Just giving a 20% raise across the board won't do much, and piecemeal rewards for visible successes will be even worse as they will cause more optimization for visibility than for success. I fully agree so far. But an engaging work environment with high pay will keep people a lot more motivated than the same environment with low pay. You can't fix a bad environment with higher wages, but higher wages make a good environment even better.

As for open plan offices, it's not the open plan that is frustrating, it's the coworkers that the office is shared with. Nobody is a perfect office-mate all the time. But open plan multiplies not only negative but also positive morale, so I would not generally rule out the possibility that it can be net positive in places where all other factors are close enough to perfection and that the problems only really start when they are copied by the less exceptional. High pay would be an important contributing factor (maybe even one of many necessities), not a silver bullet solution.