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The answer to this question lies in what really motivates people, I think. Most people are not motivated solely by money, as it turns out. There are two kinds of motivation, external and internal. A paycheck is just one form of external motivation, while the satisfaction of a job well done and being able to meet the demands of a challenging work environment are forms of internal motivation.
It would be silly to say that most people would work without a paycheck, no matter how much internal motivation is present because they have to pay their mortgages and put food on their tables. But with just a paycheck, people are not likely to be as engaged or give their best performance if that is all there is. If you want people to be really productive and you want people to stay on the job, you must provide more. Otherwise, work is likely to be soulless and even demoralizing for even the most internally motivated.
There are many forms of external recognition beyond mere wages. Recognition is a powerful motivator. People work harder when they are thanked for a job well done. Bonuses are another important motivator, making people strive harder for something beyond the regular paycheck. A few amenities at work will motivate people, a lunchroom, free parking, some bagels or doughnuts from time to time. It is the little things that count, not just the big ones.
To enhance internal motivation, managers can offer new challenges at work, cross-training or an expansion of an employee's responsibilities. Most people respond well to such opportunities, rising to the occasion and performing even better, because they are more engaged in the process. An employee can be assigned to a special project, understanding that this is a reward for proficiency and that he or she will enjoy grappling with an important problem or situation.
There are few places left today in which managers rely solely on the paycheck to motivate the employee. This has a way of producing the absolute minimum performance and higher employee turnover. No manager wants this in his or her workplace.
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