For most of the 20th century, the quintessential American job was in a factory. Workers earned good incomes and middle-class lifestyles by doing repetitive, high-volume tasks. The way to motivate workers at these jobs was simple: "carrots and sticks." Pay people more money for doing more work, and punish people for breaking the rules.

Today, in the 21st century, the best organizations must act less like factories and more like think-tanks. The winners of the 21st century workplace will not be the ones who make the most widgets, but who can create and incubate the most creative and game-changing ideas.

But what many social scientists are discovering is that the motivational styles of the 20th century "factory" workplace do not work as well when motivating people to perform creative tasks. If the successful model for a 20th century organization was a factory, the successful 21st century organization will look more like a social movement.

This means that 21st century organizations need to embrace a new style of motivational leadership. Carrots and sticks must be replaced with deeper, more personal, more powerful motives for success.

Current research (outlined in Dan Pink's bestselling book Drive) is showing that when it comes to creative, innovative work, money is not what really motivates people. When organizations are really looking to achieve breakthrough innovations, they need to motivate their workers in other ways: by recognizing people's innate desire to be a valued team member who contributes to significant solutions.

Money only covers the basics like shelter and food. To encourage truly creative thinking, the work and related result must become its own reward.

What really motivates people?

To see great gains, organizations need to make a cultural shift away from short-term gains and contingent incentives. Instead of saying, "if you do this, then you will get that," organizations need to move toward a culture where people are self-motivated to do their best work. This is the best way to get employees to take responsibility, take (smart) risks, and develop truly creative solutions.

In July 2009, Dan Pink gave a talk to the TED conference about the surprising science of motivation. Social scientists and economists are discovering that when it comes to creative thinking, people are most strongly motivated by intrinsic factors ("doing things for their own sake") not from extrinsic motivators ("carrots and sticks"). To get the most creative solutions for your most complex challenges, you need to create a culture where people have Autonomy, Mastery and Purpose.

What do we mean by these terms? And does it really work?

In his lecture, Dan Pink discusses how experiments have shown that financial incentives only work for routine tasks. When there is a clear set of rules and a single solution, people can get the work done faster when they are promised more money.

The trouble is: most of the biggest challenges that our organizations are facing in the 21st century are anything but routine. Automation and outsourcing can replace any lower-level or repetitive task. For more complex cognitive thinking and creative work, financial incentives do not work. In fact, these financial incentives actually distract from truly creative solutions.

As Dan Pink says, "enticing people with a sweeter carrot or threatening them with a sharper stick" does not work in the business of thinking creatively.

In contrast to "sticks and carrots", Dan Pink introduces the concepts of Autonomy, Mastery and Purpose.

• Autonomy: People feel an urge to direct their own lives.
• Mastery: People feel a drive to get better at something that matters.
• Purpose: People feel an innate need to be part of something larger than themselves.

If your organization can help your employees achieve feelings of Autonomy, Mastery and Purpose, you will likely "AMP" up your performance. Employees who have Autonomy, Mastery and Purpose are intrinsically motivated, full of internal drive. They're doing work for its own sake. They're doing work that matters, that interests them and that they feel is important. This is a huge difference in attitude from just punching a clock at the "factory."

Don't forget Maslow.

To be sure, money matters to some extent. People want to earn enough money to have food and shelter and a safe place to live. But once those basic needs are met (as Maslow's Hierarchy of Needs states), people aspire to meet higher needs – love and belonging, esteem, and self-actualization.

Once people have a decent standard of living, additional money doesn't really motivate them as much as Autonomy, Mastery and Purpose.

Organizational leaders are re-thinking some long-held assumptions about what truly motivates people. External motivators like money are less important (and less effective) than helping your employees light their own spark of motivation within themselves.

• On Employee Performance Reviews (July 8, 2012)
• The Ultimate Measure (May 30, 2012)
• What Inspires Motivation in Educators ... a Daniel H. Pink Perspective (March 12, 2012)
• Inspiring work with nonprofits (March 12, 2012)
• Balancing Acts & Success within your Family (August 27, 2010)