Motivating Employees in Today’s Economy: A Lesson from the Past


Faced with the threat of a double-dip recession, many U.S. companies, rather than re-expanding their diminished workforces, are expecting more from their employees for less pay. These circumstances put a strain on worker satisfaction; a survey by First Command Financial Services Inc. found that 24% of respondents were unhappy with their job and 39% were actively looking for a new employment. Talent Management magazine quoted Scott Spiker, First Command CEO, as saying, “This rising discontent in the middle-class workforce is clearly being fueled by the continuing economic turmoil.”

Reduced bonuses and extended work weeks are sure to diminish morale. So what can organizations do to motivate and retain their talent given today’s economic constraints? A look back into the field of psychology may provide the answer.

Frederick Herzberg, a well-known psychologist and business management guru, was one of the first to propose theories of workplace motivation in the 1960s. He asserted that “the only way to motivate employees is to give them interesting jobs.”

Although Herzberg’s theory is quite absolute, the concept is worth entertaining. Job enrichment, a less expensive and arguably more effective way of intrinsically motivating workers compared to traditional methods (e.g., bonuses, promotions), involves:

• Providing employees with challenging and interesting work so they can use and develop a wide range of skills
• Empowering employees to make decisions about their work
• Allowing employees to work on projects from start to finish
• Delivering accurate, timely, and constructive feedback to let workers know how they’re doing
• Letting employees know how their work relates to the organization’s overall strategy

Herzberg and other psychologists found that when organizations enriched jobs, employees became motivated, satisfied, and engaged by their work and were less likely to leave. For example, a leading technology company wanted to boost their sales team’s morale and retention rate. Instead of increasing pay, they assigned each sales representative a geographic area so that he/she could develop long-term relationships with clients. Also, they gave the sales reps the authority to offer discounts and set their own work hours. These initiatives led to happier employees and a 19% increase in sales.

Although financial compensation is important, it isn’t the only thing that matters when it comes to satisfaction in the workplace. A recent Talent Management magazine article reported that a PDI Ninth House survey found that only 10% of surveyed leaders cited compensation and advancement opportunities as essential motivators within their jobs. Instead, leaders claimed that key motivators included having stimulating and challenging work and an organizational mission they can support. These results echo Herzberg’s job enrichment theory.

Although traditional motivators can lead to contentment and short-lived happiness, job enrichment can lead to engagement, pride, and growth. Given today’s turbulent environment, organizations can use these lessons from the past to motivate and retain top talent.