Why Do Some People Contend That Pay Isn't a Motivator?

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One reason people contend that pay isn't a motivator is that they don't really understand the concepts, or the research. On the other hand, people who claim that pay is a supreme motivator are equally incorrect.

In surveys of employee regarding what motivates them, or what provides job satisfaction, pay, or salary is always somewhere down on the list, with people being much more concerned about work conditions, work challenges, and other soft factors. At least, that's what they say in surveys, and in one sense it's a fair reflection. Except, of course that if you stop paying them, most people won't go to work just because of the challenges. Clearly, regardless of what people say on surveys, money, pay, salary is important. If this was not the case, we'd all work for the fun of it.

The relationship of pay to performance and work motivation is actually quite complex. It varies according to:

  • the situation of the individual employee (their financial situation)
  • the values of the individual employee
  • the employee's perception of whether pay (or pay increases) are fair
  • other working conditions in the company
  • the industry/sector (pay perceptions differ between let's say, sales people versus engineers)

We can sum up the situation this way. Money, salary, and pay are important in the motivational mix, and thus should not be ignored (if simply so good employee will stay). However, an increase in salary does not necessarily increase productivity of an employee, but a reduction of salary may result in bad feelings and lower effort.


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Bacal & Associates was founded in 1992 by consultant and book author, Robert Bacal. Robert's books on performance management and reviews have been published by McGraw-Hill. He is available for consultation, training and keynote speaking on performance and management at work.


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