Want Disengaged and Unproductive Employees? Become a “Scrooge”

A Christmas Carol: 1971 musical Scrooge – Sheep Laughs Records

By Dr. Marc and Marcia Hardy


Although it takes more than just a significant paycheck and pay incentives to motivate employees, they are undeniably some of the most important factors in creating a positive workplace environment. Some studies have claimed that pay is not an important employee motivator, but according to an article titled “The Importance of Pay in Employee Motivation” in the journal Human Resource Management (Rynes, Gerhart, and Minette, 2004), the opposite is true. According to the studies they cited, pay incentives increased employee motivation and productivity by 30-48 percent. Imagine if all employees increased their productivity by even 10 or 20 percent – the growth and efficiency of an organization would be phenomenal!

Of course being a “Scrooge” creates the opposite effect. A few days ago we had a conversation with one of my best friends who told me that he has not had a pay raise in seven years. Seven years! Since the inflation rate averaged about 1.75 percent during that time, that means that his salary has actually DECREASED by about 15 percent.  His challenge is that he is in his early 60s and his options for other employment are limited. And I suspect his employer is exploiting discriminating against him because of his age, which by the way is illegal.

It isn’t that our friend can’t survive on what he is making, he has been very frugal throughout his life and his wife also works full-time. So it is not so much about the money as it is being appreciated at work for his productivity. And when we are not validated for our performance, when the organization does not acknowledge our worth, it is a psychological hit that over the years takes its toll on us. I have known my friend for over 40 years and he has always been a conscientious, hard worker, so we find it hard to believe that his lack of a raise over seven years is due to poor performance. In addition, the company has grown substantially over those seven years and there is always the promise of a pay raise when the “get a little bigger.”

Hogwash! Or perhaps I should say “humbug!” This company is growing their revenue on the backs of its employees who are in a state of indentured servitude. Do the employees know this? You bet they do. And as a result, they are giving the bare minimum of effort when it comes to productivity. They are not going above and beyond, they are not offering ideas for improvement of processes, and they are not engaging in any meaningful way because they are not going to invest their best selves in a company that does not invest in them. More importantly, top employees who have options leave, gutting the organization of their best and brightest.

Although this particular company has experienced growth over the years, one has to ask how much growth they have left on the table because they didn’t value their employees and their contributions to the organization through pay raises, bonuses or other financial incentives? If the research is correct on the importance of pay incentives to increase employee motivation, then the “Scrooge” bosses of the world are undermining the maximum financial potential of their companies and organizations. They may one day look back on their miserly tenure as a bad dream about how much more could they have accomplished if they had cared more for those employees who held back the best and most productive parts of themselves at work.

Dr Hardy and his wife, Marcia, present on “Leadership through Sharing Fire” across the country. If you wish to comment on this article or contact them, please email DrMarc@SharingFire.com or Marcia@SharingFire.com.

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