Employee motivation is quite a complex topic.

For a long time, management scholars and practitioners maintained that money was the key to employee motivation. This perspective originated at the time of the industrial revolution and can be traced back to Adam Smith’s, The Wealth of Nations, a renowned work in classical economics.

I will spare you the lecture, but the Coles notes version reads as follows:

Smith believed that it was more beneficial and efficient to break down work into its component parts than to have one person complete a task in its entirety.

Think assembly line where each worker becomes quite proficient at completing an assigned task (which does yield efficiencies), but is incredibly bored and finds little, if any, meaning in the job at hand. From the perspective of the employer, however, one’s paycheck should make the work worthwhile despite the monotony, or the disconnect of how one’s efforts fit into the final project.

While 241 years have passed since Smith first published his book, this outdated perspective still dominates much of managerial thinking. Ironically, we have a substantial body of mounting evidence that indicates that employees want to feel engaged and that their work matters.

In other words, money is not as motivating as initially thought

Findings from Professors Dan Ariely, Emir Kamenica and Dražen Prelec’s experiments on meaning and money provide some insight into what motivates employees to want to work hard.

In one experiment participants were asked to create Bionicles (figurines) out of Lego. In exchange for the first Bionicle the participant would receive $2.00, but for each subsequent Bionicle, the wage would go down by 11 cents. In this condition dubbed “the meaningful condition,” participants were told that once they completed the experiment, their Bionicles would be dismantled so that the next person could use the lego pieces to construct their very own Lego figurines. For the duration of the investigation, however, the Lego people were left intact and visible to their makers.

On average participants built 11 Bionicles in exchange for a whopping $14.00.

Ariely explains, “even though this may not have been especially meaningful work, the students felt productive seeing all of those Bionicles lined up on the desk, and they kept on building them even when the pay was rather low.

The second group of participants was granted the same amount of money as their counterparts in the meaningful condition, however, right after they created each of their Bionicles the experimenter dismantled it in front of their eyes.

Ariely notes, “These poor individuals were assembling the same two Bionicles over and over. Every time they finished one, it was simply torn apart and given back to them later.” In this condition, participants built an average of 7 Bionicles, four fewer than in the meaningful condition.

That is 40% fewer figurines!

Many of you may be thinking that while this experiment sounds like a lot of fun, (I know you think it’s kinda cool that adult participants got paid to play with Lego), but how is it relevant to organizational life?

Well, the results add to a mounting body of evidence that meaning matters.

Not to mention that a lack of motivation and disengagement can be quite costly. Employees start showing up late for work and leave early. They expense non-kosher items, and they do the least amount of work possible.

This experiment (which is only one in a series of many investigating employee motivation) demonstrates that meaningful work is rewarding in and of itself. And in fact, employees are willing to work hard when jobs have some semblance of purpose.

You see one of our core basic needs is to feel that our lives have meaning. We want to know that our work matters. That our actions, even if small in magnitude, do indeed make a difference.

Recognition and appreciation, while free, are priceless.

So recognize the millennial on your team in a linkedin post, and acknowledge the boomer in a company newsletter or at a team meeting. There are reasons, as I explained in a previous post, that you want to recognize and appreciate employees of different generations using different methods and avenues.

But don’t just stop there.

Explain to your employees how their work contributes to the final product or the overall functioning of the organization.

The good news is that while research indicates that we can easily quash employee motivation, we can likewise nurture motivation by recognizing people’s efforts, contributions, and good work.

The students in Ariely’s “meaningful condition”  made 40% more Bionicles than their counterparts whose figurines were destroyed just as soon as they were completed.

If you recognized and appreciated your employees how much harder do you think they would be willing to work?

No one wants to feel irrelevant or invisible. We want to know that our work matters.

In the words of Victor Frankl, a man who endured the likes of hell and survived the Holocaust, “Life is never made unbearable by circumstances, but only by a lack of meaning and purpose.”

To your success!

Dr. Gill

Dr. Gill is the founder of rewire to retire, a corporate training company dedicated to helping pre-retirees successfully transition from work to retirement, while ensuring businesses retain their organizational knowledge.