The IdeaMany managers misjudge whether external reward or internal satisfaction motivates their employees more.
Sheena Iyengar and Sanford DeVoe studied how managers in different parts of the world judge what motivates their employees and how that judgment affects performance appraisal. The study covered 185 Citigroup branch managers and 1,760 branch employees in six countries: Argentina, Brazil, Mexico, Philippines, Taiwan and the United States.
The employees in all countries ranked themselves higher on internal than external motivation. The managers varied by region: U.S. managers misjudged their employees by ranking them too high on external motivation; the Asians judged their employees somewhat accurately on this score; and the Latin Americans were most accurate of all. In the United States and Latin America, performance appraisals were generally aligned with managers’ perceptions of employees’ internal not external motivation. In Asia, performance appraisals corresponded to how managers judged both internal and external motivation. In all three regions, the employees’ view of their internal and external motivations did not match up with their performance appraisals.
This study’s results point to a clear paradox in the United States: managers thought their employees work for external rewards but appraised them based on the employees’ internal motivation. In Latin America, managers showed the greatest consistency between what they thought of employees’ motivation and how they appraised employees. The consistency of Asian managers was somewhere between these extremes.
This research cuts to the heart of a key question of managerial leadership: How do I motivate my employees? As it turns out, around the world internal motivation is more important than external motivation. And most managers do in fact appraise their employees on that basis, even when they think that external rewards motivate employees more. But the performance appraisal system itself might favor external rewards. To resolve this potential conflict, managers might conduct a survey to find out what their employees think about internal versus external motivation. That will help managers make the performance appraisal system more transparent and might give them ideas on how to motivate employees consistently between performance appraisals too.
Designers of reward and performance appraisal systems
This research method offers designers of reward and performance appraisal systems a way to assess whether they have the right balance of intrinsic and external motivations for the culture where their employees and managers come from and work.
Professor Iyengar has taught courses in leadership and entrepreneurial creativity. Her research addresses the implications of offering people, whether they be employees or consumers, choices. She has examined choice in a multitude of contexts ranging from employee motivation and performance in a global organization, Citigroup, to chocolate displays at Godiva, to the magazine aisles of supermarkets, and to mutual fund options in retirement benefit...
Read the Research
Sanford DeVoe, Sheena Iyengar
"Managers' Theories of Subordinates: A Cross-Cultural Examination of Manager Perceptions of Motivation and Appraisal of Performance"