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The combined dataset included over 15, individuals and correlation coefficients.

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The results indicate that the association between salary and job satisfaction is very weak. In addition, a cross-cultural comparison revealed that the relationship of pay with both job and pay satisfaction is pretty much the same everywhere for example, there are no significant differences between the U. A similar pattern of results emerged when the authors carried out group-level or between-sample comparisons.

These results have important implications for management: if we want an engaged workforce, money is clearly not the answer. In fact, if we want employees to be happy with their pay, money is not the answer. In a nutshell: money does not buy engagement.

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Despite the overwhelming number of laboratory experiments carried out to evaluate this argument — known as the overjustification effect — there is still no consensus about the degree to which higher pay may demotivate. However, two articles deserve particular consideration. The first is a classic meta-analysis by Edward Deci and colleagues. The authors synthesized the results from controlled experiments.

The results highlighted consistent negative effects of incentives — from marshmallows to dollars — on intrinsic motivation. These effects were particularly strong when the tasks were interesting or enjoyable rather than boring or meaningless. Importantly, some have argued that for uninteresting tasks extrinsic rewards — like money — actually increase motivation.

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See, for instance, a meta-analysis by Judy Cameron and colleagues. The authors analyzed real-world data from a representative sample of over , U.


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The results showed that employee engagement levels were three times more strongly related to intrinsic than extrinsic motives, but that both motives tend to cancel each other out. In other words, when employees have little interest in external rewards, their intrinsic motivation has a substantial positive effect on their engagement levels.

However, when employees are focused on external rewards, the effects of intrinsic motives on engagement are significantly diminished. This means that employees who are intrinsically motivated are three times more engaged than employees who are extrinsically motivated such as by money. This is hard to test.


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  • Yes, that could be one reason; another could be that people who focus too much on money are preventing themselves from enjoying their jobs. This research also begs the question: Is this a money-focused, engagement-eroding mindset one that employees can change? Or is does it reflect an innate mindset — some people happen to be more focused on extrinsic rewards, while others are more focused on the task itself?

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    And in theory, your mindset should be malleable — the brain is remarkably plastic. We can try to teach people that if they focus on the task itself and try to identify positive aspects of the process, they will enjoy it more than if they are just focused on the consequences rewards of performing the task.

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    Intrinsic motivation is also a stronger predictor of job performance than extrinsic motivation — so it is feasible to expect higher financial rewards to inhibit not only intrinsic motivation, but also job performance. The more people focus on their salaries, the less they will focus on satisfying their intellectual curiosity, learning new skills, or having fun, and those are the very things that make people perform best. How an award-winning podcast created a language-learning app to better serve its audience. Bearing witness to history: how to adapt foreign reporting to the digital age.

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