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78 Harvard Business Review | July–August 2008 | hbr.org

MANAGING TECHNOLOGY FINANCE & ACCOUNTING ORGANIZATION & CULTURE FINANCE & ACCOUNTING ORGAN COMPETITION HUMAN RESOURCES MARKETING ORGANIZATION & CULTURE MANAGING TECHNOLOGY FINANCE & ING ORGANIZATION & CULTURE MANAGING TECHNOLOGY FINANCE & ACCOUNTING MARKETING HUMAN RESOU STRATEGY & COMPETITION MANAGING TECHNOLOGY HUMAN RESOURCES MARKETING ORGANIZATION & CULTUR TION & CULTURE MANAGING TECHNOLOGY FINANCE & ACCOUNTING MARKETING STRATEGY & COMPETITION MA FINANCE & ACCOUNTING MARKETING MARKETING ORGANIZATION & CULTURE MANAGING TECHNOLOGY FINANCE

Employee Motivation A Powerful New Model

by Nitin Nohria, Boris Groysberg, and Linda-Eling Lee

GGETTING PEOPLE TO DO THEIR BEST WORK, even in trying cir-cumstances, is one of managers’ most enduring and slippery chal-lenges. Indeed, deciphering what motivates us as human beings is a centuries-old puzzle. Some of history’s most infl uential thinkers about human behavior – among them Aristotle, Adam Smith, Sig-mund Freud, and Abraham Maslow – have struggled to understand its nuances and have taught us a tremendous amount about why people do the things they do.Such luminaries, however, didn’t have the advantage of knowl-edge gleaned from modern brain science. Their theories were based on careful and educated investigation, to be sure, but also exclusively on direct observation. Imagine trying to infer how a car works by examining its movements (starting, stopping, accelerating,

turning) without being able to take apart the engine. A n

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B ak

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Honing Your Competitive Edge

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GANIZATION & CULTURE MARKETING MANAGING TECHNOLOGY FINANCE & ACCOUNTING MARKETING STRATEGY & CE & ACCOUNTING MARKETING STRATEGY & COMPETITION MANAGING TECHNOLOGY HUMAN RESOURCES MARKET- SOURCES MARKETING ORGANIZATION & CULTURE MANAGING TECHNOLOGY FINANCE & ACCOUNTING MARKETING LTURE MANAGING TECHNOLOGY FINANCE & ACCOUNTING MARKETING HUMAN RESOURCES MARKETING ORGANIZA- N MANAGING TECHNOLOGY HUMAN RESOURCES MARKETING ORGANIZATION & CULTURE MANAGING TECHNOLOGY NCE & ACCOUNTING MARKETING STRATEGY & COMPETITION MANAGING TECHNOLOGY HUMAN RESOURCES MARKET-

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80 Harvard Business Review | July–August 2008 | hbr.org

Honing Your Competitive Edge HUMAN RESOURCES

Fortunately, new cross-disciplinary research in fi elds like

neuroscience, biology, and evolutionary psychology has al-

lowed us to peek under the hood, so to speak – to learn more

about the human brain. Our synthesis of the research sug-

gests that people are guided by four basic emotional needs,

or drives, that are the product of our common evolutionary

heritage. As set out by Paul R. Lawrence and Nitin Nohria

in their 2002 book Driven: How Human Nature Shapes Our

Choices, they are the drives to acquire (obtain scarce goods,

including intangibles such as social status); bond (form con-

nections with individuals and groups); comprehend (satisfy our

curiosity and master the world around us); and defend (protect

against external threats and promote justice). These drives

underlie everything we do.

Managers attempting to boost motivation should take note.

It’s hard to argue with the accepted wisdom – backed by em-

pirical evidence – that a motivated workforce means better

corporate performance. But what actions, precisely, can man-

agers take to satisfy the four drives and, thereby, increase

their employees’ overall motivation?

We recently completed two major studies aimed at answer-

ing that question. In one, we surveyed 385 employees of two

global businesses – a fi nancial services giant and a leading IT

services fi rm. In the other, we surveyed employees from 300

Fortune 500 companies. To defi ne overall motivation, we fo-

cused on four commonly measured workplace indicators of it:

engagement, satisfaction, commitment, and intention to quit.

Engagement represents the energy, effort, and initiative em-

ployees bring to their jobs. Satisfaction refl ects the extent to

which they feel that the company meets their expectations at

work and satisfi es its implicit and explicit contracts with them.

