‘Motivating employees leads to increased productivity’

With increasing competition and shrinking profit margins, firms are looking to boost productivity, which depends on employee motivation or morale.
A recent study by Dan Ariel, professor of Behavioural Economics and Psychology, shows that money gets workers in the door, but it does not make them go the extra mile. This position is the product of a series of experiments aimed at unlocking the roots of intrinsic motivation. For employees to go the extra mile, work must be rewarding.
To do that, Ariel recommends employers show their workers how their products or services help others. This is easier in some fields, like making drugs that fight cancer, than in others, like making soft drinks. But even then, employers can “emphasise the joy, the sweetness, even the sound of a can opening,” he says in an interview with an international business magazine.
Companies should give workers insight into its operations, and let them participate, through town hall meetings and other events. Offering them equity -such as yogurt maker Chobani did when it promised employees shares worth 10 percent of the proceeds from a future sale or Initial Public Offer — can help invest employees in the corporation’s success. “Giving them a share of the company, even if it is small, gives them a sense of ownership,” Ariely said.
In one of his experiments, Ariely asked subjects to build Lego toys, called Bionicles, and he paid them $2 for the first one they built, and slightly less for each subsequent toy. In one group, after receiving the completed Bionicle, Ariely’s researchers would set it aside.
With another group, the researchers began dismantling the toys as soon as they received them. In the first group, the subjects made an average 11 Bionicles before giving up. The second group—whom Ariely compares to Sisyphus, the figure of Greek myth eternally rolling a rock up a hill— walked away after making just seven. Other, similar experiments reinforced the message: “People want to feel like they’re contributing,” Ariely told the magazine. “They want a sense of purpose; a sense that work itself has an impact.”
Another important element in employee motivation is trust. Nothing beats down motivation like bureaucracy and rules. Organisations have regulations and procedures to standardise operations, but as they reduce employee autonomy, they reinforce that idea the workers are replaceable cogs in a machine.
At worst, an over-reliance on rules and procedures can have a negative affect and on the organisation, as workers find ways to game the system. “Every time you try to create rules, there’s going to be a gap between the rules, and the meaning of those rules,” Ariely said. It was through that gap that Wells Fargo‘s employees realised they could meet their sales goals by opening fake accounts in their customers’ names.
Many rules are in place because companies have zero tolerance for employee misbehaviour, so all employees—including the ethical majority—labor under the same morale-sapping shackles. By loosening the regulations, corporations may see some employees take advantage, but more will use their new-found freedom to serve the company’s goals in more creative ways. “When you give people trust, people can flourish,” Ariely said.
He cited a large hotel company he worked with that relied on telemarketing. Its employees were instructed to read from a script to sell products, even if they knew that the scripts weren’t appropriate for customers. When employees were allowed to deviate from the script, they had happier customers and increased sales, he said. “The lack of tolerance on the downside limits the potential on the upside.”