People naturally require motivation to work.
Consequently, they can be motivated by a higher pay to add more effort to their work and thus increase productivity. When one's payment is increased when work is done, the person due to gratitude can increase his/her efforts at work and hence better performance. However, the importance of higher pay in influencing work productivity cannot be overemphasized as it can motivate only up to a certain level above which higher pay does not elicit an increase in productivity. The only way higher pay can constantly motivate an increase in performance is when one is paid according to the units of work accomplished, for instance, the standard amount offered to the seller for every item sold (Berman, 2015). This will motivate the worker since the more the items sold, the more the pay which will be received. Additionally, when one perceives that he or she is being paid higher than a colleague with the same level of qualification, then they can be motivated to work harder to retain this position due to the benefits such a position accords them.
Theory on Motivation
Equity Theory of Motivation was advanced by Stacy Adams and asserts that people feel motivated when they perceive that their work outcome is proportional to the input; additionally, people compare their outcome with others of the same level as them and are motivated when their benefits are equal to or greater than that of another employee at the same level. Employees should thus offer additional benefits to employees which sets them apart from other employees of the same level in a different group or company. In this manner, the employees will feel duly compensated and thus be motivated to increase input which leads to performance and productivity (Berman, 2015).
Effective Compensation Practice
Higher pay can effectively increase performance on a short-term basis; however, over a long duration of time, increase in pay will boost productivity to a certain level where no significant effectiveness is registered. Therefore, a person receiving a higher pay for motivation purposes eventually gets used to receiving such and, consequently, becomes complacent and not motivated to increase productivity. Higher pay is a good incentive through which an employee's productivity can be improved. However, the higher pay should be offered as a gift and not a direct payment for the work done (Berman, 2015). When offered as a gift, the employee feels grateful and indebted to work harder and thus increasing productivity.
References
Berman, E. (2015). Performance and productivity in public and nonprofit organizations. New York, NY: Routledge.
