Motivating yourself and the people who work with you can provide interesting challenges. There are a variety of ways that one thinks will motivate a person, but there are some concepts that seem to be against common sense. Motivation for purposes of this discussion is what drives people to go above and beyond the basics of the day-to-day. Motivation is what gets people excited about their work and strive to do things better.
When you think of how you might try to motivate someone, you probably think first about higher pay, a nice office, or extra time off. If you ask someone what they want from their job or a new career direction, these things are often mentioned as being part of what they want or hope to gain. The problem with these though is that they are not long-term motivating factors.
A study by Frederick Herzberg released in 1959 interviewed hundreds of accountants and engineers to find out when they felt exceptionally good about their jobs and when they felt exceptionally bad about their jobs. From the research, Herzberg put forth the Motivation-Hygiene theory of job satisfaction. Motivation and Hygiene are the two sides of motivating people to do their jobs well and to be happy.
Hygiene factors are things that do not motivate people by their presence but usually significantly decrease their motivation when lacking. These factors include pay, job security, supervision quality, and work space. A person who is paid well is not going to be motivated to perform at a high level for an extended period. An initial improvement in performance might occur, but the new pay level quickly becomes the new standard and no longer provides motivation. However, if a person believes they are underpaid, their level of motivation will definitely decrease. In this way a Hygiene factor that is lacking will cause a decrease in motivation.
The factors that actually increase motivation are appropriately called Motivation factors. The things that can increase an employee's motivation include a sense of achievement, recognition from supervisors and peers, opportunities for advancement, and possibilities for personal growth. Imagine you just completed a 6-month long project that is going to save your organization a lot of time and money, and the CEO, director, or whoever is in charge thanks you publicly or privately (this can depend on whether you are High I or High S) for the work you did and really appreciates the impact it will have. That would be a great moment, wouldn't it? What if you never were recognized for the effort you put forth or were always told that someone else had been given a promotion you were striving to gain? That would definitely impact your desire to put worth a better than "adequate" effort.
So as a manager and leader, what do you need to remember to motivate your people? First, you need to make sure all the basics are taken care of: good compensation, good work spaces, flexible company policies, and being connected with your people. If you fail at fulfilling these needs, you are going to decrease your group's motivation. Second, to increase their motivation, you want to make sure people are recognized for their work, to make sure they have opportunities to grow their skills and to grow their knowledge and experience while you make sure that you are providing stimulating work.
To read more about Herzberg's Motivation-Hygiene theory, you can start at Wikipedia or NetMBA.