Role of Motivation in Management - Essay Example

Foundation of management Table of Contents Table of Contents 2 Introduction 3 Money as a motivational factor 4 Theories 5 Alderfer’s ERC Theory 6 McClelland’s Acquired Needs 7 Does money actually demotivate? 9 Money as Intrinsic motivation for better performance 10 Conclusion 11 References 13 Introduction Motivation plays an important role in improving the productivity of the employees and job satisfaction. Money contributes a lot in affecting the motivation of employees. People perform different types of job for earning money. In the competitive world performance of the employees is highly dependent on their salaries. In this case study contribution of money in affecting motivation has been mentioned in details. For a long time, there is a doubt that whether paying high salary to the employees does really produce better result or not. Many theories of motivation have mentioned the importance of money in motivating employees and affecting their performances. In this case study two motivational theories are mentioned where contribution of money is mentioned for motivating employees. The importance and limitations of these theories are also explained in details. Scientific evidence shows that that there is a complex connection between performance, compensation and motivation. People should enjoy their job while performing its. Then only they will be able to delivery good performance. But if the people are more focused on their earning from the job then they can never enjoy their job. As a result their performance will not be good. For motivating employees only playing them money is not sufficient. There are also some important factors of motivation which contributes a lot in the growth and development of the employees. All of these factors are discussed in details in this case study. Role of motivation in management Management of organization focuses on different theories and practices for improving its organizational processes. Some of these theories and practices are implemented to increase motivation among the organizational members. Management activities are very complex which requires huge effort and dedication for managing the organization and its different process effectively. Every company require money and resources for performing its various functions and activities. When the employees get sufficient amount of money they become motivated to perform their work and responsibilities. As a result in, most of the cases it has been observed that those employees deliver good performances. The organizations managing its all of its motivational tools successfully are able to use their human resources at its maximum level (Premuzic, 2013). Management of companies help to increase the efficiency of employees by leading them and supporting them in their various works. Management of the company puts huge effort to establish strong bonding among the organizational members. This process helps them to increase the motivational level among them by enhancing their communication level. Organization has different leaders who motivate other people for improving their performances. The leaders guide organizational members and show them different ways to achieve business goals and objectives. When the employees are strongly motivated by organizational management system then they becomes loyal towards the company and tries to do many things for the company without expecting money for it (Houston, 2006). Therefore it shows that money is not only motivational factor for organizational members. Money as a motivational factor Money is always been an important factor for employees. This is one of the reasons that they perform their work effectively. But this is not a single motivational factor for organizational members. Various researchers have proved that job satisfaction and salary are weakly associated with each other. The employees must be satisfied with their job. Without having job satisfaction they would not be motivated to give their best performance. The level of job satisfaction depends more on job role and job profile. Employees become satisfied with their job if they get proper opportunities to use their skills, potentialities and enhance career growth. Here money plays a very negligible role in affecting job satisfaction level of employees. But in many companies’ salary and job designations are related to each other. Employees draw salaries according to their role and work in the company. In this case money acts as a motivational tool for them. If a person only focuses on earning money then he will put huge effort for delivering good performance (Lim and Sng, 2006). This will help him to earn more money and improve its job designation. Different research done in organizations on job satisfaction shows an important result which highlights the importance of money in motivating. Through various researches it has been seen that employees who are placed at the top level of company and who earn huge salaries have same job satisfaction level when compared with the employees at low level, earning less salary. This research data shows that employee motivation and engagement depends on various organizational factors. Employees try to be happy within the company not only with their pay but also with many other things associated with their job. Money cannot buy the engagement of organizational members with organizational process and activities (Liu and Tang, 2011). Theories Motivation of a person is determined by his behaviour and different characterises. According to his character or nature a person will be motivated or influenced. Characterises are of two types namely individual and social. In Individual characterises person is concerned about his own needs, requirements etc. In social characterises person is concerned about society, culture, work