Commitment captures the extent to which employees engage

in corporate citizenship. Intention to quit is the best proxy for

employee turnover.

Both studies showed, strikingly, that an

organization’s ability to meet the four fun-

damental drives explains, on average, about

60% of employees’ variance on motivational

indicators (previous models have explained

about 30%). We also found that certain

drives infl uence some motivational indica-

tors more than others. Fulfi lling the drive

to bond has the greatest effect on employee commitment, for

example, whereas meeting the drive to comprehend is most

closely linked with employee engagement. But a company

can best improve overall motivational scores by satisfying all

four drives in concert. The whole is more than the sum of its

parts; a poor showing on one drive substantially diminishes

the impact of high scores on the other three.

When it comes to practical implications for managers, the

consequences of neglecting any particular drive are clear. Bob

Nardelli’s lackluster performance at Home Depot, for instance,

can be explained in part by his relentless focus on the drive

to acquire at the expense of other drives. By emphasizing in-

dividual and store performance, he squelched the spirit of

camaraderie among employees (their drive to bond) and their

dedication to technical expertise (a manifestation of the need

to comprehend and do meaningful work). He also created, as

widely reported, a hostile environment that interfered with

the drive to defend: Employees no longer felt they were being

treated justly. When Nardelli left the company, Home Depot’s

stock price was essentially no better than when he had ar-

rived six years earlier. Meanwhile Lowe’s, a direct competitor,

gained ground by taking a holistic approach to satisfying em-

ployees’ emotional needs through its reward system, culture,

management systems, and design of jobs.

An organization as a whole clearly has to attend to the four

fundamental emotional drives, but so must individual manag-

ers. They may be restricted by organizational norms, but em-

ployees are clever enough to know that their immediate supe-

riors have some wiggle room. In fact, our research shows that

individual managers infl uence overall motivation as much as

any organizational policy does. In this article we’ll look more

closely at the drivers of employee motivation, the levers man-

agers can pull to address them, and the “local” strategies that

can boost motivation despite organizational constraints.

The Four Drives That Underlie Motivation Because the four drives are hardwired into our brains, the de-

gree to which they are satisfi ed directly affects our emotions

and, by extension, our behavior. Let’s look at how each one

operates.

The drive to acquire. We are all driven to acquire scarce goods that bolster our sense of well-being. We experience

delight when this drive is fulfi lled, discontentment when it is

thwarted. This phenomenon applies not only

to physical goods like food, clothing, hous-

ing, and money, but also to experiences like

travel and entertainment – not to mention

events that improve social status, such as be-

ing promoted and getting a corner offi ce or

a place on the corporate board. The drive

to acquire tends to be relative (we always

compare what we have with what others pos-

sess) and insatiable (we always want more). That explains why

people always care not just about their own compensation

packages but about others’ as well. It also illuminates why sal-

ary caps are hard to impose.

The drive to bond. Many animals bond with their parents, kinship group, or tribe, but only humans extend that connec-

tion to larger collectives such as organizations, associations,

and nations. The drive to bond, when met, is associated with

strong positive emotions like love and caring and, when not,

with negative ones like loneliness and anomie. At work, the

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hbr.org | July–August 2008 | Harvard Business Review 81

drive to bond accounts for the enormous

boost in motivation when employees feel

proud of belonging to the organization

and for their loss of morale when the in-

stitution betrays them. It also explains why

employees fi nd it hard to break out of divi-

sional or functional silos: People become

attached to their closest cohorts. But it’s

true that the ability to form attachments to larger collectives

sometimes leads employees to care more about the organiza-

tion than about their local group within it.

The drive to comprehend. We want very much to make sense of the world around us, to produce theories and ac-

counts – scientifi c, religious, and cultural – that make events

comprehensible and suggest reasonable actions and responses.

We are frustrated when

things seem senseless,

and we are invigorated,

typically, by the chal-

lenge of working out

answers. In the work-

place, the drive to com-

prehend accounts for

the desire to make a

meaningful contribution. Employees are motivated by jobs

that challenge them and enable them to grow and learn, and

they are demoralized by those that seem to be monotonous or

to lead to a dead end. Talented employees who feel trapped

often leave their companies to fi nd new challenges elsewhere.

