Reddit mentions of Make More Money by Making Your Employees Happy

Motivation is driven by purpose, not Monetary Incentives

Monetary bonuses can backfire

[The relationship between pay and job satisfaction: A meta-analysis
of the literature](http://www.timothy-judge.com/Judge,%20Piccolo,%20Podsakoff,%20et%20al.%20(JVB%202010%29.pdf). You can read a good summary here

Make More Money by Making Your Employees Happy a book on the topic.

What Really Motivates Employees? article on Forbes.

If you want some empirical evidence just look at doctors, nurses, teachers, social workers, police officers. This are all crappy jobs with long hours, low pay and full of potential dangers, but plenty of people do what has to be done, because they believe they're making a difference, they're doing something good for society. Other good examples are open sources softwar: firefox, linux, wikipedia. All built by volounteers and all good enough to compete with founded projects like chrome, windows and encarta.

The best way to make an employee more productive is to make him more engaged in his work, but this is not done in many companies, because often it means giving the employee more freedom and tis is against accepted management techniques. (How many bosses you know are willing to give autonomy to their subordinates?)

Edit: I forgot this book: Drive: The Surprising Truth About What Motivates Us which is probably the best example.