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I remember a parallel idea from my (required by my major to broaden my mind just like Lamplighter wanted) Psychology class in college. The basic principal, backed by several studies, was that people's enjoyment of a tedious task was inversely proportional to the amount they got paid for it.
For example, give a bunch of people a little picture puzzle to put together, maybe 150 pieces. Pay some of them $1 to do it, some $15, and some $50. When asked afterwards, the people who got paid more would report that they didn't really enjoy the task, it was dumb but whatever. The people who were paid less reported that they actually had fun, and some even asked to get to do another one. The theory is that in the absence of real reward, the brain will fabricate internal rewards in order to justify having done the task in the first place. This is slightly different than the video, since that was looking less at personal enjoyment and more on successful performance. But of course his idea is that enjoyment will lead to more successful innovations.
But I think the big problem with his philosophy is lifestyle inflation: he says pay them "enough to take money off the table," so that they aren't specifically worried about the amount of money they have. But it's my experience that over time most people inflate their lifestyles such that soon they are worried about the money again. Say you quietly, unofficially put caps on your employees' salaries, and once they reached that point they only received other "benefit raises," like more autonomy, etc. It would work for awhile, but I think at some point even your best employees would get lured away by soulless jobs that paid more. They might end up being less happy in their new jobs, but they'd still decide to go there anyway because people will believe that the money will make them happier. You can make the supposedly ideal work environment, but you can't necessarily make people see that it's ideal.
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