I used to be the product manager for an employee recognition software, and as part of my job I became greatly familiar with what makes employees happy. Obviously recognition is one great motivator (but it's all in how you recognize), but another key motivator is autonomy. Not everyone needs autonomy, some people WANT their job to be a job... they want it to be mindless, and then go home to their own life at the end of the day. However, a lot of people (especially in the 'knowledge economy') want to feel satisfaction in their job... they want to feel that they are making an impact within their organization, with their employer's customers and with the world at large. Autonomy is a great way to do this. The employee recognition software I worked on was born out of an internal initiative that allowed staff members to reward each other with points and compliments without any management interference. Management could dole out recognition as well, but if I wanted to send recognition to the guy next to me, I could do so without passing it through management. Unless there was blatant abuse within the system (there were automated checks that made abuse obvious), there was no intervention by management and at the end of every month a small reward was given to the top recognized employees and some of the compliments were announced to the rest of the company (with both the senders and recipient's permission). There was a monetary reward, but it was not very substantial and you were not allowed to win it more than once in a year (it was a 120 person company). Our system was successful for the company because it was autonomous and didn't rely on the economic rewards. The video above (with the fantastic artwork by Cognitive Media) does a great job illustrating (couldn't help it!) this point, and broadens it to show that if you can apply that autonomy to practical problems then you're able to get that much more out of your employees and simultaneously make them that much more satisfied with their jobs. And it's cheap!! As an aside, is it any surprise that some of the people behind the disastrous economy are some of the most well-bonused individuals in the free world?