Most forms of financial incentives are secondary motivations for employees. In the panoply of human motivation, financial concerns rarely rank at the top of the list. Employees in hot industries know that other employers will compete for their talents, and bribery is the first tactic. Here in Silicon Valley, hurling large sums of cash at new recruits has become the norm.
Yet these financial incentives never buy loyalty. They never create employees who stay with a company and strive to do great work. Micrel, the semiconductor company I founded and led for 37 years, had the lowest turnover rate in our industry. We managed to do better than our competitors by paying attention to deep human motivations rather than the transient nature of money.
Motivations
Economists go to great lengths to study both the rational and irrational aspects of motivation in commerce. What they rarely investigate are the more enduring aspects that humanity plays in motivations. For employees, this is vastly more important than financial decision making. An employee who spends 250 days a year with his employer, who spends more time at the office than with his or her own children on any week day, is investing most of their human experience with that employer. If the employer sees golden handcuffs as an incentive, then they communicate to that employee a very base relationship that fails to connect with a human experience.
Despite money being a large lever in our hyper-competitive Silicon Valley culture, many companies realize something more must be provided to prospective employees. Google offers the chance to help engineer global change. Apple brings employees into a realm of technical elegance. Facebook thrives on the art of interconnecting real people. These are good starts, yet they still miss the essence of humanistic employment.
Within each soul are aspects of how they relate to the world, and mainly to other people. Everyone needs to have a sense of value — that they contribute something of worth. They need to feel appreciated and wanted. They need to feel safe. When one looks at Maslow’s Hierarchy of Needs, these factors dot that pyramid. Money does not.
This is why golden handcuffs rust. They are not humanistic, but restrictive. They are designed to command obedience, not participation. Golden handcuffs imprison people, not elevate them. They ignore what lies at the center of the human heart (and for more on the human aspect of management, turn to Tough Things First).
Creating a place people want to be
In open societies, people have a choice as to where they work. Creating a place…