Abstract
This study investigated the motivational signal of money among employees operating within Uganda's dual economy, examining whether high earnings translate into measurable behavioral responses and improved organizational outcomes. Grounded in Expectancy Theory, Self-Determination Theory, and Agency Theory, a cross-sectional survey design was employed with 400 employees drawn from formal and informal sector organizations in Kampala, Wakiso, and Mbarara districts. Structured questionnaires captured data on monthly earnings, motivation index scores, job performance, organizational commitment, retention intent, and composite organizational outcomes. Univariate analyses revealed significant mean differences in all variables between formal sector employees (M = UGX 1,847,300; SD = 418,600) and informal sector counterparts (M = UGX 778,900; SD = 307,400). Bivariate Pearson correlations confirmed strong, positive, and statistically significant relationships between earnings and motivation (r = 0.61, p < 0.001), earnings and job performance (r = 0.54, p < 0.001), and earnings and organizational commitment (r = 0.47, p < 0.001). Structural Equation Modelling (SEM) with maximum likelihood estimation established that monthly earnings exerted a significant direct effect on employee motivation (beta = 0.61, p < 0.001), which in turn significantly predicted job performance (beta = 0.54, p < 0.001) and organizational outcomes (beta = 0.58, p < 0.001). The overall SEM model demonstrated acceptable fit (CFI = 0.963, RMSEA = 0.047, SRMR = 0.051) and accounted for 62% of variance in organizational outcomes. Independent-samples t-tests corroborated substantial sector disparities (Cohen's d ranging from 0.55 to 3.24). The study concluded that monetary compensation serves as a powerful motivational signal in Uganda, with earnings differentials between sectors producing cascading effects on employee behavior and organizational performance. Policymakers and organizational leaders were urged to institute equitable, performancelinked compensation structures, particularly in the informal sector, to unlock productivity gains across the economy.