Why Motivating People with Money Sucks

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Scenario: "Dude, the more we pay our employees, the more we boost their performance. Billions and Porsches, here we come! Yay!" It's a common uh-freakin'-oh mindset most well-intentioned business-builders make:

  1. Manager Matty: Dude, we're paying Sally $30/hr. Imagine if we pay her $60/hr!
  2. Manager Megan: Oh-fo-shizzle! That means her performance will double. Double!
  3. Manager Matty: Ding! Ding! Ding! And since we get a +$3 ROI from her, that means we'll increase profits triple-fold.
  4. Manager Megan: We'll make billions!
  5. Manager Matty: Yay! Yay!

You could hand Sally a billion dollars more, and her performance level won't change. Money initially attracts and retains your people; but, it won't dictate their performance.

True-Badass Superstars Will Perform Regardless of Compensation

Peep this phenomenon:

  • Give a mop to the best curb-painter in the world, and you'll see amazingly beautiful floors.
  • Put him in customer service, and you'll see amazingly enthusiastic customers.
  • Place him in front of a math class, and you'll see kids kicking booty.

True badasses have an internal need to kick major ass in everything they touch -- regardless of what they "get." According to business guru Jim Collins's six-year study, if you have the right people on your bus:

They will do everything within their power to build a great company, not because of what they will 'get' for it, but because they simply cannot imagine settling for anything less. The right people will do the right things and deliver the best results they're capable of, regardless of the incentive system.


Just Think: The Absurdity of Baseball Salaries

Compare the salaries of the Oakland A's roster with the New York Yankees' over the last five years.

  • The Yankees paid their staff: ~ $1 billion.
  • The A's: ~ $350 million.

"Conventional wisdom" says the Yankees probably rocked the A's like crazy mutha-blukkas, ate their kids, and stole their mamas. But, their head-to-head match-ups remained relatively even: 26-28 (A's-Yankees). Further, the batting stats were similar. The post-season appearances were similar. The pitching records saw little deviation. Yadda. Yadda. Yadda. (And yes, the Yankees won zero championships during that time.) Skyrocket salaries and production of all-world results have little correlation; the right people will kick ass regardless of compensation.

"What's the Purpose of Money, Then?! Ahh!"

It's just this -- simple and sweet, inspired by Collins's research: to attract and retain your employees/players/partners/vendors/contractors/etc. Yes, if: (1) you're not compensating your people well, or (2) your competitors are upping you on bigger salaries: They'll take off -- faster than Britney Spears's credibility. The two keys then:

  1. Ensure every superstar like what you're paying them.
  2. Drop the notion that paying them more will boost performance.

"So how the %^&@ do I motivate my people?"

You can't. The right people are self-motivated. If you let them, they'll shine higher than a mutha-$@!^%^-eagle. The three-tip step:

  1. Attract as many of those people as you can.
  2. Ensure they're happy with their compensation.
  3. Prepare to see ridiculously sexy results.

Say it with us now:

Money doesn't motivate Sally. Sally motivates Sally.


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Posted on November 30

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