In the world of small business, employees are often in charge of about 20 different tasks that weren’t listed on the original job description. But, because you recruited well, you found employees who are okay with the extra workload, as long as they get to be a part of the success of your company. At least, that’s part of the story. But really, they are likely getting burned out, or at least unmotivated. What’s the go-to solution? Bonuses, or some other form of cash.
While this seems smart on the surface, it is not the best, or cheapest, motivational tool out there. In a recent study, Dan Ariely, James B. Duke Professor of Psychology and Behavioral Economics at Duke University, examined three different motivational tools and their effect on productivity. In his new bookPayoff: The Hidden Logic That Shapes Our Motivations, he revealed the top two best motivators: pizza and compliments.
The Big Pizza Payoff
To conduct his study, Ariely worked with an Intel semiconductor factory in Israel. Workers at the factory were divided into four groups. One group was given a promise of a cash bonus if they finished all of their work for the day. The second was promised a rare compliment from the boss. The third was offered a voucher for free pizza. Finally, the fourth group wasn’t given a promise of anything, in order for there to be a control group. Why a semiconductor factory? Because it’s easy to measure changes in productivity; each worker is supposed to put together so many chips a day.
What Ariely found was quite surprising. On the first day of the experiment, those who were promised pizza increased their productivity by 6.7 percent. Just behind the pizza group was the compliment group, which saw an increase of 6.6 percent in productivity. Those who were promised cash only increased their productivity by 4.9 percent. What happened after that first day, however, was even more shocking.
Over the next few days, those who had been promised a cash bonus saw a drop in productivity of 13.2 percent compared to the control group. That number leveled out a little bit, but by the end of the week, that group saw a 6.5 percent drop in overall productivity. Pizza and compliments, on the other hand, proved to be a solid motivator. Compliments ended up being the best one, though Ariely believes if the workers had pizza delivered to their door instead of being given a voucher, that would have been the best motivator.
What’s Wrong with Cash?
Though it’s hard to say this study was actually scientific, the results were telling. Employees who are offered money to be more productive may feel like their hard work is unappreciated. After all, those who do bring success to your company may feel they are owed a pay raise — or at least a bonus — as part of the job. It is an intrinsic value, while a reward like pizza or a rare compliment is more extrinsic.
In other words, financial compensation is par for the course, and it sort of loses its shine once your employee attains it. That bonus gets spent; their new title doesn’t sound as important when they finally get it. But tools like pizza and compliments show you actually notice and appreciate what they do — and that appreciation is what sticks with an employee and motivates them to be more productive.