The Importance of Money - Essay Example

Introduction The importance of money as a motivator remains to be an issue that has attracted great academic attention. There are people who regardmoney as the greatest motivator, whereas some people consider it to be a secondary factor. No one can, however, deny the role of money in motivating employees. There are other factors closer to money in the sense of motivation but money is topmost priority for most of the people to do work. Money is the basic need of every human being belonging to any group, gender, age and location. Different people have different views about the factors involved in motivation but still the effectiveness of money is always there. This paper argues that money is a good motivator and stands against the claim that money cannot motivate employees. It also elaborates how money motivates the employees and increases their work efficiency. The paper utilises the Herzberg Two Factor Theory and Expectancy Theory while explaining the arguments in the favour and against the effectiveness of money as a good motivator. Money as a Motivator The importance of money as a motivator over other factors has always remained to be a debatable issue. There are views that suggest the significance of money as a dominating motivator, whereas there are also some instances that provoke one to think about the other factors and their power to motivate people to work and perform in a better manner. The view that 'money cannot motivate employees' is based on the idea that employees can be motivated to work if the job enhances their satisfaction, social status, responsibility and achievement etc with the help of better working environment, company policies, promotion and growth prospects etc, rather than just money. Herzberg describes this approach in the two factor theory (motivation and hygiene) which supports such a point of view. He elaborates that there are factors that in actuality lead to satisfaction (motivators) and other ones are the factors which preclude dissatisfaction (hygienes). Herzberg says that good working conditions, status, money etc(extrinsic factor of job) are the factors necessary for growth and development but the factors that arouse the motivation to grow are creating chances for achievement, recognition, responsibility, advancement and job itself .These are the intrinsic factor of job. In order to motivate people managers should consider job itself rather than looking on its surrounds (Sheehan and Barry, 1997, pp. 305-322). This theory, to some extent, strengthens the claim that some factors are even more important than money, but nevertheless does not support that money does not bear the capacity to motivate employees. It is also said that money may matter highly for the people of lower or junior rank but as far as employees of higher rank are concerned, they may not feel as motivated only by the provision of more money. People usually want to possess money to live a convenient life and bear the expenses of living. Money is the basic need of all human being and one of the most important reasons behind one to do the job. But this does not mean that this is the only reason of doing work. There are factors other than money, which motivate the people to do work. Chiu and Luk also say that "people do want to become the masters of money rather than the slaves of money" (2002, p425). Mostly people would not like to be the slave of money but they want to acquire it for the sake of livelihood. Although this serves to be a criticism of money as a good motivator, this is also the point where the importance of money becomes highly evident. Money possesses an essential role in motivating employees because it is a basic need of every human being and also the most important reason for one to do the job. Money helps people live a better livelihood and put all their efforts into work rather than remain involved with the solution of their economic needs. Wiley (1997) point out that the majority of people consider the money and job security as the basic motivating factor. In a survey conducted by Wiley (1997), most employees irrespective of their age, gender, location and job position appreciated the money as the keen factor of motivation. Job security is also a great source of motivation for the employees. It is also noticeable that people of every age group especially younger employees consider money as their top most priority for doing any job. An Employee needs high wages and incentives to live a prosperous life. Money has become a vital element of motivation due to changes in urban lifestyles. Now people need to have luxurious life that can only be achieved through money and job security. Employees usually want high wages, increments, bonuses and job satisfaction, they tend to work for the sake of money, and want to earn as much as they can. The effectiveness of money in motivation can also be understood with the help of expectancy theory. Expectancy theory put forward by Victor Vroom describes that people are reciprocal with their environment so it has a great effect on individuals. There are three factors included in this theory. The first factor of the theory is efforts and performance which means that there is strong relationship of efforts with performance. The second factor included in expectancy theory is performance