In a famous scene from the film "Jerry Maguire," NFL wide receiver Rod Tidwell repeatedly screams, "Show me the money!" as his agent listens on the other end of the telephone. Intuition might tell us that showing the money motivates, and that increasing an employee's salary should correspondingly boost his or her motivation. It does—under certain conditions. The evolving field of behavioral economics is challenging the assumption that more money inevitably leads to increased effort.
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[This article was provided with permission from Harvard Business School Working Knowledge.]
Interesting Article to be read and deliberated!!on Dec 12, 2013
Do Employees Work Harder for Higher Pay? I think YES. Employees should pay as well whatever their boss gives them. May it be in a form of money, gift or any kind of reward for the efforts they\'ve done to the company. However, you can\'t always say that your employees will work harder when they got a higher pay. Some of them will slack at work, work for less hours, or will report late for work. But if you\'re working from home, everything is monitored and your time is logged in a database. So even if you got a higher pay you will still be accounted for whatever your work is all about. If you are using a time tracking software like TIME DOCTOR, you will always work diligently according to the scope of your task. TIME DOCTOR will not only monitor your time but it also tracks your productivity, attendance, lates and absences, daily/weekly/monthly reports and a lot more.on Dec 10, 2013
The study does not reveal anything new. A bonus/gift/incentive always has a motivational effect, and employers use it good effect. However, the flip side that the bonus becomes an expectation next time around, especially when the year-end pay-hike cycle comes. So if the \"gift group\" is asked to work on the same task again next year, they would assume $4 as a base, and expect $1 on top of it. At that time, the gift would become almost an entitlement rather than a motivation.on Dec 9, 2013
Brilliant counter point Anurag. On a separate note, especially in the Indian context where bulk of the workforce in the private sector comes from middle-class families at the entry-level, money is indeed the single biggest motivator and fat pay hikes have a significant positive impact on performance and productivity. That\'s why top companies pay top money to hire cream talent at premier institutes. Even in service-based organisations, companies are paying outstanding performers well to retain them. This might change and the non-financial incentives may matter more in the long run (after the person has worked in the industry for 7-8 years or more) and is already drawing a lucrative salary.on Dec 17, 2013
I too second your opinion Alok. But with so many years of the advent of the giant corporates in India, the middle class has become a financially stable sector. Hope too see that passion is the motivation for a job and not money, at least in the couple of years to come.on May 12, 2014
Employee pay is not related to work done by employee at all. Employee is a commodity in the market and his compensation is based on demand and supply. As long as there is large demand for talent and lack of adequate supply of this talent, the talent gets payed well. This explains why low skilled workers get lower pay, since the talent required for low skilled jobs is low. In country like India with abundant supply of manpower, but inadequate means of training, skill becomes highly paid, which acts as incentive for the people with insight to acquire this skills.on Dec 9, 2013