Motivation is still declining – Are companies unintentionally undermining it?

Every six months, Culture Amp analyzes new data from our global customer base to refresh our benchmarks. Drawing from a growing data lake of over 1.4 billion data points across 62 million surveys from 8,200 companies, we examine workplace trends over time. By tracking shifts in factors associated with employee engagement and experience, we identify emerging patterns that shape the world of work as we know it today.

Across recent benchmark releases, we’ve noted drops in employee engagement and increasingly negative sentiment in survey comments. As we explored our latest data, we saw a continued decline in employee motivation. We looked closer to uncover insights about what this means, how motivation relates to recognition, and how companies can change this downward trajectory. In this article, we’ll share what we learned.

Employee motivation declines for the third consecutive year

At Culture Amp, we define engagement as a combination of enthusiasm for the company, motivation to exceed expectations, and commitment to stay. While advocacy and commitment to stay have stabilized in the last year, motivation to go above and beyond has continued to decline.

The question is: Why? Some people might be tempted to repeat the unproven claim that “people just don’t want to work anymore,” but our data suggests otherwise.

It isn’t that workers feel more entitled, nor is it that our society has lost the value of hard work. In fact, the strong majority (92%) of employees believe what they’re doing at work matters – a signal of their intrinsic motivation to go above and beyond.

Another known component of motivation is the feeling of progress. Teresa M. Amabile and Steven J. Kramer, authors of The Progress Principle, found that when employees see evidence of progress, they feel more motivated to continue. Regular, constructive feedback – especially when it connects individual contributions to business goals – helps employees recognize their own momentum and see their own progress.

Perhaps employees feel less motivated because they aren’t getting useful feedback about how they’re performing? Considering this possibility, we looked into employee perceptions of feedback.

Employees are increasingly satisfied with feedback frequency, but they may not be getting the kind of feedback they want most

When we looked at employee responses to questions about feedback, specifically related to their performance, we found that nearly four of every five employees are getting useful feedback from their manager about their performance. The trend has been steady. However, that leaves about one in five employees who haven’t been getting useful feedback year-over-year since 2021.

When this is taken together with positive responses to the statement, “I am satisfied with the frequency of performance feedback I receive” – which has gone up by 10% points in the same timeframe – it looks a little concerning. Employees are increasingly satisfied with the amount of performance feedback they receive, but they don’t seem to find it more useful.

Some of this could be explained by the fact that feedback is fickle. High volume doesn’t equate to high quality. And, as we’ve discussed before, giving high-quality feedback can be challenging for managers and leaders alike.

We define effective feedback as that which:

• Includes at least one specific example for context [Situation]
• Cites behaviors and/or skills of the recipient [Behavior]
• Explicitly references the impact (positive, negative, or both) of the recipient’s contributions [Impact]

We also know effective feedback improves employee performance. So when managers go the extra mile to make their feedback effective, employees benefit.

That said, this new benchmark research adds another layer of complexity to the role of motivation.

Employees are struggling to bridge the execution-to-growth gap

Our data shows a gap between employees knowing what they need to be successful in their role (execution) and knowing how to be a high performer (let’s call it “shining”) – coming in at 87% and 76% agreement, respectively.

From an employee’s perspective, the most useful feedback might be tactical. Said another way, if a manager provides feedback that helps them execute the tasks of their role better, they’d probably call it useful. However, executing the tasks of one’s role doesn’t typically result in a high performance rating. For that, they may need tactical feedback.

From 2020 to 2023, a growing number of employees reported knowing how to be a high performer. The knowledge gap was getting smaller. However, in just the last year, we saw a 4% decrease. The gap is now at 11%, even bigger than it was in 2020.

If effective feedback that bolsters employees’ sense of progress helps to sustain motivation, it stands to reason that motivation would decline when employees' tactical and executional progress doesn’t align with their performance rating.

Employees aren’t convinced their performance reviews accurately reflect their impact in 2024

In 2022, 77% of employees agreed that their performance review accurately reflected the impact of their work. By the end of 2024, that percentage dropped to just 70%. While this question was used by a subset of companies around the world, it offers a clue as to what could be going on.

