Employee Motivation Money and Other Factors - Essay Example

? Employee Motivation – Money and other factors Introduction Employee motivation has been a of tremendous interest for many over the years. Tremendous research has gone into the subject to understand what motivates employees to perform to their best. Organizations adopt numerous ways and techniques to motivate its employees in order to increase the productivity. But not all techniques strategies yield positive results. There have been many theories that have been postulated over the years to explain employee motivation. One such theory is that employees are purely motivated by money. There are other theories that contradict this and argue that there are various other factors that motivate the employees and impact employee behavior. In this essay I evaluate both viewpoints and conclude my opinion on the debate. Motivation Before going on to see what motivates employees, it is first necessary to understand what exactly motivation is and the various motivation theories. Motivation is best defined by Armstrong (2002, p. 56) as a reason for a person to do something and move in a certain direction. Most people are motivated when they believe that a certain course of action leads to the achievement of a goal or results in a reward that satisfies a particular need. There are mainly two types of motivation: Intrinsic Motivation: This is motivation through work itself. This is a result of self generated factors which leads to people behaving in a particular way or particular direction. The various factors that are responsible for intrinsic motivation are creativity responsibility, challenging environment, scope for development of skills and abilities, growth opportunities, etc (Armstrong, 2007, p. 121). Extrinsic Motivation: Extrinsic motivation is inspired by what is done to or for people if they act in a certain way. That is, what is done to motivate people. These factors includes rewards such as pay, praise, recognition, raise and even punishments such as criticism, pay withholding, disciplinary action, etc (Armstrong, 2007, p. 121). Employee motivation depends on the individual. Each individual reacts to a situation in a different way and are motivated by different factors. Therefore, some employees are motivated by intrinsic factors while others are motivated by external factors. Money as motivator One of the very first theories that were published discussed how money is motivator for employees to perform better. It even concluded that money is the only factor that influences employee motivation. Research was conducted by Fredrick Taylor in 1911 and according to him employees worked only on money. The reason for this is that when employees were offered pay based directly on their performance or productivity, it was observed that productivity increased. This resulted in greater productivity and proves the fact that money is an important motivator. There are various other researches that were conducted in order to prove the role that money plays as a motivator. It is argued that financial rewards give employees an opportunity to secure their personal lives. Main motive behind employees to work is that they want to earn money to take care of their personal life and their families. If money is taken out of the equation, irrespective of what the job offers, no employee would be willing to work. Hence money is a vital motivator. Money may not be the only motivator but is definitely the most fundamental one. There is evidence from various researches that have proved that where financial rewards are offered, better is the productivity and the commitment of the employees. One of the best examples of this is how the changes in the pay system made a direct impact on the productivity and growth of General Electric. CEO Jack Welch’s strategy of greater rewards for those employees with better individual and organizational performance made motivated the employees and resulted in the revitalization of the organization (Rynes et al., 2004, p. 392). In a recent survey, it has been found that productivity of employees who are satisfied with their pay has doubled. Also many employees were dissatisfied irrespective of all other requirements met. There were different reasons stated why they were not satisfied. 47% were of the view that the raise in the pay was not in pace with the increase in cost of living or inflation. 32% said that the raise did not compensate the effort that they put into their work while 26% thought they would be paid more for the same work if they worked elsewhere. All the above are clear indicators of how money motivates the employees. In fact, it proves to some extent Taylor’s view that people work purely for money. Various other factors that motivates employees Money is an important factor but there are various other factors that motivate the employees to perform better. Money alone can not motivate an employee to perform at his/her best. There are various factors such as recognition, challenging environment, work atmosphere, colleagues, opportunity for growth, development of skills and abilities, fulfillment of creative needs, etc. There are numerous theories that have been developed to explain the how these various other factors employee motivation in the workplace. An individual has personal needs and many would want to be recognized and rewarded for the work they do. It always does not have to monetary rewards. Employees would want to be a part of something important. People love challenges and responsibilities and absence of this may not motivate them to perform at their best. Money might force them to work but not necessarily motivates them to work at their best. Absence of these factors might still result in greater production but will fail to produce quality output. David McClelland’s three-need achievement theory explains how these various other factors are important. According to him, employees have personal needs for affiliation, power and achievement and this was motivates them to perform at their best (Borkowski, 2009, 118). He says that each of these three needs are found in varying degrees among employees but without these needs being satisfied, employees will not be motivated. This is very true as employees working in a single position for a very long time can not be motivated by just offering higher pays. An employee would only continue working there is an opportunity to grow in the organizations and attain higher levels. Fredrick Herzberg’s motivation/hygiene theory is another important theory that contributes towards proving that various other factors apart from money lead to employee motivation. According to the motivation/hygiene theory, there are two different group of factors that affect employee motivation (Miner, 2007, p. 47). Motivation factors include factors such as achievement, development, responsibility, importance, etc. These factors motivate the employee to perform better and the absence of these factors makes it very difficult to motivate the employees. Hygiene factors are factors such as pay, job security, financial incentives etc. These factors do affect the performance of the employees but they do not motivate the employees. This cleanly explains that money plays a role but its not the only motivator. There are various other factors that motivate the employees. In order to perform at their best the various other needs of the employees apart from money has to be met. Conclusion Looking into the both the view points of the debate, I believe that money is an important motivator but it is not the only motivator. People do not work purely for money but there are various other requirements such as creative needs, responsibility, challenges, power, growth, etc that need to be satisfied. Only money will be ale to motivate the employees on a short term but to motivate the employees to consistently perform at their best, their various other needs have to be fulfilled. References Armstrong, M. (2002) Employee reward. 3rd edn. Wiltshire: Cromwell Press Armstrong, M. (2007) A handbook of employee reward management and practice. 2nd edn. PA: Kogan Page Publishers. Borkowski, N. (2009) Organizational behavior, theory, and design in health care. MA: Jones & Bartlett Learning. CIPD (2009) Pay Management (UK) Survey: Employee Pay Attitudes 2009. CIPD. Retrieved 19 May 2011 from http://www.cipd.co.uk/NR/rdonlyres/65F6EFCC-1DE4-465C-B146-39A2ACBE79AD/0/paymanagementsurvey20092.pdf. Miner, J.B. (2007) Organizational behavior: From theory to practice. NY: M.E. Sharpe Inc. Rynes, S.L., Gerhart, B. & Minette, K.A. (2004) The Importance of Pay in Employee Motivation: Discrepancies between what People Say and what people do. Human Resource Management, Vol. 43, No. 4, Pp. 381–39. Read More