When it comes to deciding what to pay your new hires, you want to be right on the money.

Pay too little, and before long they'll become dissatisfied and resentful. As soon as a better opportunity comes along, they'll be gone.

Pay too much, and they'll be happy for a while. But if a big paycheck is their primary reward, they'll begin to feel they've traded away their freedom for financial security. Mortgages, car payments and school tuitions may lock them into jobs they can't stand, or no longer do well. They'll want to leave, but won't know how.

Organizations made up of people who chose their jobs based on the highest salaries are miserable places to work. They're often full of petty jealousies and politics, and hostile to new hires. I won't name any of the Wall Street firms who hire mainly with outrageous salary and bonus packages; but it's clear to those of us who use their services that something is wrong. The worst offenders have created monster organizations that eat people up, are hard to manage, and miss the top-quality candidates that aren't interested in the mistreatment. When firms are full of unhappy people who are just there for the money, everyone - management, colleagues, customers - pays the price.

Instead, your hiring goal should be to create an "all-volunteer" organization, where everyone is there because they want to be. Many of today's knowledge workers are flexible enough to migrate between jobs if they're feeling unappreciated or underpaid. Remember, your competitors are just around the corner: There will always be a rival willing to pay "above market" to hire away your best people.

That's why good leaders know that a good salary alone is never enough to keep people on board. You need to offer team members ways to find meaning in their jobs, to enjoy collaborating with colleagues, and to feel invested in the purpose of the organization.

A lot of well-compensated people put up with anguish at work, hoping it'll pay off outside the office, when they're "living life." That's a losing strategy in the long run. In our personal lives, most of us are looking for happiness, for understanding, for meaning and for camaraderie with people we like and respect. So why not create a workplace where all this is true, too?

It's not all about the money. Consider other kinds of compensation, like these, that can offer meaning, recognition and respect to those you hire:

1. Access and voice - If people don't have access to senior management, they chafe when their voices aren't heard. Most people don't insist on having their way all the time; they just want to know their way has been considered.
2. Titles - The best organizations I've worked with are relatively egalitarian when it comes to titles. At jetBlue, we're all crewmembers - from the CEO to the newest flight attendant.
3. Recognition - Formal recognition programs such as "employee of the month" or years-of-service awards are all fine; but they don't have as much impact as the casual nod at the beginning of a meeting to those who put in a great effort. Making it clear that credit will be given for great performance is a form of reward.
4. Learning - For many, meaning is intimately linked to growth, learning, and the discovery of their own potential. Don't be an organization that touts growth opportunities but doesn't back it up with time or money. Giving people a chance to cycle through different positions, to learn new skills and to experience new challenges are powerful forms of compensation.
5. Service - The things people sacrifice for are the things they love. Give them an opportunity to help their fellow workers, to give to a community fund, to do work projects, to deliver meals, or to work shoulder-to-shoulder to give back.

People who prefer money to these other kinds of compensation may be "hired guns," the kind who hang around right up until a better-paying gig comes along. But the people who thrive in an environment that prizes respect and opportunity are likely to stay, to be more invested in their work, and to create value for themselves and the organization - all things that money can't buy.

Next (and last) hiring mistake: Not knowing how to 'undo' a bad hire To see upcoming posts from this series in your LinkedIn news feed, connect to Joel by clicking the "Follow" button at the top right of the page. @JoelCPeterson's recent posts: Photo: Jason Stitt / iStockphoto.com