Freedom Beats Carrots To Motivate Staff

Australian-based Atlassian Pty Ltd. is a software company with a unique perk for its engineers: Once a quarter, they are given the day off to tinker with whatever pet project they want.

The only stipulation is that the engineers must present the results of their day in the lab to the rest of the company the next morning. Atlassian co-founder Mike Cannon-Brookes calls these "FedEx days" as a nod to the shipping company's promise to deliver overnight.

Working for a small business can be fun. Employees generally get more freedom, without layers of management second-guessing them. Many people say they'd even take less pay to work for a freewheeling boss who gives them space to breathe.

But as your company becomes larger, more professionally managed and with more rules, how do you retain your best workers, who joined your business because it was small and informal?

I posed that question to Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us.

"Most companies use a series of carrots and sticks as motivators, and the research is definitive: They don't work in the long run," Mr. Pink says. "It's easy to give someone a bonus for achieving a simple task. It's a lot more difficult – yet ultimately more effective – to figure out what motivates each of your employees as individuals."

Mr. Pink's research indicates that getting superior performance from employees is tied not to relying exclusively on bonuses and threats but, rather, by unleashing employees' intrinsic motivations by offering them three things at work:

1. Autonomy:

Employees need to have some elbow room.

2. Mastery:

Employees need to feel as if they're becoming experts in their field.

3. Purpose:

Employees need to feel connected to how their role fits into the big picture.

So the challenge is how to become a more scalable, predictable company while giving your employees more freedom. That's a tricky tightrope to walk, but Mr. Pink argues that getting it right will help you stand out. "If it were easy, everyone would be doing it."

Special to The Globe and Mail

John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He writes a blog about building a valuable – sellable – company.