I delivered a Project Management, Communications and Leadership class at our NYC training center earlier this month. We discussed motivation and how project management was being influenced by Frederick Herzberg’s Hygiene Theory (which has little to do with hygiene). The Herzberg theory is more related to the two-factor theory than hygiene. But that’s another story for another day. Herzberg developed a list of items the he classified as hygiene factors, better known as demotivating events, such as:
- Physical working conditions
- Working relationships
- Salary/status and security
Herzberg’s list of motivating factors included:
- Job interest
- Job responsibility
- The work itself
Herzberg’s theory basically says almost all demotivating factors have to be removed before the motivating factors will motivate. Imagine a motivating meter hanging around one’s neck with a pointer at the 12 o’clock position (neutral). The 12 o’clock meter pointer position indicates no motivation and no demotivation. When a demotivation event occurs, the needle moves counter-clockwise (toward the 11, 10 or even 9 o’clock position). In this condition, even a positive motivation event will not cause the pointer to move clockwise. Only when the demotivation event is removed and the pointer returns to the neutral position (12 o’clock) will the motivation events have a positive effect.
Everyone in the class understood and accepted the Herzberg theory, except his hygiene factor for salary (money). That part of Herzberg’s theory evoked a 30-minute discussion. The questions that created the discussions were:
- Is salary a motivation?
- Is salary a demotivator?
- Is salary neither a motivator nor demotivator?
- Is salary both a motivator and demotivator?
All good questions!
We know the position of Herzberg and others.
Based on your own personal experience, what would you say?
Well, based upon my 33 years of experience in the corporate environment, at both the lowest level (design engineer) and the highest level (corporate senior VP), extensive experience with employee incentive programs and my own observations, I would have to say that salary (or better — a lack of it) is a clear demotivator. Everyone has a sense of his or her own worth as far as salary is concerned. It may not be accurate, but never the less, that’s their view. If they are not getting that salary, the employee thinks negatively about it a lot. Thus it becomes a demotivator. Once the wrong (salary misadjustment) is corrected, the employee returns to neutral, but does not become motivated. The employee only believes that the wrong has been corrected. Additional salary does little to motivate.
When it comes to an annual bonus or incentive, if the bonus plan has objective-type objectives, such as “a positive cash flow of $150,000”, the employee feels like they have some control over events that go into the calculation of the bonus. Assuming the amount of the bonus is high enough (satisfies needs), then this type of bonus can have significant motivational value. In order for the bonus to work, at least 75 percent of it must be based on hard objectives. These objectives need to be easily recognized and easily calculated using the organization’s normal accounting system. What the employee must do and how the calculation works must be easily understood and easy to calculate. How large does a bonus have to be to satisfy an employee’s needs? It should probably be at least 10 percent of their annual compensation. Then, and only then, can an incentive become a motivator.
My observation does not cover everyone, but probably 90 percent of the employees.