Quotes of the Day

If it's lucky, every company has at least a few employees like Burton Jenkins. An executive assistant at a large financial-services firm in New York City, Jenkins, 28, is one of those unflappable, capable people who cheerfully work long hours and expect no more extra reward than the satisfaction of doing good work and having it acknowledged. If only that spirit could be inspired in an entire work force ...

It can be. That's the radical idea behind Why Pride Matters More Than Money, Jon Katzenbach's engaging new book about what motivates employees and what doesn't. A former senior partner and director at McKinsey & Co., Katzenbach runs his own consulting firm in New York City. For this book, he has drawn on hundreds of recent interviews and his 40 years of experience in consulting. What quickly becomes clear is that workers such as Jenkins (most names in the book are fictitious) aren't selfless grinds; they have simply found satisfaction in their work in some personal way. Jenkins thrives on being the office go-to guy for everything from computer glitches to party planning, and he values the chance to earn a good living in a city he loves. Jennifer Bartholomew, 40, who works in marketing at KFC in St. Louis, Mo., gets a thrill from helping restaurant managers penetrate new territory.

Katzenbach strips back the warm fuzzies to get at the telling details. Bartholomew's husband Eddie works for a food distributor that threatens layoffs for those who miss sales quotas, so he has little incentive to do more than meet them. At KFC, however, Jennifer is judged subjectively by her bosses on her commitment to regional restaurant managers. Higher sales often result, but numbers don't define her. Katzenbach writes, "While money may attract and retain people, it is rarely at the heart of what motivates them to excel."

Many companies try nonfinancial incentives, but clumsily. Team-building junkets (even to St. Croix) don't work, nor do positive-attitude lapel buttons. Successful motivation requires careful thinking about how to encourage accomplishments that make a difference to the bottom line and how to tailor incentives to individual employees. After a manager in the Tampa, Fla., office of Aetna, for example, started pizza parties tied to quality measures for rank-and-file workers, backlogs fell sharply. (Katzenbach does note that pay is the best motivator for upper-level executives, whose potential earnings from bonuses and stock options are enormous.)

A company's culture must also work from the ground up, beginning with the frontline worker. The famously unbuttoned style of Southwest Airlines, for instance, goes hand in hand with the company's all-important low-cost structure. In job screening, test scores and educational pedigree are secondary to a candidate's excitement about that company's irreverent ways.

The book would have been richer with more about companies at which the motivation equation is more complex. Katzenbach mentions Enron's bonus-driven culture but does not acknowledge that employees did, for a time, enjoy the pride of working for a well-regarded firm. Might their pride have blinded them to Enron's rotten core? Katzenbach doesn't ask.

These issues are particularly relevant now, in an economy that has lost 2 million jobs in two years. The workers left behind are being asked to do more work, often without extra pay or even acknowledgment. The stress is mounting, but many employers don't seem to realize how important intangibles are to keeping it in check. For a recent study, consultants for Towers Perrin asked 1,100 employees at mid- to large-size companies to rate the relative importance of various factors to their job satisfaction and then asked 300 of their managers to predict the employees' responses. While managers correctly predicted the negative impact of higher work loads, they greatly underestimated the impact of a lack of challenging work and recognition. "They risk people becoming highly disengaged if they don't do anything," says Donald Lowman, a Towers Perrin managing director. When the economy improves, Lowman says, the employees who have mentally checked out will be the first to leave for other jobs.

For businesses already in this downward spiral, Katzenbach's news is good: it is possible to change. Even at generally rigid General Motors, he found managers who use creative methods to motivate employees and improve performance. In other words, the Burton Jenkinses of the world are sometimes made, not born.

• Jyoti Thottam