But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creative, all supposedly to criticize "capitalism" but in fact to make the market work worse for employees who now actually have to argue with management that yes, money does motivate them, with the manager replying "I know it doesn't so tell me what's really bothering you" or what-not. I mean it's not like companies seek less profit having seen the TED talk, instead they learn that they can cut expenses by avoiding "needless" raises. Quite the heterodoxy, that.

It's simply amazing how somebody can spin this into "money doesn't motivate people". Some people will only see what they want, and make any excuse for that, no matter how absurd.

1 - Does thinking about it as a problem have the same effect? Is there some data about this?

Almost nobody reads the original studies. Instead, they read news stories and articles, most written by professionals who are paid to spin it in amazing ways.

So, memes.

But if you're underpaying people or not giving raises, people quickly become unhappy and will either slack off or eventually leave - that's the 'certain point'! You absolutely need to keep giving good raises to keep good people there - but for most people it will just maintain their performance, not to motivate them to be better.

It is a terrible motivator as the impact of a raise is short lived, we very quickly come to believe we are worth the higher pay. See Wall Street and SV salaries. Once you're happy with your pay things like challenging work, recognising success, personal development, good co-workers become much more effective.

It is a powerful de-motivator if you're being paid less than you think you should be, to the point that the weighting between the two effects is almost entirely on the de-motivation side.

However, the lack of money (or other tangible benefits) that people feel owed is a huge motivation for those people to leave.

Thus far the market has always agreed with me.

It's probably true that post-raise motivation boost is short lived, and people's expectations level out, and it might be even true that money could even act as a demotivator. But it doesn't mean people don't want more money and will quit if an opportunity shows up.

I know the training itself is free (they actually are giving us a few grand in credit for going), and hotels, flights, etc are under $1k, so this is a super sweet deal for his company.

For normal people, its infuriating to hear businesses complain about turnover and a lack of loyalty when their "performance" raises amount to a cost of living increase, and their promotion raises don't bring them in line with the salaries that people getting hired at the more senior position make coming through the door. Money isn't the only reason I work, but it is one of the reasons. Its more about the principle. A company that wants loyalty should show loyalty and not attempt to nickel and dime the talent.

Tech companies are usually responsible for creating the turnover they complain about.

I see complaining itself as nothing but an act of trying to weasel out of the responsibility. If a company is really hurt by the turnover, it either dies or starts solving the problem - by e.g. paying people more, or reducing the impact of turnover on the business (e.g. by choosing tech stacks so that developers are easily replaceable). Complaining loudly about turnover seems to be done in hope that someone steps in and solves it without the company having to pay for it.

Want to cure polio, go to Mars, put LED lighting in every home in Africa, fund research into fusion reactors, build flying cars, or push VR into the mainstream? You'd better have some cash.

That might have been more accurately stated as:

"Want to hire people to cure polio, go to Mars, put LED lighting in every home in Africa, fund research into fusion reactors, build flying cars, or push VR into the mainstream? You'd better have some cash."

It's rarely the people with the big money that are doing these things, they're just hiring people and having influence on direction. Sure, they might get credit for being a "visionary" or "innovator", but the people doing the real work rarely make the big bucks (or get much credit, unless they're very lucky).

But, in fact, the very people with lots of money who are influencing these developments are themselves influenced: often by people with not nearly as much money -- such as relatively poor authors, or other "real" visionaries.

So you could also say something like: "Want to have some really significant influence on the world? Write a book." It doesn't take a lot of money, and it's not certain that you will be influential, but if you have some really great ideas you might stand more of a chance of changing the world by writing than by trying to compete with the likes of Gates or Musk for the really big bucks.

Of course, lots of other cultural artifacts have also been hugely influential. How much of our modern world has been influenced by Star Wars or Star Trek, or by mathematics -- which really makes all those Mars journeys possible in the first place. How many people have been influenced and inspired by music? All of the arts really feed in to and greatly influence each other.

So there are plenty of ways to influence and change the world apart from being rich -- and many of them are even more effective, as these other means could influence many generations of people -- poor, rich, and otherwise.

That being said, if Bill Gates wants to cure polio, he should spend his money on immunisations rather than artist workshops and publishing houses. Someone in the chain between thought and deed needs to apply human effort to the problem, and when the effort required is massive, the easiest way to coordinate it is by buying it.

Fortunately, my employer already does both of those. I just wish it wasn't almost a requirement to leave in order to get a decent raise.

Note: I'm not expecting to make $200k in a technical role as a security analyst any time soon, its just hypothetical.

http://www.wolframalpha.com/input/?i=US$100000+2017+in+1980+...

