12 ms·

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate

by _yosefk 10y ago

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free. But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creative, all supposedly to criticize "capitalism" but in fact to make the market work worse for employees who now actually have to argue with management that yes, money does motivate them, with the manager replying "I know it doesn't so tell me what's really bothering you" or what-not. I mean it's not like companies seek less profit having seen the TED talk, instead they learn that they can cut expenses by avoiding "needless" raises. Quite the heterodoxy, that.

beat 10y ago
Money doesn't motivate people past, oh, a half million or so a year, maybe.
- _yosefk 10y ago
  What also amazes me is that the same heterodox crowd critiquing capitalism goes on to say "money doesn't make you happy", citing surveys of millionaires and billionaires who all say they'd be happy with 2x-3x their current net worth! I mean, not necessarily the same people say it, but the same press outlets for sure. But if it doesn't make you happy and you always want more, that desire must motivate you, right? Make up your mind!
  - beat 10y ago
    Talk to some serial entrepreneurs. Many of them are already rich, and don't need to work, but they do it anyway. They're motivated by the challenge, not the money.
    - st3v3r 10y ago
      I'm sure, but the money definitely helps. If only because it enables them to do what they do.
    - maverick_iceman 10y ago
      Do they give away all their money to charity?
    - citizens 10y ago
      Well, are they working for themselves or for someone else? That has to come into play regarding motivation.
    - TuringNYC 10y ago
      "Many of them are already rich" -- I think lots of behaviors change once someone is rich. You can choose what to work on, you can walk away from bad situations. I dont think the behaviors of the rich apply to the non-rich.
  - eeZah7Ux 10y ago
    You confuse happiness with motivation.
- phaus 10y ago
  Assuming you are correct, which I suspect you are, that means the group of people that aren't really motivated by money make up a tiny percentage of the work force. Therefore anyone running a business can safely disregard any idiot making the claim that money isn't a motivator, except on the rare occasions which they find themselves hiring executives that make north of $500k. For normal people, its infuriating to hear businesses complain about turnover and a lack of loyalty when their "performance" raises amount to a cost of living increase, and their promotion raises don't bring them in line with the salaries that people getting hired at the more senior position make coming through the door. Money isn't the only reason I work, but it is one of the reasons. Its more about the principle. A company that wants loyalty should show loyalty and not attempt to nickel and dime the talent. Tech companies are usually responsible for creating the turnover they complain about.
  - beat 10y ago
    I was strongly influenced in my thinking by Jason Cohen's "Rich vs King" article, he talks about the S-curve of wealth utilization. Once you hit a few million in the bank, you have enough money to fund a reasonably lavish lifestyle, without working, for the rest of your life. At that point, how do you motivate someone?
    - phaus 10y ago
      I make low 6 figures doing network security. If I hit 200k, literally the only thing you could do to motivate me would be to treat me well and give me interesting things to do. Fortunately, my employer already does both of those. I just wish it wasn't almost a requirement to leave in order to get a decent raise. Note: I'm not expecting to make $200k in a technical role as a security analyst any time soon, its just hypothetical.
      - softawre 10y ago
        It is also interesting to think your number, 200k, is strictly based on how much you make now. What would your 18yo self said about 100k? What do you think about a Netflix engineer making 300k? They'd probably be happy with 500k (though, cost of living, derailment ahead..).
- enraged_camel 10y ago
  Yes it does, actually. Not because it leads to any noticeable quality of life improvement, but because at those levels it becomes a pissing contest with other high-earners. Some rich people care a LOT about making more than other rich people in their social/work circle.
  - milliondollar 10y ago
    Yes but if you have the intestinal fortitude to check out of those pissing contests you can really create your own life. That is, if you are lucky enough to be at level to start. I did note that many of my peers where COMPLETELY freaked out by my decision that I mentioned above. My choice to step back from the game freaked them out. No over aggression but a mix of outright confusion as well as somewhat confused jealousy.
    - st3v3r 10y ago
