Dan Ariely on How to Motivate Employees at No Cost to You

The social scientist explains why employers should focus more on meaning, connection and creature comforts than cash.
Renowned social scientist Dan Ariely explains what motivates workers more than cash. (Photo courtesy of: Dan Ariely)

Put away your wallet. Superstar behavioral economist Dan Ariely has discovered something surprising: Money doesn’t motivate workers very well. His research found that connection and meaning are much more effective.


(Photo: Simon & Schuster)

“There are lots of improvements that take surprisingly little effort that are very powerful,” explained Ariely, whose latest book, “Payoff: The Hidden Logic That Shapes Our Motivation,” explores what motivates people.

Per the back cover: “Rather than seeing motivation as a simple, rat-seeking-reward equation, my hope is to shed some light on this beautiful, deeply human, and psychologically complex world.”

NCR Silver asked Ariely how small business owners can use his discoveries to make their employees happier and more productive. Here’s his advice.

Let employees leave their mark

It’s easy to think of work as a “money for time” trade, but workers need more than money to feel like they’re doing something useful with their time. They want to use their smarts and creativity and feel like they matter. If staffers are working in an assembly line-like environment, responsible for only one small task, they might not feel like they’re really contributing to a final product.

“Meaning is about being connected to the overall goal,” Ariely says.

When possible, try throwing workers more autonomy. Give them bylines, let them create something that requires intelligence and vision and ask them to explain why they made the creative choices they did. Employees often think of creative solutions that their employers have never considered.

Send fewer emails

It’s important to for people in a workplace to communicate, but emails have a serious downside: They’re way too easy to send. It takes only a second to CC your staff on something, but that means they’ll end up spending time reading and responding to business emails rather than, you know, doing business.

An employee can feel productive answering emails all day even if she doesn’t actually get anything done. “The feeling of progress and the reality of progress are different,” said Ariely.

Instead of communicating with your employees by sending them tons of emails, try sending only the really necessary stuff.

Build personal connections

Some managers don’t take the time to build relationships with their employees. This, Ariely argued, is a mistake. “In the name of efficiency, we are doing things that create long-term inefficiency,” he explained.

Being friendly may not seem like a big deal for the bottom line, but it is. A workplace is a community like any other, and everyone wants to get along with the people they spend all their time with.

Ariely discovered that workers are much more likely to work late to help out a friend than to help themselves.

Show your appreciation

Ariely’s research showed that compliments work better than cash when you’re trying to motivate employees. Everyone working hard wants to feel valued. Give staffers a sense of progress — let them know they’re getting better at their jobs.

“It doesn’t seem too complex,” added Ariely. That’s why it’s surprising that so many employers focus on rewards like bonuses and forget to let their workers know how great they are.

Make your workplace comfortable

Both employers and staffers tend to undervalue a nice workplace when they think about it upfront. But when you spend eight or more hours a day in the same place, the vibe there becomes important.

Ariely remembers one business in which workers were stuck in bland cubicles they weren’t allowed to decorate. This sort of environment tells workers they’re replaceable and not worth investing in.

Put yourself in the shoes of your employees, and ask yourself: What would make me cozier here? Better chairs? Music? Weekly snacks? A company culture of weird decorations? A ping-pong table in the break room?

Better yet, ask employees what they want. Perhaps one of them wants a more comfortable chair, while a few others could really go for a water cooler or more heat/air conditioning. Maybe they’ve all been clamoring for a better coffee maker — a small cost for a happier staff.

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