$100,000 today would have been $33,000 in 1980, $53,000 in 1990, $70,000 in 2000, and only $84,000 in 2007.

You are totally right about the $200k mark feeling comfortable. $200k is the new $100k.

The interesting thing though is that you wouldn't really want to entice me that way, because I'd guess you'd get a worse product out of me. So there are different types of motivation that are important. The motivation to make a choice, versus the motivation to work hard on a choice.

2. I can't imagine being independently wealthy & keeping my day job but I suppose it's conceivable!

2. For example, all employees at the VP and up level at Google, Facebook, etc., make more than a million dollars are year. It doesn't take long at this level of compensation to have more wealth than any reasonable person could spend. Yet they still work, normally not to satisfy an unmet financial need.

Financial independence to me is not needing to work ever again, even if I'm living quite frugally.

I've run the numbers on what I'd need to not work and the total amount required would clearly put me in the 'wealthy' camp.

I would say yes. Well, maybe not dependent but not independent.

Some people with large incomes are still up to their eyeballs in debt, or at least not living within their means.

IMO financial independence requires living within your means until the point where you never need to work again to continue that lifestyle for the rest of your life.

Money may not motivate me in small numbers, but this goal of financial independence (what they call fuck you money) is definitely a motivator.

http://www.mrmoneymustache.com/

And this nifty calculator: https://networthify.com/calculator/earlyretirement

It's mostly about the savings rate.

What would your 18yo self said about 100k?

What do you think about a Netflix engineer making 300k? They'd probably be happy with 500k (though, cost of living, derailment ahead..).

At $200k, I could maintain the same standard of living, easily pay off all of my student debt in about a year (without sacrificing anything), easily buy a house, buy a new car outright after saving excess money for 3-4 months, pay for my kid's college education outright, and save a ton of money for retirement. At $100k, I constantly have to pick and choose which of these things I work on.

If I made $200k, living in the same area, I might not be wealthy in the grand scheme of things, but I sure would feel like it. About 70% of the negative stress in my life comes from anxiety about being able to afford everything my family will want and/or need eventually.

Interestingly enough, I have already lived through the experience of having my salary double almost overnight. I used to live in a relatively low-cost area, but I was still getting paid about $25k below market. Then I moved to a higher-cost area, and took a more advanced position at a company that paid a little more than market rate. Went from below $50k to just under $100k. The impact on my life was significant. I went from feeling poor and helpless to finally being able to breathe. I used to be depressed and angry all the time because I could barely take care of my family and my household. Now I'm more or less happy.

However, if someone offered me $200k today for a full-time position at a private company, I would almost certainly accept. I can deal with less than ideal or even boring work as long as there's a good work/life balance that lets me keep working on projects at home. And even if the work isn't glamorous, I'm the type of person that enjoys all kinds of work, physical or mental. Before I got into security I did everything from shovel half-rotten fish into buckets for a living to running network cable. As a caveat, if its a government/contracting job, it would probably have to be $300k (which is probably unrealistic). There are aspects of government work that are interesting, but from my experience the negatives almost always outweigh the positives.

That being said, motivation is a complex thing, and most people are motivated by many different things at once. Money itself may not be the only motivator, but it's definitely one of them, and an important one. Trying to skimp out on it is a recipe for failure.

- the one meaning "the stuff that will get you involved"; - the one meaning "the stuff that you'll want to get".

The first one will drive you enthusiasm to work, your professionalism, the quality of what your produce and your loyalty. It's a "motor" kind of motivation, and money can't buy it. Only a sense of purpose can.

The second one is just bound to the reality of life : you need money for food, shelter, logistic, health, hobbies, then a growing family, and an evolving lifestyle. This will make you choose something. It's more a "motive" kind of motivation.

You can get a lot of people with only the second one. You can get some people for some time with only the first one. But to get the best, and for them to stay, you need a balance of both.

But if it doesn't make you happy and you always want more, that desire must motivate you, right? Make up your mind!

You live my dream life.

The rank and file tend to be told that we're not motivated by money, so we shouldn't expect any, whilst c-level salaries have to be "competitive to attract the best talent".

I did note that many of my peers where COMPLETELY freaked out by my decision that I mentioned above. My choice to step back from the game freaked them out. No over aggression but a mix of outright confusion as well as somewhat confused jealousy.

He said he ran into some Coca-Cola executives after they purchased the company and he was sort of crowing about all the money they had just made him. I guess two of the executives were like, "Huh, $400 million, not a bad start Curtis. Let us know once you get in the $800 million or even the billion dollar range."

He said it made him a little more humble, but at the same time, he said there's a sort of pissing game when you're at those income levels with people like that.

