Article

Leadership Matters: The 4 Levels of Employee Motivation

Different light bulb glowing on the top of the level
By Joel Trammell

2 minutes

Telling your employees the ‘why’ of their work can spur their performance.

What motivates the employees at your credit union to do their best work? Are they working just for a paycheck, or do they feel that they are making a positive impact in the organization—and in the community?

Over the past few decades, the nuances of workplace motivation have been studied from every perspective imaginable: psychology, neuroscience, biology, organizational theory and more. Many of the findings have been counterintuitive, such as the fact that monetary compensation is one of the weakest motivators out there.

Fortunately, you don’t have to comb through dozens of research articles to develop a basic understanding of employee motivation. After decades of running companies and working with managers, I have come to think of employee motivation as having four basic levels. Let’s take a look at each of them.

Level 1 Motivation: “Because You Told Me To”
Some employees do their work because the boss told them to. If they didn’t do the work, they would get in trouble and risk losing their source of income. So they process that transaction, make that call, attend that training, or perform whatever other task is at hand, usually doing the bare minimum.

Level 1 is classic extrinsic motivation, and it rarely results in high-quality work. This is particularly true if the work requires any level of creativity or innovation, which almost all knowledge work today does. If your team were putting together widgets on an assembly line, Level 1 motivation might be fine. But in today’s organizations, hungry for motivated talent and fresh ideas, you cannot expect to get by with employees who feel coerced into doing their work.

Level 2 Motivation: “Because You Want Me To”
At Level 2, the employee does his work not because the boss told him to but because he wants to please the boss. Here, the employee likes and respects his supervisor, so he will bite the bullet and expend a bit more effort to earn approval.

Still, employees who do the work purely because you want them to are unlikely to be high performers. This is not to say that a strong professional relationship between employee and manager is undesirable, but it is to say that this type of relationship is “necessary but not sufficient” for creating lasting motivation. (It won’t hurt to mention that the employee at Level 2 is almost certain to jump ship should his manager leave.)

Level 3 Motivation: “Because I Want To”
At Level 3, employees move from extrinsic motivation to intrinsic motivation; they have an inner desire to do good work. They are more autonomous; they approach projects with more creativity; and they feel a greater sense of responsibility.

Level 3 motivation is typically rooted in employees’ pre-existing interest in the type of work, a specific skill the employee enjoys exercising, or a feeling that this role will move them toward a larger career goal. Managers can sustain this dynamic by

  • offering employees challenging, interesting projects,
  • recognizing employees’ skills and efforts, and
  • having conversations with employees about their career goals. 

Level 4 Motivation: “Because It Makes a Difference”
If most of your team works predominantly from Level 3 motivation, you will be in a good place. But the most powerful form of motivation is Level 4 motivation. Here, employees are engaged in their work because it makes a difference.

By “making a difference,” I do not mean that your company must be doing something like ending deforestation or finding a cure for cancer. Those things are wonderful, but what I mean by “making a difference” is that employees can see that their work has a real, tangible effect on the business and its customers.

One of the quickest ways to lose high-performing employees is to make them feel that their job is pointless. This happens when (a) their job is full of useless procedures and does not make a meaningful difference to the business or when (b) their manager fails to communicate the purpose and impact of their work.

To build Level 4 motivation on your team, then, try these tactics:

  • Examine the policies and procedures of your team. Talk to your employees; you may be surprised how much of their time is devoted to legacy tasks that could be discontinued, streamlined or otherwise improved.
  • Build “line of sight.” This term refers to employees’ ability to see how their work contributes to the broader mission of the organization. Setting specific, aligned goals every quarter is an excellent tool here. Explicitly state what your team needs to achieve in the coming 90 days, explain why it matters in the context of the organization, and then work with each employee to create a small set of specific, measurable goals that support team and company goals. 

When you do these things well, your employees know that when they arrive at work each morning, they will be doing work that matters. The smart manager acknowledges that they cannot catalyze employees into doing great work with paychecks and commands. Show your employees why their work makes a difference—in the world, or simply within your organization—and you will equip them with the strongest form of workplace motivation there is.

Joel Trammell is founder and CEO of Khorus, Austin, Texas, which provides an enterprise leadership platform that gives CEOs a central place for driving execution, managing talent, and building culture.

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