Science Explains why Money Motivates Employees

Motivation: Ever tried to get motivated to lose weight, quit smoking or get a promotion? Studies by ASAP science have shown that approximately 45% of people drop their New Year’s resolutions on average 30 days after making them! That certainly does not bode well for people looking to kick a nasty habit or seeking to take on a new challenge. Would being paid make a difference?

What if you gave your staff a cash reward to finish special projects? Research from MIT has shown interesting findings on how money can influence you in accomplishing tasks. They had 2 groups of people complete the simple task of hitting 2 keys on a keyboard as many times as possible within a 5 minute span. The first group received 30$ and the second group was offered 300$ as a reward. An astounding 95% performed better in the second group with the higher amount of money ; showing that cash be a great source of motivation. So is it time to start dishing out the dough? Not so fast!

In a second task where the instructions were a little more complex (for example solving a difficult math problem)- the group that were offered more money actually performed worse- 32% slower to be exact! Why is that? This is called the “Distraction Effect” – which occurs when people get overwhelmed by a problem that causes them intellectual or emotional stress- their attention shifts back and forth to the motivator (in this case money) and it distracts them-therefore decreasing their performance.

Even more shocking is that- (using data found from brain scans) people who are initially paid to play games – and are then asked to play again for no money- actually show huge decreases in performance- as they are no longer as motivated to participate in the activity without reward. Simply put- when money comes BEFORE playing for fun- it can cancel it out and become a DEmotivator when the dollar bills are no longer there!

You can check out the link to this study and more findings here:


So what does this mean for employee motivation and for the perks you give them? It would seem that YES money does in fact motivate your staff short term…and perhaps you may get some pretty decent results if you are looking for them to hit a few keys on a keyboard…but we seriously doubt that job tasks in your office are as simple as that.

All signs seem to point back to that word…PLAY..or the sentiment of feeling good. Now- we are well aware that filing annual reports might not send some into euphoria (though if you know someone who feels this way- please send their resume directly to the accounting department). However- in plain and simple English- it would seem that you’re more focused and motivated employees are the people that actually REALLY WANT TO BE THERE.

That’s right. Those who have remained loyal to you for years and stood by you- gotten all those promotions and moved up in your company were motivated by factors OTHER than money. Your office is where they find happiness- somewhere between the healthy relationships with management and fulfilling tasks- they have found a piece of happiness that has anchored them to you.

So what about money as a perk for a huge important project? Unless your company makes a living with people who play children’s board games- don’t expect better results with money incentives- perks come in many shapes and sizes. Either way – if Bruce wants 300$ to tap a keyboard- you probably don’t want him on your team anymore anyway. BYE Bruce.


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