Three No-Cost Ways to Improve Employee Morale

Determining which carrots and sticks drive results is easier than you think. [Morning Reckoning] May 23, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Three No-Cost Ways to Improve Employee Morale Asti, Northern Italy May 23, 2024 [Sean Ring] SEAN RING Good morning Reader, I gave you ten steps to build your [Free State of Me]( a few years ago. (Feel free to read or reread that article, as it’s been a while.) One piece of advice is to start an online business, but many people don’t know how to do that. With that in mind, I thought I’d briefly shift our focus to microeconomics. Microeconomics deals with the behavior of individuals and firms in making decisions about allocating scarce resources and the interactions among these individuals and firms. It’s critical to understand many microeconomic concepts to run a successful business, but perhaps none more so than how to keep your employees or freelancers motivated. Daniel Pink authored a book called Drive, published in 2009. It’s not about cars but what drives us to do the things we do. There’s an [excellent YouTube video]( that summarizes his findings. I encourage you to watch it after you read this. In this Morning Reckoning, I’ll relay to you his excellent points. [Supercomputing Firm Partners with the World’s Leader in AI]( NVIDIA – the world’s leader in AI – just release their biggest AI innovation, known as the “X Chip,” and could easily send every single AI stock surging. But that doesn’t mean you should invest in any AI stock… Instead, there’s one tiny AI firm that has partnered with NVIDIA on this X Chip. Rumor has it that Nvidia will name this company during the official rollout of their new microchip… Which James Altucher believes will send this tiny stock on a 100X run, growing 10,000% in 2025. That’s why he advises you to invest in it today, before the official rollout. [Get all the details right here.]( [LEARN MORE]( Just Pay People More! Not so fast! This works. Just not universally. Only in the right jobs with the right people. This is the most shocking finding among economists. For decades, the mantra was, “If you want higher performance, pay people more.” And this works for people doing mechanical jobs. That is, digging ditches or smashing rocks. However, this incentive no longer works once a job requires even basic cognitive skills. (As a former banker, I found this hard to believe. But bankers are a weird lot. Study after study replicates this finding.) Once the work task goes above rudimentary cognitive skills and into something like creativity, the motivation game changes. Innovative employees need something else: things that don’t involve money. Of course, you still have to pay people. But with intelligent employees, Pink says the trick is to pay them enough “to take money off the table.” Pay them enough so they don’t have to worry about cash. Once you’ve paid them well enough not to worry about their bills, what else do these employees need? The Three Things Smart Employees Need Autonomy, mastery, and purpose keep good employees motivated. I’ll explain each in turn. Autonomy According to Pink, autonomy is the ability to direct one’s work. Autonomy allows employees to feel empowered in their positions rather than like their success is out of their hands. Autonomous employees manage their time and decide how to do their work rather than having someone else dictate it. This sense of control gives them the freedom to be productive and engage in their job tasks. Anecdotally, one of the things I love most about my job here at the Reckoning and the Rude is that my publisher, Matt Insley, never tells me what to write about day-to-day. (Though he does give great advice, particularly about my headlines!) Mastery Pink discusses the second element of employee motivation as mastery. Mastery is the desire to get better at what you do. When employees are allowed to improve themselves and hone their skills, it creates a sense of satisfaction that leads to increased motivation and productivity. Why do people play musical instruments on the weekends for free? Because they want to master something (and enjoy their melodious tunes, too, I’m sure). When we focus on mastering a skill or task instead of just completing it, we often reach new levels of engagement and creativity that are essential for any organization’s success. Purpose Finally, Pink proposes that purpose is a crucial factor in motivating employees. When one feels connected with the purpose behind their job tasks and understands how their work contributes towards something larger than themselves, it gives them a sense of meaning. That can help drive them forward even when things seem challenging or boring. It helps them stay focused on long-term goals (rather than getting caught up in short-term frustrations) and keeps them motivated throughout the journey toward achieving those goals. Of course, purpose gets confused with wokeness sometimes. I’ve heard horror stories about developers getting hired at tech firms and immediately concerning themselves with hiring policies rather than writing code. That’s no good. Businesses must profit to stay in business. First, they must create revenue. Then, they must collect that revenue and convert it into cash. If you don’t have profits, you won’t have a business. But you don't have a business if you don’t have cash. So, the purpose and the business must intertwine to work well. Wrap Up Motivating competent employees requires more than just cash. Strange as it may sound, they need autonomy, mastery, and purpose to flourish. And this isn’t some kumbaya stuff. It’s core to a business's success and has been proven repeatedly. Motivation is an inherent part of any organization’s internal success strategy. To maximize your company’s potential, you’ll need motivated employees. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [Congrats, you earned this…]( As one of my readers, you qualify for [this special deal.]