environment etc. The theories of Alderfer’s ERG and McClelland’s Acquired Needs theories show different things which affects motivation and contribution of money in affecting motivating (Chaudry, Jain, McKenzie and Schwartz, 2008). Alderfer’s ERC Theory ERG theory explains existence, relatedness and growth of employees in an organization. They are various factors which affects these three things. According to this theory each and every people are different from each other. Therefore the things vary largely which affects their needs and requirements. ERG theory shows a refined image of various needs as shown in Maslow hierarchy of needs. Here the theory emphases that other that other than money there are different other needs which affects the motivation of individual within the organization. ERG theory states needs motivate people and their performances. Needs depends on situations and circumstances. For this reason values of people differ from each other (Arnolds and Boshoff, 2002). The theory shows that, needs of people are not satisfied at a particular level then they don’t get motivated to perform their job. For this reason they get frustrated and focus more on fulfilling their basic needs. Existence needs: This need deals with the basic requirements of various things which are essential for living. The basic requirements of people are food, shelter, drink, security, law and order etc. For satisfying most of these needs money is required. So the employees expect to get sufficient amount of money to from company to fulfil these needs. Relatedness Needs: This type of need involves in satisfying the relationship of individuals with others. Strong interpersonal relationship contributes a lot increasing motivation among the employees. To some extent money plays a vital role in this field but there are many other factors which are more important than money in building strong relationship. Growth: This needs focuses on the development of different potentialities of individuals. Personal development of a person is essential for improving its performance and efficiency. This helps the individual to achieve the level of self actualization. To satisfy this need money does not act as an important thing. It has very negligible contribution (Kini and Hobson, 2002). McClelland’s Acquired Needs McClelland’s Acquired Needs theory focuses on three types of needs which affect the performance and growth of the people within a company. This specific needs highlighted in this theory are achievement, power and affiliation. According to this theory the motivation of organizational members depends largely on these three factors. When all of these factors are satisfied then the employees get motivated and committed to deliver their best performances. Their effectiveness of job functions is influenced by these three factors. Achievement: The employees who seek achievement generally avoid both high and low risk situations. Organizational members who avoid low risk situation believes that achieving success by performing low risk works do not contributes much in their career. By performing high risk work those employees consider that outcome of high risk works is just a co incidence or chance rather than its own effort (Arnolds and Boshoff, 2003). This employee prefers to perform moderate type of work. The success chances of those works are moderate. Achievers believe in working alone or working with highly efficient employees. Here the need of money is not involved as a motivational factor. According to this model these employees’ focuses on needs associated with work quality not monetary. Employees are more concerned about the feedbacks of their work. This acts as a motivational tool for them. By getting feedbacks they will understand more about their performance level and based on this they will develop themselves. Power: As per this theory power act as one of the important thing which influences the motivation of people. Power is of two types namely institutional and personal. Institutional power helps to organize and achieve the goals and objectives of company. Personal power means the desire to control and direct other people in an organization. These two types of power provide motivation to employees. For example manager of a company needs institutional power rather than money for getting motivation in their work. But team lead requires personal power for getting motivation in his work. In both of these cases contribution of money does not have any contributing in motivating employees (Boxall and Purcell, 2003). Affiliation: This factor focuses on the need for creating and developing social relationship. The employees’ experiences the need accepted and loved by other members of the company. This motivational factor helps them to put much effort in their work and to increase their commitment level. The employees follow different rules and regulation of the company for getting accepted but different organizational member. The employees who seek this type of motivation do not perform any work which involves high uncertainty and risk. They focus more on building social relationship for getting affiliation for their work. Affiliation helps them to get noticed among other organizational member. Affiliation is provided to them by giving reward, prestigious position etc. Money does not have any contribution in this motivational factor (Laursen and Foss, 2003). Does money actually demotivate? There is always a strong controversy about money as an important motivational factor. Many researchers have presented their different opinion about this matter. But still there remains a confusion related to this question. In many incidents it has been observed that financial reward helps to motivate the employees in delivering good performances. But in some cases it has also noticed that by only providing financial reward