Three No-Cost Ways to Improve Employee Morale

I gave you ten steps to build your Free State of Me a few years ago. (Feel free to read or reread that article, as it’s been a while.)

One piece of advice is to start an online business, but many people don’t know how to do that.

With that in mind, I thought I’d briefly shift our focus to microeconomics.

Microeconomics deals with the behavior of individuals and firms in making decisions about allocating scarce resources and the interactions among these individuals and firms.

It’s critical to understand many microeconomic concepts to run a successful business, but perhaps none more so than how to keep your employees or freelancers motivated.

Daniel Pink authored a book called Drive, published in 2009. It’s not about cars but what drives us to do the things we do.

There’s an excellent YouTube video that summarizes his findings. I encourage you to watch it after you read this.

In this Morning Reckoning, I’ll relay to you his excellent points.

Just Pay People More!

Not so fast!

This works. Just not universally. Only in the right jobs with the right people.

This is the most shocking finding among economists. For decades, the mantra was, “If you want higher performance, pay people more.”

And this works for people doing mechanical jobs. That is, digging ditches or smashing rocks.

However, this incentive no longer works once a job requires even basic cognitive skills.

(As a former banker, I found this hard to believe. But bankers are a weird lot. Study after study replicates this finding.)

Once the work task goes above rudimentary cognitive skills and into something like creativity, the motivation game changes.

Innovative employees need something else: things that don’t involve money.

Of course, you still have to pay people. But with intelligent employees, Pink says the trick is to pay them enough “to take money off the table.” Pay them enough so they don’t have to worry about cash.

Once you’ve paid them well enough not to worry about their bills, what else do these employees need?

The Three Things Smart Employees Need

Autonomy, mastery, and purpose keep good employees motivated. I’ll explain each in turn.


According to Pink, autonomy is the ability to direct one’s work.

Autonomy allows employees to feel empowered in their positions rather than like their success is out of their hands.

Autonomous employees manage their time and decide how to do their work rather than having someone else dictate it.

This sense of control gives them the freedom to be productive and engage in their job tasks.

Anecdotally, one of the things I love most about my job here at the Reckoning and the Rude is that my publisher, Matt Insley, never tells me what to write about day-to-day.

(Though he does give great advice, particularly about my headlines!)


Pink discusses the second element of employee motivation as mastery. Mastery is the desire to get better at what you do.

When employees are allowed to improve themselves and hone their skills, it creates a sense of satisfaction that leads to increased motivation and productivity.

Why do people play musical instruments on the weekends for free?

Because they want to master something (and enjoy their melodious tunes, too, I’m sure).

When we focus on mastering a skill or task instead of just completing it, we often reach new levels of engagement and creativity that are essential for any organization’s success.


Finally, Pink proposes that purpose is a crucial factor in motivating employees.

When one feels connected with the purpose behind their job tasks and understands how their work contributes towards something larger than themselves, it gives them a sense of meaning.

That can help drive them forward even when things seem challenging or boring.

It helps them stay focused on long-term goals (rather than getting caught up in short-term frustrations) and keeps them motivated throughout the journey toward achieving those goals.

Of course, purpose gets confused with wokeness sometimes. I’ve heard horror stories about developers getting hired at tech firms and immediately concerning themselves with hiring policies rather than writing code.

That’s no good.

Businesses must profit to stay in business. First, they must create revenue. Then, they must collect that revenue and convert it into cash.

If you don’t have profits, you won’t have a business. But you don’t have a business if you don’t have cash.

So, the purpose and the business must intertwine to work well.

Wrap Up

Motivating competent employees requires more than just cash.

Strange as it may sound, they need autonomy, mastery, and purpose to flourish.

And this isn’t some kumbaya stuff. It’s core to a business’s success and has been proven repeatedly.

Motivation is an inherent part of any organization’s internal success strategy. To maximize your company’s potential, you’ll need motivated employees.

I wish you a very Happy Easter!

The Daily Reckoning