Meaningful Work Increases Performance More than Money

Rewards, even monetary ones, don't result in increased performance as much as doing work that matters. That's what a recent study by the World Economic Forum reveals.

World Economic Forum conducted a 2016 study of 400 workers to determine how performance is affected by perceived meaningfulness of work and by other incentives.  They looked to answering two questions:  Do people perform better when they believe their work is important?  Also, do workers perform better if they are rewarded?

The Forum admittedly “manipulated the meaning of work” in a field experiment.  In the high-meaning condition, workers were told that their work, which consisted of entering data into an electronic database, was of great importance for a research project. In the low-meaning condition, workers were told that their work was merely a routine quality check that most likely would never be used.  They also offered different forms of non-monetary or monetary incentives to examine how performance changed. They paid workers a fixed wage, a fixed wage plus a bonus for every data entry or a fixed wage plus a symbolic award, like a trophy. 

Those who received monetary incentives (a bonus for each data entry) had 6% higher productivity rates than those who received nothing or received a symbolic award.  Thiis group was told nothing about the meaningfulness of their work.

For the group of workers who were told their work was not meaningful, rewards has a significant positive effect on performance.  These workers, doing work that didn’t matter, were 18% more productive when they were rewarded.  Further analysis revealed that workers were demotivated by the unimportant work, but could be re-motivated by incentives of any kind – monetary or symbolic.   In contrast, when the worth of their work was perceived as high, the recognition didn’t impact performance at all.  In the latter case, they were already giving their best because they believed in what they were doing. 

Overall, the studies revealed that monetary rewards can indeed result in increased performance.  People want to be well compensated for their work.  And, if they know they will be paid more for doing more, they tend to do more. This really isn’t a new concept – pay people to perform and they will perform. Here is the evidence that today's business leader can leverage.  Even when we don’t have anything ‘extra’ to offer our workforce as a reward, they appreciate knowing how their work will contribute to the overall success of the business or how their deliverables will be utilized.  When they have a sense of worth and value, they will still do more -- in this study workers increased their productivity three times as much (6% versus 18%)  when they felt work was valuable.  

So when your budget gets cut and you can no longer offer gift certificates, free vacations, quarterly bonuses, or pay increases for top performers, don't fret.  Simply make sure you communicate the value of the work to the people doing the work.  This could encourage higher productive even more than money alone.