Following Shell's CEO, Jeroen van der Veer, comment to the FT saying that: "You have to realise: if I had been paid 50% more, I would not have done it better. If I had been paid 50% less, then I would not have done it worse", let's explore the issue of remuneration and bonuses. Psychologists have long concerned themselves with human motivation and whilst there is no theory that can explain it in its totality, they are useful in understanding what is going on here. What van der Veer was referring to is the "motivation ceiling". The theory of money as a motivator goes like this: more money = more motivation. But where is the ceiling? At what point can someone no longer work hard to warrant the remuneration they receive? Whilst we could, in theory, increase remuneration without a limit, an individual's performance will not increase in a linear fashion. Clearly levels of remuneration are not just linked to how hard people work. Other factors to consider are the level of responsibility, the complexity of the role as well as the value that an individual contributes.

Further, continuously increasing salary can create what we call the Hedonic Treadmill: an increase in salary motivates us for a short period of time, but then we grow accustomed to it and want more. Combine this with our need for equity, whereby we compare ourselves to others in similar roles and become dissatisfied when they earn more, we get into a situation of spiraling remuneration and eye watering bonuses. But does some one already earning £1.3M really need that additional £200K to bring them to £1.5M? Of course not.

Whilst to some extent, we are all motivated by money, there are other factors that should be considered here. Work can give us meaning, recognition and a sense of purpose. All have a motivational impact. Maslow spoke of the hierarchy of needs in the 40's, with self actualisation being at the top and our physiological and security needs being at the bottom. Although a simplified theory, it does suggest that financial rewards do not contribute towards the higher levels of human motivation. In thinking about remuneration, therefore, we should be thinking about more than just how much we give somebody. More money does not equate to better performance.