Motivating your employees – what you’re doing wrong and how to fix it

A national study on employee engagement has found that only 1 in 4 employees are motivated at work.

For a manager whose success depends on the productivity of their employees, these statistics don’t exactly inspire confidence.

Chances are your employees are counting down the minutes until they can shut down their computers and call it a day, which is quite the opposite of the vision you have for dedicated, passionate employees who will stop at no ends to guarantee the success of your company.

It might be time to re-evaluate your approach to employee motivation, and take a look at what really motivates us.

What is it that really gets us going?

What is it that really gets us going?

1. How you’re losing time and money because of unmotivated employees

Unmotivated employees cost US business an estimated $350 billion a year.

Engaged employees are up to 50% more productive than unengaged employees. The reality is, though, that not many managers know how to motivate their employees, and employee archaic tactics. This article seeks to break these stereotypes and lay down some cold, hard facts.

Imagine all of your employees were engaged and constantly striving to do the best at their job. Seems like a guaranteed recipe for success. The real question, however, is what are you doing, or rather, not doing, to be leading to your employees’ current behavior? What can be done better?

2. Common outdated employee motivational tactics

Think about your company. What is the motivator in your company?

Some tactics come to mind:

Carrot and Stick

The promise of end-of-year bonuses. Typical “carrot” bait, if you will. Financial incentives to do a better job. Often unattainable results, that just keep your employees running after it.

Boss parking

Perks like reserved parking for the bosses. The glorification of upper management, which in the end brings you

Comfortable bosses

More comfort for those higher up on the feeding chain. “Work well, get promoted, get a more comfortable chair!”

Fancy phones

Corporate phones…the iPhone for the big boss who might not even know how to use, and the little one for the marketing intern…who actually should be keeping tabs on the company social media accounts.

All of these are meant as motivators, for employees to stick around, and to work hard with the goal of one day making it up the corporate ladder. Though in some cases carrot and stick bait may help in some situations, in others, it has actually proven to hinder human motivation. We’ll go a bit deeper into this later on, but keep in mind that your current motivational tactics might be outdated.

3. Problem: Monetary rewards are the wrong type of approach

Leading psychologist on employee motivation Daniel Pink (NYT best-selling author of his book Drive: the surprising truth about what motivates us), writes about when monetary reinforcements work, and when they don’t.

Let’s take a look at an experiment that was conducted by psychologist Karl Duncker, that show’s us the psychology of motivation.

Duncker’s Candle Problem

Two groups of people were given the same task, to adhere the candle to the wall, and make sure that no wax drips on the table.

They were all given these materials:

An experiment conducted by Karl Duncker

Before scrolling down, think about how you’d solve the problem

One group was given an infinite amount of time to find the solution.

The second group was offered monetary bonuses for finding solution within a certain time frame.

Finding the correct result involves a creative use of the materials:

The solution

The solution to Duncker’s candle problem

Obviously, this is a task that requires (quite literally), thinking outside the box.

The shocking results were – the group offered financial incentives consistently finished the task slower than the group given unlimited time. This would imply that financial incentives hinder the completion of tasks. 

An experiment was conducted on another group. The task was the same, but they were given the materials in this form:

Part 2 of Duncker's Candle Problem

Part 2 of Duncker’s Candle Problem

It’s clear that the box is a part of the materials that can be used to complete the task.

This experimental group was also divided into two; one given unlimited time to complete the task, and another given financial incentives.

The results from this experiment were that the group offered financial incentives was able to complete the task much faster than the group given unlimited time.

By comparing the two experiments, we can come to the conclusion:

Monetary reinforcements don’t work for knowledge workers

Daniel Pink explains that rewards based on performance only work well when there’s a clear path to follow. However, for tasks that require thinking outside the box, monetary rewards will only hurt performance.

The majority of us these days are white-collar, knowledge workers. Our value as an employee lies in how we think, and the ideas we come up with, rather than the mechanical tasks we perform. Rewards work for 20th century problems, not for 21st century problems and their knowledge-workers.

When comparing the two scenarios, it becomes clear. Creative tasks require more freedom for success, whereas financial incentives are fine for jobs with straight-forward and obvious tasks.

4. Intrinsic motivation: the basis of engaged employees

Intrinsic motivation is the kind of motivation that comes from the inside of the person’s own will. As opposed to extrinsic motivators, such as bonuses, and fear of being fired.

Def. Intrinsic motivation: motivation based on taking pleasure in an activity rather working towards an external reward

In a survey conducted by BNET, 29% of workers said that doing something meaningful was their key motivator at work, whereas money motivated 25%, and recognition motivated 17%.

Blake Mycoskie of Toms shoes sees how meaningful his daily work is. Something that spurs him on daily.

