An Employee’s Inner Compass | Why External Incentives Don’t Work

External stimuli cannot, will not, and will never change the direction of a person’s inner compass. Any business owner or leader who is figuring out–or is trying to figure out–how to best motivate and inspire their employees; needs to understand this fundamental fact of human nature.

We cannot change people. If they are open to change, they will naturally change in their own time and at their own pace. Nothing we do ever has any impact unless a person’s inner compass is willing and/or able to move in that direction in the first place.

In an article entitled Why Incentives Plans Cannot Work in The Harvard Business Review, Alfie Kohn writes, “If our goal is excellence, no artificial incentive can ever match the power of intrinsic motivation. People who do exceptional work may be glad to be paid and even more glad to be well paid, but they do not work to collect a paycheck. They work because they love what they do.

“Few will be shocked by the news that extrinsic motivators are a poor substitute for genuine interest in one’s job. What is far more surprising is that rewards, like punishment, may actually undermine the intrinsic motivation that results in optimal performance. The more a manager stresses what an employee can earn for good work, the less interested that employee will be in the work itself.”

The Dichotomy

I am aware of the generous salary packages complete with benefits that enterprises offer to new hires; as well as those seeking a promotion within an organisation. My honest opinion is that these monetary incentives impede; as opposed to accelerate an organisation’s growth.

You can use the carrot or the stick. But when neither the carrot or the stick is there–what happens?

Everything collapses.

I’ve started numerous businesses. A business is an entity that is separate to its owners; and thus a business should always have profit at the heart of its purpose for existence. If the business does well, then the people working on or for that business can also profit as a result of their hard work and effort. But what we cannot–and what I will never–tolerate are people who look at a business and simply see nothing beyond a means to make money.

Employers and employees are both guilty of this. For every disgruntled employee who hates his job and/or his boss; there is a frustrated and fed-up employer who can’t trust his employees to just do the right thing.

Does an employee really need a boss breathing down his or her neck to get the job done? For a vast majority of people, the answer to the question is yes.

I have always been against external incentives and rewards or punishments to inspire and motivate team members. If what’s on the inside is utter crap–it is all too easy to revert to undesirable behaviours once the external stimuli is taken away.

It is nearly impossible to change the direction of someone’s inner compass through extrinsic mechanisms. In the end, the inner compass will always point them right back to the deluded direction they were headed in the first place.

Monetary incentives only work for people whose inner compass is pointing towards money. Motivating employees with a purpose or a cause can only work if their values are aligned with that vision.

Nothing external changes any of that.

Skillset vs Values

Not too long ago, I had a very high performing and high potential candidate apply for a sales role in one of the organisations I was running. At my encouragement, she decided to change career trajectory from social work to sales. Both roles require strong people skills, empathy, an ability to solve problems and the adaptability to deal with all sorts of people. One trait most salespeople lack is empathy for their customers; which is why there are so many lousy salespeople and difficult customers.

As you might imagine, this lovely individual thrived and outperformed her peers in social work and had lukewarm success in sales. Robbed of that sense of purpose that had driven her social work; she was lost in a stream of KPIs, numbers and serving people in a context where only profit mattered. I had seen this person work relentlessly hard in social work; going as far as to give up her own personal life so that she could excel at her job. This enthusiasm quickly died out in a sales role–even though both jobs require similar skills. The sales role even paid better and had a neat package of benefits.

In the case of this lovely lady, no amount of money could have changed the inner compass–which was to help people in a meaningful way. In a sales role, that inner fire that once fuelled her on was simply vanquished.

The Inner Compass

When hiring, it is important to identify what motivates people at their inner core. Within a team, anyone who is hired for a given role needs to be motivated by the particular piece of the puzzle that the business needs to succeed as a collaborative and cohesive entity.

Salespeople need to be motivated by numbers, delivering excellent customer service and thriving in a competitive environment where your bread-and-butter is determined by commission.

Marketing people need to be motivated by getting people curious about a product and creating a certain level of hype that grabs–and holds–the attention of potential customers.

If that basic intrinsic motivation is not there to begin with–or if that internal compass is pointing in a distinctly different direction–nothing in the external environment is going to change anything or have any kind of impact.

Always, always assess a potential team member’s inner landscape. Whatever is manifesting externally, is nothing but a reflection of what lays within.


8 thoughts on “An Employee’s Inner Compass | Why External Incentives Don’t Work

  1. I wholly understand what you are saying. I think this applies the most to a leader’s inner circle. It is hard to find people with a strong inner compass–which is why most organisations and institutions end up having to use either the carrot or the stick. I personally prefer to use the stick.


    1. I think the point that Paul made about understanding what motivates people’s inner core is still valid whether we’re talking about the carrot or the stick.


      1. True. If people are motivated by the wrong things, then we will only get lousy results. Which is why so many companies collapse whenever there is a crisis.


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