But, ok, that's a fairly prohibitive expense. Musicians can get that and have the audience pay for the privilege. They can do so repeatedly, which certainly qualifies as some kind of asset.

So call it a type of capital, a social capital, maybe... ability to muster crowds?

It would be interesting to see a graph of how much "muster" varies across a given population.

Follows Zipf's Law like everything else, I'd wager. Most people would have to buy an audience. A tiny few can get audiences to pay. There's a growing middle-class sitting at the zero-pivot--emerging indie bands and popular academics--they pull in audiences, but only for free.

Once we formalize all that we'll of course need some sort of exchange rate for muster, USD:MST, before we can get down to the important work of comparing the relative capital of a superstar and the super-rich.

Take note young econ grad students: the to-be-written papers on the liquidity of muster are the stuff careers are made of!

In terms of consulting, credit/loans are harder to get for smaller businesses and most software ends up being targeted toward large businesses, and so do most consultants.

It's harder to be a small business than to be a large business; therefore it's hard to pay more and since you're already as efficient as possible it's harder to get those rates up.

(Also there was wage suppression by Google and Apple and other big companies for around 5 years, that's a HUGE damper on the maximum salary which also translates into a damper on consulting rates.)

Anecdotally one guy I know quit embedded to do rails development and doubled his paycheck.

I've seen it so many times. Instead of wasting money on boosting morale, why not just give us cash?

I may not need a raise and the money may not make a notable improvement to my life in and of itself but getting one is a clear signal of appreciation and in the opposite direction not getting one while your peers do (again regardless of whether you need one) sends a clear (if unintentional) message of undervaluation.

Unlike most other signals of status, salary is directly comparable.

The previous job gave me back-to-back 1% raises. Left that job after two years as well. Should have left at the one year mark.

I've been in my current job a few months. I'll stick around till the first annual raise cycle to see how they treat me. I don't think I'll give this employer a second chance if they screw up the first one (Hint: if your raise doesn't at least cover inflation + offset the costs associated with your annual medical benefits cuts -- I consider it a pay cut, and I'm not going to be happy. In fact, getting a "Congratulations on your (1%) annual raise" email from corporate HR is probably not going to get the reaction you were anticipating).

I actually had one employer that gave me an 8% raise at the two-year mark. So they got another year out of me (until the mass layoffs came).

The result? I was offered 2%-3%, to be discussed on the next annual review (still some months to go), and the PM said strictly that it would depend on my performance. That happened on a Friday, and I quit the job next Monday. My conclusion: never accept verbal agreements again..

> My conclusion: never accept verbal agreements again.

Was the verbal agreement not honored? 2-3% after 6 months is not nothing.

It seems your problem was accepted an offer 20% below what you should.

Actual was at 6/7 month be told that contingent on performance you would get a raise of 2-3% at 12 months.

Being 20% lower than market rate is definitely the problem and a signal that they don't want to pay appropriately.

Edit: if you don't value your worth appropriately from the get go, why would the employer?

Ah, I missed that was delayed.

Yes, that was indeed his mistake.

And so was expecting a 20% raise six months after being hired. That is, frankly, a ridiculous proposition.

2. Your conclusion is spot on. I've never seen this kind of agreement actually work: it's almost always FUD. If they're not willing to put it in an offer letter, it's not real.

After 6/7 months I went to talk to one of the founders about that specific issue, i.e. that I was promised a raise, and that I wasn't expecting anything below 20%. I came to know during the time that I work there that was being paid well below my coworkers (and the market rate in general for my position).

Their response was that I would only get raised on the next company review (still some months to go, but note that I was promised a raise after 6 months), the raise would be around 2%-3% (note that I said to them, quite direct, that I was being underpaid, at least 20%), and the project manager even said that I would be subjected to a performance review before they would give me a raise.

So they failed me at least with 3 things: no raise after 6 months as agreed (still some months to next review), would not raise me enough so I would still be underpaid, and I could even not get raised because I would have to be reviewed first..

Basically, I quit on the next working day, and one or two months later, most of the team got laid off, so there was bigger problems on that specific company..

I can't imagine the majority of managers fixing it and I can't imagine an employee doing anything other than finding a new job. Everyone loses this one.

Plenty of companies do, because HR does the negotiations & their motivation is to minimise employee costs. If you're not negotiating with the recruiter/hiring manager, you're likely to get a poor offer.

If they aren't willing to put it on paper, it doesn't exist.

> My conclusion: never accept verbal agreements again.

Was the verbal agreement not honored? 2-3% after 6 months is not nothing.

I got 60k raise over 2 years because I pushed for it.

Which was probably an honest statement. Raises were centrally managed by 'Human Capital Management', and individual supervisors had pretty much zero say in the size of their employees raises.

