Employee Benefits Summit 2008: Employers told pay is not a lasting motivation tool

Pay is a hygiene factor and not a lasting motivation tool, delegates at the Employee Benefits Summit in Jerez, Spain were told.

Adrian Furnham, professor of psychology at University College London, said: “If you want to use money as a motivator you need a lot of it and you need to use it frequently.”

However, he added that it was important to get pay strategy right and avoid making pay structures transparent to guard against breeding resentment among staff.

“Money is a powerful de-motivator, if you get it wrong and don’t pay people equitably and with market forces, they get [annoyed],” he said.

Employers, he said, also need to think about what money means to staff who may prefer to receive other forms of reward such as holiday.

He suggested that employees may be attracted to a company by the offer of a good salary, but this may not necessarily retain them.

In order to engage staff, employees also need to ensure that they manage and understand individuals effectively as employees tended to leave because of the way they are being managed rather than money.

Furnham said: “Money can be a hygiene factor and is never going to be a good motivator, [employers] need to add to that good management and understanding of individuals – only then can they truly engage people.”