Money And Motivation: How Are They Connected? Essay

The concept of money is very important to many people. Although, these incentives can vastly improve efficiency, most employees prefer other methods. Monetary motivations are not always available, therefore other strategies must be concluded. There are many things that money can buy, but job satisfaction isn’t one of them. Employees seek comfort, appreciation, and challenges. Pay alone is not enough to enhance the efficiency of a company. Management must familiarize themselves with alternative mechanisms that create lasting impressions amongst their workers. There has been abundant research conducted in the air of money and the effects it has on humanity. How does it affect their motivation within an individual’s life and how they are motivated in the working world? The purpose of this research is to understand how money is correlated with motivation.

Money does make the world go around, but it does not produce happiness. Individual’s motivations are different and management should strive to create numerous strategies to fit these needs. Naturally, employees who are eager and comfortable in their settings, will work diligently in their positions. Job dissatisfaction is very common in modern times, which is why these topics are significant. Discovering new strategies and activities to increase efficiency will positively affect both owner and workers.

Research Questions

By undergoing this research, I aim to answer the question of what the leading motivation factor is in the workplace. Understanding the psychological and historical contexts of these issues, will provide me with a worldlier view. By examining past evidence on these topics, I can gain personal insight towards the current state. Comparison of past and present data will reveal ideas of structure and influence on these topics.

Literature Review

The first section of my literature review will discuss why money is not a proper incentive for employee’s performance. By doing so, I aim to show audiences why other means should be utilized in these situations. The second portion of this literature review will be devoted to showing other mechanisms that will increase employee’s motivation and performance without the use of financial gains. Lastly, I would like to dedicate the final section of this review to showing audiences why these other methods are more realistic and the benefits they possess. Money cannot buy everything in a workplace, and that is what I hope to conclude with. By the end of this review, I hope to have learned a great deal, and teach others more about these issues.

Money is Not the Motivation

The use of money has been woven into the workplace for increases in production and performance alike. Monetary incentives are the number one tactic used when business’s want to get more from their workers. These incentives can come in various forms; however, these can become quite costly to business’s and are not the only mechanism that works. Money is not a proper motivational incentive because there are several negative consequences that follow it (Tang,1992).

Money by all means can motivate most individuals. But to those who have more than enough, this cannot be the only factor. The survey utilized in this study tested the importance of money incentives in the work place, and many realizations were found. Although many people enjoy pay increases and so forth, many employees enjoyed positive words just as much. This study indicates to us that money isn’t everything and should not be the only strategic force in recognition for a job well done. Most people who are very passionate about their positions, wanted to increase their performance for their own sake and the good of the companies as well. Money is in the eye of the beholder, and for some, these incentives just don’t work (Tang,1992).

Money is Not the Motivation

According to Camerer, at al. : “The studies show that the effects of incentives are mixed and complicated. The extreme positions, that incentives make no difference at all, or always eliminate persistent irrationalities, are false. Organizing debate around those positions or using them to make editorial judgments is harmful and should stop(1). These incentives cannot be utilized for many individuals in the workplace. That is why business’s need to formulate other types of incentives to reach to many different workers (Camerer,at al., 1999).

On judgement or decision based tasks, incentives can severely hurt. Especially money incentives because they allocate hasty choices. Money as a motivation tends to bring out competition and the worst in people, these types of incentives can harm employees and companies alike. Sometimes incentives can also make no difference at all in the workplace. This is especially true for risky decision making. These incentives are not enough to make practical decision, especially for those with ethical principles (Camerer,at al., 1999).

Performance and motivation are dependent on several variables. Whether it be the individual, environment, or personal beliefs/passions. Incentives should vary if form and should not only include money. This review reveals to us that money can either hurt or enhance a business. Companies must be highly informed with these ideas, and conclude other motivational strategies to help increase performance (Camerer,at al., 1999).

Money is Not the Motivation

As we can see from the research above. Money cannot be utilized as a proactive incentive. Most managers believe in the power that comes from offering monetary incentives to workers. These mechanisms are simply default in most companies. Although, sometimes these means are successful, they do not identify the real problems of the scenarios. This article claims that money offerings do not alter attitudes or underlie our behaviors. These are quick fixes to problems that often cause many other problems. Rewards do not enable strong commitments to the company, they are just temporary solutions. Even if they do increase performance, this performance captured is not consistent, and will be unlikely available next time around. (Kohn,1993).

