What Really Motivates Employees?

For centuries, businesses have tried to motivate their employees with rewards and punishments. On the surface, it seems these would be the easiest way to get employees to do a good job. This process is known as transactional leadership. It can be effective, but isn’t the only way to reach your employees.

There are also limitations with using transactional leadership as the only means of motivation. Employees want monetary rewards, better positions and nicer offices when they do well. They also want to do a good job so they don’t get fired or given meaningless work.

On the other hand, employees are human beings. They are too complex to be motivated solely by rewards and fear. Here are some limitations of transactional leadership styles:

• Employees want an enthusiastic leader. Purely transactional leaders fail to create enthusiasm for their work. Employees benefit from leaders who help them feel passionate about what they do. These leaders first show passion about their job themselves. Then they get their employees to buy into it.
• Employees do better when they feel part of the project. Taken too far, transactional leadership can make employees feel like automatons. Employees can be happier and more motivated when they feel involved and committed to their work. Most employees want to feel like they are team members rather than hired help. Each employee has a unique set of skills that can be valuable to the team. The appreciation of those skills can be a greater motivator than any reward or threat.
• Employees need direction. A flaw with consequence-based leadership styles is that it doesn’t tell employees how to succeed. It tells them they must succeed, but not how to do so. That doesn’t mean that transactional leadership doesn’t work. It just means that employees still need some direction from above. When leaders are more involved, employees know they can count on them to provide a direction.
• Transactional leadership can encourage unethical behavior. When in their best interest, employees can resort to unethical means to achieve results. The temptation of rewards and fear of consequences is compelling. It can encourage deception or illegal activity. Employees may sabotage the company’s interests in pursuit of their own. As a precaution, businesses need to be clear on the terms employees must work under. Employees are also less likely to resort to unethical behavior when their leaders are able to earn their loyalty.

This is not to say that transactional leadership does not work. Rewards and punishments are great tools to motivate. However, they may be far more effective when combined with other leadership styles and motivation tools. Making employees feel included can provide greater motivation and overall satisfaction.

The transactional style has always been effective. It has also been overused by many companies. Employees can be more productive when they feel appreciated and included. Transactional leadership styles can be much more effective when combined with other tools that provide motivation and encouragement.