We’re taking this as a signal that employees feel less seen in the performance review process. Managers' feedback, though useful, may not provide clarity about how to shine bright enough for a high performance rating.

The decline here could also reflect our increasingly complex work environment, where traditional performance review processes fail to take that complexity into account. At Culture Amp, we’re proud to offer a performance management tool that is dynamic enough to meet the world of work and all its complexities.

That said, receiving a high performance rating is just one aspect of what influences employees’ feelings of being seen and valued at work.

Recognition is fading – and employees notice

Our latest data shows that recognition is dropping, too. Fewer than seven out of ten employees agree that they receive appropriate recognition for good work at their company (69%). Confidence in how recognition is handled is at a five-year low, with only 60% agreeing that the right people are recognized and rewarded.

Our question, of course, was why? And could this help explain the drop in motivation to go above and beyond? What’s happening here? And why now?

Are companies tightening recognition to manage costs?

Economic uncertainty drives companies to make tough choices. We’ve all heard it: budgets are tight, promotions are scarce, and merit increases are constrained. But beyond financial constraints, organizations may unintentionally be signaling that extra effort isn’t valued.

Historically, hard work led to tangible rewards. But in today’s economic climate, employees are asking: What does working harder actually get me?

Trends like “Act Your Wage” reflect a growing sentiment that extra effort won’t lead to better pay or advancement. If companies hesitate to recognize exceptional work, employees may hesitate to put in extra effort. What’s worse, with career growth being the top reason people exit organizations, the threat of attrition looms in workplaces where recognition is restricted and growth opportunities appear scarce.

There is a silver lining, though.

Employees appreciate skill development, even when opportunities for advancement are scarce

The top drivers of employee motivation have to do with leadership and development.

The top three global drivers of motivation are:

1. [Company] is a great company for me to make a contribution to my development
2. The leaders at [Company] have communicated a vision that motivates me
3. I have confidence in the leaders at [Company]

Given that career development was a top driver, we dug into employee comments on the topic to deepen our analysis. We looked at 22,594 comments from 2806 companies globally.

It turns out that employees who agreed with the statement, “[Company] is a great company for me to make a contribution to my development,” did so with a fairly open mind about what a valuable contribution could be. Across the thousands of comments we looked at, a theme of skill development emerged. Even employees who noted a scarcity of opportunities for advancement within the company mentioned gratitude for what they’ve been learning on the job. They talked about challenges at work in a positive light, saying that the difficult aspects of work have helped them to grow.

Their comments suggest that employees, aware of the macroeconomic environment and resource limitations, are taking development into their own hands. Across all employees, regardless of whether they agree or disagree with the statement above, we saw self-determination. Employees say that development, learning, and growth can be achieved anywhere.

So, in this macroeconomic moment where resources are limited, employees still want to make an effort – and they still want to grow. The crucial intrinsic motivation is there. As for sourcing extrinsic motivation, that is where companies can do more. And given how open employees are about what could be considered development, there are several low-cost avenues companies can try.

A way forward: Closing the gap between effort and impact

Companies can turn the tide on employee motivation by restoring and reinvigorating recognition and performance. Employees need to know their efforts matter and are seen – and that they’ll be rewarded, whether through career growth and development, meaningful evaluation, or fair compensation.

Here’s how organizations can move forward:

• Boost peer recognition. Open opportunities and formal pathways for employees to celebrate and commend the efforts of their peers.
• Clarify pathways to high performance. Be transparent with employees on what differentiates strong role-based execution from standout impact.
• Improve feedback quality. Equip managers to connect day-to-day work with long-term growth and communicate what those standout moments might look like for their direct reports.
• Align performance with opportunity. If top performance is unattainable or doesn’t lead to advancement, employees may disengage.

Motivation thrives when effort leads to progress that is observed and recognized. Leaders who commit to meaningful recognition and clear performance pathways will see employees re-engage – not because they have to, but because they want to. A workplace where great work is seen, valued, and rewarded is one where motivation can flourish.