Why Pay Doesn’t Motivate: Herzberg’s Motivation Two-Factor Theory

By Lon W. Schiffbauer, BA, MBA, PhD, SPHR

What if I were to tell you that pay is not a motivator at work?

Don’t believe me?

Let’s say your employer comes up to you and gives you a 10% pay increase. Awesome, right? But are you going to give your employer a 10% increase in productivity? You’ll be grateful for the increase, to be sure, but you’ll likely continue to work hard and deliver as you always have. But now let’s say that instead of a 10% increase, your employer came to you can said they are going to cut your pay by 10%. Are you going to deliver the same level of output and quality as you had before? Not likely. My guess is you’d be looking for a new job before too long. At the very least you would probably stop giving your all to the company. In short, you would be demotivated.

So, with this in mind, would you still say that money is a motivator?

It may be tempting to assume that motivation and job satisfaction run along a single continuum, with job satisfaction at one end of the spectrum and dissatisfaction on the other. However, Herzberg’s Motivation Two-Factor Theory takes a different tack. It argues that job satisfaction and job dissatisfaction occupy individual continua, each with its own set of contributing factors (Nickerson, 2021). Put another way, the theory states that there are there are two separate sets of mutually exclusive factors in the workplace that contribute to job satisfaction and job dissatisfaction (Herzberg, 1966; Herzberg, Mausner, & Snyderman, 1959). These two sets of factors are Motivational Factors and Hygiene Factors.

Motivation Factors are experienced intrinsically and contribute to job satisfaction because they support an employee’s need for growth and self-actualization (Herzberg, 1966). Motivation Factors lists out what it calls Satisfiers. These include:

  • Performance and a sense of achievement
  • Recognition
  • Job status
  • Responsibility
  • Opportunities for advancement
  • Personal growth
  • The nature of the work itself

Generally speaking, making improvements in these areas will likely increase motivation and job satisfaction. By contract, Hygiene Factors are experienced extrinsically and contribute to job dissatisfaction because they are focused more on “the need to avoid unpleasantness” (Herzberg, 1966) than they are the more fulfilling, aspirational aspects of the work. Hygiene Factors lists out what it calls Dissatisfiers. These include:

  • Pay
  • Work conditions
  • The physical work environment
  • Relationship with coworkers
  • Relationship with the manager
  • Competence of the manager
  • Workplace rules and policies

In general terms, making improvements in these areas will decrease the likelihood that employees will become dissatisfied in their jobs.

One way to think of hygiene factors is to think of…well…hygiene. Take brushing your teeth, for instance. Brushing your teeth will not make your teeth healthier, it will simply keep your teeth from becoming unhealthy. Likewise, Herzberg’s Hygiene Factors don’t motivate, they simple prevent employees from becoming demotivated.

With these definitions in mind, let’s return to our example of pay. Herzberg doesn’t consider pay a to be a Motivation Factor. Rather, he lists it as a Hygiene Factor—something you have to offer to keep folks from becoming demotivated. Now to be clear, I’m not suggesting that pay has no motivational potential. In fact, some companies have seen something of an uptick in productivity as a result of pay increases. One study suggests this is because employees “have more to lose by slacking off”, triggering a sense of loss-aversion (Carter, 2021). In addition, the economic theory of efficiency wage states that increasing wages can lead to increased productivity for a variety of reasons, including the aforementioned fear of losing the job (and hence the pay increase), as well as increased loyalty. However, most of these studies applied the efficiency wage theory to lower-paying labor jobs. Higher-wage jobs generally do not normally see increased performance from an increase in pay.

Let’s look at a real-world example of this. During the COVID pandemic many hospitals were forced to cut staff hours and pay (Bebinger, 2020). At the same time, health care workers were resigning in droves. To be sure, burnout played a major role in this unfortunate trend, but pay played a part as well. As Ed Yong with the Atlantic put it, “many have taken stock of their difficult working conditions and inadequate pay and decided that, instead of being resigned, they will simply resign” (Yong, 2021).

Now it’s important to remember to understand that this is a theory, and that not every aspect of it applies equally to every circumstance. Nevertheless, it’s hard to think of a time when a workplace policy increased motivation and productivity (despite what those pressing for free sodas and casual Fridays may promise), yet we can all think back to times in which opportunities for personal and professional growth lit a fire under us and increased our desire to perform.

That, in a nutshell, is the idea behind Herzberg’s Motivation Two-Factor Theory.

References

Bebinger, M. (2020, April 2). Covid-19 hits some health care workers with pay cuts and layoffs. NPR. Retrieved January 4, 2022, from https://www.npr.org/sections/health-shots/2020/04/02/826232423/covid-19-hits-some-health-care-workers-with-pay-cuts-and-layoffs

Carter, S. S. (2021, December 10). The impact of wages on employee productivity. Forbes. Retrieved January 4, 2022, from https://www.forbes.com/sites/forbesbooksauthors/2019/09/12/the-impact-of-wages-on-employee-productivity/?sh=194280f260cf

Herzberg, F. I. (1966). Work and the nature of man. World Publishing.

Herzberg, F. I., Mausner, B., & Snyderman, B. (1959). The motivation to work (2nd ed.). John Wiley.

Nickerson, C. (2021, November 16). Herzberg’s motivation two-factor theory. Simply Psychology. www.simplypsychology.org/herzbergs-two-factor-theory.html

Yong, E. (2021, November 18). Why health-care workers are quitting in droves. The Atlantic. Retrieved January 4, 2022, from https://www.theatlantic.com/health/archive/2021/11/the-mass-exodus-of-americas-health-care-workers/620713/

Lon is an Associate Professor of Business Management at Salt Lake Community College and holds an MBA, a PhD, and is a certified Senior Professional in Human Resources (SPHR). In addition to his academic background, Lon spent close to 30 years working and consulting for such companies as FedEx, Intel, eBay, and PayPal, as well as a variety of small to mid-sized companies around the world.