According to Daniel Pink, author of Drive, you can't buy employee engagement. In fact, when it comes to encouraging people to work hard on brainpower tasks that require broad creativity or focused problem-solving, cash incentives can be more of a de-motivator than a motivator.

Don't believe me? Take ten minutes to watch this enlightening video.

“Bottom line: If we treat people like people, instead of like horses…”

Instead of inspiring excellence, extrinsic monetary rewards can actually discourage excellent work. Research shows that, if you don't pay people enough, they'll feel "ripped off" and stop contributing. On the other hand, if you pay them too much, they can feel they're just the "Flavor of the Day" in an unfair system that's probably ripping other people off and, you guessed it, they'll stop contributing.

First of all, to take money matters off the table and empower your people to focus on their work, your compensation plan needs to be perceived as 1) sufficiently generous and 2) fairly administered. So much for dangling the Almighty Dollar, huh?

Which, according to Pink, leaves you with three behavioral tools that can really pay off in improved performance:

• Autonomy. Don't micro-manage. Instead, to get the most out of your people, try to support their intrinsic, natural tendencies to behave in effective and healthy ways. Initially developed by Edward Deci and Richard Ryan at the University of Rochester, you can learn more about Self-Determination Theory here.
• Mastery. People have a natural need to feel they're becoming incrementally better, all the time, at what they do. Instead of just sitting them down once a year to tell them what you think they're doing wrong, find genuine opportunities, each and every day, to catch your people "doing things right." Never, ever compete with your employees. Instead, encourage them to compete with themselves.
• Purpose. The real motivational magic happens when your people perceive purpose in their work, a connection to a cause larger than themselves. Do you tell your people what they need to do, or demonstrate to them what needs to be done? There's a difference, and it's the difference between getting busy and getting results.

Questions:

• Leaders/Managers: On your team or project, or within your organization, which extrinsic incentives (e.g., money) have you used to motivate people? Which have worked? Which haven't?
• Everyone: Which intrinsic motivators best inspire you in your professional pursuits? Do you work within an organizational culture that understands and respects this? If so, how is this expressed in that culture? If not, what do you think management can/should do to correct it?