Employers strive to motivate and engage their employees through various reward and recognition programs, perks and increases in pay scale.
Its doubtful that a one or two dollar increase in the hourly rate might play the trick of motivating your employees, especially for those who are perfectly comfortable in the quality of life that they have. And these employees work not for the money but for better career prospects. Money can be a hygiene factor (a phrase coined by Frederick Herzberg) and can motivate individual performance in the short term but not in the long term though and in many contexts it can contribute more towards decreasing motivation than increasing it.
And of course employers who are interested in retaining their key talent are not at all looking for those employees whose productivity totally depends upon the carrots that they receive. But they want to nurture a talent pool that can unconditionally support organizational growth.
But at the same time employers should know what can possibly disengage that unconditionally supportive talent.
Well one the ways that this can play out differently is in situation below! What might have considerably disengaged or demotivated your employee?
When you hire a new Employee with a relatively high salary: The employees that may have been satisfied with their current salary may obviously feel unrecognized when they know that a new employee has been hired with his similar skills and education but with a higher salary for doing the same job. In this scenario they feel unappreciated and eventually it can affect his productivity. He may ask for a pay hike or ultimately quit. So to avoid this disengagement its better that organizations give a similar hike to the existing employees or bring onboard a new employee on an equal pay scale.
Another flip side of the situation is when the pay scale does not justify the experience of your employees. This can possibly an awful situation for an employee when he finds out that he has been under-compensated compared to his colleagues and market value even though he has higher experience than others. My suggestion to the organization is to recognize those advanced experience of your employees to avoid disengagement.