Blake Mycoskie of Toms shoes sees how meaningful his daily work is. Something that spurs him on daily.

The fact of the matter is, no matter how many bonuses, fancy cars, company phones and other perks you may use, the most efficient way to boost employee productivity is to motivate them. Only when they are personally interested in the result, will they be able to work at their highest potential.

For a deeper look into intrinsic motivation, check out this fascinating animated explanation.

5. Motivation leads to company savings and awesome employee retention

What you get from intrinsically motivated employees is well worth the time it takes to figure out the motivation. For one thing, your retention rate soars, employee turnover diminishes, saving on HR and training expenses. Not to mention holding on to skilled and valuable employees.

Winning in the long run – companies that fall in the top 10% with most engaged employees surpass 72% of their competition based on earnings.

Employees who feel motivated at work are also less likely to leave you if a higher paying employer comes around.

6. How to motivate your employees: tips and tricks from the Draugiem Group

The importance of a manager is undeniable. Here are some things you can start doing today, as well as keep in mind for the future.

Some are obvious. For example, taking credit for work that was done by subordinates is a no-no. Credit should be given where credit is due.

Ensuring work-life balance opportunities

At the Draugiem Group we let any employee arrive as late as 11am, while still working an 8hr work day. Not only does it accept that some people not be the most productive in the morning, but also allows time in the morning for other things that might be important for employees, like taking kids to school, morning appointments, or whatever it may be.

Most companies have a strict 9am arrival time, to be able to make sure that by 5pm their employees put in a full work day. For us, arrival time isn’t a factor we worry about, since the hours we put in are automatically through DeskTime.

Compensation: does money buy happiness?

Though money is proven not to buy happiness (a notion contested by many), it’s proven to be a vital factor to ensure a basic level of life. Studies have shown that money does impact happiness, only up to $70k a year (based on US salaries). Once the employee doesn’t have to think about their material existence, they’re able to focus on the job at hand.

What can you do? Make sure to compensate your employees enough that they don’t have to worry about paying the rent, groceries, etc. This will result in a less stressful environment, and will banish thoughts of leaving for a better job, or resentment for the work they’re doing.

Foster Innovation: Give employees a voice

Employees who feel they have impact on the bottom line of your business will feel more motivated and engaged in the processes of the company and in its growth, which is one way to encourage the development of intrinsic motivation. This has several results;

  1. Employees feel like they have a purpose/feel valued/feel invested in the success of the company
  2. The company benefits from innovation by staying on top of the trends

At the Draugiem Group, any employee can pitch their business ideas to the founders. If they like it, the project can be developed and the employee can have equity options. Talk about motivation!

This communication goes both ways. Employee engagement is heightened when the manager takes interest in employees’ personal lives (54% are engaged when they believe managers are interested).

Genuine interest goes a long way. Don’t be afraid to ask employees how their weekend went, or how their kid’s adjusting to their new school. It’s ok to have some interest in what’s going on in your employees’ lives.

Meet the new motivators: Autonomy, Mastery and Purpose

Dan Pink tells us about what he believes are the pillars of modern employee motivation and the 3 keys to better performance, higher motivation, and personal satisfaction.

Autonomy – the urge to direct our own lives.

This comes across as giving employees a sense of autonomy, be it in the work they do, the goals they set for themselves, the hours they work, or the place they work from.

  • The Draugiem Group has allocated Friday evenings as the time to work on whatever they want to, and presenting what they’ve created. This lets employees work on their passion, to create something that didn’t exist before.
  • ROW – Results Only Work environment. Some companies have set this as their policy – you don’t necessarily have to come to work at a certain time, or at all. As long as you provide results.
  • The Draugiem Group allows employees choose where they want to work – if you feel you’d do better working on a different project, working with a different kind of software, you’re free to migrated within the group. This gives employees the autonomy to change where they work.

Mastery – the desire to get better and better at something that mater

Improving yourself is something that anyone in their right mind would like. You can attribute this motivator as a reason for the success of self-education apps and services like Coursera, the free university course website or Duolingo, the website that teaches you a new language while competing against your friends.

  • Some companies bring in lecturers to ensure the education of their employees. Google is a great example of this, with their Talks at Google, which brings in inspiring speakers to foster innovation
  • Accommodating school schedules is a simple way to support mastery

Feeling challenged is a big factor for motivating people to try. Challenges at work are also necessary for an employee to reach the state of flow – a working state that any manager should know is particularly lucrative. 

