New research: Approaches to Motivation at Work, It's Not All About the Money

The question of what motivates people at work is core to the success of organisations. How to align people’s efforts to an organisation’s goals and the maximisation of its performance is one of the oldest and most persistent challenges in management.

The issue came into sharp focus with the growth of companies in the 19th Century and the separation of ownership and control. The conflict of interest between the owners of the company and those charged with managing it became known as the ‘agency problem’ – one which governments and organisations have spent 200 years trying to solve, with varying degrees of success. Aligning the interests of those that own the company with those that manage it has never been fully resolved. The same underlying tension – how to get people who are not the ultimate beneficiaries of an organisation’s success to act as if they were – runs through every subsequent attempt to manage motivation at work.

The pattern that emerges is one of repeated amounts to solve motivation problems with structural and procedural fixes. We have treated motivation like something that can be switched on by a process. From governance codes, binding shareholder votes and disclosure requirements at corporate level through to objective-setting, performance ratings, bonuses and long-term incentives at the level of the individual employee, regulators and companies have consistently tried to answer the motivation question with systems and processes. The underlying incentive misalignment remains largely unaddressed. 

In this paper, we argue that reward practice needs to be intellectually fluent in all four traditions - not to abandon pay obviously, but to understand what pay can and cannot do, and what else needs to be consideered when developing a reward strategy. 

The objective of this report is to open up a discussion on the different ways of looking at motivation and the elements that influence people's decisions and choices, The challenges of attracting, retaining and managing people are likely to become more acute as working age popilations shrink and skills shortages become a feature of labour markets across the developed economies. Social attitudes are changing too. Consumers and employers are demanding more from organisations and their senior executives, Over the coming years, those charged with leading organisations will have to work harder to ensure the loyalty and committment of their employees. 

Read the full report

This is an abridged introduction to our latest PARC Report, Approaches to Motivation at Work: It’s Not All About the Money.

Download the full report below to explore the research, insights and implications for how organisations think about motivation and reward.