Don't Show Me the Money

I think a lot of people mistakenly assume that economics is only focused on money as a motivational tool. That may be where a lot of the attention goes, but an economic viewpoint is fundamentally about people responding to incentives. And, in many cases those incentives are non-monetary.

Here's an article from strategy+business that indicates employee productivity may be more responsive to changes in areas not related to compensation.

Over the past 10 years, we’ve conducted an in-depth study into the attitudes of more than 100,000 shift workers at more than 150 companies around the world. Through face-to-face surveys taken during work hours, we sought primarily to gather information about what employees like and dislike about their work environment, the changes they hope to see, the health and safety issues they face, and how their work schedules affect their personal lives. Of all the thousands of pieces of data we collected, one stood out: Eighty-one percent of employees surveyed felt that their pay and benefits were adequate. In fact, when we determined what really affects productivity, compensation paled in comparison to good management–employee communications. In other words, although most companies try to inflate employees’ morale by shoveling more dollars at them, less expensive strategies will do.