“…Research shows that employees’ personalities are much better predictors of engagement than their salaries…”
But one size does not fit all. Our relationship to money is highly idiosyncratic. Indeed, in the era of personalization, when most things can now be customized to fit our needs — from social media feeds to potential dates, to online shopping displays and playlists — it is somewhat surprising that compensation systems are still based on the premise that what works for some people will also work for everyone else.
Other than its functional exchange value, pay is a psychological symbol, and the meaning of money is largely subjective. For example, there are marked individual differences in people’s tendency to think or worry about money, and different people value money for different reasons (e.g., as a means to power, freedom, security, or love). If companies want to motivate their workforce, they need to understand what their employees really value — and the answer is bound differ for each individual. Research shows that different values are differentially linked to engagement. For example, income goals based on the pursuit of power, narcissism, or overcoming self-doubt are less rewarding and effective than income goals based on the pursuit of security, family support, and leisure time. Perhaps it is time to compensate people not only according to what they know or do, but also for what they want.
Finally, other research shows that employees’ personalities are much better predictors of engagement than their salaries. The most compelling study in this area is a large meta-analytic review of 25,000 participants, where personality determined 40% of the variability in ratings of job satisfaction. The more emotionally stable, extraverted, agreeable or conscientious people are, the more they tend to like their jobs (irrespective of their salaries). But the personality of employees’ is not the most important determinant of their engagement levels. In fact, the biggest organizational cause of disengagement is incompetent leadership. Thus, as a manager, it’s your personality that will have a significant impact on whether your employees are engaged at work, or not.
Money Motivation Series
Does Money Really Affect Motivation? (1)
Does Money Really Affect Motivation? (2)
Does Money Really Affect Motivation? (3)
Does Money Really Affect Motivation? (4)
Does Money Really Affect Motivation? (5)