Despite anecdotes of isolated layoffs, the labor market is not cooling. The U.S. economy added over 500,000 jobs in July 2022, such that the U.S. unemployment rate went back to its pre-pandemic level and tied for the lowest since 1969.
With a tight labor market, attracting and retaining talent is difficult. Candidates have many options, and voluntary employee turnover is up nearly 20% from pre-pandemic levels.
How can talent and people leaders more effectively recruit and retain successful hires in the midst of a tight labor market? In this blog post, I review an overlooked factor in recruiting and retaining successful employees: work motivations.
While academics have spent considerable time investigating the psychology of motivation, these academic insights have yet to reach their full potential in recruiting and retaining employees. To bridge this gap, I review what the academic literature tells us about work motivations, why they matter, how to increase them, and how to measure them.
What are the Two Different Types of Work Motivations?
What drives us to work? According to the behavioral and organizational sciences, there are two main drivers of motivation: intrinsic motivation and extrinsic motivation.
Intrinsic motivation describes working because the work itself is pleasurable, bringing you feelings of challenge, purpose, achievement, or growth. When people are intrinsically motivated, people engage in work because it is fun, enjoyable, or satisfying — not to obtain something of value or avoid pressures like a deadline.
Extrinsic motivation describes working to earn a reward, such as financial compensation, career advancement, status, or recognition. When people are extrinsically motivated, people engage in work to obtain something of value in return or avoid something unpleasant — not because the work itself is enjoyable or satisfying.
Let’s consider a common reason people join an organization: work/life balance. If someone joins an organization because of the strong work/life balance offered, they are extrinsically motivated in that role because work/life balance is an external reward for doing the work. In contrast, if someone joins an organization because of the potential for learning, they are intrinsically motivated in that role because the satisfaction of learning motivates them.
In the figure below, I examine how the top four important motivating factors that drive employee retention (according to McKinsey) map to extrinsic and intrinsic motivation.
Why Understanding Employee’s Work Motivations Matters
According to a review of the available academic research, employees are most effective in their role and happy when they are intrinsically motivated as opposed to extrinsically motivated. Intrinsic motivation is even more important if you desire innovative and creative employees. You can think of extrinsic motivation as dangling a carrot from the end of a stick in front of a person’s nose. Although extrinsic motivation can be effective in the short-term, the reward (the carrot) will eventually lose its appeal (and become stale) or lead to burnout. Thus, intrinsic motivation trumps extrinsic motivation.
Nevertheless, the reality is that no candidate is ever only intrinsically motivated. Extrinsic motivations are foundational for a top candidate to consider a position at your company, relating to financial security and wellbeing. You can imagine that someone who is a caregiver of their family would require a certain compensation threshold. The research says that intrinsic and extrinsic motivation can co-exist together. For instance, someone can be very much intrinsically and extrinsically motivated at the same time, or simultaneously low on both intrinsic and extrinsic motivation. The key takeaway is to cultivate your employee’s level of intrinsic motivation — while also making sure their extrinsic motivation is satisfied — for a greater likelihood of employee success.
Given intrinsic motivation is typically more effective at promoting employee success, how can organizations promote intrinsic motivation in their workforce? Here are three science-backed techniques relevant for talent and people leaders.
DO: Understand your candidates’ intrinsic and extrinsic motivations.
If you attract and select candidates that are intrinsically motivated to do the job, then managers and leaders only have to provide the necessary tools to enable employees to succeed without worrying about the motivation ingredient.
Attracting and hiring for intrinsic motivation is one of the most cost-effective approaches to building a workforce that is intrinsically motivated. In the absence of hiring for intrinsic motivation, managers and L&D professionals will need to spend resources proactively developing and fostering the workforce’s level of intrinsic motivation.
DO: Promote constructive feedback — and avoid negative feedback.
Constructive feedback is important for fostering intrinsic motivation because constructive feedback enables employees to feel a sense of challenge and purpose, heightening the satisfaction of hard work. Research across 78 different organizations shows that constructive feedback that includes specific details on how to improve, is derived through a fair and transparent process, and is delivered in-person is most effective at boosting intrinsic motivation. In contrast, negative feedback (that is not constructive) can undermine intrinsic motivation.
L&D professionals can invest in feedback training sessions to upskill managers on giving constructive feedback and thus increasing their direct reports’ intrinsic motivation.
DO: Encourage employee autonomy.
According to academic research, employees with autonomy are more likely to have intrinsic motivation than employees without autonomy. Autonomy can take many different forms, such as minimizing employee controls and regulations, providing opportunities to share perspectives on team-level decisions, and encouraging employees to plan their own work schedules. With higher autonomy, employees are empowered to try out and test new ideas, which fuels curiosity and challenge, resulting in higher intrinsic motivation.
As an example of autonomy in action, Netflix employees operate in an environment of “no rules.” There is no expense policy, employees are granted unlimited vacation which is not tracked, and managers do not make decisions for their direct reports but rather coach direct reports to make high quality decisions that are aligned with the company’s strategy.
How are Work Motivations Measured with Searchlight?
Searchlight helps organizations hire candidates by aligning candidate work motivations with the company. To do this, we lean into the research and measure an individual’s work motivations as part of our People Assessment. Specifically, we ask candidates to select and rank the most important job attributes in their next role.
Our work motivations assessment currently includes 24 potential work motivators which we built from consulting the academic literature and interviewing talent and people leaders. (However, the exact number of work motivators in our assessment will continue to evolve as our database grows and our predictive insights become stronger.)
See below for a partial section of our current assessment:
Our work motivations assessment provides the following insights to talent and people leaders:
- We build talent models that identify which work motivations are linked to new hire effectiveness in a given role and level, enabling talent acquisition to use these insights when developing interview scorecards.
- We surface the most important job attributes to a candidate; as a result, recruiters can tailor the job offer package to the candidate and increase offer acceptance rates.
- We enable the hiring manager to personalize the candidate’s onboarding process according to the candidate’s unique motivations for taking the job. This level of personalization fosters alignment between the new hire and hiring manager, setting the new hire up for success in the role.
- We identify whether candidates tend to be intrinsically or extrinsically motivated. With this knowledge, L&D professionals can align the new hire’s motivations with the structural characteristics of the job, setting both intrinsically and extrinsically motivated employees up for success.
Searchlight helps organizations hire candidates by aligning candidate work motivations with the company. Click here to learn more about Searchlight’s Work Motivations Assessment.