      At the same time, it still sounds like you're making a huge ton of money. More than most of us.
  - at-fates-hands 10y ago
    To your point, I remember 50cent (the rapper) talking shortly after he made $400 million on his Vitamin water investment. He said he ran into some Coca-Cola executives after they purchased the company and he was sort of crowing about all the money they had just made him. I guess two of the executives were like, "Huh, $400 million, not a bad start Curtis. Let us know once you get in the $800 million or even the billion dollar range." He said it made him a little more humble, but at the same time, he said there's a sort of pissing game when you're at those income levels with people like that.
    - jimbokun 10y ago
      Meh, he could have replied "let me know when you have a stadium full of people screaming your name."
- milliondollar 10y ago
  Exactly yes. I used to make over a million a year as a big 3 partner in management consulting. I dialed back to half time and am UNBELIEVABLY happy!
  - TeMPOraL 10y ago
    > I dialed back to half time and am UNBELIEVABLY happy! You live my dream life.
  - _yosefk 10y ago
    Having dialed back to 3 days/week, I believe that "how much time I'm willing to spend working" is a somewhat orthogonal question to "what motivates me during the time when I'm working." Not entirely orthogonal but also very far from the same question.
  - deleted 10y ago
    [deleted]
  - jimbokun 10y ago
    Is that because you saved enough making a million a year you can now afford to work only half time and absorb the pay cut?
- vacri 10y ago
  Wasn't there a talk show host that was complaining on air about how it was so hard to live in Washington DC on 'only' $500k?
- sametmax 10y ago
  You are confusing 2 meaning of motivations: - the one meaning "the stuff that will get you involved"; - the one meaning "the stuff that you'll want to get". The first one will drive you enthusiasm to work, your professionalism, the quality of what your produce and your loyalty. It's a "motor" kind of motivation, and money can't buy it. Only a sense of purpose can. The second one is just bound to the reality of life : you need money for food, shelter, logistic, health, hobbies, then a growing family, and an evolving lifestyle. This will make you choose something. It's more a "motive" kind of motivation. You can get a lot of people with only the second one. You can get some people for some time with only the first one. But to get the best, and for them to stay, you need a balance of both.
- maverick_iceman 10y ago
  I can't tell for others but it'll absolutely motivate me to be able to buy my own plane or yacht.
- nihonde 10y ago
  Anecdotal, but when I left my last big law firm (to start my own company), I was making around 3/4 million dollars per year. None of my peers who left ever went to jobs that paid more--they all went "in house" for a lot less money and maybe some moonshot equity, but mainly they sought a less horrible lifestyle.
- frobozz 10y ago
  Interestingly, the remuneration model used by most big companies seems to be based on the opposite of that. The rank and file tend to be told that we're not motivated by money, so we shouldn't expect any, whilst c-level salaries have to be "competitive to attract the best talent".
battlebot 10y ago
And yet isn't it just slightly odd how software consulting rates were the same 17 years ago as they are now? And there was all that inflation in the interim...hmmm...
- paulddraper 10y ago
  Supply has increased a lot.
- deleted 10y ago
  [deleted]
- bsder 10y ago
  Funny, the rates for folks on embedded just keep going up ...
  - xyzzy_plugh 10y ago
    In my experience the rates for folks on embedded are way below market rates for the rest of the field. Anecdotally one guy I know quit embedded to do rails development and doubled his paycheck.
  - aprdm 10y ago
    +1 anecdote, had 4 years as embedded systems engineer, quit to be a junior django dev making way more. If there's one fucked up industry that's called Embedded systems :D
- omouse 10y ago
  as the other reply said, supply has increased non-linearly while the number of companies has increased linearly. Even with all the companies out there, you're getting lots of mergers and acquisitions and consolidation. In terms of consulting, credit/loans are harder to get for smaller businesses and most software ends up being targeted toward large businesses, and so do most consultants. It's harder to be a small business than to be a large business; therefore it's hard to pay more and since you're already as efficient as possible it's harder to get those rates up. (Also there was wage suppression by Google and Apple and other big companies for around 5 years, that's a HUGE damper on the maximum salary which also translates into a damper on consulting rates.)
marcosdumay 10y ago
