Decades of research and dozens of studies show again and again that while money can be a de-motivator, it is rarely a good motivator. Money always shows up as fourth or fifth on any list of motivational factors. Pay gets people to show up for work. But it doesn’t get people to excel. More important is interesting, challenging, or meaningful work, recognition and appreciation, a sense of accomplishment, growth opportunities and the like.
The big problem is that managers have consistently listed money as the number one factor that they think motivates people. So they keep fiddling with pay, bonuses, and financial incentives in a futile attempt to find the elusive combination that will motivate people to higher performance.