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Why Money Doesn't Always Motivate Employees

Freedom to operate, according to a recent survey, is far more valuable in motivating employees.

Stefan Lindegaard, an author and consultant who runs a terrific blog on innovation in organizational settings, recently conducted a survey which asked this fundamental question: What are the best ways for leaders to motivate employees to become more innovative and help create a better culture for innovation?

Lindegaard's results offer two key takeaways for leaders looking to foster an innovative culture:

1. Financial incentives and bonuses are not that important to the process.

2. Setting clear objectives is less important than providing freedom to operate.

I reached out to Lindegaard seeking insights about these survey results. Here is an edited version of our conversation.

Can you explain why money isn't the biggest motivator?

Having spoken with lots of people over the years on incentives and drivers for innovation, I was not surprised that financial incentives and bonuses rated low. People who get the chance to work with innovation (full-time or part-time) seem to be very happy about their jobs and they are more driven by the passion of what they are doing. They also like intellectual challenges and being able to work with other qualified and competent people in order to reach their goals.

Of course, it should be noted that people working with innovation are already fairly or well compensated and [like] everyone else they also like a good paycheck and bonuses. They are just in a position where it is not [at] the top of their objectives.

Another interesting result of the survey was that "set clear objectives and expectations" ranked below "give freedom to operate." What are your theories about this?

Too often, I see that corporate innovation teams lack direction and proper support from the executives who do not really understand how to approach the modern kind of innovation as we see it today. This [pertains to] much more than internal R&D; it also [includes] open innovation and business model innovation. [Also] if [innovation professionals] have been doing innovation based on internal R&D for many years, then everyone kind of knows the objectives and expectations.

Dec 24, 2013