Why a Pay Rise Isn't Everything - Literature review Example

Motivation – Theory and Practice Student’s Name: Course: Tutor’s Name: Date: Introduction The article Why a Pay rise isn’t everything as written by Anneli Knight (2012) and published by The Age is just a confirmation that pay is just one (or part of the) motivation factor among others, which organisations must consider for purposes of boosting productivity. Notably, motivation is a psychological process, which if understood well by managers, can enhance and sustain job performance among employees (Lathans 1998; Oluseyi & Ayo 2009, p. 8). According to Luthans (1998), motivating employees enables managers and business leaders to influence employee behaviour. For the managers to succeed in influencing such behaviours however, an understanding of what motivates people is necessary, hence motivational theories (Oluseyi & Ayo 2009). While acknowledging that the skills possessed by employees are crucial to productivity and performance, Burney and Widener (2007, p. 44) observes that the level of motivation that a person exhibits towards the job and related tasks is also crucial. Motivation is defined as the inner drive that leads a person to act in a specific way (Dessler 1978; Mawoli & Babandako 2011, p. 1). Motivation however can also be induced through external factors. In either way, motivation typically is a way inspired by rewards (Harrington 2003, p. 22). In this paper, three motivational theories are discussed and applied in the above named article by Knight (2012). The theories are Maslow’s hierarchy of needs which suggest that non-financial aspects act as motivators when financial needs (basic psychological needs) are met; the two factor theory which suggests that money is a hygiene factor and its absence or presence does not always lead to motivation; and equity theory, which suggests that salaries are judged whether they fair or not based on employees’ perceptions of equity and justice. Theories of motivation Maslow’s hierarchy of needs theory Figure 1 Source: Griffin and Moorhead (2009, p. 86). Maslow’s hierarchy of needs theory suggests that people’s “needs are arranged in a hierarchy of importance, with the most basic needs at the foundation of the hierarchy (Griffin & Moorhead 2009, p. 86). As indicated in figure 1 below, salary features as a psychological need that must be met at the base of the pyramid before the security needs and other needs up the hierarchy are met. Once the salary and other aspects of psychological needs are met, a person will seek motivation in other needs up the hierarchy. As such, an increase in the psychological components would not have a major effect on motivation. As Griffin and Moorhead (2009) note however, individuals can return to lower levels in the hierarchy if previously met needs become deficient. In the case of salary fleeces for example, employees may start feeling dissatisfied if the cost of living increases, and their sense of security is eroded especially if their savings diminish. As noted by Griffin and Moorhead (2009, p. 87) however, the application of Maslow’s hierarchy of needs theory differs among cultures and countries. The writers for example found out that belongingness was a more relevant motivation in Norway, Sweden and Denmark than it was in Japan and Greece. The latter two countries were found to rate security as a higher motivator compared to belongingness. Notably however, the needs hierarchy theory makes intuitive sense in most places owing to managers understanding it better. As Griffin and Moorhead (2009, p. 87) point out however, the theory has its deficiencies and it is thus best used as a framework for categorising needs. Herzberg’s two factor theory As a clinical psychologist, Frederick Herzberg came up with the two factor theory of motivation which suggested that factors that motivate people are different from factors that cause the same people dissatisfaction (Wall & Stephenson 2007, p. 41). In his theory, Herzberg argued that dissatisfying factors are not simply the opposite of the satisfying factors. Addressing salary and its ability to act as a motivator in the work place, Herzberg grouped it among other factors which he called hygiene needs. According to the theory, hygiene needs are the maintenance factors which include salaries, work conditions, and policies. One’s status, their relationships with supervisors and/or with subordinates, one’s security and personal life were also identified as hygiene needs that set the conditions for satisfaction or lack of it (Smerek & Peterson 2007, p. 230; Wall & Stephenson 2007, p. 42). However, Herzberg identified the true motivators as achievement, recognition, responsibility, advancement, and the work itself (Schwab & Heneman 1970, p. 56). Stating the difference between hygiene factors and motivators, Cole (2005, p. 98) used a motoring analogy indicating that: Hygiene factors can be considered as filling up the petrol tank, i.e. the car will not go, if there is no fuel, but refuelling of itself does not get the vehicle under way. For forward movement, the car electrics must be switched on and the starter operated – this is the effect created by motivators. While acknowledging that money is often cited as a primary motivator by people, Herzberg also noted that there was an interrelation of pay (salary) with other factors (Sachau 2007). For example, the author indicates that people seemed to acknowledge that a higher pay was a form of recognition, while a pay increase was an indicator that one was doing their job well, and/or progressing in work. Overall, Herzberg’s two-factor theory suggests that despite people thinking that money (or high salaries) was a primary motivator, the reality is that other factors such as achievement, recognition, responsibility, advancement and the nature of work are more motivating than the salary (Sachau 2007). Theoretically, Herzberg appears to be suggesting that while salary increments may decrease dissatisfaction in the workplace, there would be no guarantee that such increments would improve satisfaction. Equity theory Equity theory is the brainchild on John Stacey Adams, who it put it forward in 1963. The theory’s basic concept is premised on the perceived fairness that a person gets from an