Background: I work in a company that has a bad culture: everybody has been treated the same: The same salary, no rewards for high achievers, and no punishment for bad employees, including people who have a part-time job during work hours while not doing anything. The company pays on the lower end and requires a lot of knowledge of niche market and custom IT systems and business rules. The two people, who got fired, were only fired after one year of constant warnings for not doing anything and watching porn multiple times.

My team is working on a new system and two new employees got onboard with high productivity. We are on 70% of the project completed after almost three years working on it, but other people got promoted in other teams, based on relationships while not achieving anything. My team have not had a salary correction in two years and is solving a big problem for the company, and we are still below the market average

Problem: the team got demotivated and contaminated with the culture, while before they wanted to change the company, but now they are becoming slackers. Management is increasing the complexity of the project (never-ending scope creep and unrealistic expectations). I am putting more resources such as external freelancers, but the more I put the more they slow down.

Note: the resources are not redundant, but they focus on different areas such as QA automation and DevOps that speed up development. They know I am trying to do my best to finish the project, and I try all my best to give them the option of being self-managed and make decisions, but for some reason, they are responding negatively because they know the company is willing to pay external people and not pay them better or improve them.

My current problems are:

team members are lying to me

team members are leaving work unfinished for me to correct

team members are acting like they are doing a favor to me and I'm not the real boss but my boss

team members are pushing more and more to take more time to do the same thing. An example: last year was two days, but now they are pushing for one week

team members are decreasing the quality of work

I talked to my boss about this and he said we can't say too much or punish because we "depend on them" to maintain an old system and the current system. The new system is being done in a similar way to the old system (very complicated without documentation), so the developers can build job security.

This was something that was discussed at the beginning of the project that needed to change including employee rewards, but the culture doesn't change and it's repeating the same errors as before. Including the same developers on my team who saw the old team doing this, and now they want to become like the old team and repeat the same pattern, so they might be getting a shitty salary, but will be able to build a business on the side and maybe retire sooner.

Any suggestions on how to change this behavior? I know that if the project is completed successfully I might have some more power to talk to the CEO to let him know what is going on.