Understanding the importance of pay and rewards
Pay is important to individuals for a number of reasons. To everybody of course it's important because it determines their lifestyle and their ability to function effectively really in today's world. But there's another element to pay that makes it important and that is the prestige and the esteem factor and the sense of feedback that people get when pay increases are passed out particularly if they're said to be based on performance. The net result of all that is that pay is actually one of the most imporant features of the work experience of people.
And if you survey them they will tell you pay is very important. There's a lot of mythology around oh it's only a hygiene factor, it doesn't really ever have a positive feeling for that. But that's not what the research says, the research says that people do take pay seriously, they do care very much about how they're paid, particularly how they're paid relative to their peers and co-workers, and that it is an important part of how they feel about themselves.Source: https://www.linkedin.com/learning/human-resources-pay-strategy/understanding-the-importance-of-pay-and-rewards