and not providing any other important things to employees often de-motivate them in their work. In such incidents it can be inferred that providing only high pay to employees causes de-motivation among them. The employees also need affiliation, power, growth, security, social connections etc to become motivated to perform their jobs and responsibilities. Moreover there are some negative effects of incentives which hamper motivational level in organizational members. Employees feel more interested to perform interested works rather than the works which provide incentive facilities. If the work is boring then the employees do not enjoy their work in spite of getting incentive facilities. When a company provide tangible reward like money, then the level of intrinsic motivation decreases. This is because the employees feel that their effort and contribution of facing new challenges and enhancing business process by that is substituted only by money. For this reason their performance also deteriorates. In such situation other than money the employees require social recognition, position, and power etc for motivating themselves to deliver much better performance. But in many public sector companies it has been observed that employees are less interested in external or non monetary reward. There motivational level depends highly on monetary reward. Performance of these type of employees increases by three times when they extra money for their job. Their work performance and engagement level with the organization increases by this process. This is because the employees of many public sectors earn less salary in respect of their designations. So earning extra more money buy incentives and reward facilitate them in fulfilling their basic needs successfully. Therefore motivational factors strongly on personal characterises and focused objectives. When both of these things are satisfied by the company then employees feel motivated to perform their job and achieving organizational goals. Motivational tool must match with needs, interest, task and skills of employees. Only considering money as motivational factor will lead to prevent the employees from enjoying their work. It will also reduce their engagement with the company. Money plays a significant role in motivation up to a certain level but after that many other motivational factors are required to motivate organizational members effectively and increase their involvement in organizational process. Money as Intrinsic motivation for better performance In many cases it has been observed that high financial rewards act as a strong intrinsic motivational factor in enhancing job performances. A huge number of people focus mainly on their salaries other than their involvement with the company, learning new skills, establishing their position etc. These types of employees deliver their best performances for receiving financial reward from company. Many employees are more concerned about living a luxurious life by earning a huge amount of money. Money acts as an intrinsic motivational factor for them. Their happiness is mainly dependent on the amount of money they are earning. So if the employees are offered less money for a work then will not deliver their best performance for that work. Therefore in this case job performance will vary with money. But for this reason extrinsic motivational factor like social affiliation, maintaining strong social relation does not loss its importance. Different people value money for satisfying different reasons. Fulfilling such reasons influence them to increase their engagement with the company. To increase employees job performance companies must developed and use different motivational tools according to the need and knowledge of the employees. Personality of the employees also plays a major role in enhancing job performances and engagement. Employees which are more emotionally stable or earn more often develop a strong or influential personality which affects their job performance positively. Conclusion Motivation is a significant factor for employees affecting their performance and growth. Motivational factors differ from person to person based on their characteristic, needs and personality. An organization should provide different motivational tools to its employees which will influence them to deliver best performances. In this case study role of money has been discussed as a motivational tool. Two different theories of motivation have been explained in details explaining the contribution of money in affecting motivation of employees. The theories highlighted that other than money there are many other things which affects motivation and influences the job performances of employees. Factors line power, growth, affiliation; achievement etc contributes lot in influencing employees’ motivational level. This case study highlights that to some extent money acts as a de-motivating factor for motivation in case of many employees. References Arnolds, C. A., and Boshoff, C., 2002. Compensation, esteem valence and job performance: an empirical assessment of Alderfers ERG theory. International Journal of Human Resource Management, 13(4), pp 697-719. Arnolds, C. A., and Boshoff, C., 2003. The influence of McClellands need satisfaction theory on employee job performance: A causal study. Journal of African business, 4(3), pp. 55-81. Boxall, P., and Purcell, J., 2003. 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Does the love of money moderate the relationship between public service motivation and job satisfaction? The case of Chinese professionals in the public sector. Public Administration Review, 71(5), pp.718-727. Premuzic. T., 2013. Does Money Really Affect Motivation? A Review of the Research. [online]. Available at < https://hbr.org/2013/04/does-money-really-affect-motiv> [Accessed 27th March 2015]. Read More