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Without Purpose, Financial Incentives Can Be Meaningless & Cause Mistrust



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As someone with extensive experience in managing businesses and leading team members, I understand first-hand the challenges that come with disengagement in the workplace. And when you consider organizations, especially small businesses that often operate with tight budgets, disengagement can be extremely costly. Whether it’s lost customers, or lack of productivity on the job, business owners want and need a solution, and they need it fast! Unfortunately, the solution is seldom easy. There’s no “quick fix” when it comes to increasing team member engagement. The good news, however, is that it can be done – that is, if are courageous enough to lead the way with purpose.

I often discover that small business owners encounter very specific stumbling blocks when it comes to understanding how to effectively manage, lead, and motivate their teams. And it isn’t their fault! Many of them get into the world of small business and entrepreneurship after a successful career in a corporate environment, and as a result, they bring a set of belief systems along with them, that although sometimes popular, may not really be good leadership practices at all. Let me give you an example: a common belief is that financial incentives motivate people. Nothing could be further from the truth! Rewarding team members with monetary rewards for doing their jobs, implies they wouldn’t do the job without it (Pyzdek & Keller 48). It’s much better to help someone find purpose, meaning and fulfillment in their work, and align their unique talents and skill-sets with the needs of a specific job.

Business owners must treat their team members like the adults they are. This means providing them with “adequate and fair compensation for doing their jobs,” (Pyzdek & Keller 48). Don’t get me wrong. I’m not saying to never offer a financial reward. You simply have to be smart about it. I have a close friend who was told in an offer letter he would receive 15% of his base salary in the form of a bonus at the end of the year, which amounted to be about $12,000. When organizational challenges surfaced, he ended up receiving only $800.

Don’t make offers and promises you cannot and/or will not keep. Something that was meant to be incentivizing, may turn out to be nothing more than a catalyst for mistrust.

Jim Whitt, says, “Without a purpose, our only motivation is reward and punishment.” So, what is the purpose of your organization? And if you know what it is, are your team members aware of it? If I were to come in to your organization today and ask them, could they tell me? And if they know, are they living it out on a daily basis in the workplace? I only ask that, because championing a cause that serves others is far more motivating than $800. Trust me, it’s that important.

Reference: Pyzdek, T., & Keller, P. (2014). Six Sigma Handbook, Fourth Edition: A Complete Guide for Green Belts, Black Belts, & Managers at all Levels. New York, NY: McGraw-Hill Education.


Nathan R Mitchell is America’s Leading Empowerment CoachTM  and the Editor of Leadership Addict. In 2010 he founded the business and leadership development company, Clutch Consulting. Nathan is also a Certified Speaker, Trainer, and Coach with The John Maxwell Team. Originally from Springfield Missouri, Nathan earned his B.S. Degree in Management and an MBA from Missouri State University. Currently, he lives near Tulsa Oklahoma with his wife and children. His purpose in life is to empower others to lead to their full leadership potential.


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