The British NHS faces major challenges recruiting, motivating and retaining staff in a period of sustained growth and change. This paper examines the prevalence of skill shortages and organisations' coping strategies, as well the factors that motivate staff in the workplace and in the NHS in particular. It argues that the evidence base for informed policy-making needs radical improvement. It then considers a number of approaches to pay that are being used or suggested to attract, motivate and retain staff. These include performance pay, team pay and local pay determination, as well as considering broader factors such as morale and staff development. The paper then draws together some conclusions for policy-makers. These argue that better evidence is needed as to what is happening in the public sector labour market in order to frame appropriate responses and that thorough evaluation of policy initiatives is necessary to establish their utility before their widespread implementation.