It's not all about the money

By Michael Hardy | Spring 2016

The Importance of Pro-Social Motivation

At the annual New York Auto Show in 1990, the Swedish car maker Volvo launched its soon-to-be-famous “Volvo Saved My Life Club” advertising campaign, which highlighted the company’s strong safety record by telling the stories of Volvo drivers who had survived horrific accidents. The campaign proved so successful that Volvo invited some of the club members to Sweden to thank its engineering team in person for saving their lives.

“In their daily lives, the engineers didn’t have any opportunity to interact with potential beneficiaries, so they didn’t realize how important their work was,” said Jasmine Hu, an assistant professor of management who studies organizational behavior at the Mendoza College of Business.

Other companies have launched similar initiatives: Facebook, for instance, has flown some of its most devoted users to its headquarters in Menlo Park to tell programmers how the company helped reconnect them to lost friends and family members.

According to Hu’s research, Volvo and Facebook may be on to something. For the past few years, Hu and the University of Illinois-Chicago’s Robert C. Liden have been studying the impact on work team performance of employees with high “pro-social motivation” — the desire to have a positive impact on society. “The starting point for my research is a fundamental question: What motivates employees to work, especially in a team setting?” she said.

Hu and Liden began their recent paper, published in the Academy of Management Journal, by noting the increasing prevalence of work teams in today’s business environment. “Tasks have become more complex, and people are increasingly reliant on each other to achieve higher-level outcomes, which increases the need for work teams,” Hu said. The challenge for managers, of course, is how to motivate those team members to achieve those higher-level outcomes.

In the past, researchers have focused on more traditional ways to motivate employees, such as pay raises, bonuses or opportunities for promotion. “Those are important factors, but they aren’t the only ones,” Hu contended. “If it were that simple, everyone would be motivated, right? But a lot of times, people are not just motivated to work for money. They want opportunities to make a positive impact on the lives of others, but that’s something that’s generally lacking in the academic literature.”

Previous research has shown that pro-socially motivated employees — those who focus on others rather than themselves — actually experience more personal success in the long run. Hu and Liden wanted to expand that research by examining the effects of pro-social attitudes on team, rather than individual, performance.

To determine the significance of pro-social motivation relative to so-called “extrinsic” factors such as financial incentives, or “intrinsic” factors including taking personal pleasure in the task, Hu and Liden designed two studies. The first was a field study that collected data from three U.S. companies and three Chinese companies over the course of a year. (“We didn’t want the study to be limited to one type of team or one type of culture — we wanted our results to be generalizable,” said Hu.) The second was a laboratory experiment that analyzed the performance of 124 four-person teams — made up of volunteer students from Mendoza — under a shifting set of conditions, in order to analyze the underlying causality of the pro-social motivation effect.

In the end, both studies confirmed Hu and Liden’s hypothesis that work teams composed of employees with high pro-social motivation consistently outperformed other teams. In fact, the studies found that pro-social motivation played a bigger role in team effectiveness than any other factor, including the prospect of a hefty raise or a fat bonus — about five percentage points more, to be precise.

“When teams are pro-socially motivated, they’re more likely to make a difference to the team’s outcome,” Hu explained. “They’re more likely to perform better and contribute more to the team, and they’re less likely to quit or leave the team.” The study also found that the pro-social motivation effect is greatest in teams whose members have to rely on each other more. The more team members have to cooperate, the more important it is that they be pro-socially motivated.

When asked how managers can put her research to use, Hu said that they need to adjust the way they approach the entire topic of motivation: “When they think about motivation, they can’t just think about financial incentives. Our study found that team leaders realize how important pro-social motivation is.”

Of course, it’s one thing to understand the importance of pro-social motivation; it’s quite another to actually inspire a spirit of public-mindedness in employees. Hu suggested that managers take a cue from Volvo and Facebook by “showing the beneficial impact of the team’s work — letting them realize how important their work is for potential beneficiaries.”

Other steps managers can take include forcing teams to work more closely together (since this enhances the effect of pro-social motivation) and adding highly pro-socially motivated employees to underperforming teams. And, as always, managers should lead by example by demonstrating their own commitment to making a positive impact on the world.

In the conclusion to their paper, Hu and Liden reassert their contention that researchers have long underestimated the social component to employee motivation and performance. “Rather than being motivated by financial income or personal enjoyment, many people are driven by the impact that their work has on the well-being of others,” they write. In other words, it’s not all about the money.

But any employee worried that her boss will be tempted to replace year-end bonuses with motivational speeches after reading Hu’s paper can rest easy: She doesn’t advocate scrapping financial incentives. “We’re not saying that managers shouldn’t give employees money,” she emphasized. “But we are saying that they should pay more attention to pro-social motivation.”