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Thursday, September 16, 2010

Paying to Keep Employees?

Mr Peter Handal appeared in the Straits Times Interview on Wednesday. Mr Peter Handal is the 68 year old CEO of a global training company Dale Carnegie and Associates. Mr Handal shared that to keep employees and keep them happy, you need to pay them right, praise them and recognise them. He is not entirely wrong. But he is not entirely right either... or maybe the article in the Straits Times did not accurately reflect his level of expertise.

Which? I don't know.

You see... in between making yoghurt, laughing at my kids and getting strawberries to bloom, Petunia has a deep fascination with the psychology of human motivation. In other words, I actually get down to doing dry and boring research in human motivation. I analyze rows of numbers that measure human motivation... I listen to and pick apart hours of one-to-one interviews on human motivation... I read every research paper (of good quality) on human motivation. And I have been doing this for 7 years.

Of course, on a scale of 1 to 10, I probably don't rate very high as a researcher... but even the half-baked researcher that I am, I know enough to say that Mr Peter Handal has got it only half right.

Let me explain.

Someone really smart came up with a psychometric instrument that measures motivation from 1 to 10. If you score one, you don't have much internal drive... if you score 10, you have plenty of internal drive. Those people who score 1 are driven by factors outside of themselves. It's like a parent bribing a child to do his homework. No more bribe = no more homework. Kid does homework for an external reward. No more reward, no point to do homework i.e., no internal drive.

Those people who score 10 are driven by factors inside of themselves. These people have... I don't know... strength of conviction... passion for something... a burning desire to make a difference. They work because they are driven from within by something they find hard to describe. In my research, some people have actually told me... "I stuck in there because I couldn't let someone down." or "I stuck in there because it was my duty" or "I stuck in there because I believed in it".

Now pay, praise and promotion (the three Ps) are ALL extrinsic motivators, right? Well... here is the strangest thing yet.

Again and again and again, research shows that extrinsic motivators REDUCE internal drive. Researchers love to argue with each other... oh yes, they do. Some fracas published in serious journals look a lot like high class bitch fights, with male combattants. But get this... they DON'T much argue about the notion that extrinsic motivators REDUCE internal drive ANYMORE, because so many studies have reported this.

So what it means is this... if you are counting on pay to keep your people engaged (i.e., motivated to stay in your company and help you achieve your goals), it WON'T work. People will still leave because other companies can offer more. If you want people to stay with you, you need to engage them from within them, not from outside them. You need to develop their intrinsic motivation, not undermine their intrinsic motivation with a battery of extrinsic motivators such as pay, praise and promotion.

And there are practical and effective ways to do that too. Petunia quit her job because the kids were doing poorly in school. The Daughter once scored in the bottom 25% of her year. Little Boy was completely un-interested in reading... and his motivation for Chinese would be in the minus portion of the scale, if there was a minus portion. Little Boy fled Chinese like the plague.

7 years on, The Daughter is a straight A student (often) in a top JC. Little Boy just topped the class in something or other. Neither need be bribed nor threatened (yes... threats are extrinsic motivators too) to get work done. Indeed, I once locked up The Daughter's books to PREVENT her from studying herself to death.

I never once gave my kids presents or money to study. I feed them and clothe them. Is all. I knew that presents and money would destroy everything I was trying to do to build their internal drive for studying.

Ok... ok... ok... by now, some people are saying, "Ptooie! That's a crazy Petunia alright!! Where got money don't motivate people one?! Crazy ah?! Everyone is motivated by money!! I sure am!!"

Of course you are... but that's the point! You are motivated by money and so when the money is gone, your motivation is gone too. True motivation... the kind that drives people to achieve miracles like building the first plane... or to sacrifice their entire wealth to build planes... or to not eat for 10 days so that the children can eat... or to stay and slug it out when the going gets tough for country and people... looks beyond the money, praise and promotion. THIS was the drive with which Lee Kuan Yew and Goh Keng Swee built this nation. It is a drive that fashions miracles out of marshland and mosquito people.

Now, mind you... I am not saying that we should be paying people peanuts and try and get at their internal balls. We should be paying people decent wages... market competitive wages... OR even a little below. And then you work on their internal motivation... such that, when competitors beckon, they will stay with you. Such that, their internal drive compels them to surpass the objectives set at only levels that will get them rewards. The target is set at 1 million? Watch them achieve 2. It is this same internal drive that will lead them to even disobey you and disagree with you at every risk to themselves... so much are they enthused by the corporate vision. They will look past you because they believe so much in your vision, and the work that needs to be done. They will put up with pay cuts even... and no pay.

And then wonderful things begin to happen. The Daughter suddenly blooms into a rather good student. Little Boy, the gong-gong onesheds all gong-gongness and actually enjoys Chinese. It is powerful you know, this internal drive thing.

When you manage employees with only a battery of extrinsic motivators, it is like an unskilled cook in the kitchen. He can only employ salt because salt is necessary (ummm... adequate pay is necessary), and has a strong and obvious taste. But to make a successful dish, there are other more subtle flavours that can be employed to good effect in an orchestra of taste notes.

Pay, praise and promotion are obvious, in-your-face motivators. Any Tom, Dick or Peter Handel can tell you that pay, praise and promotion will keep staff and keep them happy. But they'll only be half right... and they're right on the much smaller half at that!! Working purely with extrinsic motivators is like pushing your Ferrari. We all agree that when the internal engine is switched on, the Ferrari can do far more than what you can push outta it. The human spirit can accomplish miracles. Singapore is one. Will it continue to be one when everywhere you turn money is both a carrot and a stick?

