Merit pay does not always motivate employees

By Tania Richman
"Show me the money!" We've all seen the movie Jerry Maguire. And, rest assured, if someone speaks those four words, you're almost always going to associate them with that unforgettable scene.
You know, the scene where Jerry Maguire is talking on the phone to his client, up-and-coming football star Rod Tidwell, and Tidwell tells Jerry to "show him the money." Now that you've gotten a visual, perhaps you paused a moment to reminisce over this 1990s classic or even yelled "show me the money" a few times for good measure . . . No? Just me? Okay, let's continue.
As much as I'm sure some people would love to step into their manager's office and tell them to "show me the money," that's probably not likely to happen. Truth is (and this might come as a surprise), it takes more than just money to keep employees motivated. Studies have shown that merit pay does not necessarily lead to an increase in employee drive, and that in some cases it can even de-motivate.
Aliza Hoffman took an interesting approach in a recent Wall Street Journal blog by comparing employees to students, and explained three key factors that lead to better performance: autonomy, mastery, and purpose. All three of these factors can be applied to managing talent. Most employees want to be self-sufficient, to be recognized for their contributions, and, most of all, they want to know their place and purpose within their organization.
Pay for performance is still a crucial part of any talent management process. But rather than focusing exclusively on a carrot-and-stick system, HR should center its efforts on the larger picture. Think of innovative ways to keep employees content and motivated rather than simply handing them a review and a pay increase once a year.
It's not always about money. It's a combination of factors that keep an employee motivated and wanting to stick around. Tap into your talent, find out what they want, what keeps them on their toes, and act on it.
Think back again to that famous scene. Before Tidwell utters his famous line, Maguire asks him, "What can I do for you?" So here's some food for thought: Besides showing them the money, what can you do for your employees?
Related articles:

You may like these other stories...

We've all been there. Trying to make our work-lives more efficient, transfer knowledge to newer team members, and leverage our practices. Sometimes it works, and sometimes, well, the result is embarrassing at best.Here...
From May 20-23, the Association for Accounting Marketing (AAM) held its annual conference. Frequent contributor Sally Glick picked up some ideas that she will be sharing with us in the coming days, as she has done in...
Success, for a practitioner in a busy CPA firm, requires the ability to handle multiple tasks effectively. To get everything done, CPAs typically track their agenda with a "to do" list or other open-item systems to...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.