on 8 April 2006
If you believe the words of the classic rock and roll song "Money" ("Money don't get everything its true; what it don't get I can't use. Now give me money - that's what I want". Check out the great Beatles version on 'With the Beatles'); or if you are about to formulate a pay and incentive scheme for your organisation, then you need to read this book.
The authors of "Just for the Money ?" set out their stall from the very beginning:
"At work money is a powerful demotivator., rather than a motivator. There is, quite simply, a very weak relationship between pay and productivity, and pay and satisfaction, over the long term" (p3).
The early part of the book devotes itself to this link between money and motivation, and it does it very convincingly. Money is a poor motivator for a number of reasons, including:
Adaptation - we soon get used to higher pay
Comparison - it is what we earn in comparison to others that motivates us more than absolute earnings.
I think I probably knew that, but it is a very interesting analysis, and the book is well written and easy to read.
There are many highlights in the early part of the book on money and motivation as the authors argue against the widely held belief in business that money is the most effective motivator. This idea is rooted in the "scientific management" theory of FW Taylor, and the authors make the point that the "thrifty Dutchman" of Taylor's study died rather young - of exhaustion !
While studies suggest that money does influence the quantity of output, they also show that pay-for-performance schemes do not work in the long term. A number of reasons are cited for this - for most jobs comprehensive measures of performance are difficult to formulate; there are few jobs where output is the only requirement; and people simply do not like the culture of competitiveness created.
In most situations there are many complex factors, other than pay alone, that motivate us to perform well. People like a friendly supportive atmosphere at work; we like to feel that we are giving a good quality of service; and we like to feel we are appreciated. These things cannot be measured in incentive schemes.
The book also suggests that incentives may actually have a negative impact - we start to work for the rewards (like mice hunting a maze for treats) rather than work for the pleasure of doing a good job well (and we ignore tasks that are not rewarded). Also teamwork is damaged by individual rewards, while team rewards can breed resentment, envy and ill-will between teams, and even between members of the same team.
Reward schemes, it is argued, also deter risk-taking which, in a rapidly changing word, will damage long term competitiveness. Luckily, the authors also explore how people can be motivated at work. It is a fascinating, and very readable, analysis in a world where performance-pay seems king !. The solutions are all good management common sense - so why do many organisations seem to ignore these simple guidelines ?.
The book is worth reading for these 60 pages of well-written analysis and sense alone. Ultimately their formula for pay in the workplace is simple - pay people well; pay people fairly; then do everything possible to take money off people's minds !
Although the subtitle of the book is "What really motivates us at work", only a third of the book is devoted to this interesting and insightful analysis. To my mind this is by far the best part. The remainder of the book looks at the messages we give our children about money; and how money impacts on our psychology as individuals, and as a society. While there are interesting nuggets in this part of the book, I do feel it went on a bit too long.
The exploration of money at work is fascinating though, and highly recommended for anyone involved in organisational reward schemes.
Forget "now give me money". Get a grip on your organisation's pay and reward process. It'll be one of the most important things you ever do.
on 31 January 2010
I ordered this book to help with my CIPD studies and it's really helped. It offers a really good insight into how we are conditioned to think about money by society, childhood and our working environment.
It's definitely aimed at a personal level, rather than a business/manager perspective, but that doesn't mean it's not useful.
From a CIPD learning point of view, the book only refers to "standard" motivation theorists Maslow & Herzberg which although are still relevant today some 40 years later, could be backed up with more modern theory that fits society as it is today.