Ladder | Meaningful Work | Millennials

Finding the Next Rung: Attracting & Retaining Talented People in Your Small Business

Center for Values-Driven Leadership Leadership

What do you do when you need a highly motivated and talented person but your company’s size limits the career path you can offer?

Ladder | Meaningful Work | Millennials

Human Resources executives live in the tension of X/Y Theory, making daily assessments to determine if the candidates are a) highly motivated for personal success in the company (Theory Y), or b) only seeking a job and lack personal investment (Theory X). Theory Y employees offer all their talent, engagement, and strengths with the underlying psychological contract, but they come with the expectation that you will be able to move them up quickly in the company’s ladder.  On the other hand, you could hire a Theory X employee, who is happy to have an average performance.

This presents a challenge for many small or medium-size companies, many of which are family run, as there is not always an easy way to be an attractive company for highly talented people. The limited size of the company or the natural, slow pace of growth can offer few “up the ladder” opportunities for motivated leaders. But at the same time, it’s unlikely your company wants to settle for second-best; in order to be sustainable, you need people who are engaged and excelling in their performance. What to do?

Finding the Right Source of Motivation

In the 1990s at IESE, one of the most important business schools in Europe, Dr. Antonio Perez Lopez  started a research initiative related to motivation; he proposed that human beings are not only motivated by extrinsically rewarding elements, but also by intrinsic and transcendent motivational sources.

Extrinsic motivation is directly related to cost-benefit analysis. It is a rational relationship between the employee and employer: a transactional understanding of the value proposal for both the company and the employee.

Intrinsic motivation relates to the connection between personal strengths and the job done. We see this source of motivation in the familiar television show House. The lead character, a doctor, is not motivated by the money he makes, nor by the persons he helps, but by the activity itself.  The pleasure his brain produces at making assertive and precise diagnosis is his main attachment to the hospital where he works.

When we think about engagement with a mainstream perspective, we assume that these two sources of motivation are the recipe for true engagement. That’s the reason why companies invest tons of money to increase benefits (extrinsic) and personal career development plans (intrinsic) for young, high-potential executives.

What Dr. Perez Lopez said is that another kind of motivation exists but is rarely analyzed because of its complexity: transcendent motivation. This type of motivation has its source in the meaning and purpose of what is done. In other words, we are not only motivated by what we obtain through our work, or by how much we enjoy doing it, but also by the purpose for which it is done. Indeed, engagement has to do more with this last element than benefits or personal growth.

Dr. Perez Lopez’s research gives us an anthropological perspective called Personalism that suggests human beings not only hunger for wellness but also hunger for finding a greater purpose in life.

A second researcher, Dr. Raj Sisodia, also has something to teach us. In his book Firms of Endearment (, Sisodia and his co-authors illuminate how world-class companies profit from passion and purpose.  All of them have something in common; they are not only driven by the idea of profit.  All of the companies featured in his book are very successful companies that define themselves as people and purpose-oriented companies.

Indeed, as an HR executive or CEO, you are not limited to X and Y prospects for your job openings. There is a third kind of potential candidate for your company: the individual who is not only interested in his or her career, but also – and we must underline the word “also”-  in finding a congruent and transcendent company that believes in making money while also making the world a better place.

For some people, this single idea could be read as a romantic notion, but think again: When we talk about our job to other people, what is the most important source of our professional pride?  The last financial report? The Corporate Social Responsibility practices? The moral quality of our leaders? I’m quite sure that in any regular conversation, most of the people will choose the second and third options over the first.

In this post-industrial era, where millennials will soon be 50% of our workforce, we have to make quick changes in order to be attractive to the competitive talent pool. Small businesses must find a way to give younger workers the benefits they want, while also giving them the meaning and purpose they truly desire. Human beings are not always totally conscious of what they truly need. Anthropology and ethical leadership research show us that to be attractive, even as small companies, we need to have a congruent and transcendent purpose that needs to be supported by great leaders that really embrace the idea of achieving the greatest possible good.  Without it, we’ll fail to attract top talent to our small and mid-size companies.

Enrique Lopez is President, Founder and Senior Consultant of Humanum, an international consulting, training and development firm focused on creating competitive advantages through a values-driven organizational culture. He is also a student in the Center for Values-Driven Leadership’s doctoral program.

For more from the CVDL on meaningful work and retaining talent please see:



Photo by Yousef Al Nasser on Unsplash

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