Many think that increasing pay will produces improved output. However, it turns out the link between motivation, compensation, and performance is far more complex 🤔 Most research shows that there is a minimal relationship between salary and job satisfaction. After all, money can’t buy happiness and, people’s satisfaction with their salary is mostly independent of their actual salary.
Research shows us that most people are more likely to like their job if they focus on the work itself, and less likely to enjoy it if focused on money irrelevant of the relative levels of salary. The more people focus on their salaries, the less they will focus on satisfying their intellectual curiosity, learning new skills, or having fun, and those are the very things that make people perform better ⚖️
Money is highly personal. What money means to different people is very subjective, as we all have different outlooks, reasons or associations with money (e.g., as a means to power, freedom, security, or love). For example, what may feel like millions to one person may just as easily feel like penny scraps to another.
If companies want to motivate their workforce, they need to understand what their employees really value — and the answer is different for each employee. For instance, income goals based on the pursuit of power, narcissism, or overcoming self-doubt are less rewarding and effective than income goals based on the pursuit of security, family support, and leisure time. People should be compensated not only for what they do but also for what they want.
Research shows that someone’s personality is a far better predictor of engagement than salary. The more emotionally stable, extraverted, agreeable or conscientious people are, the more they tend to like their jobs (irrespective of their salaries). That being said, it’s crucial to remember that the personality of recruits or employees’ is not the most important factor. The most important determinant of employee engagement is the competency of leadership. The existing manager’s personality has the most significant impact on whether employees are engaged at work, or not.
Overall, while money definitely contributes to an employees’ willingness to succeed, it isn’t the end-all and be all. In order to build a workforce of highly motivated individuals, companies need to delve deeper into what truly drives each employee.
Questions? Don’t hesitate to get in touch 💭