The drive to defend. We all naturally defend ourselves, our property and accomplishments, our family and friends,

and our ideas and beliefs against external threats. This drive

is rooted in the basic fi ght-or-fl ight response common to most

animals. In humans, it manifests itself not just as aggressive

or defensive behavior, but also as a quest to create institu-

tions that promote justice, that have clear

goals and intentions, and that allow people

to express their ideas and opinions. Fulfi ll-

ing the drive to defend leads to feelings

of security and confi dence; not fulfi lling

it produces strong negative emotions like

fear and resentment. The drive to defend

tells us a lot about people’s resistance to

change; it’s one reason employees can be

devastated by the prospect of a merger or

acquisition – an especially signifi cant change – even if the deal

represents the only hope for an organization’s survival. So, for

example, one day you might be told you’re a high performer

and indispensable to the company’s success, and the next that

you may be let go owing to a restructuring – a direct challenge,

in its capriciousness, to your drive to defend. Little wonder

that headhunters so frequently target em-

ployees during such transitions, when they

know that people feel vulnerable and at

the mercy of managers who seem to be

making arbitrary personnel decisions.

Each of the four drives we have de-

scribed is independent; they cannot be

ordered hierarchically or substituted one

for another. You can’t just pay your employees a lot and hope

they’ll feel enthusiastic about their work in an organization

where bonding is not fostered, or work seems meaningless, or

people feel defenseless. Nor is it enough to help people bond

as a tight-knit team when they are underpaid or toiling away

at deathly boring jobs. You can certainly get people to work

under such circumstances – they may need the money or have

no other current prospects – but you won’t get the most out

of them, and you risk losing them altogether when a better

deal comes along. To fully motivate your employees, you must

address all four drives.

The Organizational Levers of Motivation Although fulfi lling all four of employees’ basic emotional

drives is essential for any company, our research suggests that

each drive is best met by a distinct organizational lever.

The reward system. The drive to acquire is most easily satisfi ed by an organization’s reward system – how effectively

it discriminates between good and poor performers, ties re-

wards to performance, and gives the best people opportunities

for advancement. When the Royal Bank of Scotland acquired

NatWest, it inherited a company in which the reward system

was dominated by politics, status, and employee tenure. RBS

introduced a new system that held managers responsible for

specifi c goals and rewarded good performance over average

performance. Former NatWest employees embraced their

new company – to an unusual extent in the aftermath of an

acquisition – in part because the reward system was tough but

recognized individual achievement.

Sonoco, a manufacturer of packaging

for industrial and consumer goods, trans-

formed itself in part by making a con-

certed effort to better meet the drive to

acquire – that is, by establishing very clear

links between performance and rewards.

Historically, the company had set high

business-performance targets, but incen-

tives had done little to reward the achieve-

ment of them. In 1995, under Cynthia Hart-

ley, then the new vice president of human resources, Sonoco

instituted a pay-for-performance system, based on individual

and group metrics. Employee satisfaction and engagement

improved, according to results from a regularly administered

internal survey. In 2005, Hewitt Associates named Sonoco

one of the top 20 talent-management organizations in the

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United States. It was one of the few midcap companies on the

list, which also included big players like 3M, GE, Johnson &

Johnson, Dell, and IBM.

Culture. The most effective way to fulfi ll the drive to bond – to engender a strong sense of camaraderie – is to create a

culture that promotes teamwork, collaboration, openness, and

friendship. RBS broke through NatWest’s silo mentality by

bringing together people from the two fi rms to work on well-

defi ned cost-savings and revenue-growth projects. A departure

for both companies, the new structure encouraged people to

break old attachments and form new bonds. To set a good

example, the executive committee (comprising both RBS and

ex-NatWest executives) meets every Monday morning to dis-

cuss and resolve any outstanding issues – cutting through the

bureaucratic and political processes that can slow decision

making at the top.

Another business with an exemplary culture is the Weg-

mans supermarket chain, which has appeared for a decade on

Fortune’s list of “100 Best Companies to Work For.” The family

that owns the business makes a point of setting a familial tone

for the companywide culture. Employees routinely report that

management cares about them and that they care about one

another, evidence of a sense of teamwork and belonging.

Job design. The drive to comprehend is best addressed by designing jobs that are meaningful, interesting, and challeng-

ing. For instance, although RBS took a hard-nosed attitude to-

ward expenses during its integration of NatWest, it nonetheless

invested heavily in a state-of-the-art business school facility,

adjacent to its corporate campus, to which employees had

access. This move not only advanced the company’s success

in fulfi lling the drive to bond, but also challenged employees to

think more broadly about how they could contribute to making

82 Harvard Business Review | July–August 2008 | hbr.org

Honing Your Competitive Edge HUMAN RESOURCES

How to Fulfi ll the Drives That Motivate Employees

For each of the four emotional drives that employees need to fulfi ll, companies have a primary organizational lever to use. This table matches each drive with its corresponding lever and lists specifi c actions your company can take to make the most of the tools at its disposal.

