance?
To create a diverse, equitable and inclusive company, many employers believe establishing quotas in leadership positions is the answer.
As shown in MindGym’s inclusion solution whitepaper, employee appreciation and equality are not easy to measure but are far greater indicators of employee performance, motivation, and inclusion.
As recent work discrimination scandals have demonstrated, the presence of senior female leaders does not prevent them or other women employees from experiencing discrimination.
Prof. Dan Ariely interviewed female employees from listed companies and asked them if they felt equal and appreciated. The most equal and appreciative companies performed on average 5.4% a year better than the S&P 500, he found.
What matters in the hybrid world?
Intrinsic motivation is more important than ever.
Working from home is a fixture in our working lives following the start of the COVID-19 pandemic.
Fewer in-person meetings. More non-work distractions.
Understanding how to keep employees motivated at home and in the office will be essential for driving business productivity.
“What is matters is how people feel – psychological safety, being appreciated, connection with managers, fairness of salary,” proposes Prof. Dan Ariely.
After studying 1,400 listed firms, Prof. Dan Ariely found that companies with high levels of employee appreciation, engagement and inclusivity increased their stock price by 15% on average since COVID-19 began - compared to the average 5% net increase across the whole market.
“Human motivation,” notes Prof. Dan Ariely, “is one of the few things that is a win-win situation for everyone.”
For more information on how to improve your workforce’s performance, read our Performance Management guide or contact us for a call back.
Want to read more insights from CHRO Summit 2021? Check out the highlights.
References
- Ariely, Dan, and Matt R. Trower. Payoff: The Hidden Logic That Shapes Our Motivations. New York: TED Books/Simon & Schuster, 2016.
