---
title: "Why a Pay Raise Won't Motivate You to Work Harder?"
description: "A pay raise alone cannot sustainably improve employee performance because compensation primarily addresses fairness, not motivation. To truly engage employees, organizations must create conditions for recognition, responsibility, and achievement, and build a culture of recognition that is specific and visible."
author: "许玉林"
publisher: "New Distribution"
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published: "2018-07-09"
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# Why a Pay Raise Won't Motivate You to Work Harder?

> A pay raise alone cannot sustainably improve employee performance because compensation primarily addresses fairness, not motivation. To truly engage employees, organizations must create conditions for recognition, responsibility, and achievement, and build a culture of recognition that is specific and visible.

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**If someone doesn't work hard, will they work harder if you give them a raise? Remember: an employee's work attitude will not improve sustainably just because their salary increases.**
If you were paid more, would you work harder?
**Don't fool yourself.**
In the past, we always wanted to cultivate employees' initiative and self-awareness, but have we ever succeeded?
If a few employees don't work hard and complain about low pay, and the company raises their salaries from 2,000 yuan to 20,000 yuan, will there still be people not working hard? Of course there will. And the ones not working hard will be the same people.
Once during a lecture, a student excitedly told me, "Teacher Xu, you're absolutely right! In the past, I wanted to improve my company's performance, so I raised salaries, hoping employees would work harder. But I found that although salaries increased, the goal was not achieved."
**Why is that?**
Compensation first solves the fairness problem, not the motivation problem.
A study shows that an employee's work attitude will not improve sustainably just because their salary increases.
Because compensation doesn't solve the motivation problem; it first solves the fairness problem.
The fairness of human resources is mainly reflected in two aspects: one is fairness comparison within the organization, and the other is market supply and demand.
**For example, if we are teachers at a school, and you are not satisfied with 10,000 yuan a month, would you be satisfied if it were raised to 50,000? At that point, there is neither satisfaction nor dissatisfaction, because that's what I'm worth in the market.**
At the same time, the fairness of compensation within the organization is affected by market supply and demand.
For instance, compared to HR managers, financial managers are more irreplaceable in a company, so their job value in the company should be higher.
But the market supply of financial personnel is often greater than that of HR, which causes their job value within the organization to decline. The final salary should be a trade-off between fairness comparison within the organization and fairness in market supply and demand.
Only when the salary you offer exceeds the baseline determined by the trade-off between organizational fairness and market supply and demand can it potentially have a motivating effect.
"Two-Factor Theory": The stronger the individual's ability, the more they can be motivated.
In the 1950s, American psychologist Frederick Herzberg proposed the "Two-Factor Theory" – "Motivators" and "Hygiene Factors."
"Motivators" refer to a series of factors that increase job satisfaction; while "hygiene factors," if not managed properly, can lead to job dissatisfaction.
"Hygiene factors" include working conditions, job security, relationships with other employees, and salary; "motivators" include recognition, responsibility, promotion opportunities, personal achievement, and development potential. In Herzberg's words, "The stronger the individual's ability, the more easily they can be motivated."
**In this theory, job dissatisfaction and satisfaction are equally important.**
Unless hygiene factors are managed properly, employees will not work hard no matter how strong the motivators are. At the same time, although hygiene factors themselves do not have a motivating effect, satisfying them reduces dissatisfaction and lays the foundation for motivation.
**So we see that for employees, salary level is actually only a "hygiene factor."** It may be good for recruitment and retention, but it is not as effective at motivating employees to work hard as we think. If you're interested, you can also check that high-paying companies are not often at the top of the best employer lists.
Money is important, but workplace motivation is far more complex than a single financial reward. To motivate employees, you must create conditions for them to gain a sense of accomplishment, enjoy responsibility, and receive recognition at work.
Employee value must be recognized, and recognition must be specific and visible.
Compared with the past, the management philosophy of enterprises in the Internet era has undergone fundamental changes. In the past, employees' survival depended on the growth of the enterprise; today, the growth of the enterprise must depend on the value created by employees.
**This shift also requires that employees' value must be acknowledged today.**
A study of entrepreneurs and managers shows that when employee engagement is between 49% and 60%, shareholder returns increase by 9.1%; when employee engagement is between 60% and 70%, shareholder returns increase by 24.2%.
