Financial Targets Aren’t Always The Best Motivator

Classic company strategy has long been to motivate employees with financial rewards.

From sales staff on commission to employees vying for annual bonuses, money seems like a logical thing to dangle in front of employees you’re hoping to motivate. 

But as Harvard Business Review reports, “A growing body of evidence tells us that overemphasizing financial targets erodes morale and undermines long-term strategy.”

Their point: making financial targets the focal point of employee performance creates sheerly transactional relationships — not just between leaders and their team members, but between employees and customers. 

There are other motivators that are equally if not more important, and that lead to employees who are highly invested in company outcomes. Consider employee engagement — most people are best engaged when you make their work feel meaningful.

Financial targets are certainly important. As a Founder, I wouldn’t argue they’re not.

But as a leader, are you clear about the impact your employees’ efforts have on the company, customers and the world?