by V. S. Ravi Elangkoh

Money - stack of notesIn this installment of our six-part series, we will discuss the second myth of creativity in organizations: “Money is a Creativity Motivator”, as espoused by Professor Theresa Amabile.

[Editorial note: If you missed Part 1, which covered the first myth, please click here: “Creativity comes from Creative Types”.]

Since the days of scientific management or Taylorism, organizations have attempted to correlate staff rewards with staff output. However, research has shown that giving material rewards to employees in direct proportion to their productivity can yield only limited success. Such a pay-per-output approach is only feasible for outputs that are highly tangible, easily measured and unmistakably attributable to a specific person or group. So for instance, if you agree to pay me $1 for every envelope that I seal, then for 100 envelopes that I have sealed, you need to pay me $100 – no argument or ambiguity about that.

On the other hand, if you were to offer me monetary incentives for my marketing performance, how would you be able to delineate my achievement clearly and fairly enough to avoid controversy, especially when the achievement involves multiple parties and many other factors?

Myth No.2: Money is a Creativity Motivator
The positive impact of extrinsic motivators such as money is only as good as the duration of that incentive. But why can’t an extrinsic motivator help to boost intrinsic motivation as well?

According to Amabile, material reward is a synergistic extrinsic motivator, which may enhance intrinsic motivation but may not in itself cause maximum creative effort and output. This means the impact of extrinsic motivators is at best fleeting, and at worse, demoralizing to employees when it is no longer available.

That is why Frederick Herzberg (1923-2000), a former professor of psychology and business management, made a distinction between true motivators and ‘hygiene’ factors in his famous Two-Factor Theory. Money is a classic a hygiene factor – without it, you would be unhappy, but even with more of it, you would be no happier!

Right motivation for Wright brothers’ creativity
Though they seemed like unlikely candidates for success, the Wright brothers beat other aspiring contenders to be credited with building the world’s first piloted airplane in 1903. The brothers had no college education, no funds except for the proceeds from their humble bicycle shop, and absolutely no public support. In contrast, the brilliant Samuel Langley Pierpont, who was employed by the Smithsonian Institute, had high education, received generous funding, and could tap from all the great minds among his contemporaries, while he soaked in all the moral support and publicity he could garner through the media that followed him around.

Though Pierpont had all the resources for success at his disposal, he failed in his mission. What made the difference? It was the Wright brothers’ intrinsic motivation of strong beliefs and personal convictions that spurred their creativity to ultimately produce an innovation that would change the world forever.

And how sure are we that it was not due to sheer bad luck that Pierpont failed? As Simon Sinek1, author of Start With Why, pointed out, Pierpont had quit soon after the Wright brothers’ achievements went public. If Pierpont were truly intrinsically motivated, he would have continued his quest and tried to build an even better airplane than the Wrights’ early model. Instead his resignation revealed that he was more driven by external factors.

Money is merely a by-product
Jon R. Katzenbach and Zia Khan, authors of the book, Leading Outside the Lines: How to Mobilize the Informal Organization, Energize Your Team, and Get Better Results, ( that outstanding professional leaders such as Marvin Bower, who built McKinsey & Co., and John Whitehead, the former co-Chairman and co-Senior Partner of Goldman Sachs, are motivated by the work itself, and that the enduring respect of others greatly surpass money as a measure of accomplishment. For such top achievers, money is usually a secondary by-product.

Motivating with money can backfire!
Amabile’s famous diary study (first described in Part 1 of this series) showed that the majority of participants reported that they were not motivated by rewards on a daily basis. Interestingly, the few who did report spending a lot of time mulling over their bonuses were the ones who were doing very little creative thinking! People can become so worried that a wrong move they make may affect their compensation, so they become risk averse and hamper their own creativity.

More dangerously, an overdependence on using money as a motivator can erode one’s emotional commitment towards one’s true mission, to the extent that money becomes the primary goal itself. Gradually, the primary goal turns into sheer greed, leading to a self-serving addiction that can derail one’s sense of integrity. We have seen such cases manifesting as financial scandals that strike even among the top echelons of the corporate world.

So the next time your organization is thinking about implementing money as a motivator of desirable behaviour such as creativity, think again!

What to do instead?
(a) Leverage on emotional motivators
Sparingly and wisely use money as a reward or motivator, and where possible, leverage on emotional sources of motivation instead. Emotional motivators are much more powerful and effective. Katzenbach and Khan remind us that in the organizational context, emotional motivation is best conveyed informally through the respect of peers, admiration of subordinates, approval from one’s friends and community, etc.

(b) Use money only for short-term behaviour change
It doesn’t mean that you totally cut out money in your reward and compensation scheme. Just be mindful that money is most effective for motivating short-term behaviour change, but not so effective when it comes to enduring institutional accomplishments, advise Katzenbach and Khan.

(c) Provide a conducive environment for creativity
This may sound obvious is much more easily said than done. As we have noted, it’s not all about money.

Although people need to feel that they are being fairly compensated, they place far greater significance on a work environment where creativity is supported, valued and recognized, as the participants in Amabile’s study have attested.

In reality, many organizations – especially those aligned to traditional Asian culture – are unable to “let go” of their employees. They are fearful that employees might abuse the free time allocated to them for contemplation and creative thinking. To them, abstract thinking sessions during office hours seem wasteful or unfruitful compared to time better spent in producing tangible outputs. It’s not that these organizations don’t know the value of creativity – they just want it for free and they want it fast!

(d) Match employees to projects on the basis of their experience AND interests
Employees desire the opportunity to deeply engage in their work and achieve authentic progress. That’s why Amabile recommends that leaders match their people to projects that interest the latter, not merely according to work experience.

Employees are able to express optimal creativity only when they truly feel connected to their work and can prove themselves. If the assignment proves too easy or too difficult, employees will become bored or frustrated. To summarize, leaders must know how to strike the right balance when delegating assignments to their people in order for creativity to flourish.

To be continued in Part 3

[Image courtesy of David Castillo Dominci]