DRIVE PRIMARY LEVER ACTIONS

Acquire Reward System ■ Sharply differentiate good performers from average and poor performers

■ Tie rewards clearly to performance

■ Pay as well as your competitors

Bond Culture ■ Foster mutual reliance and friendship among coworkers

■ Value collaboration and teamwork

■ Encourage sharing of best practices

Comprehend Job Design ■ Design jobs that have distinct and important roles in the organization

■ Design jobs that are meaningful and foster a sense of contribution to the organization

Defend Performance-Management and Resource-Allocation Processes

■ Increase the transparency of all processes

■ Emphasize their fairness

■ Build trust by being just and transparent in granting rewards, assignments, and other forms of recognition

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a difference for coworkers, customers,

and investors.

Cirque du Soleil, too, is committed to

making jobs challenging and fulfi lling.

Despite grueling rehearsal and perfor-

mance schedules, it attracts and retains

performers by accommodating their

creativity and pushing them to perfect

their craft. Its employees also get to

say a lot about how performances are

staged, and they are allowed to move

from show to show to learn new skills.

In addition, they get constant collegial

exposure to the world’s top artists in

the fi eld.

Performance-management and resource-allocation processes. Fair, trustworthy, and transparent processes

for performance management and re-

source allocation help to meet people’s

drive to defend. RBS, for instance, has

worked hard to make its decision pro-

cesses very clear. Employees may dis-

agree with a particular outcome, such as

the nixing of a pet project, but they are

able to understand the rationale behind

the decision. New technology endeavors

at RBS are reviewed by cross-business

unit teams that make decisions using

clear criteria, such as the impact on com-

pany fi nancial performance. In surveys,

employees report that the process is fair

and that funding criteria are transparent.

Although RBS is a demanding organiza-

tion, employees also see it as a just one.

Afl ac, another perennial favorite on

Fortune’s “100 Best Companies to Work For,” exemplifi es how to

match organizational levers with emotional drives on multiple

fronts. (For concrete ways your company can use its motiva-

tional levers, see the exhibit “How to Fulfi ll the Drives That

Motivate Employees.”) Stellar individual performance is recog-

nized and rewarded in highly visible ways at Afl ac, thereby tar-

geting people’s drive to acquire. Culture-building efforts, such

as Employee Appreciation Week, are clearly aimed at creating

a sense of bonding. The company meets the drive to compre-

hend by investing signifi cantly in training and development.

Sales agents don’t just sell; they have opportunities to develop

new skills through managing, recruiting, and designing curri-

cula for training new agents. As for the drive to defend, the com-

pany takes action to improve employees’ quality of life. Beyond

training and scholarships, it offers benefi ts, such as on-site child

care, that enhance work/life balance. It also fosters trust through

a no-layoff policy. The company’s stated philosophy is to be

employee-centric – to take care of its

people fi rst. In turn, the fi rm believes that

employees will take care of customers.

The company examples we chose

for this article illustrate how particular

organizational levers infl uence overall

motivation, but Afl ac’s is a model case

of taking actions that, in concert, fulfi ll

all four employee drives. Our data show

that a comprehensive approach like this

is best. When employees report even a

slight enhancement in the fulfi llment of

any of the four drives, their overall moti-

vation shows a corresponding improve-

ment; however, major advances relative

to other companies come from the ag-

gregate effect on all four drives. This ef-

fect occurs not just because more drives

are being met but because actions taken

on several fronts seem to reinforce one

another – the holistic approach is worth

more than the sum of its constituent

parts, even though working on each part

adds something. Take a fi rm that ranks

in the 50th percentile on employee mo-

tivation. When workers rate that com-

pany’s job design (the lever that most

infl uences the drive to comprehend) on

a scale of zero to fi ve, a one-point in-

crease yields a 5% raw improvement in

motivation and a correspondingly mod-

est jump from the 50th to the 56th per-

centile. But enhance performance on all

four drives, and the yield is a 21% raw im-

provement in motivation and big jump

to the 88th percentile. (The percentile

gains are shown in the exhibit “How to Make Big Strides in

Employee Motivation.”) That’s a major competitive advantage

for a company in terms of employee satisfaction, engagement,

commitment, and reluctance to quit.

