INTRODUCTION TO WORK AND ORGANISATIONS TITLE: HOW EFFECTIVE IS MONEY IN MOTIVATING INDIVIDUALS TO PERFORM BETTER AT WORK? WORD COUNT: 1871 “Motivation is the number one problem facing business today” (Watson, 1994) and money has been instrumental for modern businesses to use as a motivator at the workplace. The intention of this essay is to attempt to answer the question of how effective is money at motivating individuals to perform better at work.
The possibility of money being the best motivator for employees will also be discussed. It will investigate previous motivations theories which attempted to answer the same question and will analyse eight theories ranging from “content to process”. Furthermore, it will critically evaluate how motivation theories help us understand the relationship between money, motivation and performance and whether motivation is purely influenced by money.
Finally, it will look at how these motivation theories express their view of how money affects employee performance at the workplace presenting a balanced decision on how best individuals can be motivated (extrinsically or intrinsically) to perform better at work. Whilst researching this subject, it became apparent that most motivation theories accept the fact that money as a reward can motivate individuals at some point to perform better at work. “Taylor believed pay to performance can affect motivation and money was the only significant motivational factor in the workplace” (Bratton et al. 010 p. 49). To illustrate, the film Wall Street (1987) highlights that greed for money is good and is right. However, it is important to note that money as a reward can cause conflict and jealousy, which in the end can hurt satisfaction and productivity and likely to upset people rather to motivate. To illustrate, in a telesales environment, a low salary and commissions based sales can lead to mercenary behaviour through the need of selling in quantity to increase bonus. It presents a logical concept as how some type of rewards systems can produce negative results.
Whilst it is generally agreed that money can cause job dissatisfaction, some workers from a store in New York won millions in lottery, yet kept working because of motivation they had (Mail, 2011). Some people would prefer to keep their job and lifestyle purely because of the recognition they already possess at work, meaning money would not be effective to persuade the individual to work harder, thus presenting a restricted analysis of money being the main motivator as Taylor believed.
Elton Mayo was most closely related to Hawthorne studies, which concluded that more than just economic incentives greater communications and improved human relations led to increased productivity and performance. Although there were no clear relationship between the factors and productivity, recognition and social cohesion were important too (Bratton et al. 2010 p. 52). The workers are not only motivated by economic incentives but they also want to be praised and recognised for the work done.
In his work, McGregor (1960) in Frick and Drucker (2011) acknowledges this and places money in his “Theory X” category and considers it as a poor motivator. Praise and recognition are placed in the “Theory Y” category and are considered stronger motivators than money. Likewise, McClelland also noted that “workers could not be motivated by the mere need for money; in fact, extrinsic motivation (e. g. money) could put out intrinsic motivation such as achievement” (Lawler, 1973). This means financial rewards (e. g. oney) could be effective if used as an indicator of success for a range of reasons e. g. keeping the productivity and performance levels stable. Maslow’s Hierarchy of needs theory believed that as “one began to satisfy one set of needs then the individual would start to have higher needs and satisfying that level of need became their motivator and placed money at the lowest level of his hierarchy” (Wiley, 1997). This suggests that other needs are better to motivate than money and people have the need to try to fulfill their potential and gain satisfaction.
Research shows (Kirton, 2001) that, when interviewed foster carers about their level of motivation and money, it suggested payment levels had a bearing and others not, but there were wide agreement that payment was not the principal determining factor in motivating workers. If this is the case, then payment played little component in initial motivation and for many foster carers occupied a relatively low place, as it was more rewarding for them to help the children in achieving their needs. In other words, foster care workers motivation and performance was greater compared to the rewards (e. g. alary/wages) received as they were leaned towards the fulfilment of other people needs or intrinsically motivated and money played a very little part in motivating them. Herzberg (2001) adopts the view that money is not a motivator in the way that primary motivators are such as achievement, recognition and salary (base rate) has a short motivational time effect. To illustrate, “An employee might receive a pay raise today, and 30 days later begin to question when the next rise will be forthcoming and current salary has little influence on willingness to improve performance” (Henderson, 2002, p. 91). On the contrary, money could be a primary motivator if it represents a symbol of achievement at work. Individuals seek hygiene needs such as salary because they are unsatisfied without these needs. Also, Herzberg policy called ‘job enrichment’ to make the job better, allowing workers to use the skills and abilities and also to plan and make decisions over their work and this included bringing variety into jobs through “rotation and enlargement”.
Given that, it can lead to greater staff commitment, understanding and loyalty within the organisation (Castillo & Cano, 2004). Some may agree that a variety of skills in a job will tend to keep the employee more interested in the job and thus motivated. However, employees could simply lack the skills and knowledge required to perform enriched jobs while others could be happy doing routine jobs because they feel the current work situation is relatively stress-free.
Also, in current environment people are aware of the pros and cons of promotion and become difficult to persuade them to accept promotion for certain jobs (e. g. supervisory level) as the financial rewards simply do not match the stress therefore, monetary rewards may not be effective to persuade them to work harder. Moreover, Rosenbaum and Bernard (1982) concluded that holding company award ceremony can better help to enrich jobs and motivate employees by recognising individual contributions to the organisation.