Purpose – the desire to contribute with our work to something that matters

The knowledge that your work is not in vain, that you’re contributing to a higher goal is what purpose is all about. Take Wikipedia as an example – an encyclopedia that’s fueled entirely by individuals not getting paid, but rather motivated by the knowledge that what they contribute can serve mankind

  • Let your employees know that what they’re doing is very important to the project you’re working on. Our manager Davis often gives long-winded speeches on the importance of customer service, the face we make for ourselves through what we write, and how this is one of the cornerstones of our success. He takes a seemingly small role, and shines the light on how it fits into the success of the company. 
  • Purpose can be felt in many ways: The feeling of working on a project that might just change the way your industry works, becoming a role-model for someone else, knowing that what you’re doing will help someone in the long-run.

See Dan Pink’s TED talk about employee motivation for a more charismatic explanation.

Your office: a place you want to be

A significant part of your day (a third, in fact!) is spent in the office. Creating a friendly environment and making it a place you and your employees want to be is a factor that shouldn’t be ignored.

A humorous take on exactly the opposite of what you want to achieve

A humorous take on exactly the opposite of what you want to achieve



Plants, working environment, those little things that make you love where you are. (in our case, it’s our industrial-feel office, plant wall, cool gadgets, seqways, and catered lunches, just to mention a few).




Plants give our industrial office a cozy feel

Plants give our industrial office a cozy feel

Team members work together on a daily basis. You want to be around people you like. To foster teamwork, mutual understanding, and to create a feeling of joy, spaces to hang out together are just right. For us, this translates to a super-cool terrace where employees can go hang out, take a break, or stay a bit longer on a Friday night to party together.


The perfect place for spending quality time with the team

The perfect place for spending quality time with the team

Other ideas for making your office the most pleasant place to be are organizing team and company team-building activities like corporate birthday parties, Christmas parties, boating events, board game nights and more. My absolute favorite, however, is this. We have a simple policy – just to say hi to your fellow colleagues when you see them in the hallway. It makes your day when you walk into a room to a resounding “Hey!”.


Here’s a recap of what the science of motivation tells us tells us:

  • Rewards work, but only in narrow circumstances
  • If/then rewards destroy creativity
  • Secret to results is in intrinsic motivation
  • What science tells us, and what the market does, is completely different

The vast majority of us are knowledge-workers. Estimated to be about 4-1 in the US. Therefore, statistically speaking, chances are you’re alos a knowledge worker.  This means that we have to re-think the way we understand our own motivation, as well as the motivation of employees. Simple carrot and stick motivation isn’t sufficient anymore. We have think about intrinsic motivators – growth, challenges, personal fulfillment, and work-life balance. It’s time to bring the 21st century into our workplaces.

Bonus: Just for fun, here’s a girl who sure has a whole lot of intrinsic motivation!

Now it’s your turn – let us know what your office uses for motivation in the comments below!


8 thoughts on “Motivating your employees – what you’re doing wrong and how to fix it

  1. Adger Smith

    Nice Article I m also agree with you Julia !!!!! Each and everyone is busy in office routine, but not anyone tried to make it more and more interesting. Everyone is saying that I m getting bored with my daily office routine and all . Nice post, people will came to know what are the actual facts for that …

  2. Employee Training Software

    Employee engagement really matters when it comes to productivity of organization. because motivated and happy employees can only give the best performance and indirectly it will help to improve quality of work. Thanks for sharing this useful information about how to fix bugs about employee motivation strategy.

  3. Irina

    Wonderful article! Thanks! I write a scientific thesis on self-motivation of workers, self-development of employees. If you have an idea, I’ll be glad to know them. Thanks.
    Irina from Russia.

  4. Lauren Deegan

    Great article, well researched. Daniel Pink’s message plays a huge role in my company and his talk actually influenced us to provide a better quality of life at the office which has totally boosted all employee performances.

  5. Jean-Paul Lott

    I am actually in total disagreement. Article seems to be based on the majority of employees. Which in turn may hold value for most. Having been an employee for over 50 companies, I have found mismanaged, creativity killing ideas based on rules and superiors just trying to keep their jobs by keeping the boss off of their backs. The motivation needs to be in management. I myself am totally motivated by compensation, when it is a significant amount. Albeit an article that some may find value, having been constantly suppressed by management, there is no greater de- motivator like motivators being forced to motivate with no drive to improve themselves.

  6. Gisela Normandorf

    If the division of labour considers intrinsic motivation, it doesn’t
    come to the unemployment.
    Division of Labour + Intrinsic Motivation = Technology (Technical Change).
    How should a economic system work? It must turn intrinsically
    motivated people into the prosperity. Because they are sources of
    What does systematic error mean? If the education system can’t
    distinguish intrinsically motivated students from other, then it comes
    to the systematic error.
    If education system encourages insisting students (who are intrinsically motivated), they must not be ready for financial emergency and they must not consider securing financial stability in the future.


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