Advice: For your staff, money is merely a secondary motivator

The evidence is overwhelming. People are the key to business performance.

By Malcolm Martin, managing director, Employer Solutions.

Companies on the Sunday Times Best Companies to Work For list consistently outperform the FTSE Index.
Whether you want to grow a business, provide superlative service or meet charitable aims, you will need employees to achieve it.

The ratio between the contribution of the average employee and the very best is huge. Indeed based on their evidence, Google claims the performance differential between the exceptional and the average is as much as 300 times. Can you believe that?

Good selection is crucial. Relying solely on the good old fashioned interview is no longer enough – there are more cost-effective additional techniques today. Indeed professional selection interviewing itself is now a well developed skill. But you need to attract good people in the first place.

If you haven’t yet heard of glassdoor.com you may do so soon. Think of TripAdvisor, but instead of people choosing where to eat or stay, think of them choosing their employer.

To get those high levels of contribution you need to understand the psychological contract you have with your employees. It goes beyond their legal contractual terms to the very heart of what you expect of them and they expect of you.

Recent neurological research using functional MRI scans confirms that money is merely a secondary motivator; it is only what people can do with money that provides reward. Social rewards play higher and are primary motivators in themselves.

Psychological contracts that reward employees create more commitment, job satisfaction and engagement - often itself socially rewarding.

To gain commitment to the psychological contract, and thus employees’ enhanced contribution, employers can offer: a sense of purpose; fair pay; training and development; opportunities for personal growth; social experiences; outlets for ambition; a pleasant work environment; and consideration for work-life balance, etc.

Tablets are popular because, by accident or probably design, game developers tap into the latest neurological concepts of human reward. Their small, dehumanised and non-monetary “rewards” create engagement in, and even addiction to, the games.

This and other evidence increasingly supports the view that employees respond to small gestures of appreciation, however they are shown. The trick is to show them.

If your aim is to increase business performance, then good human resource management just might have the answer.