Rethinking Motivation: Beyond Paychecks Toward Purpose
Andras Rusznyak
4/11/20256 min read
Ha magyarul szeretnéd olvasni a cikket, kattints ide
Why Motivation Matters More Than Ever
Ask any HR leader what keeps them up at night, and chances are “employee engagement” and “retention” are high on the list. As talent markets tighten, especially in knowledge-based industries and tech-enabled service sectors, the battle for motivated, productive employees intensifies. Yet motivation is a complex beast—it’s dynamic, highly individual, and influenced by personal, cultural, and generational factors.
Organizations often default to compensation-related motivators: raises, bonuses, benefits. And while those are essential (and sometimes expected), they’re only part of the story. Employees don’t just want to be paid well—they want to be seen, heard, and given space to grow.
Let’s break down the tools HR and managers have at their disposal, compare traditional motivators with emerging ones, and explore how these can be applied at the right levels and for the right people. We'll also look at constraints specific to Hungary, although some can be generaliyed to the EU level and beyond.
IMPORTANT NOTE:
We utilized generative AI in the making of this article.
The Traditional Motivators: Still Important, but Not Enough
Still the foundation of any motivation strategy. If employees feel underpaid compared to peers or the market, dissatisfaction grows fast. For many, fair pay is the ticket to stay in the game, not a motivator to go the extra mile.
Organizational responsibility: HR and leadership must ensure fair and competitive salary structures across roles, regions, and demographics.
Best for: All employees, particularly those in lower-wage roles or at early career stages.
Hungarian constraints: Base salary must comply with the Labour Code’s mandatory minimum wage and guaranteed wage levels, while also remaining market-competitive. Employers can differentiate pay through collective bargaining agreements or internal policies — but only in alignment with the equal treatment principle. Employees in identical roles and responsibilities must not receive arbitrary pay discrepancies and the reasoning for anz differeneces cannot be based on personal factors, such as gender, age, mother tongue, financial situation...etc.
1. Base Salary
2. Bonuses and Incentives
Performance-based bonuses, commissions, and annual payouts can drive behavior, especially in sales or operational settings. But they must be transparent and achievable—or they can backfire.
Organizational responsibility: Bonus schemes should be designed centrally but interpreted locally.
Managerial role: Managers must communicate clearly about targets and link performance to outcomes.
Best for: Competitive personalities, extrinsically motivated employees, and those in measurable performance roles.
Hungarian constraints: Bonus schemes can be discretionary, but unless governed by formal agreements, they do not grant entitlement rights. Performance-linked bonuses must be clearly outlined in writing, and both bonuses and rewards must respect fair parity and equal treatment across employees.
3. Fringe Benefits
Company cars, health insurance, gym memberships—these are perks that can sweeten the deal. But they rarely drive long-term engagement unless aligned with employee needs.
Organizational responsibility: Design packages that reflect employee demographics (e.g., family support, mental health, wellness).
Best for: Mid-career professionals, parents, or employees with specific lifestyle needs.
Hungarian constraints: Benefit schemes must align with Hungarian tax law and the Labour Code. Cafeteria benefits can be adjusted by role, but proportionality is required—for example, part-time workers must receive pro-rated benefits. Formal benefit policies must be documented to ensure transparency and legal compliance.
The New Motivators: Culture, Purpose, and Personalization
4. Career Growth and Learning
Opportunities to grow—through promotion, mentoring, or learning—are powerful intrinsic motivators. Employees want to feel that their work leads somewhere.
Organizational responsibility: Establish clear career paths, training budgets, and internal mobility.
Managerial role: Coach employees, recommend development paths, provide stretch opportunities.
Best for: High-potential talent, younger generations (especially Millennials and Gen Z), and self-directed learners.
Hungarian constraints: Training provided during working hours counts as regular working time; employers must allocate time and budget for it. Conditions should be defined in employment contracts or internal policies that respect working-time rules and data protection obligations.
5. Recognition and Appreciation
Being seen and acknowledged—formally or informally—can have a significant impact on morale. Recognition doesn’t have to be monetary; a public thank-you, a shout-out in a meeting, or a handwritten note can go a long way.
Managerial responsibility: This is where frontline managers shine. They’re in the best position to recognize effort in real time.
Best for: Most people. Especially effective for relational employees and those who thrive on feedback.