As it happened, my departure was ill-timed (for them) and I'm pretty sure it cost them far more than it would have to just give me a decent frickin' raise (seriously, 3-5% and I would have stayed).

Money is not a good motivator for one's involvement in work. But it's a decisive factor to choose a work place because it's a limited and required resource.

E.g. person A generally wants to be happy in their job, but needs $100k to maintain their lifestyle, pay the mortgage, not worry about bills etc. If paid $100k they wouldn't jump ship.

Later, person A has a baby. Well guess what happens next.

Person B also wants to be happy in their job, but they also want to invest in stocks for an early retirement. They get an offer at a stressful trading job paying 3 times their current salary. They think it is worth it in the short term so they go for it.

Money isn't a motivator for doing better work. Once people are being paid 'enough', the studies showed increasing pay lowered performance.

The part they didn't mention is that money is a major factor in choosing who you do the work for. Of course you are going to haemorrhage employees if they get a much better deal to do the same job for someone else.

Companies that pay more will get to pick the best people from the talent pool, who may perform worse due to being overpaid, but the company still comes out on top because underperforming top tier employees still perform better than the remainders working for a 'standard' salary. And thus wages are driven up in industries where talent is at a premium.

0. A caveat about the "studies" is that they typically start with workers who are already receiving market compensation. That little bit is always left out during the seminars. At the factory where I once worked, unskilled workers quit over a $0.25 per hour raise offered by a nearby factory.

1. Most HR personnel have psychology degrees, so they are trained to believe that people are motivated by psychology. Imagine if HR people all had economics degrees. For me, treating my fellow workers as homo economicus is a sign of respect, because as engineers we are paid to make rational economic decisions.

2. It's a bargaining strategy, intended to attach a social stigma to people who demand more money, and to make the money game more stressful for people by making you feel like an oddball. This is also why people are discouraged from discussing salary from one another -- divide and conquer.

3. They are also bargaining with their managers, i.e., telling me as a manager that I shouldn't ask to pay my people more -- divide and conquer.

4. Yet... I looked around and the managers who had the highest regard and most power in the department, were coincidentally also taking care of their people with promotions within the ranks (e.g., from junior to middle to senior), meaning that they played the salary game differently than what HR told us. In addition, because salary budgets for the work site are relatively inflexible, it's kind of a zero sum game, and more money for their employees meant less money for mine. I was competing with the other managers for salary budget.

5. I decided to compete hard. I somehow convinced my higher-up that my people were "special" and thus immune from stack ranking. This eliminated the zero percent raise in my group. I got one engineer a nice raise. I promoted two others, making them equal to me in rank. In practical terms, a promotion in between annual review cycles was a way to give someone a raise, since the money came out of a different pot. This kind of thing worked for a few years, then I started to run out of luck, and stopped being a manager.

The people who I took care of are now some of the most valued and loyal employees.

Or did they quit because they increasingly felt they've become stuck, left behind and not valued highly by their employer?

I went from a local company with overseas offices paying poorly for my niche into an international company paying nearly double without even flinching at negotiation. That was eye opening to me as a signed up 'what matters is autonomy, mastery and purpose' guy. Not only that but the company matched salary raises to a local unions pay negotiations which meant that my until then roughly cost of living raises suddenly doubled. I also ended up getting an annual bonus bigger than I was contractually entitled too as well. All in I more than doubled my salary which let me do things like rebuild our family home.

I realised that not only did I feel my work wasn't recognised at the previous company but they were actively taking the piss. I also realised that whilst I didn't do anything I did for the money reward (I genuinely felt this bonus scheme would have been as worthless as others) the actual monetary demonstration of value in raises and other rewards really makes your value apparent in a manner very meaningful to the rest of your life.

I still think the competition for bonuses and raises can lead to all sorts of degenerate behaviour from the POV of the business and stress on an employee but I really see the absolute value of monetary rewards now when they appear out of your expectations.

And yet I'd bet that money does have a significant correlation with retention and satisfaction. Perception of insufficient raises will certainly lead to dissatisfaction. Offer of meaningfully more money at a different job --> who wouldn't want that if the work is otherwise as good?

So in other words, productivity != retention.

Like, you might still make less money than you would elsewhere, but if your employer at least makes an effort, people are much happier.

An employee that feels as though they are not valued by the company or feel as though they company does not feel that their contributions are valuable will probably see their job as insecure and will look for better opportunities.

Classic example of telling stories that the audience wants to hear?

WHAT management consultant will tell CEOs that they need to pay their employees high enough salary to the point that they won't leave for another company?

Don't mean to be a cynic, but it's all about money.

If you treat people well on multiple dimensions, you can underpay them relative to their value.