Inside Business: It takes more than money to motivate a workforce

Tuesday's Budget is expected to include more details of how the Chancellor, Gordon Brown, intends to bring about a huge increase in the number of people owning shares in the companies for which they work.

The Government believes this factor could play an important role in engineering the much talked-about improvements in competitiveness. There is, after all, evidence for the notion that those organisations in which significant numbers of employees have a "stake in the action" perform better.

However, it needs to be acknowledged that it is not only owning shares that puts employees in this position. Sharing in bonuses, particularly where individuals can see the effect of the performance of themselves or their team, can have the same effect. But there does not even have to be money involved. Time after time, surveys show that employees are motivated by more than money. Sure they want a living wage, and they would like to see their pay rise. But they are also interested in many softer things, such as involvement in decision- making and being trained and developed, both personally and for the benefit of the organisation.

For the record, the "Satisfaction at Work" survey published on 3 March found that 94 per cent of workers in organisations which have achieved the Investors in People (IIP) standard said they liked their job, against only 37 per cent of those in other organisations.

When you dig deeper, the importance of "soft" issues over monetary matters becomes apparent. Yes, 67 per cent of employees in IIP companies rated rewards and pay well. But then so did 45 per cent of those in firms without the standard.

By contrast, 57 per cent of those in IIP companies felt real involvement with their business, compared with 3 per cent in companies without the standard. In addition, 39 per cent of those in IIP organisations agree with their businesses' ambition or focus, while the figure was only 1 per cent for those in organisations without the standard.

This is not rocket science. As Ruth Spellman, chief executive of IIP, said: "If you look after staff, motivating and developing them, then they will look after your business."

It is a point often made by companies that feature in the upper reaches of this newspaper's annual survey of fastest-growing private concerns. But it often eludes bigger and better-established companies. Such organisations are starting to catch on, though.

For instance, British Aerospace has responded to IIP's challenge by, for instance, giving employees much greater access to learning. Terry Morgan, the company's human resources director who attended the presentation of the survey findings, said he had become more interested in discovering individual employees' needs. "We know we've made improvements, but we know there's a lot still to do," he said.

Such doubts are indicative of an organisation that is taking such matters seriously. Contrast this with the findings of researchers from the Roffey Park Management Institute in West Sussex. Caroline Glynn, author of the institute's report, "Enabling Balance: the Importance of Organisational Culture", published last month, said that organisations believed they had dealt with the balance problem by introducing "family-friendly" policies, such as part-time work, flexi-time and job shares. But they had created a "Catch 22" in which employees might want to take up such policies but feared that doing so would jeopardise their careers. Once again, it is the soft issues winning out. This group of more than 400 managers was putting emphasis on creating a work/life balance as well as job advancement.

Traditional executives might regard this as trying to have your cake and eat it. But more managers and employees are trying to say that they do not regard long hours as the only expression of commitment. People might be more motivated to work hard for a firm that allows them free time or flexibility.

The evidence is irrefutable: people work for more than money and Mr Brown and his colleagues would do well to consider this in their economic equations this week.