That's a very well known experiment, and well explained on the one TED talk I've seen it cited. The experiment conclusion is that thinking about money as a reward¹ makes people much less creative. It's simply amazing how somebody can spin this into "money doesn't motivate people". Some people will only see what they want, and make any excuse for that, no matter how absurd. 1 - Does thinking about it as a problem have the same effect? Is there some data about this?
- TeMPOraL 10y ago
  > It's simply amazing how somebody can spin this into "money doesn't motivate people". Some people will only see what they want, and make any excuse for that, no matter how absurd. Almost nobody reads the original studies. Instead, they read news stories and articles, most written by professionals who are paid to spin it in amazing ways.
  - hengheng 10y ago
    Reports on studies are there to create one-liners, bite sized phrases that are to be repeated and retold over and over. So, memes.
st3v3r 10y ago
Yes and no. If you're unhappy with your job, having a big bucket of money thrown at you is unlikely to make you suddenly happy at your job. But raises also usually come with the recognition that you're doing a good job; that the company is wanting to keep you around. Not getting a raise in 2+ years gives the impression that the company doesn't care about you, and what you do doesn't really matter.
kelukelugames 10y ago
"Money talks, talent walks" I've seen it so many times. Instead of wasting money on boosting morale, why not just give us cash?
TuringNYC 10y ago
I would probably agree that "money doesn't motivate people past a certain point"...except when the cost of housing goes up every year. It is not like the extra money most people seek is more and more vacation money -- most are just trying to keep up with rents.
- trome 10y ago
  I'm at this training with a developer from South America who just moved to the US, and holy moly he got screwed over. He is earning $15/hr writing PHP for this small company in an expensive area ($1350/month for 1 bed & 1 bath) with a broad non-compete and $4k that he will have to pay back if he leaves within the next 12 months for this training. I know the training itself is free (they actually are giving us a few grand in credit for going), and hotels, flights, etc are under $1k, so this is a super sweet deal for his company.
  - bitJericho 10y ago
    He should be suggested to just leave and say fuck you to the bill. It's the only way to deal with crooks in the US.
deleted 10y ago
[deleted]
stephen_g 10y ago
There's a fairly clear misunderstanding here. I think it's absolutely true to say that money doesn't motivate people. For most people, giving them raises won't make them work harder, stay longer, be more creative, etc. - at least, not long term. And if there are problems making them unhappy, throwing money at them isn't going to help much long term either. But if you're underpaying people or not giving raises, people quickly become unhappy and will either slack off or eventually leave - that's the 'certain point'! You absolutely need to keep giving good raises to keep good people there - but for most people it will just maintain their performance, not to motivate them to be better.
- ktRolster 10y ago
  I usually interpret being underpaid as, "The company doesn't care about me." When the company doesn't care about me, I start looking elsewhere.
  - cmdrfred 10y ago
    I also factor in inflation to this estimation. "The company thinks I'm worth less this year than last year, I think I'm worth more, lets see what the market says" Thus far the market has always agreed with me.
- taneq 10y ago
  Exactly. Money (as a carrot) like most tangible benefits (free lunch/drinks, foosball tables) won't motivate people for long. Weeks at most. However, the lack of money (or other tangible benefits) that people feel owed is a huge motivation for those people to leave.
- cmdkeen 10y ago
  The management courses I've done have said that money is a terrible motivator but a really powerful de-motivator. It is a terrible motivator as the impact of a raise is short lived, we very quickly come to believe we are worth the higher pay. See Wall Street and SV salaries. Once you're happy with your pay things like challenging work, recognising success, personal development, good co-workers become much more effective. It is a powerful de-motivator if you're being paid less than you think you should be, to the point that the weighting between the two effects is almost entirely on the de-motivation side.
ck425 10y ago
What those talks often miss is how closely linked salary often is to status and communication of value. I may not need a raise and the money may not make a notable improvement to my life in and of itself but getting one is a clear signal of appreciation and in the opposite direction not getting one while your peers do (again regardless of whether you need one) sends a clear (if unintentional) message of undervaluation. Unlike most other signals of status, salary is directly comparable.

