Debate on how to motivate employees goes way back. Employers have two sets of tools in their toolbox. The first are pecuniary rewards, so beloved by economists, for extrinsic motivation: more money, and linking pay to performance can deliver greater worker effort if designed properly. The second are the non-pecuniary aspects of the job, which tap into employees’ intrinsic motivations. These include aspects of job quality, such as opportunities to work autonomously, and supports to deal with job demands.
One might assume both to be important, but the empirical literature suggests that the balance between the two matters. Some jobs offer more of one over the other. For instance, it is often assumed that those engaged in pro-social work, such as health and care workers, take those jobs in part because they are the types of people who want to ‘make a difference’; what Timothy Besley and Maitreesh Ghatak term “motivated agents” in their 2005 article Competition and incentives with motivated agents. For intrinsically motivated teachers and nurses it’s even possible that performance pay will squeeze out that intrinsic motivation, according to Roland Bénabou and Jean Tirole's article, Intrinsic and extrinsic motivation, published in July 2003. Others, like traders and brokers, are assumed to be primarily motivated by money so that high-stakes financial rewards are expected to bring out the best in such workers.
The pandemic has refocused attention on what will motivate workers going forward. It has highlighted the difficulties many workers face balancing work and family life, leading to increasing demands for employers to accommodate flexible working requests. The public were scandalised at the lack of personal protective equipment (PPE) offered to care workers at the height of the pandemic. But employees’ concerns with safety issues travelling to the workplace and while at work are persisting. Now the debate is about what it is reasonable for employers to expect of their staff with respect to working in the office or at home, and what rights and responsibilities employees have with regard to their own safety and that of their co-workers and customers.
There will be no easy answers because solutions will differ in different settings and for different types of worker. But in all cases the onus will be on employers to engage with their staff and listen to those concerns. Providing employees with the opportunity to voice their concerns will be key.
Money will matter. Financial rewards remain a potent way to motivate workers. Witness the calls for a decent living wage, particularly among social care and public sector workers who are among the most highly intrinsically motivated of workers. But so too will non-pecuniary aspects of the job: respect, good working conditions and voice. More will be better, just as Michael White and I found in our 2013 study on job satisfaction and organisational commitment, Positive employee attitudes: how much human resource management do you need? That won’t have changed.
Alex Bryson is professor of quantitative social science at University College London's Social Research Institute
