Correlation between wage, motivation and performance

November 05, 2014

Do Employees Reciprocate Positively to a Pay Raise? Maybe Not So Much

In an experiment among people who were hired to distribute copies of a new newspaper to passersby, a pay raise had no effect on performance except in the case of workers who felt the original wage was unacceptable. For them, the increase boosted performance by about 7%, says a team led by Alain Cohn of the University of Zurich. The findings suggest that the “positive reciprocity” effects of a wage increase are elusive, and that the performance boost from a pay raise may be due to countering certain employees’ sense that their original wages were too low and therefore unfair.