by _yosefk 10y ago

beat 10y ago

Money doesn't motivate people past, oh, a half million or so a year, maybe.

_yosefk 10y ago
What also amazes me is that the same heterodox crowd critiquing capitalism goes on to say "money doesn't make you happy", citing surveys of millionaires and billionaires who all say they'd be happy with 2x-3x their current net worth! I mean, not necessarily the same people say it, but the same press outlets for sure. But if it doesn't make you happy and you always want more, that desire must motivate you, right? Make up your mind!
- beat 10y ago
  Talk to some serial entrepreneurs. Many of them are already rich, and don't need to work, but they do it anyway. They're motivated by the challenge, not the money.
  - st3v3r 10y ago
    I'm sure, but the money definitely helps. If only because it enables them to do what they do.
  - maverick_iceman 10y ago
    Do they give away all their money to charity?
  - citizens 10y ago
    Well, are they working for themselves or for someone else? That has to come into play regarding motivation.
  - TuringNYC 10y ago
    "Many of them are already rich" -- I think lots of behaviors change once someone is rich. You can choose what to work on, you can walk away from bad situations. I dont think the behaviors of the rich apply to the non-rich.
- eeZah7Ux 10y ago
  You confuse happiness with motivation.
phaus 10y ago
Assuming you are correct, which I suspect you are, that means the group of people that aren't really motivated by money make up a tiny percentage of the work force. Therefore anyone running a business can safely disregard any idiot making the claim that money isn't a motivator, except on the rare occasions which they find themselves hiring executives that make north of $500k. For normal people, its infuriating to hear businesses complain about turnover and a lack of loyalty when their "performance" raises amount to a cost of living increase, and their promotion raises don't bring them in line with the salaries that people getting hired at the more senior position make coming through the door. Money isn't the only reason I work, but it is one of the reasons. Its more about the principle. A company that wants loyalty should show loyalty and not attempt to nickel and dime the talent. Tech companies are usually responsible for creating the turnover they complain about.
- beat 10y ago
  I was strongly influenced in my thinking by Jason Cohen's "Rich vs King" article, he talks about the S-curve of wealth utilization. Once you hit a few million in the bank, you have enough money to fund a reasonably lavish lifestyle, without working, for the rest of your life. At that point, how do you motivate someone?
  - phaus 10y ago
    I make low 6 figures doing network security. If I hit 200k, literally the only thing you could do to motivate me would be to treat me well and give me interesting things to do. Fortunately, my employer already does both of those. I just wish it wasn't almost a requirement to leave in order to get a decent raise. Note: I'm not expecting to make $200k in a technical role as a security analyst any time soon, its just hypothetical.
    - softawre 10y ago
      It is also interesting to think your number, 200k, is strictly based on how much you make now. What would your 18yo self said about 100k? What do you think about a Netflix engineer making 300k? They'd probably be happy with 500k (though, cost of living, derailment ahead..).
enraged_camel 10y ago
Yes it does, actually. Not because it leads to any noticeable quality of life improvement, but because at those levels it becomes a pissing contest with other high-earners. Some rich people care a LOT about making more than other rich people in their social/work circle.
- milliondollar 10y ago
  Yes but if you have the intestinal fortitude to check out of those pissing contests you can really create your own life. That is, if you are lucky enough to be at level to start. I did note that many of my peers where COMPLETELY freaked out by my decision that I mentioned above. My choice to step back from the game freaked them out. No over aggression but a mix of outright confusion as well as somewhat confused jealousy.
  - st3v3r 10y ago
    At the same time, it still sounds like you're making a huge ton of money. More than most of us.
- at-fates-hands 10y ago
  To your point, I remember 50cent (the rapper) talking shortly after he made $400 million on his Vitamin water investment. He said he ran into some Coca-Cola executives after they purchased the company and he was sort of crowing about all the money they had just made him. I guess two of the executives were like, "Huh, $400 million, not a bad start Curtis. Let us know once you get in the $800 million or even the billion dollar range." He said it made him a little more humble, but at the same time, he said there's a sort of pissing game when you're at those income levels with people like that.
  - jimbokun 10y ago
    Meh, he could have replied "let me know when you have a stadium full of people screaming your name."
milliondollar 10y ago
Exactly yes. I used to make over a million a year as a big 3 partner in management consulting. I dialed back to half time and am UNBELIEVABLY happy!
- TeMPOraL 10y ago
  > I dialed back to half time and am UNBELIEVABLY happy! You live my dream life.
- _yosefk 10y ago
  Having dialed back to 3 days/week, I believe that "how much time I'm willing to spend working" is a somewhat orthogonal question to "what motivates me during the time when I'm working." Not entirely orthogonal but also very far from the same question.
- deleted 10y ago
  [deleted]
- jimbokun 10y ago
  Is that because you saved enough making a million a year you can now afford to work only half time and absorb the pay cut?
vacri 10y ago
Wasn't there a talk show host that was complaining on air about how it was so hard to live in Washington DC on 'only' $500k?
sametmax 10y ago
You are confusing 2 meaning of motivations: - the one meaning "the stuff that will get you involved"; - the one meaning "the stuff that you'll want to get". The first one will drive you enthusiasm to work, your professionalism, the quality of what your produce and your loyalty. It's a "motor" kind of motivation, and money can't buy it. Only a sense of purpose can. The second one is just bound to the reality of life : you need money for food, shelter, logistic, health, hobbies, then a growing family, and an evolving lifestyle. This will make you choose something. It's more a "motive" kind of motivation. You can get a lot of people with only the second one. You can get some people for some time with only the first one. But to get the best, and for them to stay, you need a balance of both.
maverick_iceman 10y ago
I can't tell for others but it'll absolutely motivate me to be able to buy my own plane or yacht.
nihonde 10y ago
Anecdotal, but when I left my last big law firm (to start my own company), I was making around 3/4 million dollars per year. None of my peers who left ever went to jobs that paid more--they all went "in house" for a lot less money and maybe some moonshot equity, but mainly they sought a less horrible lifestyle.
frobozz 10y ago
Interestingly, the remuneration model used by most big companies seems to be based on the opposite of that. The rank and file tend to be told that we're not motivated by money, so we shouldn't expect any, whilst c-level salaries have to be "competitive to attract the best talent".

