Can money buy happiness? Not on the best teams . . .
August 16, 2012
Article courtesy of SBAM Approved Partner ASE
By Anthony Kaylin
The best things in life are free
But you can keep ’em for the birds and bees
Now give me money, (that’s what I want) that’s what I want.
–From the 1959 hit single “Money (That’s What I Want)”
Money, money, money. Given today’s society and costs, it seems that money has greater importance now than at any other time since the Great Depression of the 1930s. But does it make employees happy to make more money?
No doubt it does for many. But researchers from the University of Iowa may respectfully disagree with Motown founder Berry Gordy (who co-wrote the above song) and all the pop groups that eventually covered it including the Beatles, the Rolling Stones and Led Zeppelin.
The researchers examined how members of self-managed teams allotted pay raises for their peers. Using questionnaires, they asked the workers about their level of attraction to the team and their compensation, and asked the workers’ supervisors about the productivity of both individuals and teams. The thinking was that team members would better value the contributions of their fellow team members.
Surprisingly, the study found that a sense of belonging and attachment to a group of co-workers is a better motivator for some employees than money. “We found that self-managing teams exhibit increased performance when they are highly cohesive,” says Greg Stewart, Henry B. Tippie Research Professor of Management and Organizations in the UI Tippie College of Business. “We all have a social need to be accepted, to identify with a group and be a part of it,” Stewart said, “so much so that peer pressure from team members is more effective than money in prompting strong performances from workers.”
“In high functioning teams the group takes over most of the management function themselves,” says Stephen Courtright, assistant professor at Texas A&M University who was also a member of the research group. “They work with each other, they encourage and support each other, and they coordinate with outside teams. They collectively perform the role of a good manager.”
But there is a “but” to this research. The researchers noted that this sense of belonging as a motivating force only works when team members get along well with each other. If they don’t get along, then money does play an important role in motivating people, according to Courtright.
So the obvious next question is how to create self-functioning high performing teams. J.R. Katzenbach and Douglas Smith, authors of The Wisdom of Teams, argue that such teams have three major competencies: shared mission and goals, knowledge to complete tasks, and effective interaction for problem solving, decision-making and coordination of effort. In addition they will have an understanding of the big picture and their role in it.
Yet a team can have all this and still not be effective. Certain members of the team can be unproductive or difficult. Others overbearing. Team members have to learn to trust in each other and have effective mechanisms for feedback. So employers need to put resources into conflict resolution training and communication skills.
Ineffective teams are a cost that companies cannot afford to bear. Happier employees are more committed, productive, and engaged employees. Organizations need to make sure the tools for employees to create happiness for themselves are available.
“Teams perform better when there is social pressure from peers to perform well than when peers wave a carrot and stick” says Courtright. “However, the carrot and stick method works pretty well when team members just can’t get along.”