Now mind you, even in this post, I have had to simplify. The field of psychology in human motivation is far wider and deeper than what I can articulate here, and there are myriad exceptions and subtleties to beware of when using these other "spices of motivation" in cooking up your "dish of employee retention and performance". So you see, how can the recipe for staff retention be as simple as pay+praise+promotion?

By all means, pay people well (it is necessary... I do feed my kids because it is necessary)... but do MORE than that too or you will only get the performance you ask for. No miracles... no huge big achievements. The American pop culture sells these trite solutions to all American companies. It's no wonder that the American workforce is a largely unhappy and burnt out one. Singaporeans look like we're about there too because we follow these American gurus blindly... and pay them a lot for what I could tell you on my blog for free.

Note also that Mr Peter Handel said in his interview that he has one rule in life - to do things he likes. That's internal drive at its highest. Gee... why didn't he apply pay praise and promotion to himself?


Just in case people misinterpret this post as an objection to ministerial pay, I state here that it is not. I think our politicians should be well paid. It keeps them honest. It is NECESSARY.

However, American HR practices such as bonus payouts tagged to KPIs need to be more stringently assessed for practical application to our context. The American way got the Americans into a lot of trouble... Why is everything they say taken as gospel truth? They advised us a system that we live with. They don't have to live with it.

Firstly, tagging bonus to GDP trains the eye/attention overly on economic growth. This reflects an assumption that COULD BE outdated, i.e., that jobs and more jobs are necessary. We want to have jobs, yes... but not so many that waves of immigration bring Singaporeans back to subsistence level existence - i.e., no jobs.

We want jobs that don't demand our entire lives as sacrifice - 12 hour days and dismissal when one is pregnant. We want to live like humans again, with time for family... time for friends... time to reach out to loved ones and feel for and with them... care for and be cared for by them. Make babies in safety, knowing that there will be enough good things to share with them as they grow up and we grow old. Things of the heart that nourish the soul... and that make a person feel that this is truly my country and my home.


Alan said...
This comment has been removed by a blog administrator.
Blur Ting said...

Petunia, you're so brilliant! I read every single word because you put it so clearly so people like me can understand. If you were my teacher in JC, I would have passed with flying colours.

Petunia Lee said...

Ting - I'm trying to put these strategies (to use on kids) down into a book simple enough for busy moms to understand. It's hard though... to make things simple to understand.

Wen-ai said...

A very insightful post! From my experience, not many bosses bother to motivate their employees. The process of knowing each individual and to bring out the best in them... somehow does not apply in the local culture. Plus the notion of NOBODY is indispensible, seems to reinforce the lack of engagement between employer and employee. Or maybe, many bosses (in MNCs) are worried of being outshine by their younger and more motivated subordinates that they purposely "de-motivate" them?

In anycase, I'll buy your book if you publish it! I bet it will be a very insightful read because you walk the talk! ;)

Malar said...

Wow! A well said post!
You're super women!

Fresh Fry aka 福星 said...

very good piece and i agree beyond the high pay, there're more to keep talents. i work with alot of HR directors before and their biggest worry isn't money to keep good people (will defo get approved) but keeping them motivated + increase their creativity + productivity in their work.

'cos talents feel bored very easily, and once they see a bigger + more fun playground = time they throw The Letter, no matter how much benefits + money the HR is going to give. they're bent on leaving

Anonymous said...

Pet, I read this post with relish and think u r our very own Lucy Kellaway.

All the management gurus of the Western ilk tend to state the obvious n are paid big$ for stating the obvious. Ditto Western investment gurus. I won't mention names but no prizes fr correctly guessing at least two who zip in and out of S'pore annually to collect their pile.

The 3 Ps might have worked perhaps 50 or even 20 years ago. Not any more, other than as a temporary patch to keep a feet-itchy talent. Even then, stick to pay: because higher pay that comes with a promotion merely reflects the new responsibility and effectively no pay increase.

As for praise, the employee probably thinks to himself "you can shove it", even if politeness (if he's the polite kind) prevents him from articulating it.

From my experience and perspective, the only sticky employee is one who becomes mersmerised with the boss or the job or both, which means 1)the employee must be the needy sort and 2)the employer/company is a charismatic leader who/which somehow attracts many followers.

Now where in the world outside of religion do you find such a combination, hur, hur, hur!

Petunia Lee said...

Hahaha! Auntie Lucia... "Shove it!". That's funny!! You have a way with words. Very very evocative, those 2.

Petunia Lee said...

Ting - Nah! You are too kind lah... My students sometimes complain about me and write me hate mail.

Petunia Lee said...

Wen-Ai... oh... I do hope people (and children who suffer under the wrong techniques) will be blessed.

Petunia Lee said...

Malar - Thanks so much for your encouragement.

Petunia Lee said...

Fry - Yup! Every HR Director will tell you that pay attracts. To retain, you need other things.

RF said...


How do you get intrinsic motivation from your children?

Petunia Lee said...

RF - The research literature states that you can't develop intrinsic motivation because it is assumed that personal enjoyment of activities is inborn.

However, I have messed with strategies from 2 different streams of research and was able to get my son to enjoy reading when he initially didn't like it.

I've put these strategies down in a book that is at its 3rd round of vetting. This book should be out by June 2012.

RF said...

Thanks for your feedback. Can i just purchase the book off you now? My daughter is P5 this year. I believe she is a intelligent enough. But somehow she just ends up doing things just way too slow. At this moment, she is finding it hard to just finish up her homework and i beleive it has to do with focus and negative self-image. I feel like I am fighting a losing battle and time is slipping by so fast.

Petunia Lee said...

RF - I am sorry you are facing these problems right now. I can't release the book because the international copyright process on a trademarked term has not yet been completed. Besides, it hasn't even been printed yet. We are still working with drafts.

If you leave me a number to call, I won't publish it, but I will call you.