I recently elicited laughter from the HR director of a community bank. We were discussing the challenges of motivating employees during chaotic times and fragile economies.
The comment that brought laughter was one I've shared a version of hundreds of times through the years: Money is the most overrated motivational tool in business. Folks get a raise or bonus and are motivated about it for a few days and then start thinking, "Well, they just caught up to what I should have been making already."
After laughing she said, "Oh, no. I absolutely agree. It's just that few people want to come out and say that aloud." I suggested that few folks will ever acknowledge it because it sounds like you're just being cheap and looking for excuses to underpay people. But that's not the case at all.
However, if money were the clearly dominant factor in retaining, motivating and maximizing the productivity of talented people, leading a team would be simpler than it is. I'll often point out to bankers that some of the competitors in their markets paying the highest hourly rates and salaries frequently have retention numbers that are no better (and sometimes worse) than their competitors.
This does not mean that paying competitive wages isn't a priority. However, wages are the table stakes of the game. They get you a seat at the table but do not guarantee an outcome.
And yes, outside factors like bizarre labor markets and persistent inflation continue to put upward pressure on wages. These pressures compel leaders to continually strive for more efficient operations and higher levels of production to meet those demands.
With that, knowledgeable leaders know that experienced team members tend to be both more efficient and more productive. The value of retaining good employees over time is hard to overemphasize.
While it sounds like an overused management trope, most competent employees do not leave organizations purely for money. Sure, we sometimes lose good people who take on higher positions elsewhere. That's just a fact of business.
But far more attrition tends to happen from people leaving for comparable positions at other institutions. They aren't leaving for a paycheck so much as for a perceived improvement in opportunity.
In conversations about this fact with managers, I reference suggestions I also make to folks striving to build healthy growth cultures.
I ask them to briefly explain what their value proposition is to a customer. In other words, why you? In a world full of options, why choose you?
If you don't have a clearly explainable value proposition — if nothing stands out or differentiates you in a customer's eyes — comparisons will always revert to price.
Similarly, if team members don't sense opportunities for personal and professional growth with an organization, their commitment to that place tends to come down to their current pay. If a job is seen as "just a paycheck," retention and employee engagement levels tend to suffer accordingly.
Clear communication and feedback are powerful, nonmonetary motivators. Whether through one-on-one chats, team meetings or other personal two-way interactions with a manager, the sheer act of open communications conveys respect. Few things are more helpful in avoiding the "us" vs. "them" dynamic between leaders and their teams.
It's such an obvious factor that many leaders convince themselves that they do an excellent job in this area. Too often, their teams might not agree.
Facilitating and encouraging professional development opportunities at all levels of an organization increase engagement as well. If a leader (or organization) seldom speaks to employees about their futures, many simply assume that theirs won't be with that organization.
That said, offering development programs and proactively promoting them are different things. Many organizations have particularly good personal and professional development opportunities available to team members that go underutilized.
It's more likely that employees are unaware of or hesitant to explore opportunities than they are uninterested. Employee development needs to be as much a leader's priority as it is an employee's.
And something as basic as recognition from a manager and/or senior leader tends to have an impact beyond even monetary incentives. A personal phone call or even email from a leader acknowledging someone's efforts and/or accomplishments can be remembered for years.
People don't remember their 4% salary increase from seven years ago. They do remember, however, the time they were personally acknowledged and encouraged by a leader.
While salary and monetary incentives are always important, it's nonmonetary practices that almost always distinguish a great employer from the pack.