and outcome expectancy. This part of the theory tells that the performance of an employee is strictly based on the rewards that he or she expects to receive on the successful completion of the task. Employees are motivated with the rewards they get from their superiors and these rewards lead to results. In the same fashion the employees who know what reward they would be getting if they effectively accomplish the goals of a company would be more motivated than the employees who do not have any idea regarding the rewards they would get from the organisation. The rewards are necessary to motivate the employees. The third part of the theory describes the volume of rewards one would get for his work. For instance, if employees know about the rewards at the outset, more motivation can be seen in his work. These rewards might be in the form of huge salaries, bonuses and commission etc (Fudge and Schlacter, 1999). The expectancy theory shows the importance of rewards or money in motivation of employees. The better performance depends on the level of rewards offered to employees. If the employees are expecting to get rewards for their performance, they will show the high level motivation towards work and it will also increase their ability to work. Money motivates employees more than any thing and that is why it can be termed as the best motivator. The relationship between an individual and money starts from the childhood and it is sustained till he or she enters the professional life. Employers tend to use money as the biggest source of motivation. Motivation increases the performance and loyalty of employees towards the organisation. No one can deny the importance and need of money in our daily life. Despite the fact that there are people who say that other factors like job satisfaction etc are more important to motivate employees but still the importance of money to motivate cannot be ruled out (Tang, Kim 1999). It is because of the fact that the other motivating factors like working conditions, job environment, company policies and promotion etc cannot be successful motivators unless employees are free from the worries of their economic needs. Maslow also states the importance of satisfying physiological needs as the first and core step towards motivation (Sheehan and Barry, 1997). It is because of the fact that employees need money as their first priority so that they can buy things that are necessary for their survival. One should be enjoying doing his or her work but this does not mean that this serves to be the only reason behind their job. Money satisfies the basic physiological needs of human beings that are important to enable them to survive in the world so the money motivates more strongly as it is the basic need of a human being. Due to this fact managers prefer giving high incentives to motivate worker such as commission based salaries for sales staff etc. Steininger (1994) propounds that employees do not work for the sake of enjoyment, pleasure or satisfaction, rather most of them work to improve their economic conditions and to satisfy their prioritised needs. This suggests the significance of money in motivating employees and enhancing their level of performance. Conclusion This paper discusses the role of and importance of money in motivating employees. Money is not everything but something for which almost every one loves to work. Money is what drives people to engage their efforts towards the achievement of organisational goals. Expectancy theory also states that the employees become motivated if they know the reward they could achieve after the completion of a task. For the achievement of better results and higher profits managers should motivate employees with help of money and also by making use of other important factors. The extent to which money can motivate employees also depends upon their levels and ranks. Money can be a useful motivator for younger and lower rank employees, but other factors also seem to be of importance in the case of senior or employees at higher positions. These factors i.e. job satisfaction etc should also be applied to motivate them but here also the role of money cannot be completely ignored. References Chiu, R.K. and Luk, V.W.M. (2002), "Retaining and Motivating Employees: Compensation Preferences in Hong Kong and China," Personnel Review; 31(4), pp. 402-431 Fudge, R.S. and Schlacter, J.L. (1999), "Motivating Employees to Act Ethically: An Expectancy Theory Approach," Journal of Business Ethics, 18(3), pp. 295-304 Herzbarg, F. (1968), "One More Time: How Do You Motivate Employees," Harvard Business Review,46(1), pp. 53-62 Sheehan, J. Barry, A. (1997), "Job Satisfaction among Academic Staff: An International Perspective," Higher Education, 34(3), pp. 305-322 Steininger, D.J. (1994), "Why Quality Initiatives Are Failing: The Need to Address the Foundation of Human Motivation," Human Resource Management, 33(4), pp. 601-616 Tang, T.L and Kim, J.K. (1999), "The Meaning of Money among Mental Health Workers: The Endorsement of Money Ethic as Related to Organizational Citizenship Behavior, Job Satisfaction, and Commitment," Public Personnel Management, 28(1), pp. 15-26 Wiley, C. (1997), "What motivates employees according to over 40 years of motivation surveys", International Journal of Manpower, 18(3), pp. 263-280 Read More