Are Employees Only Motivated by Money?

By Perminus Wainaina

Study after study has shown that money WHEN USED ALONE is a poor motivator for employees.

So why do many managers and employers only think that money is the only motivator? Are there advantages and disadvantages of using money as the only motivator?

While several factors, like opportunities to be promoted, benefits, and job satisfaction, contribute to employee motivation, money does indeed motivate most employees.

This is especially the case in recent times in Kenya, where the cost of living and payroll taxes have increased and a lot of employees are now forced to borrow through the credit apps to meet their financial obligations.

Apart from financing an employee’s day-to-day needs, earning more money can improve an employee’s standard of living. It is also linked to status, which may be important to some employees.

In regards to money, this is what I’ve observed:

• It makes sense to pay market rate for employees, as paying below creates resentment and paying above market rates means you get bad employees who hate the job but can’t leave as their pay will be lower.
• If you want to retain your best performing employees, you better pay the market rate, otherwise they will go work elsewhere
• It also makes sense to keep increasing staff salaries fairly on a regular basis, especially for top performing and loyal employees even if it’s only to cater for the inflation increase.

The key thing is, try as much as possible to pay within the market rate and offer other incentives based on employee performance.

If you want to know whether what you are paying is within the market rate, reply to this email and we shall organize a meeting.

While Money Is Important, It’s Not Everything.

But throwing money at employees to motivate them doesn’t work. While money is important, it’s not everything. An attractive salary will entice employees, but it won’t guarantee employee retention, motivation, and productivity.

Recently, I was conducting Leadership Training for a Multinational Company. One of the managers, commented, “We are struggling to retain top performing employees despite paying them well. In fact, we pay our employees above market salaries and also have benefits such as medical, pension and bonuses. During a recent exit interview, one of our employees revealed that they were leaving for a job that offered a lower salary. This has left us puzzled. We’re a well-known, respected company, one that many professionals aspire to work for but when they report, they don’t last.  So, what could we be missing? Why isn’t compensation enough to keep employees loyal to us? Perminus, what’s your advice?”

Employees want more than just a paycheck; they want to feel valued, respected, and engaged. If they show up and then leave quickly, the company likely has underlying issues.

We had a lengthy discussion on this; below are the pointers we had:

1. Employees Not Feeling Valued or Respected.
If your idea of managing people is to give them orders and expect complete submission and obedience through fear, then you are not going to retain employees who know their value. If your employees don’t feel valued or respected, they won’t stick around despite the good salary.

2. You Might Have a Toxic Work Environment
Let’s be real: a toxic workplace can drive good employees straight to the exit. If your environment is filled with negativity, conflict, and poor communication, employees will exit despite the good pay.

3. You Have Incompetent Managers
You might have managers who are either incompetent or unsupportive. Your team is a reflection of your managers and their leadership style. If your managers lack the skills to motivate and guide their teams, employees will look for better opportunities elsewhere. When it comes to employee happiness, productivity and how long they will stay with you, the relationship the employee has with their bosses and supervisors play a bigger role than one might guess. So having a manager with the right leadership skills is a must.

4. Employee Might Be Suffering From Burnout
If you’re stretching your employees to their breaking point, don’t be surprised when they leave. Always balance the company’s needs and the employee’s welfare. Remember, if they’re constantly exhausted, especially through unrealistic targets, they’ll be out the door in no time.

What can you do to retain employees beyond paying well:

1. Start by building a culture where employees feel invested. Improve communication.
2. Train your managers and supervisors on leadership, emotional intelligence and other key soft skills including communication.
3. Set clear expectations with your employees

We have a Leadership Development Program for your managers that will equip your leaders to support their teams better and create the positive, thriving work culture your business needs. For more details, please reply to this email.

Perminus Wainaina is the C.E.O at Corporate Staffing Services. For help on your pressing staff issues including recruitment, staff productivity, business performance, training, labour laws etc., write to this email events@corporatestaffing.co.ke and we shall organize a free consultation meeting.