battlebot 10y ago

And yet isn't it just slightly odd how software consulting rates were the same 17 years ago as they are now? And there was all that inflation in the interim...hmmm...

paulddraper 10y ago
Supply has increased a lot.
deleted 10y ago
[deleted]
bsder 10y ago
Funny, the rates for folks on embedded just keep going up ...
- xyzzy_plugh 10y ago
  In my experience the rates for folks on embedded are way below market rates for the rest of the field. Anecdotally one guy I know quit embedded to do rails development and doubled his paycheck.
- aprdm 10y ago
  +1 anecdote, had 4 years as embedded systems engineer, quit to be a junior django dev making way more. If there's one fucked up industry that's called Embedded systems :D
omouse 10y ago
as the other reply said, supply has increased non-linearly while the number of companies has increased linearly. Even with all the companies out there, you're getting lots of mergers and acquisitions and consolidation. In terms of consulting, credit/loans are harder to get for smaller businesses and most software ends up being targeted toward large businesses, and so do most consultants. It's harder to be a small business than to be a large business; therefore it's hard to pay more and since you're already as efficient as possible it's harder to get those rates up. (Also there was wage suppression by Google and Apple and other big companies for around 5 years, that's a HUGE damper on the maximum salary which also translates into a damper on consulting rates.)

marcosdumay 10y ago

That's a very well known experiment, and well explained on the one TED talk I've seen it cited. The experiment conclusion is that thinking about money as a reward¹ makes people much less creative. It's simply amazing how somebody can spin this into "money doesn't motivate people". Some people will only see what they want, and make any excuse for that, no matter how absurd. 1 - Does thinking about it as a problem have the same effect? Is there some data about this?

