We often assume that paying more automatically equals better results. But before defaulting to salary increases as your primary motivator, consider where that logic leads. Here are three reasons why higher salaries may not drive the performance you’re seeking.
1. Diminishing Returns
Once basic financial needs and a comfortable lifestyle are met, additional salary increases deliver diminishing value. We see this in professional sports where highly paid athletes sometimes become complacent. Pay should keep pace with cost of living, but it won’t necessarily motivate better performance on its own.
2. External vs. Internal Motivation
Salary is an extrinsic motivator that requires constant escalation to maintain effectiveness. It drives short-term performance but doesn’t sustain long-term engagement. Internal motivators like purpose, skill development, clear strategy, and well-designed processes create lasting value and deeper commitment.
3. Transactional Culture
Relying heavily on financial rewards creates an “if I do X, you give me Y” mentality. This transactional approach weakens emotional connections, erodes trust, and ultimately leads to declining outcomes.
Take Action
Implement a five-minute purpose and recognition moment in weekly meetings. Have team members share brief stories of how their work made a difference—whether with clients, colleagues, or the community. Celebrate behaviors that exemplify your culture and values, not just sales targets and profitability.
Pay fairly and reward well, but remember: higher pay alone doesn’t motivate. Simple rhythms that reinforce meaningful work and fuel internal motivation create the results you’re really after.
Enjoy the journey.
About Monday Myth Check
Monday Myth Check is a weekly dose of reality where Jono Brake holds up commonly held leadership beliefs and asks the question “What if this was not true”. You can find the weekly videos and other posts by following Jono Brake on LinkedIn or following The Forged Leader, as well as on Youtube @jonobrake.
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