This even works in companies and departments with high compensation to begin with. Money is a motivator, the primary motivator, despite what clueless business professors might tell their students. In my department everyone was already earning about $20k over the area average for salaries. But our management noticed productivity had stagnated. So out of the blue the did a "market adjustment" (the term they used to justify it to HR and the CEO) and boosted everyone's salary by 5%-10%, gave many promotions prior, and implemented discretionary bonuses.
That was a little over a year ago. In that time productivity ramped up and my department alone developed a number of tools that help application owners (mostly developers) and DBA's have an almost hands-off approach to their servers and applications, easily schedule maintenance to bring things into standards, approve SLA's at a click of a button, view their servers' and apps' performance metrics, budget expansions and new resources then build those servers/storage/whatever with simple to use browser-based tools, etc. They brought an outside company in to evaluate and found that we now save each app team (and there are literally almost a hundred) about 2,000 man hours a year. My team consists of eight engineering types and a technical manager.
A shame more companies don't realize that they could pay their people a little more and get twice the work out of them. No, they'd rather be hard asses and rip off kids coming out of college with atrocious salary offers - then complain when those underskilled, under experienced young workers can't hit goals and drag the rest of the team down.
