Many managers reward their staff through monetary measures as a sign of praise and to boost motivation. Everyone loves the idea of a bit of extra cash for their hard work. Yet, according to psychologist Edward Deci, when used carelessly, bonuses and pay rises can become a hindrance to motivation.

In an experiment conducted by Deci, two groups were asked to solve a puzzle. Group A was rewarded in cash and, as expected, spent a considerable amount more time completing the puzzle than Group B, who received no reward. However, the following day, when the groups were asked to conduct the same task, Group A was told there would be no cash reward; they soon lost interest in completing the puzzle, unlike Group B, who worked harder than they had the previous day. This study showed that people could become dependent on incentives, and when they are taken away, it can lead to demotivation.

So if money isn’t the best employee motivator, what is? Employees working for monetary rewards can lose their self-motivation, so although they may work long hours to meet targets, the quality produced is likely to be lower than someone who feels happy and respected in their job. Creating autonomy for employees can make them feel indispensable, allowing employers to focus less on tangible rewards.

This isn’t to say that money should never be used to award hard-working employees, but rewards need to be tailored to meet individual employee needs. Everyone is different, and so their motivational needs will vary.

The DISC Group offers the tool to understand personal behaviours to help improve teamwork, communication, and productivity. Our products can help you recognise your staff’s motivations and ultimately manage an engaged workforce. Please visit for further details on what our products can do for you.