By Robert Strand, Executive Director at the Berkeley-Haas Center for Responsible Business
This post originally appeared in the San Francisco Chronicle and Media Planet.
How do you motivate someone to work? For many the response is quite simple: money. Want more work? Pay more money.
Economists have long instructed us that human beings are rational self-interest maximizers motivated solely by the dollar. The discipline of economics has historically dominated business schools and management research and, it follows, that the fundamental assumption of self-interest maximization is applied to companies. As the economist Milton Friedman famously wrote “the social responsibility of business is to increase its profits.”
However, the view that money is the way to motivate someone to work is only half correct. And it is half terribly, terribly wrong. The research is in and it is clear. For knowledge workers, one must pay enough money to take the issue of money off the table. But beyond that, money is a terrible motivator. In fact, money can be a demotivater as incentive plans often end up encouraging employees to think more about money than the work.
Instead, purpose is increasingly recognized as the greatest motivator for employees and organizing force. Purpose is increasingly demonstrated with new generations of employees who are increasingly demanding that the organizations at which they spend their precious time connect to something much bigger. Great thinkers like Daniel Pink and my Berkeley-Haas colleague Barry Schwartz have much to say in support of this.
At the Berkeley-Haas Center for Responsible Business, in consultation with our students, we have teed up social inclusion and climate change as themes we are working to incorporate across our programming.
These themes also represent opportunities for companies to connect their employees with purpose. We recently held an event at Berkeley-Haas to explore how companies like Adobe and Microsoft are innovating their hiring practices to make it more possible for individuals from underrepresented populations to fulfill their potentials at their firms and, ultimately, encourage greater social inclusion.
For many large, established companies, connecting employees with a sense of purpose is remarkably challenging. This is where a corporate social responsibility (CSR) or sustainability group can serve an important role. CSR and sustainability groups can identify material issues for that company, such as encouraging social inclusion or battling climate change, and bring these issues into the company.
Profits are a bit to the company like oxygen is to the body: Necessary for survival but a pretty lousy thing to live for. Companies that connect their employees to a greater sense of purpose are those that will foster healthier organizations and ultimately realize greater profits.
Dr. Robert Strand is the Executive Director of the Center for Responsible Business and member of faculty at the University of California-Berkeley Haas School of Business. He is also Assistant Professor of Leadership & Sustainability with the Copenhagen Business School Centre for Corporate Social Responsibility. His research and teaching focuses on the strategic aspects of sustainability that includes the role of the Chief Sustainability Officer, comparing global approaches to sustainability with particular focus on the U.S. and Scandinavia, and theory of the firm with a focus on ethics of the corporation and considering the role of corporations in society.
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