Would not that depend on the type of work? In a taylorized workplace productivity is mainly a function of technology rather than the skill or motivation of human operators - so motivating labor force with pay incentives has little effect on productivity.
But in a non-taylorized environment, especially one that requires cognitive skills, it is a different story. If employees do not have the required skills, paying them more will probably have little effect on increasing productivity. However, lower wages may provide disincentive to people with skills, so they can actually lower productivity by negative selection of the workforce.
Wojtek