Hungarian constraints: Non-monetary recognition is not taxable, but awards with material value must stay under tax-free thresholds. Recognition must not discriminate or violate data-protection standards, and transparent guidelines or manager training is recommended.
6. Workplace Atmosphere and Team Dynamics
A positive environment, supportive peers, and healthy communication contribute strongly to long-term motivation. Toxic culture, in contrast, is one of the top reasons people leave.
Organizational responsibility: Create policies that support inclusion, feedback, and psychological safety.
Managerial role: Foster trust, manage conflicts, model respectful behavior.
Best for: Employees who value belonging and teamwork; often more important to women and Gen Z.
Hungarian constraints: A respectful, inclusive environment must comply with the Labour Code’s stipulation for good faith and non-discrimination in conflict management. Employers and leaders must uphold equal treatment and lawful practices when addressing workplace conflict.
7. Autonomy and Trust
Giving employees control over how they do their work is deeply motivating, especially for knowledge workers. Micromanagement is a fast path to disengagement.
Managerial responsibility: Provide goals and guardrails, not constant oversight.
Best for: Experienced professionals, introverts, and those with strong internal drive.
Hungarian constraints: Job autonomy must still respect contractual duties, defined working hours, and overtime regulations. Managers should ensure autonomy does not lead to excessive hours without compensation or breach labour law limits on working time.
8. Purpose and Meaning
A sense of connection to a bigger mission fuels engagement—especially in mission-driven industries or roles with social impact. But even in commercial contexts, tying daily tasks to a broader purpose helps.
Organizational responsibility: Clearly articulate mission and values; link them to strategy.
Managerial role: Help employees see how their work contributes to the big picture.
Best for: Values-driven individuals, younger generations, and mid-career staff seeking impact.
Hungarian constraints: Communicating company mission and values must balance transparency with data protection. Information shared must conform to lawful HR communication practices and avoid using protected personal data or manipulative methods.
Matching Motivators to the Person
People aren’t spreadsheets. What lights up one employee may do nothing for another. That’s why personalization is key in motivation—especially in diverse or international teams.
Consider the following variables:
Factor
Impact on Motivation
Gen Z seeks meaning and feedback; Millennials seek growth; Gen X values autonomy.
Studies show women often place higher value on teamwork, fairness, and atmosphere.
Managers tend to prioritize career growth and team cohesion; frontline workers value pay and security.
Competitive types respond to bonuses; relational types prefer recognition; introverts may crave autonomy.
New parents may seek stability and benefits; young professionals crave learning and challenge.
One-size-fits-all motivation doesn’t work. This is why tools like engagement surveys, stay interviews, and increasingly AI-based motivation profiling are gaining traction—they help employers understand the unique drivers of their workforce.
Tailoring motivational factors individually is legally feasible only within written frameworks—such as collective bargaining agreements or employer policies—that apply objective criteria (e.g., performance, competencies, role, tenure), while strictly observing the equal treatment principle under Hungarian and EU law. Differentiation must be justified by job-related reasons and not violate anti-discrimination laws. It also requires transparency, documentation, and safeguards against bias or unequal treatment.
Organizational vs. Managerial Responsibility
It’s helpful to divide motivation strategies into two tiers:
Organizational-Level Tools:
Compensation systems
Career frameworks
Benefits packages
Learning & development platforms
Company values and mission
Workplace policies (e.g., flexibility, diversity)
Managerial-Level Tools:
Recognition and feedback
Daily communication and tone
Delegation and autonomy
Conflict resolution
Career conversations
Team rituals and bonding
Successful companies ensure that top-down structures support bottom-up implementation. For example, HR may launch a new recognition platform, but if line managers don’t use it, the initiative falls flat.
The Takeaway for HR Leaders
Motivation is multi-dimensional, context-sensitive, and personal. Financial incentives form the base of the pyramid, but they’re not enough to inspire excellence or loyalty. To create truly motivated workforces, HR and managers must partner on a dual front: provide the right conditions at the system level, and coach, support, and appreciate individuals day to day.
Motivation isn’t about gimmicks. It’s about meeting people where they are—understanding what matters to them, in their role, at their stage of life, in their cultural context. When we get that right, motivation becomes sustainable—and so does business performance.
Age/Generation
Life Stage
Gender
Job Level
Personality
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