Higher salary DEMOTIVATES your team


Higher salary and bonus motivates people and results in better performance, right? Well, it turns out that this is NOT true for most types of work we currently have in the 21st century.

At the beginning of the 20th century during the industrial revolution the majority of tasks required basic and mechanical skills. For those type of tasks, consisting of defined steps with a single answer, a higher salary results in better performance.

But, if tasks involve cognitive skills, decision-making, creativity or higher-order thinking, higher salary results in LOWER performance. These surprising results are based on studies done at M.I.T. and other universities and have been scientifically tested over and over again.

So what are the motivation factors then?

Extrinsic and intrinsic motivation

Science distinguishes between extrinsic and intrinsic motivation.

Extrinsic motivations are for instance a bonus or higher salary, while intrinsic motivation factors are autonomy, mastery and purpose.

It turns out, that intrinsic motivation factors – autonomy, mastery and purpose – are much more important for people`s motivation in the 21st century.


Autonomy is the desire to be self-directed. Like children explore the world by themselves, people want to decide by themselves how they do things.

Autonomy gives a higher job satisfaction.

As a manager you can support your team by giving meaningful feedback, but let people decide by themselves how they do things.


Mastery is the urge to get better at stuff.

For instance, people learn an instrument – after work, or during weekends, although they don’t get paid for that!? Why? People want to get better at things, they want to master the instrument, and proudly show to their family and friends, what they are able to do.

If you are the expert in a certain programming language or technology and all your coworkers come to you with the hard questions, then this is very satisfactory and motivational, when you are able to answer them.

On the other hand, if you are not able to complete your given tasks, then this is very demotivating. Therefore it is very important for employers to calibrate what people must do by looking what they can do. If the tasks are too difficult, then people feel worried and can’t cope with it. If the tasks are too easy, they will get bored. Therefore it is important that the must-tasks are just right according to what a person is able to do. This is also known as “Goldilocks tasks”.


Purpose is the most important factor for motivation.

People, who find purpose in their work, are able to unlock the highest level of motivation. If you feel you are working for a cause, which is larger and more important than yourself, this drives the deepest motivation. Purpose is what you gets out of bed in the morning and into work without groaning and complaining.

People who see purpose in their work are motivated to pursue the most difficult problems. They will go the extra mile and stay engaged, if they care about the outcome.

Let me wrap it up

Extrinsic motivations like higher salary or a bonus do not improve performance of people for the work of the 21st century, which mostly involves cognitive skills, decision-making and creativity.

The intrinsic factors, which are autonomy, mastery and purpose are the drivers for motivation. It is important for management to realize these things and support the people and the environment to facilitate those factors.

If you want to know more about this topic, then you should google for Dan Pink. He is a famous author, who wrote several books about that topic. He also gave a very interesting TED talk, which you can find here!

Ok, that’s it for today. If you have any questions or opinions, please leave a comment. Stay tuned and HabbediEhre!

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