The relationship between pay, employee performance, and creativity

Employee performance has been a critical topic of discussion in most modern workplaces, as management look for options to improve. According to Pink, on tasks that require creativity, basic monetary reward systems do not work and may in most cases lead to poor performance. He acknowledges that money indeed is a good motivator, but it reaches a level where employees look and expect more from work than just rewards. Pink believes that pay may necessarily boost performance but it will not encourage creativity. Pay promotes performance for simple tasks that have clear frameworks and procedures on how to do them, but when employees are supposed to figure out how to do tasks on their own, rewards lead to poor performance.


Most scholars acknowledge the use of money as a rewarding factor to employee performance. However, some highlight some limitations to such usage. Most people advocate the use of money only in cases where the goals are specific. There are also arguments that it reaches a point where money as a rewarding factor will not work as employees want to feel part of something big.

While it is said that money as a rewarding factor works as long as employees feel that the appraisal is fair, it is also important to note that when it reaches a point that employees feel that rewarding is fair, it ceases to work for them as the now shift to other rewarding mechanism that make them feel part of the organization.    

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Factors linked to performance

Autonomy, Mastery and Purpose.

Pink defines autonomy as the desire to shape our lives. Through allowing employees the freedom to manage their time, team, technique and tasks it allows them to be more creative and lead to better performance. Managers should therefore allow employees flexible working practices. According to Pink, mastery is the desire to persistently improve at something which matters. People generally love to improve at doing things and feel content for individual progress and achievements. Managers should promote employee progress so as to build their personalities and contribute better to the company. Purpose is the desire to work in service of bigger things than ourselves. This means that managers should communicate the goals of the company well to employees so that they can appreciate their contributions towards such goals.

Applied Example

Toyota company uses various approaches to reward its employees to boost performance and creativity. First, it was its employees well and guarantees them job security plus childcare and onsite recreational facilities. Toyota also encourages its employees to experiment on different challenges to enhance their confidence and creativity such that they can satisfy the needs through self-actualization. Toyota also employs a clear feedback mechanism whereby through visual management systems, employees are motivated by allowing them to track their progress and direction towards company goals. Finally, the company provides gift certificates to employees for their ideological contributions which makes them feel valued and recognized by the company thus strive to contribute more useful ideas.

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