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Principles in Brief


Motivation (from the Latin word meaning “to move”) is what prompts us to act. It is not a feeling, emotion or what makes a person happy. A person’s motivation comes from a combination of what is within them (intrinsic) and their environment (extrinsic). Thus, to have an organization of contribution-motivated people, we address both factors.

We start by selecting contribution-motivated employees who define success as making a positive difference for others and have a strong desire to do so (intrinsic). We then strive to select supervisors who will create an environment (extrinsic) that motivates employees to maximize their contributions to Koch’s long-term success. (See Alignment of Incentives.) We reward results rather than activity; otherwise, we unintentionally motivate employees to do work that is wasteful.

We also recognize that for individuals to act, they not only need to be dissatisfied with the status quo, they need to have a vision of a better state and a belief it can be achieved. (See Requirements for Human Action.) Just as profit and loss can help satisfy these three conditions for entrepreneurs, roles, feedback and rewards can help satisfy these conditions for employees.

Rather than using rigid, formulaic pay structures that fail to consider what an individual has contributed (whether positive or negative), we attempt to reward employees according to the long-term value they create. This includes contributions to culture, current results and building capabilities that we believe will generate results. When employees understand how they earned and can increase their compensation, they become more fully motivated to increase their contributions.

Effective supervisors are motivated to help their employees self-actualize, rather than control and stifle them. They prioritize building trusted relationships and learning how to motivate each employee based on what is important to them, given their subjective value – such as pay, doing meaningful work they are good at and care about, having some control over their activities, and the opportunity to be creative and develop. (See Life of Meaning and Synergy.)