employer based on the perceived worth of their input (Robbins 2003). In other words, an employee compares their effort and input with the outcomes he/she gets from the workplace. If the employee thinks that the input-output ratios are equal, then a state of equity is perceived – hence creating satisfaction. On the other hand, if the input is considered as being more than the outcomes or benefits that the employee gets from the workplace, a state of inequity is realised, and this consequently leads to dissatisfaction. According to Konospaske and Werner (2002, p. 405), one’s sense of equity is shaped by several factors which include: comparing oneself to others with similar jobs in other organisations; comparing oneself to people holding different jobs in the same organisation; and comparing oneself to others holding the same job in the same organisation. In a research, Jacques (1961, p. 26) found out that underpaid employees “felt a sense of grievance” due to their perceived inequity, and if their employers fail to respond sufficiently and in good time, the employees feel an “active desire to change jobs”. Robbins (2003) however indicates that employees adopt different approaches in order to deal with perceived inequities. First, they can adjust their own inputs or outputs. Second, they convince others to change behaviours in a manner that changes their collective inputs or outcomes. Robbins (2003) further indicates that the employees can choose a different comparisons reference, but if nothing gives them the perceived equity they desire, they can quit the job and engage in something else (or workplace) which they perceive as more just and equitable. Application All three theories discussed above are reflected by Knight (2012) in the subject article as was published by The Age. Maslow’s hierarchy of needs theory is for example evident in the introductory statement where the author indicates that faced with hard economic times, businesses would need to consider using other motivators other than salaries to motivate employees. Such sentiments correspond with the hierarchy of needs theory, where safety needs become motivators after the basic needs are met. Employees for example may need assurance that their jobs will exist in future, and even if layoffs were to occur, the employer may provide motivators by assuring the employees that assistance would be provided. The need to foster an environment where belonging and social needs are met is indicated by Knight (2012) who notes that addressing the social needs of workers might be more motivating to the employees and rewarding to the employer compared to just salary increments. Following the proposition in Maslow’s hierarchy of needs, it is evident that Knight (2012) was right in her proposition that a pay rise is only a momentary boost, whose motivational potential fades off just as quickly. Knight’s (2012) views are also supported by the two factor theory as indicated by Frederick Herzberg, which classified pay (salary) as an extrinsic hygiene factor, which had the potential to provide the basic conditions that would motivate people in the workplace, but whose absence did not automatically mean that the employees would be dissatisfied. Rather, and as Herzberg (1987 cited by Cole 2007, p. 99) indicates, such absence would mean that the employee is not satisfied. Herzberg draws a distinction between being ‘not satisfied’ and ‘dissatisfied’, arguing that the former does not necessarily mean that the latter happens. Specifically, Herzberg is quoted by Cole (2007, p. 99) as having stated that “viewed within the context of the sequences of events, salary as a factor belongs more in a group that defines job situation and is primarily a dissatisfier”. Citing Kulik, Knight (2012) observes that staff who “receive a fair wage ...are unlikely to leave on the basis of pay alone” (n.pag.). The quoted statement corresponds with J. Stacey Adam’s equity theory, which argues that employees who perceive the rewards they receive from their employers as equitable based on their perceived contributions and the levels of outcomes feel satisfied. Citing Kulik further, Knight (2012) observes that it is hard for employees who receive a fair wage, to “...leave a good business and it is much harder for them to leave good co-workers” (n.pag.). Here, the motivational factors identified by Maslow and the motivators identified by Herzberg seem to be conjoined with perceived equity hence suggesting that the three theories can be jointly applied in the work place to find the real motivators that work in different circumstances. As Kroth (2007, p.5) notes, there is no “generally accepted model that integrates all workplace motivation”. As such, organisations are at liberty to find and use different aspects in varying theories for own benefits. This is supported by Locke and Latham (2004, p.390) who observe that workplace motivation is better represented in an integrative model. Conclusion In conclusion, it is worth identifying that the above described theories and their applicability in different situations may vary from one organisation to another. As such, it would be wise for organisations to find out what motivators work best for them and adopt the same. At the basic however, perhaps the three theories underscore the importance of salaries as a condition to workplace motivation, but are also indicative that there is more to motivation than plain monetary value attached to salaries. Initially, money could be a motivator, but its significance eventually changes to give way to other needs such as the need to be appreciated, recognised, and even treated equally to other people of equal skills and abilities. References Burney, L & Widener, S K 2007, ‘Strategic performance measurement systems, job relevant information, and managerial behavioural responses – role stress and performance, Behavioural research in Accounting, vol. 19, pp. 43-69. Cole, G A 2005, Personnel and human resource management (5th ed.), Book Power, London. Dessler, G 1978, Personnel management: modern concepts and techniques, Prentice-Hall, Reston, VA. Griffin, R W & Moorhead, G 2009, Organisational behaviour: Managing people and organisations, Cengage Learning, London. 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