Pay can always directly affect performance because pay for a lot of people is a driving factor for better performance and is a huge motivator. When an employee believes he is underpaid for his job, skills, and hard work, then the employee becomes less motivated to do more work that he believes he is paid for.
For me personally this has happened a lot. In the department I work for I used to work with a group of employees who would underperform just because they relied mostly that I will do the job for them in the evenings and they can relax in the day, personally I believed I did not get paid enough to do everyone’s job and also saw a decrease in my performance.
After this we had a new group of employees come who did not underperform and it was a great push to work as a team, yet around this time my company and union were in talks of giving raises, the company wanted to give 1-3% raises yet the union was asking to match inflation in the city and give 11% raises, we picketed, and were planning on going on strike when the union and the hospital settled for 5%, which for me was very saddening because our hospital seemed to not appreciate us at all, and just want to give us the lowest pay possible, this was like a slap in the face. Due to this situation my performance really struggled, and I started seeking other job opportunities because I didn’t feel appreciated by the company since they pay the upper management millions and give the heads of the company million dollar bonuses, but they can’t pay their employees normal wages. Since then I’ve been trying to create some change for my group (specialty) and managers are looking into changing our level of work which will give raises, which helped me become a bit more motivated because a raise would help a lot right now.
