New Study Shows Employees Perform Best When These Two Factors Are Combined

Though a fat paycheque may be incentive to choose – and remain on – a particular career path, a new study has shown that it’s not money alone that motivates employees to perform to the best of their abilities.

study by KIT economist Petra Nieken and two colleagues sheds a little insight into employee motivation and subsequent performance. It found that small signs of appreciation have a significant influence on the output and quality of the work of employees.

Of course, money is still a motivating factor, no doubt – few people want to bust their ass for someone else out of the goodness of their heart, after all.

A field experiment involving 139 students showed that a combination of performance-oriented piece wage and motivating words increases the performance reduces the error rate by significant amounts. The students were instructed to acquire data electronically for a research project. Though the task was relatively simple, it did require a degree of attention to detail and care. All participants were paid the same base salary. In an attempt to observe both individual effects and the interaction of motivational tools, however, one group was awarded an additional piece wage that was dependent on performance.

The experiment found that a few encouraging, motivating words resulted in an improvement of performance only if they were accompanied by a performance-based payment. That makes sense; you can’t pay your bills (or reward yourself with a vacation) in kind words, after all. The thing is, though, that if an extra performance-based payment was made but the motivating words were absent, the performance of the participants decreased and they made more errors.

Meaning, we’re not driven by dollar signs alone.

That’s why you need to verbally express appreciation to employees. Seriously, an email at the end of the week from your boss expressing his or her gratitude for all of the hard work and results goes a long way.

Monetary, performance-based bonuses + words of encouragement and appreciation = happier, more productive employees.

To break it down further, in the study, the combination of an appreciation with an extra salary of about 10 per cent resulted in an increase in performance of about 20 per cent and a reduction of error rate by 40 per cent.

“We hoped to obtain such a result, but we did not expect it to be so clear,” said Nieken.

Personally, I don’t find the results surprising in the least. Nobody wants to feel like they’re undervalued or underappreciated in their workplace – that’s like marrying for money and staying in a bad, loveless relationship.