What motivates us? For decades, businesses have operated under the assumption that they can motivate workers to work harder, be more productive, and produce better results by using carrots and sticks. This monetary system of rewards is pervasive among American corporate culture, and drives the long hours of professionals from consultants, to lawyers, to senior business executives.

In a recent interview on NPR’s Talk of the Nation, Daniel Pink talks about his groundbreaking new book Drive: The Surprising Truth About What Motivates Us, where he de-bunks the myth that fiscal rewards result in motivation and hard work. Analyzing 40 years of research into human motivation, he says that especially for work that is not routine, and that requires creative and conceptual abilities, fiscal rewards are not effective ways to inspire better work or results.

Once people meet their primary biological needs, they are driven to do things that interest them, according to Pink. He calls this the drive for autonomy and for self-direction, and points to research from scholars at the University of Rochester that supports this finding. And, he says that companies that provide their employees with large amounts of autonomy are creating more satisfied, more engaged, more productive, and more innovative work forces.

From the report:

And so I think that what we need in our businesses today is a kind of an updated operating system that goes beyond carrots and sticks and recognizes that human beings are not simply horses, and that if you treat people like people, the science shows that people will respond. They work at a very high level and both individuals, organizations – and the economy, I think – can be better off.

People aren’t only driven by the desire for autonomy, Pink says, but also by the desire for mastery and for purpose. Current management practices are effective tools to get compliance, he notes, but:

It’s not a very good technology for getting engagement. And what you want, especially for highly skilled workers – but even for workers who just want to enjoy their job and might not have the exact, same skills – you want to have engagement. And one of the things that’s so troubling about the workforce today are the declining numbers of engagement on the job.

Engagement comes from workers feeling that they are doing something that matters, that they are contributing to a larger purpose, and that they are getting better at what they are doing.

Pink’s theory up-ends years of orthodox understanding of workplace psychology and behavior. While he argues that monetary rewards don’t drive performance, he isn’t saying that money is not important. Companies need to pay their workers enough so they can live, he says, but they need to “pay people enough so that money isn’t an issue, and they can focus on doing great work.”

This focus on giving workers autonomy and boosting their engagement is in-line with much of the work that Corporate Voices for Working Families does. Corporate Voices has undertaken studies showing that flexible workplace policies have concrete business benefits for both professional staff and hourly workers.

As the U.S. economy increasingly outsources manufacturing and service jobs and our economy becomes more dependent upon industries that require innovation and creativity to progress, managers would do well to re-evaluate how flexible workplace polices can increase productivity and engagement in their workforce.