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Welcome to the New Lantern blog. Our goal is to shine light on leading innovators and creative artists, and how your business can learn and profit from them. Companies large, medium, and small can benefit from employees who think more creatively. New Lantern may be just the source of inspiration your company needs to spark more innovative products, services, and processes.

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A New Look at Motivating Employees

Posted by on March 15, 2010 at 7:14 pm

Last week, Washington Post’s Steven Pearlstein profiled career analyst and author Daniel Pink and his new book: “Drive: The Surprising Truth About What Motivates Us.”

In the book, Pink makes the case that money can only motivate employees up to a point. In fact, he cites studies and real-life examples that support the notion that incentive bonuses actually result in less creative and innovative thinking.

Granted, Pink notes that good performance starts with employees who feel like they are fairly compensated. Beyond that, he contends that employees will in fact use higher levels of initiative, problem-solving, and creativity in response to traditional, non-monetary competitive forces.

In a speech at a TED conference at Oxford, England last summer, Pink previewed some of his thinking that went into “Drive.” He cited a 2005 study by MIT conducted for the Federal Reserve that found that “as long as the task involved mechanical skill, bonuses worked as would be expected: the higher the pay, the better the performance.” However, “once the task called for an even rudimentary cognitive skill, a larger reward led to poorer performance.”

Pink also wrote “A Whole New Mind” in 2006, which makes the case for more right-brain thinking (e.g., inventiveness and creativity), noting “the workplace terrain is changing yet again, and power will inevitably shift to people who possess strong right-brain qualities.” This is an interesting proposition (and a correct one in my opinion) considering it is coming from a trained left-brain-thinking lawyer.

Given today’s level of global competition and the fragile economy, companies would be well-advised to look differently at how they try to motivate employees. Based on my own experience in managing executive compensation programs at large multinational companies, companies are far too quick to assume that traditional carrots like higher bonuses and larger stock grants will result in higher levels of performance.

These compensation tools are important for retaining your most promising employees. Yet, when used alone, they may in fact be stunting – not inducing – higher levels of innovation, risk-taking, and problem-solving.

Companies that seek to promote a motivating corporate culture, a competitive work environment, and ample levels of recognition for excellence will ultimately be in the best position to elicit the innovation “drive” needed from employees to beat the competition.