A complaint I often hear from CEOs is that they feel as if their CTOs are confused and view themselves as some sort of engineers’ union leaders. That’s because tech leaders can get tunnel vision and overly emphasize a single way to compensate their people. With the best intentions, we find the easiest lever to pull and obsess over it. There are other ways to lead a healthy team.

Understanding Motivation

First, we need to stress the fact that you cannot manufacture motivation. At least not the real thing. A lot of organizations have things go awry when they think they ought to. When you throw more money (and equivalent, like stocks and options) at unsatisfied employees, you usually just delay the issue and don’t solve it.

The best teams are those where people are intrinsically motivated, and it’s the leaders’ responsibility not to mess it up. The actualization levers (I use the word “actualization” because we’re talking about the higher levels of Maslow’s hierarchy of needs here) available to you can be used to increase, enforce, and sustain what’s already there. And when you accept that, and see that there are different ways of getting there as opposed to just smashing the “raise” button once or twice a year, you just might create an organization that will keep improving with time.

With that said, let’s go over the different levers you should consider.

Compensation

Getting the obvious part out of the way. While more money won’t make an unhappy employee happy (at least not long term), there’s no denying that it does play a crucial role in many settings. You have to ensure that your company offers adequate compensation for it not to become an obstacle, but don’t get past the point of diminishing returns.

It’s worth having in place agreed-upon schedules for raises and bonuses, as well as pay bands. Doing that work once clears up a lot of cognitive load and makes planning and budgeting much easier.

Mastery & Healthy Challenges

One of the most important aspects for anyone who cares about the craft of their work is getting the ability to keep improving. When we learn new skills, master new scenarios, and hone our capabilities, we can sense that we are moving forward. Contrast that with people who feel like their careers are Groundhog Day, where they repeat the same sort of work endlessly.

There’s a reason this is one of the main things I suggest in the impact coaching framework (a free copy of the PDF should be available at the bottom of this article). I’ve seen it repeatedly help create robust teams where people felt the attention and effort spent on their personal growth, enjoyed the challenges (though a cliché, it’s still correct that if you’re cruising along, it usually means you’re going downhill), and realized the positive effects this mastery will inevitably have on their careers.

Responsibility

The other side of the mastery coin is providing people with ever-increasing responsibility. For most people, advancing to a senior role typically involves assuming greater responsibility for projects and goals. It also has the added benefit of freeing you and other leaders in the company to focus on other things. Delegation, done correctly, is a genuine win-win.

Do not confuse this with moving people from an IC path to a managerial role. It is entirely possible to take on more responsibility as an IC, and I believe that in most companies, it is not done enough.

Impact

I’ve written so much about the importance of providing your people with feedback loops that show them the fruit of their efforts. Discuss the business goals achieved, share feedback from customers, or show them the graphs indicating the improvements.

You can read more about how to do this here, but the bottom line is that when we can sense that our work actually accomplishes something and changes the world for the better, it sure helps.

Gratitude

Lastly, one of the simplest forms of supplying people with actualization is showing them that you appreciate their work and demonstrating gratitude for what they achieve. Sometimes this should translate into a promotion or a different title, but most times it’s more about making people feel seen and appreciated.

I’ve recently heard of a startup that had to go through a belt-tightening operation. The entire team cooperated, and many of those affected by the change that “downgraded” them did not complain. But when the company’s senior leadership seemed to take that behavior for granted, without expressing any gratitude, many in the team naturally started moving their attention to external factors, like becoming bitter about their compensation. Showing appreciation doesn’t cost you anything and can sometimes be the most important thing for your best employees. Why aren’t you using this lever?

Taking all of these different aspects into account, I’m sure you’ll be able to find ways to make your team more effective without always resorting to perks and compensation. Good luck.