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Air Canada says it will recall more than 2,600 employees who were furloughed during the COVID-19 pandemic.

Nathan Denette/The Canadian Press

The pandemic, from the moment it took hold in Canada, has been a formidable challenge to managers at all levels. The specifics have varied but most have had to rethink normal operations and find new ways of doing things.

So how do bosses and boards of directors show appreciation? How do they reward them? How do they motivate them to continue to give organizations their best?

For the Air Canada board, the answer is money – shower your top executives with bonuses, even paying them back for money they relinquished to share the pain in the early days of the pandemic – and also funnel some of that lucre to lower ranks of managers. The senior executives have had the sense to do an about-face on the money, after a storm of public protest, but the incident suggests the august stewards of that company believe money is the supreme form of appreciation and motivation. They need to provide bountiful monetary rewards and regular bonuses or the top executives in their ranks – the people they count on for success; the people who emulate the best of their culture – will give less than their best or flee for more lucrative pastures.

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Air Canada’s senior executives to return 2020 bonuses over ‘public disappointment’

Many other boards of directors agree, and while the public fulminates when top executives get million-dollar bonuses there is widespread belief in the effectiveness of monetary incentives. But just how effective are they?

Jochen Menges, chair of human resource management and leadership at the University of Zurich, suggests you ask yourself what makes you happy at work and then write down what you think makes your three most important subordinates happy. It will vary; everyone being different. Does money feature as the key to happiness for you and your subordinates? Is it the key to feeling appreciated or to motivation?

I always have been motivated by accomplishment – seeing my ideas and efforts come to fruition, collaborating with others. I assumed that my efforts would be rewarded by pay raises and promotions (that also carried pay raises). But that was not the motivation. It was not what made me happy. A kind word from a boss – a thank you – could have more impact than a pay raise.

I remember a boss who called me in after a successful project and handed me some cash – the equivalent of $250 today – and ordered me not to put it in my bank account, where it would be forgotten. Instead I was to take my wife out to dinner. The memory of the meal we had – the top-quality cuisine, and conspiring with the serving staff to ensure we dutifully spent every cent – still lingers. It was a picayune amount in terms of my annual compensation, but highly effective appreciation.

Most research plays down the impact of monetary rewards as motivation. In his book Drive, Daniel Pink showed how it can even backfire. Instead of being spurred to more creativity in one experiment, the lure of a reward seemed to narrow focus and cloud thinking. Using money to discourage bad behaviour – in this case, a fine for parents late picking up their children at a daycare – led to an increase in the number of parents coming late. Mr. Pink speculates that before the fines were imposed parents had a desire to pick up their children on time out of allegiance to the centre and its staff. But the fine took it from a moral obligation to a simple transaction and the parents started to buy extra time for their children in daycare. Directors at Air Canada and elsewhere might want to ponder that monetary-moral connection.

Mr. Pink argues carrots and sticks, as motivators, have seven deadly flaws:

  • They can extinguish intrinsic motivation, as people offered money to carry out certain activities stop doing them – or stop doing them properly – unless they are adequately paid.
  • They can diminish performance, according to various studies.
  • They can crush creativity, as in the creativity experiment mentioned earlier.
  • They can discourage out good behaviour, as the daycare example shows.
  • They can encourage cheating, shortcuts and unethical behaviour, as we have seen in financial markets.
  • They can become addictive.
  • They can foster short-term thinking.

Mr. Pink says we should recognize that humans can be fuelled by intrinsic behaviours – what we like and want – rather than just extrinsic, outside rewards such as money. And he brings motivation at work down to three elements: Autonomy, a feeling of mastery, and meaning.

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Looking at research into drivers of engagement at work, consultant Julie Winkle Giulioni came up with 15: Autonomy; career opportunities; flexible working conditions; respect; learning, development and training; employee appreciation; meaning; money; opportunities to use skills/talents; pride; relationships with co-workers; relationship with supervisors; recognition and appreciation; work-life balance; and the work itself. On money, Ms. Winkle Giulioni points to a recent report from the Society for Human Resource Management saying it’s essential employees feel they are paid fairly for the work they perform.

“Motivation is as unique as each individual,” she says, echoing Prof. Menges.

Figure out what you can do to make people under your supervision feel appreciated for their contributions during the pandemic. It’s probably many things, not just money if they are paid fairly – although after a year of difficult challenges and hard work, for many fairness may involve remuneration. It probably starts for almost everyone with “Thanks.”

Cannonballs

  • Research shows commuting by your staff hurts both the quantity and quality of their innovation. “It’s amazing how robust the results are,” notes Harvard Business School assistant professor Andy Wu.
  • Great managing is an act of coaching, not one of directing and administering, says Gallup CEO Jim Clifton. The firm’s research says the silver bullet for a manager is to coach direct reports once a week.

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