As your career changes the value you put on things does too. When you are starting out in your adult life acquiring money is very important. You have startup costs involved with leaving the family home or finishing college. You might want to travel or immigrate to another country. Increases in your pay matter to you very much.
When you have no money, money matters a lot.
If you are in technical pre-sales and you get to influence which sales person you will work with, choose the one with two ex-spouses, three houses, the shiniest car on the road and a boat. That person is hanging on to the illusion of success by a thread. They will dig through a granite mountain with a tin spoon to make their bonus targets because they are a missed debt payment away from losing everything. If you are tied to their success expect to be worked until you break but I assure you if the compensation plan is solid, you’ll get a check at the end that’ll make your eyes bulge.
On the other hand, when you’re further along in your career and the big bad debt wolf is not at your door, money matters a bit. But not enough that it will affect how you behave to get it.
No, this is not a robust defence of why during your last performance appraisal your manager might have told you that your pay increase will just about match inflation. I am not saying you should be fine with that. You might want to consider looking across the table at them and yelling “BUT I’M POOR!” when that situation occurs. What this post will be is a quick run through what people look for at work. Why do they stay at a firm? Why do they leave?
Fredrick Herzberg’s Two Factor Theory states that there are motivating factors, that is things that inspire better performance, and hygiene factors, things that prevent demotivation from lowering our performance. Money, he found, was hygiene factor. As was the relationship to your management structure and the quality of interaction with your peers.
Hygiene factors do not contribute to motivation at work, but if they’re seen to fall below a specific level they do lead to de-motivation.
A 10% raise won’t motivate you to work 10% better. A 10% pay cut could lead you to feeling what you are doing does not matter, you are not appreciated for doing it so why not do a half assed job?
Kenneth Kovach showed the theory applied with a longitudinal study (Same factors, different people across different times) he carried out in 1941, 1981 and 1986. Dr. Kovach passed away before he could take his research into our century but his findings were consistent over the decades.
Employee rankings of Kovach’s factors varied in some places but were very much driven by the state of the world at the time. Factors changing position between times of war and times of peace. That said, what Kovach found was what managers thought motivated their employees was consistently wrong over 45 years of study.
Not what they thought was wrong by a bit. They were entirely wrong in exactly the same way every time he did a survey.
I apologise for my hideous abuse of Excel in advance. Looking at the 1986 survey results we find the following factors ranked by managers and employees.
45 years and the manager rankings kept their exact positions. Across three different sets of survey takers. It makes you question if employees and managers even speak to one another? They do, of course they do but it is easy to see that we do an awful of lot of projecting intentions and motivations onto other people. This helps us comfortably fit them into our mental model so we can get on with the rest of our life.
If an employee leaves a job it is because they are getting what they see as a more interesting work challenge or a better life. They might get more money with the new job but it is certain that it is the job satisfaction, the co-worker experience or a change in life situation that is driving the change.
Across all three studies “Good wages” ranked consistently in the middle of the pack for employees. More important than personal sympathy for problems at home, less important than interesting work and appreciation. "Good wages" was ranked number one in every manager survey when managers were asked what mattered most to their employees.
When you have no money, money matters a lot but above a point where someone feels you are not exploiting them you will get more productive work out of them with a kind word and an interesting problem than with cold cash.
(Though for your next performance appraisal you might want to start rehearsing your “BUT I’M POOR!” moment as soon as possible.)