The Role of the Direct Manager Our research also revealed that organizations don’t have an

absolute monopoly on employee motivation or on fulfi lling

people’s emotional drives. Employees’ perceptions of their im-

mediate managers matter just as much. People recognize that a

multitude of organizational factors, some outside their supervi-

sor’s control, infl uence their motivation, but they are discrimi-

nating when it comes to evaluating that supervisor’s ability to

keep them motivated. Employees in our study attributed as

much importance to their boss’s meeting their four drives as

to the organization’s policies. In other words, they recognized

that a manager has some control over how company processes

hbr.org | July–August 2008 | Harvard Business Review 83

How to Make Big Strides in Employee Motivation

The secret to catapulting your com- pany into a leading position in terms of employee motivation is to improve its effectiveness in fulfi lling all four basic emotional drives, not just one. Take a fi rm that, relative to other fi rms, ranks in the 50th percentile on employee motivation. An improvement in job design alone (the lever that most infl uences the drive to comprehend) would move that company only up to the 56th percentile – but an improvement on all four drives would blast it up to the 88th percentile.

Baseline (average firm)

After improving on any one drive

After improving on all four drives

50 56

Standing relative to other firms (percentile)

88

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84 Harvard Business Review | July–August 2008 | hbr.org

Honing Your Competitive Edge HUMAN RESOURCES

and policies are implemented. (See the exhibit “Direct Manag-

ers Matter, Too.”)

Employees don’t expect their supervisors to be able to sub-

stantially affect the company’s overall reward systems, culture,

job design, or management systems. Yet managers do have

some discretion within their spheres of infl uence; some hide

behind ineffective systems, whereas others make the most

of an imperfect model. Managers can, for example, link re-

wards and performance in areas such as praise, recognition,

and choice assignments. They can also allocate a bonus pool

in ways that distinguish between top and bottom performers.

Similarly, even in a cutthroat culture that doesn’t promote

camaraderie, a manager can take actions that encourage team-

work and make jobs more meaningful and interesting. Many

supervisors are regarded well by their employees precisely be-

cause they foster a highly motivating local environment, even

if the organization as a whole falls short. On the other hand,

some managers create a toxic local climate within a highly

motivated organization.

Although employees look to different elements of their or-

ganization to satisfy different drives, they expect their manag-

ers to do their best to address all four within the constraints

that the institution imposes. Our surveys showed that if em-

ployees detected that a manager was substantially worse than

her peers in fulfi lling even just one drive, they rated that man-

ager poorly, even if the organization as a whole had signifi -

cant limitations. Employees are indeed very fair about taking

a big-picture view and seeing a manager in the context of a

larger institution, but they do some pretty fi ne-grained evalu-

ation beyond those organizational caveats. In short, they are

realistic about what managers cannot do, but also about what

managers should be able to do in meeting all the basic needs

of their subordinates.

At the fi nancial services fi rm we studied, for example, one

manager outperformed his peers on fulfi lling subordinates’

drives to acquire, bond, and comprehend. However, his subor-

dinates indicated that his ability to meet their drive to defend

was below the average of other managers in the company.

Consequently, levels of work engagement and organizational

commitment were lower in his group than in the company as

a whole. Despite this manager’s superior ability to fulfi ll three

of the four drives, his relative weakness on the one dimension

damaged the overall motivational profi le of his group.

• • •

Our model posits that employee motivation is infl uenced by

a complex system of managerial and organizational factors.

If we take as a given that a motivated workforce can boost

company performance, then the insights into human behavior

that our article has laid out will help companies and execu-

tives get the best out of employees by fulfi lling their most fund-

amental needs.

Nitin Nohria ([email protected]) is the Richard P. Chapman Professor of Business Administration, and Boris Groysberg ([email protected]) is an associate professor, at Harvard

Business School in Boston. Linda-Eling Lee ([email protected]) is a research director at the Center for Research on Corporate

Performance in Cambridge, Massachusetts.

Reprint R0807G To order, see page 163.

Direct Managers Matter, Too

At the companies we surveyed whose employee motivation scores were in the top fi fth, workers rated their managers’ ability to motivate them as highly, on average, as they rated the organization’s ability to fulfi ll their four drives. The same pattern was evident within the bottom fi fth of companies, even though their average ratings on all fi ve dimen- sions were, of course, much lower than those of companies in the top fi fth.

0

1

2

3

4

5

Acquire Bond Comprehend Defend

Direct ManagerOrganization

A ve

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at in

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top 20% of companies

bottom 20% of companies

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