Indeed, salary is important to motivate employees, but only to a certain extent

Indeed, salary is important to motivate employees, but only to a certain extent

Studies have examined employees’ motivation factors. Results have shown that indeed, salary is an important factor but employers had better invest in engaging workers to believe in the cause.

Indeed, salary is important

Employers’ number one question is “how to motivate my employers?”  Indeed, salary is an important factor in this equation, but how important is it?


As an employer, you may be wondering how motivated a worker would be if you were to raise his or her salary. As there are important economic consequences to this question, there have been many studies examining  the best predictors for employee motivation.

The Federal Reserve of Boston made a thorough economic study to see if salary was the main motivator for workers.

They concluded that resources invested in engaging employees to the cause of their work had a more positive effect on motivation than increasing salaries. In other words, belief in a mission can benefit an employee’s motivation better than their salary.


However, there is a synergetic effect. If an employer pays an employee a low salary and only invests in trying to engage them to the cause, the effect will be much lower than paying a better salary while investing less in engagement. Basically, the Federal Reserve of Boston suggests there are two main factors, salaries and belief in a cause, both of them important and demand investment, though believe in a cause is more important and requires greater investment.

Intrinsic rewards are more important than salary

Another study looked at intrinsic and extrinsic rewards.
Intrinsic rewards are rewards that are belonging naturally within you. Extrinsic rewards are what comes from the outside to impact you. Examples of intrinsic rewards are curiosity, well being of satisfaction, and learning. An example of extrinsic rewards is money.


The study that examined these factors was done by Yoon Jik Cho and James Perry. Their study shows intrinsic motives had a greater impact on motivation than extrinsic motives. This impact was, in fact, three times more powerful than extrinsic motives. Is there a lesson to be learned from this? The answer is simple.

Enjoying your job, liking it, focusing on the work, deriving curiosity, and the main reasons you desire to work (such as to support your family or to have a secure future) are much more important than how much money you make. You may find that if you enjoy your job more, you will be more productive and you make more money. Indeed, salary may increase if you find enjoyment out of your work.

This may be a controversial question with a controversial answer. Some of you may be surprised. Others may not. Indeed, salary is not as important as one may have expected. It has it’s place on this earth but it does not rule over everything. Having some real curiosity can be more driving of a force than money. It is up to you if you decide to believe this or not. If you are a leader in the workplace, you may find that this article may help you more than you think.