When most business leaders are asked what motivates people to work harder, they answer ‘money’. But what if ‘pay for performance’ is an oxymoron and spending more money doesn’t get any better results? Would you be brave enough to cut the compensation bill and invest a fraction of the saving in non-financial factors that are far more likely to increase productivity? In this 30-minute slide show you will discover: - that most of the time, financial incentives have no effect on performance and may, actually, make it worse - the 5 non-financial factors that are guaranteed to increase productivity - the powerful psychological reason which explains why most business leaders don’t want to believe this - what they would do if they did - the impact on stock price for those that have already worked it out

1. More than money
How to increase productivity
without spending a penny
Octavius Black, CEO

2. What’s the impact on the bottom line?
Mind Gym’s top 3 ways to motivate people
Why we want to believe that money is the answer
Impact of financial incentives – what the data tells us
What’s this about?
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3. Who chooses to work more and get paid less?
They work longer hours yet are
more positive about their work-life
balance.
They earn less, yet are happier.
Which group of full-time workers
are they?
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4. Ariely, D., Geneezy, U. (2009) Large Stakes and Big Mistakes. Review of Ecomonic Studies, 76, 451-469. Commissioned by Federal Reserve Bank of Boston.
The impact of big incentives
‘Great performers’ by incentive size
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5. What happens when analysts move banks?
Key skills
• Research
• Writing
• Networking with
business leaders
• Relationships with
journalists
Groysberg, B., Nanda, A., & Nohria, N. (2004). The Risky Business of Hiring Stars. Harvard Business Review. Retrieved from http://hbr.org/2004/05/the-
risky-business-of-hiring-stars/ar/1.
What happened?
After they switched loyalties, their
performance plummeted by an average of
about 20% and had not climbed back to the
old levels even five years later
Around 36% of the stock analysts left the
investment banks that hired them within 36
months, and another 29% quit in the next 24
months.
Switching firms doubled probability that
analysts would fall off rankings (32% vs 16%)
“When an analyst
moves from one
firm to another the
only thing that
changes is the
letter head”
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6. Money does make you happier…
Stevenson, B, & Wolfers, J. (2013) Subjective Well‐Being and Income: Is There Any Evidence of Satiation? The Gerald R. Ford School of Public
Policy, University of Michigan.
…But there is little evidence that it makes you more productive
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7. Mind Gym’s top 3 ways to
motivate people so they
are more productive?
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8. 01 Purpose
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9. Purpose
Wrzesniewski, A., McCauley, C. & Rozin, P. (1997). Jobs, careers and callings: People’s relations to their work. Journal of Research in Personality
31(1), p.21-33.
My relationship with work
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10. The same religion
Not singing from
the same hymn
sheet…
…but belonging
to the same
religion.
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11. 02 Stretching goals
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12. Stretching goals
Logs loaded as percentage of legal maximum load
Locke & Latham, 1984. Latham & Kinne, 1974. Latham & Yukl, 1975.
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13. It’s more than just the thought
Mean Goal Achievement
Dr. Gail Matthews , Dominican University (n.d.)
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14. Aligned goals
Source: Fitz-enz, J. (2007). Financial impact of HRM. Workforce Intelligence Institute.
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15. 03 Appreciation
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16. What’s the point?
• As each person (‘subject’) came into the room they were
asked to suit down and build an identical Lego figure.
• For the first one, they were paid $3.00, for the second,
$2.80, for the third $2.60 and so on.
• In Group #1 the Lego figures where displayed on a desk
and a new set of Lego given to make the next figure.
• In Group #2 the Lego figures were taken apart and the
pieces given back to them to re-assemble.
• Group #1 completed, on average, 10.6 figures and
earned $14.40 = $1.36 per figure
How many figures do you think that Group #2 completed?
• 7.2 figures and earned $11.52 = $1.60 per figure
• Feeling that ‘my work wasn’t pointless’ reduced the cost
per figure by 15% and increased output by 50%.
Prof Dan Ariely, D. Duke University (2012).
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17. Praise and performance
Corporate Leadership Council (2002) Building the High-Performance Workforce. Corporate Executive Board.
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18. What’s the effect
on the bottom line?
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19. Engagement correlates with business results
Employee engagement affects nine performance outcomes.
Compared with bottom-quartile units, top-quartile units have:
37% Lower absenteeism
25% Lower turnover (in high-
turnover organizations)
65% Lower turnover (in low-
turnover organizations)
28% Less shrinkage
48% Fewer safety incidents
41% Fewer patient
safety incidents
41% Fewer quality
incidents (defects)
10% Higher customer
metrics
21% Higher productivity
22% Higher profitability
Gallup (2012).. Sample size: 49,928 business or work units and included about 1.4 million employees in 192 organizations, across 49
industries, and in 34 countries .
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20. Bassi investments
Outperformed the S&P 500 by 40% since inception
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21. Parnassus Workplace Fund
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22. Employees come first
HCL Technologies case study
35% growth in revenue per
employee and a sector-leading
25% CAGR
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23. +44 (0)20 7376 0626 ● www.themindgym.com ● @themindgym
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