Why Increments don’t motivate?

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If one goes through the dictionary meaning of the word “Reward”, it means “something given or received in return or recompense for service, merit, hardship, etc.” Going by this meaning, reward should be purely a quid pro quo relationship, and any manager should be able to able to keep their flock together and motivate them by offering rewards. But the question that confounds the managers is how come they generally witness the maximum attrition in the 1-2 months period post the grant of annual salary increments and bonuses to employees?

To explain the concept further, let me share he following story to you:

The famed psychologist William James Hall was once disturbed by a group of kids playing loudly below his bedroom window. Attempts to get them to play somewhere else failed. Eventually, the good doctor hit on a clever solution. He told the kids that the noise reminded him of his childhood and paid them fifty cents each to continue playing outside his window. The next month, he told them that he couldn’t afford fifty cents and dropped the payment to forty cents each. There was some grumbling, but, overall, the kids were happy to accept the money. This continued for a month, with the payment dropping every few weeks. Eventually, Dr Hall paid them a dime each and told them that the next week they would get only a nickel. Infuriated, the kids stormed off, leaving him in peace.

What did Dr Hall do in the above case? He established a transactional quid pro quo relationship with the kids by paying them in exchange for making noise below his window. By paying them at the first place, he shifted their goal from playing to instead making money. Once the kids agreed and started taking money for making the noise, he took control over their actions. He reduced their motivation by reducing the money being paid in lieu thereof, until he eventually destroyed their motivation to play near his window.

Doesn’t this remind us far too familiar scenario in the corporate set-ups? Companies try to motivate employees with increments and bonuses, but these truly work for a very short time. Why? Because managers don’t invest enough in their employees. They make people slog during the year treating them as commodities, don’t share big picture and how their work contributes to larger objectives. They hardly appreciate good performances, don’t give regular performance feedback but make them feel small in front of others if anything goes wrong. Similarly, many managers pay little heed to their employees’ personal concerns, don’t help them build their careers and hold back key information to protect their jobs. They neither involve them in decision making nor take their suggestions seriously. In their bid to be popular, they first don’t differentiate performance objectively and tend to give high performance rating to most of their team members, and later, because of paucity of reward pool, tend to give average increases to most, thereby demotivating all!

Managers fail to realize that motivation is not always rational. By not focusing on the other enabling factors that engages the employees at an emotional level, they reduce the relationship to a transactional level by believing that the year-end monetary rewards will keep them motivated. Such monetary form of motivation only works for a short time. Experiments have proved that not providing raises or bonuses also produces almost similar results, but only without this short period of improved motivation.

As a matter of fact, in the absence of other engagement factors, the reward or increments have to keep increasing to produce even the same level of motivation. Since this is generally not feasible and reward pool keeps getting slimmer and unevenly distributed being by so many moving parts in the organizations, hence the potential of salary increments and bonus to motivate also get dimmer. Accordingly, as soon as the ritual of annual increases is over, best employees lose their motivation to stay and start shopping in the job market soon after getting their increment letters.

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