( Only a small fraction of our readers will have the chance to see this. Fortunately, you’re one of them. All you have to do is [click here now to see how to claim your special deal.]( [LEARN MORE]( In Case You Missed It… The Most Unexpected Breakout of 2024 Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, The bulls continue their unstoppable run as stocks launch higher once again this week. The major averages are all fresh off new highs – and the US indexes aren’t the only names on the list. In fact, 14 of the world’s 20 largest stock markets have recently logged all-time highs, gushed Bloomberg shortly after the Dow Jones Industrial Average closed above 40,000 for the first time Friday afternoon. Other notables on Bloomberg’s new high list: Europe, Canada, Brazil, India, Japan, and Australia. The bull market party doesn’t end there. Gold just posted fresh all-time highs above $2,400. Silver has broken above $30 and is hitting prices not seen since early 2013. Copper is squeezing above $5 after gaining more than 30% off its early March lows. And Bitcoin is once again pushing back toward its highs after breaking back above $70K late Monday. Everywhere you look, you’ll find risk assets either logging fresh highs or extending their respective bull trends. Well, almost everywhere… There’s one prominent country that’s lagged woefully behind the US and other nations that are watching their respective indexes fly into the stratosphere. In fact, this country’s biggest indexes were threatening to retest their 2009 lows as recently as January. But something has changed over the past four months. Instead of breaking down, these stocks are beginning to catch higher. They’ve even outperformed the resilient US averages in April and May. This could only be the beginning of a much bigger move. Despite this year’s bounce, most investors have little to no exposure to these stocks – a fact that’s quickly changing as the smart money starts to buy into the move, notably Stanley Druckenmiller and David Tepper. Every major bull run has to start somewhere. As prices rise and the narrative begins to shift, we could be looking at the biggest snapback trade of the year… in China. A “Good News” Shortage I don’t talk about Chinese stocks very often. In fact, I couldn’t immediately recall the last time I spent any significant time discussing China at length. So I went through my past columns to try to find out just how often China or Chinese stocks appeared in my notes recently. A quick search of my personal archives found just a few key mentions over the past five years. Most of my attention during the first few post-pandemic years focused on China’s hardline lockdown policies and anti-business tactics that weighed heavily on Hong Kong’s Hang Seng, which by late 2022 had cratered to levels last seen during the Great Financial Crisis of 2009. I also wrote about China’s attempts to squash crypto by banning mining and going after firms that accept crypto payments, and how these actions had failed to produce a sustained selloff (the push to ban crypto seemed to backfire as more wealthy Chinese citizens attempted to protect their assets from the government.) Finally, I found a short passage where I discussed Xi Jinping securing his third term as China’s leader, stacking the government with loyalists – and subsequently sending Chinese stocks skidding lower. That was all I could dig up. As you can see, none of my China research was even remotely positive. That’s not surprising if you pull up a long-term look at the Hang Seng or Shanghai indexes. While US stocks enjoyed a post-pandemic boom, the Hang Seng was chopped in half and trading at 31-year lows, while Shanghai suffered a similar fate. Even the most steadfast optimist would have trouble coming up with a positive spin on this ugly bear market. But a curious thing happened just three short months ago… Chinese shares stopped going down. Now, we’re witnessing the beginning stages of what could be a massive reversal in these ignored stocks… Changing the Narrative China’s market woes go much deeper than its post-pandemic fallout. While shares have rallied in fits and starts over the past two decades, nothing has come close to matching the performance of BRICs mania that began in the early 2000s and peaked with a parabolic move in late 2007. The iShares China Large-Cap ETF (FXI) finally fought back to those highs in 2021, only to get rejected and fall into a nasty three-year bear market that sent shares lower by nearly 60%. This downtrend remained intact until earlier this month, when FXI finally exploded higher, breaking above the Oct.- Nov. swing highs near $26. FXI is now up nearly 14% on the month, nearly doubling the performance of the Nasdaq Composite (+7.25%). And while the stories surrounding China and its economy remain overwhelmingly negative, we’re beginning to see a few glimmers of hope and a few brave fund managers swooping in to buy shares of their favorite Chinese names. Remember, price moves first – not the stories told in the financial media! Most of the stories you’ll dig up on China right now involve the property crisis, snowball derivatives, and a general lack of confidence in its economic prospects. The situation had gotten so bleak that foreign investors reportedly pulled out almost 90% of the money they put into Chinese stocks in 2023, according to the Financial Times. Even as Chinese stocks have started to bounce, the only positive stories you’ll find related to China right now are about how stocks are currently a value play as world markets extend their respective rallies. This will change once some FOMO kicks in. If Chinese shares continue to push higher, we’ll witness a drastic narrative shift as the herd begins to buy into the move. For now, we’re still in the early innings. There’s still time to take a shot at these “cheap” stocks – before the rest of the world catches on. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. 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