TeMPOraL 10y ago
> It's simply amazing how somebody can spin this into "money doesn't motivate people". Some people will only see what they want, and make any excuse for that, no matter how absurd. Almost nobody reads the original studies. Instead, they read news stories and articles, most written by professionals who are paid to spin it in amazing ways.
- hengheng 10y ago
  Reports on studies are there to create one-liners, bite sized phrases that are to be repeated and retold over and over. So, memes.

st3v3r 10y ago

Yes and no. If you're unhappy with your job, having a big bucket of money thrown at you is unlikely to make you suddenly happy at your job. But raises also usually come with the recognition that you're doing a good job; that the company is wanting to keep you around. Not getting a raise in 2+ years gives the impression that the company doesn't care about you, and what you do doesn't really matter.

kelukelugames 10y ago

"Money talks, talent walks" I've seen it so many times. Instead of wasting money on boosting morale, why not just give us cash?

TuringNYC 10y ago

I would probably agree that "money doesn't motivate people past a certain point"...except when the cost of housing goes up every year. It is not like the extra money most people seek is more and more vacation money -- most are just trying to keep up with rents.

trome 10y ago
I'm at this training with a developer from South America who just moved to the US, and holy moly he got screwed over. He is earning $15/hr writing PHP for this small company in an expensive area ($1350/month for 1 bed & 1 bath) with a broad non-compete and $4k that he will have to pay back if he leaves within the next 12 months for this training. I know the training itself is free (they actually are giving us a few grand in credit for going), and hotels, flights, etc are under $1k, so this is a super sweet deal for his company.
- bitJericho 10y ago
  He should be suggested to just leave and say fuck you to the bill. It's the only way to deal with crooks in the US.

deleted 10y ago

[deleted]

stephen_g 10y ago

There's a fairly clear misunderstanding here. I think it's absolutely true to say that money doesn't motivate people. For most people, giving them raises won't make them work harder, stay longer, be more creative, etc. - at least, not long term. And if there are problems making them unhappy, throwing money at them isn't going to help much long term either. But if you're underpaying people or not giving raises, people quickly become unhappy and will either slack off or eventually leave - that's the 'certain point'! You absolutely need to keep giving good raises to keep good people there - but for most people it will just maintain their performance, not to motivate them to be better.

ktRolster 10y ago
I usually interpret being underpaid as, "The company doesn't care about me." When the company doesn't care about me, I start looking elsewhere.
- cmdrfred 10y ago
  I also factor in inflation to this estimation. "The company thinks I'm worth less this year than last year, I think I'm worth more, lets see what the market says" Thus far the market has always agreed with me.
taneq 10y ago
Exactly. Money (as a carrot) like most tangible benefits (free lunch/drinks, foosball tables) won't motivate people for long. Weeks at most. However, the lack of money (or other tangible benefits) that people feel owed is a huge motivation for those people to leave.
cmdkeen 10y ago
The management courses I've done have said that money is a terrible motivator but a really powerful de-motivator. It is a terrible motivator as the impact of a raise is short lived, we very quickly come to believe we are worth the higher pay. See Wall Street and SV salaries. Once you're happy with your pay things like challenging work, recognising success, personal development, good co-workers become much more effective. It is a powerful de-motivator if you're being paid less than you think you should be, to the point that the weighting between the two effects is almost entirely on the de-motivation side.

ck425 10y ago

What those talks often miss is how closely linked salary often is to status and communication of value. I may not need a raise and the money may not make a notable improvement to my life in and of itself but getting one is a clear signal of appreciation and in the opposite direction not getting one while your peers do (again regardless of whether you need one) sends a clear (if unintentional) message of undervaluation. Unlike most other signals of status, salary is directly comparable.