What Drives Employees to Work Hard?

Workers who are passionate about their jobs don't care as much about money. They'll come early and stay late, without expecting overtime pay. Right? 

That's one theory. But it may not be true. For decades, labor economists have argued about what motivates workers--and how that affects compensation. 

In one corner are those who support the "donating" theory. Workers who love what they do are more willing to accept lower wages, the academics argue, because they're getting satisfaction through the environment. They'll come early and stay late, without expecting overtime pay.

In the other corner are the proponents of "motivation-productivity." They argue that an engaged employee works harder at his or her job, increasing work output and simultaneously garnering higher wages.

In a study published in August's Small Business Economics, a group of Italian economists sought to clarify which of these two theories is more accurate. The authors focused on 4,134 paid workers from 320 Italian non-profits, noting that non-profit wages are frequently lower than in other industries. It seemed more likely these workers would be driven by passion than money. 

Individuals were asked to rate their identification with a definition of work: as a mere contractual relationship where labor is exchanged for pay. Those who agreed completely with this statement--in effect, those who were working just to get paid--in some cases earned as much as 5 percent less than average.

Intrinsic motivations do have an effect on wages, the study found. Those who are willing to work for nothing actually tend to earn more than people who are in it for the money.

Why might this be? In part, these employees tend to be more productive, putting in more overtime hours, which compensates for the donated work. While the effect on pay was limited (amounting to about 1% of total wages), their results suggested that intrinsic motivation creates extra productivity, leading to higher pay.

Additionally, the researchers suggested that having personal goals closely aligned to that of the company's is correlated with significant gains in productivity, and can be correlated to commitment and loyalty.