Higher Salary is a Myth

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“I am leaving for a higher salary”

“I can’t work for this amount, I have been offered a better salary by another company “

“I will perform better if I get a higher salary “

These are some common statements that we hear from our employees, team, juniors, people who work with us.

You hear employees in your company cribbing about their salary and talking about how they can’t work for the salary that they get. However, they end up staying in the company.

According to psychological studies, the thought that higher salary is the biggest motivator for employees to stay in the company and deliver their best is a myth. Yes, this may leave you surprised and shocked, but money is the easy & effortless way to get people to stay and do the work for you though not guaranteeing their best performance.

According to a 2010 Monster.com survey, the top-rated item on would-be employees’ wish list (87 per cent) was an employer that truly cares about the well-being of its employees. A challenging and fulfilling job was rated second, job security third, and an attractive benefits package was fourth. Financial compensation was rated lower at fifth.

Thus , it is no surprise that a lot of times, we come across people who leave their high paying corporate job to work for a small sized company.

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The 3 Myths of higher salary

  1. Higher salary helps retain employees
  2. It helps in motivating employees to perform better &
  3. It ensures that employees are loyal to your organisation.

Higher salary does not guarantee any of the above statements. . In fact it only helps in momentary retention, as the employee will soon leave you in search of a better salary package. There is absolutely no co relation between a higher salary and motivation as explained by the studies done by G. Douglas Jenkins, at Arizona State University, writing in the Journal of Applied Psychology, who concludes that when it comes to the issue of performance, financial incentives don’t help. Alfie Cohen, author of the book Punished by Rewards  and a long-time critic of extrinsic rewards as a motivator for performance, argues, “No controlled scientific study has ever found a long-term enhancement of the quality of work as a result of any financial reward system”.

In other words, employees will leave you or feel demotivated if the pay is not a competitive pay, But salary is not the key factor for high motivation and high performance.

High performance is ensured when you have the key factors of

  1. Transparency
  2. Challenging work
  3. Recognition &
  4. A strong purpose of work

To read more on what motivates your team http://bit.ly/1zhlYNc

If next time you have an associate leaving your company, do not let them give you salary as a reason, dig a little deeper and find out the real reason for leaving the company.

P.S. If you have a second, and found this article useful, do share it on your Twitter or Facebook page

Keep ideating

Gauri.

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