Expectancy theory adds a condition to the importance of the reward as an influence on performance which is the individualistic assessments of the importance of the reward and the likelihood of that reward actually being achieved. In his work, Vroom (1964) argues what was crucial to motivation to work was the perception of a link between effort and reward. This implies that although a person might be motivated to perform a particular task well, the worker can be restricted from doing so by his abilities.
In addition, opportunities for the exercise of effort also vary and thus affect the impact of an individual motivational force to their achievement. To illustrate, recession can make the task of selling very difficult whatever an individual ability or motivational force. The Glengarry Glen Ross (1992) film provides an interesting analysis as whether the money is everything at work and it reflects a logical overview of the characters where they are seen as dissatisfied with the new reward system implemented at the work which leads to a dysfunctional management and having a negative impact in the organisation.
In their study, Lawler and Porter (1967) compared the performance of a group of managers who felt that pay was a probable outcome of performance with another who felt that there was little relation between performance and pay and it suggested that performance was higher for the group which the pay was the outcome, adopting the view of money as influential in motivating managers to perform better at work. Again, Lawler’s (1973) discovers that different employees are likely to place different value on certain rewards, and therefore some incentives will motivate them more than others.
It could be suggested that individuals with low job status (e. g. undergraduate and non-managerial roles) are more concerned with working conditions and clarity in their work than those of a higher status and individuals who have been working for longer periods. A potential reason for this is that those in “high status positions may take the safety, quality of conditions and regularity of work for granted” (Warr, 1987). In practice, organisation such as PriceWaterhouseCoopers runs a benefits scheme named “Choices” which offer incentives including discounts on flight tickets, childcare vouchers and sabbatical programmes (Pwc. om, 2012). Such schemes seem to welcome the role of individual differences in the value placed to certain rewards (e. g. parents choice are likely to differ from the graduates) which can lead to increased motivation and satisfaction of the employees and their performance at work. In his studies, Locke et al (1981) investigates the influence of goal-setting on performance and believes that hard, specific goals produce better performance than easy goals and accept that hard goals will lead to more effective performance than easy goals.
To note, the goals have to be SMART (Specific, Measurable, Achievable, Realistic, Timely) and requires the participation of workers and the provision of feedback to allow positive results. To specify, some would argue goal setting is a very effective tool for managers to motivate people and setting “SMART” goals with provision of feedback about progress towards that goal greatly enhances job performance and motivation. Others would argue, higher motivation does not always result in a direct increase in productivity as in various jobs, productivity is limited by other people or by the pace of machines.
For example, higher motivation among factory production-line workers will not result in higher productivity, because the speed of the line will determine the pace of the work of the slowest worker. Latham & Kinne (1974) in Latham (2002) concludes that through training, people can be taught to set specific, high goals. In addition, Pink (2009) states the promise of more money does not influence workers to perform better. Therefore, the motivation of members of a group at work will confirm that not everyone has the same level of motivation and money can be a motivator for one but not to the other.
To conclude, there is no simple answer to the question. Does money motivate? Yes, but money alone is not enough but it does help. Some employees work for salary to satisfy their daily expenditure. However, people are motivated by different things at work as some employees have professional, some personal and others have financial goals and this might change over the time and circumstances and the same incentives do not work for all. The theories of motivation cannot realistically apply to each employee although they are useful for identifying general ways in which people can be motivated.
It can be said that money can be influential to motivate individuals for a short-term period. On the other hand, non-financial rewards such as recognition, progression and satisfaction can work better in a long-term. Managers should not rely purely in financial rewards to motivate individuals but integrating intrinsic motivators with flair of extrinsic reward (money) could be a better strategy for employers to apply and achieve a win-win situation. References: Bratton, J. et al. (2010) Work & Organizational Behaviour. nd ed. Basingstoke: Palgrave macmillan, p. 49-52. Castillo, J. X. , & Cano, J. (2004) Factors explaining job satisfaction among faculty, Journal of Agricultural Education, 45 (3), 74-75. Frick, D, & Drucker, P 2011, ‘MOTIVATING THE KNOWLEDGE WORKER. (Cover story)’, Defense Acquisition Review Journal, 18, 4, pp. 368-387, Academic Search Premier, EBSCOhost, viewed 02 April 2012. Glengarry Glen Ross (1992) Film. Directed by JAMES FOLEY, USA: New Line Cinema Henderson, R. I. (2002). Measuring and paying for performance (chap. 3). Compensation management in a knowledge-based world (9th ed. , pp. 387–421). Upper Saddle River, NJ: Prentice-Hall. Herzberg F. (2001) One More Time: How Do You Motivate Employees? Harvard Business Review, 81(3), p. 87-96 Kirton, D. (2001), ‘Love and money: payment, motivation and the fostering task’, Child & Family Social Work, 6, 3, pp. 199-208, Academic Search Premier,[ Accessed] 1 April 2012 Latham, G. P. (2007) Work motivation: History, theory, research, and practice (Foundations for organizational science).
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