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Organisational Behaviour: The Role of Money in Motivation - Essay Example

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Organizational behavior: The role of money in motivation Introduction Organizational behavior defines the study of the effects of actions on an organization. Individual members or groups within an organization or the organization itself may initiate such actions…
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Organisational Behaviour: The Role of Money in Motivation
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Download file to see previous pages The role of money in motivation Money, being a common medium of exchange, is recognized and desired by almost every individual in an organization. As a result, money factor influences people’s behavior, either positively or negatively. Motivational theories such as the Maslow’s theory of needs and McClelland’s theory for example explains the motivational drive that employees derive from advancements such as monetary awards in remunerations and rewards. “Maslow’s hierarchy of needs” theory explains that human beings are motivated by the drive to satisfy needs. The hierarchical postulation of needs, according to Maslow, offers the general opinion that availability of resources for satisfying needs will motivate employees in an organization towards positive behaviors. As a result, Maslow’s theory of motivation identifies money as a motivational factor in an organization. Maslow’s postulate that human need never end, and that satisfying a need results into another need for motivation implies that availability of rewards such as money would continually motivate employees in an organization. This identifies money as an instrumental tool towards motivation (Armstrong, 2009). Armstrong explains that money is a common reward that is appreciated by a majority of employees. The author however argues that money can have both negative and positive motivational impacts. While failure to offer monetary rewards to members of an organization may demoralize them, provisions for such rewards may motivate or fail to motivate. Money may also fail to motivate because of diversity of people’s needs. A person who does not value money may for instance not derive motivation from monetary reward. A recipient’s capacity to attain set objectives for rewards also explains effectiveness of monetary rewards in motivation. While a person with the potential and confidence to attain the desired objectives is motivated by rewards in money, incompetent individuals or those who lack confidence in a task often respond negatively to rewards. Money therefore plays a dual directional role in motivation (Armstrong, 2009). Benabou and Tirole (2003) further explains that in cases of positive impacts of money, effectiveness in the motivational role decreases with time, an indication of psychological aspects. The psychological role of money in motivation is further explained by the fact that people do not only value the reward in money but also attach it to other factors. Fairness for instance plays an instrumental role in motivational effects of money. An unfair reward, with this effect fails to achieve motivational roles. Research has also shown that money may improve people’s utility in their jobs without necessarily motivating the individuals to higher performance (Armstrong, 2010). Similarly, money plays fundamental social role in motivating workers in an organization. Social needs, based on Maslow’s motivational theory as well as McClelland’s theory explains money’s social role in motivation. The need for “achievement, affiliation, and power” for example generates utility in money that in turn develops motivation (Armstrong, 2009, p. 125). The need for social identity and association with a respectable social class that are attainable through financial capacities further explains the indirect role of money in motivation. This means that besides the derived utility from rewards, people are motivated to work harder and generate ...Download file to see next pagesRead More
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