7 Reasons “Pay” May NOT Be the Best Motivational Tool


Salary and pay is a taboo subject at most companies.  Even in business school, the subject is rarely discussed even though it is the main incentive tool that companies use for better employee performance.  Despite what most managers and companies believe, some reward schemes are counterproductive and can actually backfire.
During business school, my favorite course was organizational behavior. I remember we read an interesting book Productive Workplaces Revisited by Marvin Weisbord.  This book outlined the following problems with pay.


the_problem_with_payHere Are 7 Reasons Pay May NOT Be the Best Motivational Tool:

1. Higher pay does not guarantee greater engagement. Unfortunately, money doesn’t buy happiness.
2. Some incentives can backfire, decreasing employee motivation.  Don’t give an employee more money just because he or she has to do a boring job.
3. Money without meaning is not enough compensation. More money to sit in a room and twiddle my thumbs. No thanks, I need a challenge.
4. Most employees who feel generously compensated repay the gesture.  If a company knows how hard you are working and repays you for it, it will most likely make you work harder.
5. Pay comparisons among employees spark intense emotions.  I guess this is why the subject is so taboo!
6. Good and bad employees are equally likely to think they deserve a raise.  And the hard part is, they don’t both deserve it. You have to be fair.
7. Pay is more about status than paying the bills.  Unfortunately, I think this has a lot to do with the culture that we live in.
[RELATED: One Woman Encounters (not so) Equal Pay]  
A recent study at Live Science found that “We tend to be happy as long as we’ve got more than the people around us.’  said study researcher Christopher Boyce in the Department of Psychology at the University of Warwick in England. “You might buy a new car. But if your neighbor has just bought the very same car, that new car doesn’t seem as good as it once was if you were the only one to have that car.”
A higher salary may get you to do something but it can’t make you care about something. So, if money doesn’t motivate, what will?

Honorable purpose.  This is when employees believe what they are doing adds meaning to their lives and purpose to other’s lives.

Money alone doesn't motivate me.


Ben Bernanke, the Federal Reserve Chairman, recently spoke to graduates at the University of South Carolina.  He gives this advice,
“We all know that getting a better-paying job is one of the main reasons to go to college.  But if you are ever tempted to go into a field or take a job only because the pay is high and for no other reason, be careful!  Having a larger income is exciting at first, but as you get used to your new standard of living and as you associate with other people in your new income bracket, the thrill quickly wears off.”

So, what do you think? Would you do a boring job for a few extra bucks? What motivates you at work?

Hi, I'm Anna!

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