In other words, what truly affects organizational performance is employee engagement, not assessment, and not a form that can boost business performance.
So how can we improve employee engagement? Forbes magazine concluded that the biggest motivator for employee engagement is – recognize me!
There is also a survey on this issue. Look at companies with strong recognition cultures: employee engagement is 78%, while in companies with weak recognition cultures, it is only 34%.
Why do we think employees are hard to manage? **High turnover and lack of organizational performance – you think it's just an engagement issue, but behind this is actually your company's recognition culture.**
Let's look at a global survey. Among recognized employees, 71% will double their efforts, meaning their engagement will double; 53% will generate better work ideas; and 92% are eagerly looking forward to the next recognition. This is the deepest expectation of employees.
Recognizing employees and employees being recognized has become the core direction of HR technology, thought, and methods.
1
**Total Rewards Model**
**What does it mean to recognize employees? What does it mean to be recognized?**
As early as 2006, the American Compensation Association proposed the Total Rewards Model. They found that relying solely on compensation cannot solve the motivation problem.
Total rewards refer to everything employees consider important. In the past, we thought it was just salary and benefits, but there are other factors.
**What do young people today pay more attention to? Being recognized, work-life balance, and career development opportunities. These three points are exactly what we have been ignoring.**
We can see that among the Fortune 1000 companies, 88% use multiple recognition incentive plans, 77% already have three or more recognition incentive plans, and 54% have department-level recognition incentive plans.
Recognition methods have become the most common management method for global companies, but how many do we have?
2
**Make the "Recognition Culture" Concrete, Digital, and Visible**
If you are interested, you can use a small tool called WeRecognize. All work information is presented here. In fact, this uses data to grasp employee trends, and ultimately it can replace traditional assessment.
For example, what is cultural recognition? When an employee's behavior is what your company advocates, you give them points. This is similar to the points management we often talk about.
You might think this is as childish as giving children little red flowers in kindergarten. But are children happy when they wear red flowers? Are employees happy when they wear red flowers? Of course they are!
**Think about when you post opinions or share articles on your Moments every day. What do you most want your friends to do? Like! That is recognition. It's a human trait.**
Similarly, performance recognition: if you do your job well and achieve results, you also get points. What about employee care? When an employee has a birthday or their child wins an award, you can also give them points. There is also a reward hall: when someone encounters a problem, you can post a reward there, and whoever helps solve it gets points.
Finally, these points can be linked to employee benefits.
This method also allows you to see from the points data whether an employee has intentions to leave, so you can pay attention to the employee's improvement, development, and guidance early, and prevent problems before they occur.
Digital management is not that complicated. What we need to do is to make the things your company recognizes concrete and form reference standards.
**For example, Kohler Company proposed the 4C spirit, so put that standard into the database. As long as an employee's behavior aligns with the 4C spirit, they can earn points.**
Another example: Dong-E E-Jiao proposed 10 advocated behaviors, which can also be put into the database. As long as behaviors consistent with the advocacy occur, points are given. This method can even replace traditional assessment.
**Summary: For business, look at culture; for people, look at values.**
Motivating and recognizing employees ultimately comes down to selecting and cultivating employees who align with the company's values. Remember one sentence: For business, look at culture; for people, look at values.
Jack Welch (former CEO of GE) example of choosing a successor is something we can learn from.
When Welch was choosing a successor, he proposed a model: a performance and values talent matrix. Values are actually culture.
Those with good performance and who accept my values, that is, the second quadrant, are the people my company needs and should be given important roles.
Those with poor performance but who identify with my values, the fourth quadrant, the company gives a second chance.
If you have poor performance and do not accept the corporate culture, the third quadrant, these people should be eliminated.
**There is also a type of employee, the first quadrant, who has performance but does not accept values. Such people will destroy your culture. The longer they stay in the organization, the greater the damage to the organization. These people also have to go.**
Our small businesses often seek quick success and instant benefits, and may hire people from the first quadrant. You use their abilities, but if their moral character is bad, in the end, they will destroy your corporate culture.
If you have to make me choose: moral character or ability, choose moral character, not ability. It's that simple.
Source: Chaos University
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