Why a pay rise isn't enough - 6 ways to truly motivate staff

visual representation of a pay rise
By Ross Tracey | 2nd March 2022 | 6 min read

A lot of business and HR leaders may be worried about attracting and retaining staff at the moment.  

It’s not surprising given the cost of onboarding a replacement if someone leaves. There’s also no guarantee that you will find someone (or they will find you) given the current recruitment climate. 

According to the latest ONS data, the ratio of vacancies to every 100 jobs reached a record high of 4.1 in October to December. That equates to 1.25 million vacancies in the UK alone. 

Let’s give everyone a pay rise!

Many of you will be thinking that increasing pay is the best way to show appreciation and retain staff.   

Indeed, a big determinant for employees leaving is dissatisfaction with their level of pay (or not being paid accurately or even on time), but I’m going to attempt to explain why cold hard cash is not enough to motivate the majority of your workforce to stay. 

McKinsey’s latest ‘Great Attrition’ survey exposed some concerning trends. More than half of employees who left their job in the last six months did not feel valued by their organization (or manager) and lacked a sense of belonging. Almost all cited a desire to work with people who trust and care for each other as another reason for quitting. 

There are some powerful theories in the world of psychology that explain why money is not enough to make staff want to join and stay with an employer. I believe they are incredibly useful reference points for all businesses when making decisions about how best to manage a workforce. 

Let’s start with the Self Determination Theory. According to Ryan and Deci: ‘the fullest representations of humanity show people to be curious, vital, and self-motivated. At their best, they are agentic and inspired, striving to learn; extend themselves; master new skills; and apply their talents responsibly... Yet, it is also clear that the human spirit can be diminished or crushed and that individuals sometimes reject growth and responsibility.' 

We’ve all probably been on the receiving end of a disgruntled employee. It may have felt, at the time, that their reasons for leaving were minor, such as being left out of conversations, a decision, or not feeling that a manager cared.  

Self Determination Theory goes some way towards explaining why these seemingly small things are enough to damage someone’s motivation, perhaps even activate a threat response, and send them looking for a new role.  

What motivates us? 

Motivation directs us and maintains our behaviour. It contributes greatly to the choices that we make and how hard we apply ourselves. It also facilitates resilience and persistence. Exactly the sorts of traits you’d want in the people that work for you! 

Ryan and Deci’s empirical research affirms that there are two distinct types of motivation that exist in all of us:  

  • Some that apply to external (or extrinsic) factors, such as rewards or other incentives. 
  • Some that point to internal (or intrinsic) factors, such as needs and interests. 

If we are ‘extrinsically’ motivated at work, we are not usually very interested in the activity, just the gain or the reward. 

When we are ‘intrinsically’ motivated in the world of work, we also see the activity itself as rewarding. 

This may sound simplistic and perhaps being extrinsically motivated at work is enough for some. However, evidence suggests that if you go the extra mile and seek to intrinsically motivate staff as well, they are more likely to stay, and quality of their work will be far greater. 

What do we know about intrinsic motivation in the workplace? 

Forms of intrinsic motivation are associated with enjoyment, interest, engagement, effort, learning and satisfaction. These encourage people’s inner resources.  

So, must the work offered be stimulating and enjoyable? Sure, but more importantly, psychologists maintain that three basic needs must be met in order to develop that all-important intrinsic drive. 

According to Maslow’s Hierarchy of Needs Model, it is only once we feel secure in an environment that we can establish meaningful connections with others, grow in self-esteem and reach our true potential.  

Deci and Ryan’s research extends Maslow’s model and validates that the three needs of autonomy, competence and relatedness ‘appear to be essential for facilitating optimal functioning of the natural propensities for growth and integration, as well as for constructive social development and personal well-being.’  

  • Autonomy requires some aspect of freedom in the role you perform. 
  • Competence is a sense of belief in your capability to perform the task. 
  • Relatedness explains the need to belong and feel connected. 

They go on to say that if one of these needs is not met, individuals can experience poor wellbeing. 

meta-analysis of 99 workplace studies (by Van den Broeck, et al) reported that each of the three needs predicted lower turnover intention and were associated with higher job satisfaction, engagement and affective commitment. 

Relatedness stands out here. Psychological research has proven time and time again that relatedness is the strongest predictor for regulating intrinsic motivation in the workplace – for the long term.  

When we feel a sense of relatedness with our work and our colleagues, we are a powerful force in driving outcomes aligned with organizational goals. 

There’s greater trust, better information sharing, improved communication and collaboration. Increased productivity, loyalty and commitment then follows. 

Six ways employers can foster a sense of relatedness 

We have some great HR minds at IRIS Software Group, as you would expect from an HR and Payroll software provider and an official Great Place to Work®. So we work hard to nurture more of a psychological contract, based on intrinsic motivators, with our staff. 

We believe that fostering feelings of relatedness is an important part of any company-wide employee engagement initiative.  

Here are six things we think business can be implemented to help develop this: 

  • Risk taking - Staff should feel able to tell someone if they make a mistake, without fear of repercussion. Try to create an environment where it is OK to make mistakes, especially if they can be learned from. 
  • Speaking one’s mind - Successful work relationships are built by staff being able to speak their mind, share concerns, raise questions and disagree without fear of judgement, including from management. Encourage people to challenge the status quo, not just go along with it. 
  • Listen to feedback - Staff need regular opportunities for feedback and every team member must be given a voice – even the quiet ones. Managers should encourage everyone to contribute to discussions and there should also be formal feedback vehicles, such as employee surveys. 
  • We’ve got your back - Feeling you can count on people drives connection and belonging. Employees need to know their team will help them during times of trouble, both personally and professionally. This sort of team building is a key competency of people managers.  
  • Common goals - Relatedness is also about self-identifying with a team. Regular group goal setting and reflection are great way to ensure everyone has a united sense of purpose and direction. If teams are working remotely, daily group check-ins are a must. 
  • The bigger picture - Everyone should know where their work fits into the bigger picture, so they can recognise the value of their contribution.  Make sure those close to the action have input into critical decisions, know people’s strengths and involve them in projects/company initiatives. 

Developing a psychologically safe culture starts with HR and management.  

Motivation theories provide strong evidence for driving through new employee engagement initiatives. They give existing, new and aspiring managers direction in how to empower teams. They also help encourage those in leadership roles to practice new habits and better understand what it truly means to motivate individuals.

Of course, choosing the right human capital management software can inform, provide insight and free up valuable time across the HR department; leaving your people management experts to focus on what really matters - improving workforce motivation.  

To see our HR solutions, click here; for a limited time, we're also offering up to 50% off all IRIS software - find out more.