there is a certain critical range , which varies according to job type , culture , current economic conditions and the age and years of experience of the emplyee , within which employees expect to be paid . If you pay below this range , productivity declines . Such employees may be motivated to additional productivity if monetary incentives are also available . If you pay above this range , productivity does not necessarily increase . These employees may be additionally motivated by certain nonmonetary incentives , but only if the employee places a personal value on what is offered , eg single persons , with no partner and no children , may not place a much value on parental leave . The key here , is that paying people badly screws productivity . Paying people a fair wage , or a good wage is great . Paying a great or higher wage doesn ' t help increase productivity in the long term unless you are a field that competes for talent and therefore higher wages draw outside talent in .