Most credible studies by psychologists and economists have indicated that money alone doesn’t accomplish much when you want to add motivation over the standard effort.
By and large, money contributes considerably to happiness as people move up from poverty. It contributes to happiness more modestly as income reaches the community’s norm. Beyond that point, money only adds a little to happiness.
People indeed welcome a raise and regret a decline. But most adapt to their change in circumstances, and the change doesn’t markedly affect their happiness over time.
This being said, ask people if they’re willing to change their job for a better one in virtually every aspect they can imagine—better environment, cooler technology, more exciting products, and broad scope for self-development—but with lower money offer, few would give in.
Idea for Impact: The money-as-a-motivator premise has some validity, but it’s not all-encompassing. For the most part, the dominant motivator for many employees is meaning—the prospect of learning and growing, engaging in stimulating work, and getting recognition for achievements.
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