Why Money Alone Won’t Motivate Your Team—Lessons from IBM

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There’s a widespread belief in organizations that people are motivated primarily by money.

If you ask around, most employees will mention salary as a key reason for their engagement—or lack of it. I’ve heard countless times, “If only I were paid more, I’d be more enthusiastic, more productive, more committed.” It’s a tempting narrative, especially when we see others earning more and assume that’s the secret to their performance.

But is it really true?

Gallup’s 2023 State of the Global Workplace report found that 77% of employees worldwide are either not engaged or are actively disengaged at work. When asked why, many point to compensation. But my own experience tells a more nuanced story.

Early in my career, I joined IBM as a junior engineer. This was the late 80s, and IBM was a powerhouse—offering salaries well above the local average, with working conditions that were simply unmatched. Air-conditioned assembly lines, generous business trip allowances, a library and book club, travel discounts, and even restaurant-quality meals for everyone from the general manager to the newest operator, just to name a few.

It was, by any standard, a dream workplace.

And yet, even in this environment—where money and perks were abundant—I saw something surprising. Not everyone was motivated. Some employees did the bare minimum, some tried to “cheat the system,” and a few even crossed ethical lines. Despite IBM’s best efforts to create a high-standard environment, a significant portion of the workforce was disengaged.

This was a wake-up call for me. If money and benefits can’t guarantee motivation, what can?

Research backs this up.

A Harvard Business Review article highlights that while fair pay is essential, it’s not a strong long-term motivator. In fact, Herzberg’s classic two-factor theory shows that salary is a “hygiene factor”—it prevents dissatisfaction, but it doesn’t create true engagement or drive.

When IBM eventually sold the facility and resources became scarcer, the “family” feeling vanished almost overnight. Many left, and those who stayed often spoke bitterly about management—even though the leadership team hadn’t significantly changed. The lesson was clear: when the going gets tough, money alone won’t hold a team together.

What does this mean for leaders and managers?

It means we need to look beyond paychecks. Money is a tool—it gets people in the door and keeps them from leaving for purely financial reasons. But it doesn’t inspire creativity, loyalty, or the willingness to go the extra mile. Especially in today’s world, where most organizations can’t compete with the resources IBM once had, we need to find other ways to motivate our teams.

Ask yourself:

Are you relying too much on money as a motivator?

What else are you doing to inspire genuine engagement and loyalty?

Are you creating an environment where people want to give their best, not just because they’re paid to, but because they feel valued, challenged, and connected?

I encourage you to reflect on your own team. What motivates them—really? And what can you do, starting today, to move beyond money and tap into the deeper drivers of engagement?

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