We want more money! Or do we?

As small business owners, we are faced with the never-ending daily task of boosting employees’ performance. Looking for some possible solutions to this dilemma, I turned to a few of the prodigious thinkers of our time. I skimmed the pages of Socrates and Machiavelli until I happened upon my answer. The solution to this problem came from the late, great philosopher, the Notorious B.I.G.

I don’t know what they want from me. It’s like the more money we come across, the more problems we see.

Biggie Smalls Mo Money, Mo Problems

As it turns out, the legendary rapper was also a font of business management knowledge. The idea is certainly counter-intuitive, but Biggy was onto something when he suggested that money is not always the answer.

Imagine this situation: your boss has just promoted you, given you a raise, and increased your responsibilities. Things are looking up; however, as soon as you get back to your desk, there’s an email from him. He wants to see every draft of the proposal you are working on. Nonetheless, he hasn’t given you any guidelines for what he’d like to see. Within twenty minutes, he’s at your desk, pestering you to see if you’ve made any progress. When you get a second to breathe, you forward him your latest draft. It’s returned within minutes. It’s been edited so extensively, you can barely recognize it as your own work. Is this kind of micromanagement really justified by an increase in pay?

To put it simply, no it’s not. Scientists have recently conducted a slew of social experiments that show people actually perform worse on complex tasks when their performance is incentivized.

So, if money’s not the answer, and neither is the risk of punishment, then how do we get our employees to be more creative, more productive, and more eager to come to work? Fortunately, those same scientists who discovered the problems in our current management system also seem to have found a solution. It’s all about two factors: Autonomy and Mastery.

Autonomy

The first step to improving employee performance is to turn over the reins. Has there ever been a time in your life when you wish your boss would just trust you a little more? A time where you wish your boss would just try one of your suggestions? When you tell your employees what to do, and you micro-manage them every step of the way, you are limiting their creativity and their productivity. Even more importantly, you’re stressing them out.

Listen to your employees’ suggestions. Let them design their own system for getting the job done. Give them some free time to work on whatever they want to, as long as it betters the business in some way. When you trust your employees, they trust you. They will be more excited about walking in that door every day, and they will be more willing to do what you ask of them on those occasions when you do need to be more direct.

Mastery

Think about the number of your employees who like to do something thought provoking in their off hours. Maybe they play a musical instrument, run marathons, or fix up old cars. Why would they spend their discretionary time doing something that is difficult? The answer to this question reveals one of our fundamental desires as human beings: we like to be challenged, and we like to measure our progress against these challenges.

In the workplace, this means giving your employees stimulating tasks (maybe even a task that you’re not sure they are capable of completing) and offering valuable feedback on their performance. It’s not enough to simply give someone who works for you a difficult job; you have to let them know how they did on that job so they can improve on the next go-round.

Just like your Mage in World of Warcraft, your employees will keep trying to earn that valuable XP so they can level up in the RL.

In summary, employees only respond to incentives for the most menial of tasks. If you want their performance to increase in more dynamic ways, you need to increase their autonomy and give them a way to measure their mastery. When you do this, your entire company will benefit and your profits will increase. Then, you’ll really be able to pay them the big bucks for their outstanding work.

TL;DR – More autonomy and challenges = improved performance in the work place.