In recent Harvard research it has been found that paying someone based on results may not be enough. There are other factors at play which impact performance, engagement and tenure.

Assistant Professor in Negotiations, Markets and Organizations, Ian Larkin has found that a final hurdle to motivation is that rewards offered are considered “fair” when compared to remuneration and rewards of others. It appears not enough that we reward others for results they produce but also on how those results and rewards compare to others within your organisation and the industry. The “is it fair” hurdle can be an expensive one for organisations to get wrong.

Larkin makes the following critical points:

  • The most powerful workplace motivator is our natural tendency to measure our own performance against the performance of others.
  • Individuals will actually give up the chance to make extra money if doing so will garner positive recognition from their peers.
  • In the age of social networking, employees are more likely than ever to share salary information with each other. Employers need to keep this fact in mind when designing compensation plans.

A crucial step in maximising motivation is therefore to ensure that individuals are not only clear on the rewards for their direct efforts but also how the expected results and rewards compare to those of others. The natural tendency to contrast rewards against others is hard wired into the social conscience. Failure of managers and coaches to tie down this motivator could derail the performance of a high performer and create extra effort in the process of re-engagement.

Here’s some tips to position objectives and rewards in comparison to others:

  1. Separate – break down the components of the role, size of objectives, perceived efforts, rewards and remuneration, opportunities and challenges
  2. Comparisons – compare and contrast the elements of the role to external benchmarks, high performers in the role, new starters and those not performing, being careful around confidentiality having strategies to manage the “left field questions”
  3. Be Clear – clearly state differences, both positive and negative and explain why
  4. Feedback – ask for the individuals thoughts and feedback, discuss what can be changed and what can’t be changed and why
  5. Engagement – ask, “Given what we have just discussed, on a scale of 1 to 9, how enthusiastic and engaged are you?” If not a 9 ask “what would it take to make it a 9″

Carefully crafted disclosure and conversations are required to ensure that this hidden motivate, which is totally at the discretion of individuals, is used to further cement motivation rather than derail. If this final stage of motivation is overlooked the best remuneration, bonuses, conferences, car parking spot, gym membership and biscuits in the tearoom could amount to nothing.