Your company/department needs to have passionate leadership working towards goals that right people would be inspired to work for. Working with such leadership, inspired people can work without micromanagement. This is the ideal case.

You yourself need to be inspired first, and be able to communicate your vision to the team. If you are genuinely inspired, some people in the team will choose to follow your lead and work with you, and some will resist this and won’t. You can’t change people without them agreeing to change, there is no way for this. But you can be inspired and create a great vision and you can adjust your team to consist of self driven people who would support this vision. Such a team won’t need micromanagement but there can be no shortage of inspired action and diligent work either.

How to be inspired yourself? You must work on yourself to sincerely to discover your true passion in life, and let go of what is not serving you any more. This is a gradual process of discovery, and staying true to yourself and living your life this way will pave the steps towards inspiration.

In-spire.. When I look at this word, I imagine a spiral of energy coming from deep within. It is learning to find the energy that creates fulfillment from within. When we are fulfilled with our own energy, it reflects in our actions, radiates from us in many ways that people consciously or unconsciously perceive. So make it a point to work regularly on your personal/spiritual development. Developing genuine understanding through experience will teach you how other people function and can be guided towards inspiration as well.

Trying to motivate people with external incentives is only a temporary push that does not create any new energy, or bring any new energy. It will drain resources, because no true work is being done. There never is a replacement of sincere effort in any level of a company, management or the other departments. It is the driving force behind real success, but the resulting changes might not fit some people’s expectations. The point is bringing the Love into the company. Otherwise it is a dead end of seeking external sources for fulfillment, and would never make a person truly sustainably happy.

Update: To additionally clarify the last paragraph, if incentives are an expression of Love from you, with sincere intention to benefit the employees, (not to manipulate them to be self driven), then they are good. If you had already been unfair to your employees, and this unfairness was a reason of their lack of motivation, then it is loving to correct this. See? It always depends on your judgment to do the right thing, and that judgment must come from a sincere intention. To get things going in a good direction, we must be really sincere in our efforts to create this goodness, taking care of what we do in all our actions to the best of our capacity, without burning ourselves out or being unfair to ourselves. We must work for the highest good of all including ourselves and the employees. No effort in this direction will be wasted, your efforts will be building an invisible energetic momentum somewhere, and the results will be noticeable sooner or later somewhere.