Rewards are defined as manipulative in this article. It claims that both reward and punishment are two sides of the same coin. They are considered both to have punitive effects in the workplace. Monetary rewards can also have a negative effect on employees. It creates a competitive atmosphere in the workplace and can cause many issues that were not initially present. Once these rewards are eliminated, they are already expected by employees. It is likely that performance will decrease (Kohn,1993).

Alternatives to Monetary Incentives

Although money incentives can be highly effective, they also come with several complications and restrains on business’s. Which is why firms must construct alternative motivational strategies. One mechanism that been proven to work in employment settings is the enacting of goal setting. Each week or month, a firm will work towards a specific goal. When tasks are conducted, it aims focus on necessary changes. This motivates employees to work together to fix a certain goal or means (Latham,et al.,1979).

Compared to money incentives, goal setting can often cost companies little to nothing. Goal setting is especially effective when utilized to its full potential. This includes active participation, both of the employer and employees alike. Of course, without the specific conditions of this, even it can fail as money. Even some employers are not engaged in these tatics because they offer little incentive to them personally. Nonetheless, these methods have shown to be positive alternatives and should at least be tried (Latham,et al.,1979).

Alternatives to Monetary Incentives

This article also presented highly valuable information regarding motivation of work members. This article starts out with the conclusion that pay raises or improving work conditions will not be enough to encourage workers to be productive. It does however conclude, that giving workers challenges is one way to motivate them to work. This works because workers become consumed in work and they either have the option to do the work, or lose their jobs. This is increasingly true in competitive business fields (Herzberg, 1986).

Often times, this work is easy persuaded unto those employed. However, even this solution has some circumstances in which it will not work. This is especially true when working conditions are not meeting employee expectation. In these cases, a firm list with improvements should be crafted by the entire team. This is one way that challenging work can be the complete makeup of the motivation within a firm (Herzberg, 1986).

Alternatives to Monetary Incentives

We have viewed already two alternatives to money that are utilized to promote increased productivity. These were the utilization of goal setting and challenging work. Another noteworthy alternative to cash is utilization of praise in workplace settings. Employees love to be congratulated and recognized when their merits are good. Although this mechanism may seem a tad silly, it actually works (Nelson,1996).

In 1999, a survey was conducted by Mastery Works, Inc., 500 professionals were surveyed on what qualities would need to be present for them to continue working in their current jobs. One surprising discovery was that only some 30% listed wages. Most who were surveyed claimed they wanted to be praised in their work place. Who would have thought that something as simple as saying ‘good job’ would be highly satisfying to workers. The main reasoning for this is because very few jobs appreciate workers for outstanding work (Nelson,1996).

Amongst this suggestion, was a list of ten other alternative ways to enhance motivation in the workplace. Another suggestion that I found very fit was striving to create an open and fun work environment. Let’s face it, nobody really wants to work, but it is essential for life. However, a more fun environment would create motivation for workers. Work becomes a fun and exciting activity and promotes each employee to try their hardest. The last strategy that was listed was providing workers with a sense of ownership. Whether it’s the CEO, or an ordinary worker, they all contribute to the same goal. Workers who feel important will act important (Nelson,1996).

Alternatives to Monetary Incentives

As we can see there are several ways that employees can be motivated in the workplace, not including monetary incentives. There has been a lot of research done on such issues, simply because businesses can’t afford pay incentives all the time. One interesting fact that I found in the course of this article being reviewed was that workers are motivated when they have sympathetic help with personal problems. This was found in research conducted in the span of 40 years and helped identify many motivational forces utilized in business. This survey included several relatable questions and is responsible for much of the information available on these topics (Kovach,1987).

The motivation of supervisors and workers is also different, which was revealed in this article. However, sometimes money can be the leading motivation for both. Most often managers and supervisors of the sort are only concerned with profits. This is because they own the business, and are the ones responsible for downfall. In some sense, it is easy to understand why they are concerned primarily with money. However, workers are generally not concerned with money as the primary motivation for work. Workers tend to want to be valued and appreciated and that is what makes their work experience a positive and motivational one (Kovach,1987).

Money Can’t Buy Everything

Although sometimes, money incentives are essentially. Because, let’s face it, money provides us the ability to live. However, as this article proclaims, there are many things that money can’t buy in the workplace. This is first shown to audiences with an example of voting. Candidates cannot simply pay to receive one’s vote, even though surely, many would take this offer. Just as votes cannot be bought, neither can workers. Something outside from money must convince some to work (Sandel,2012).

Another thing that money can’t buy is ethics or morals. Generally, the utilization of money complicates one’s moral beliefs. Money tends to drive people to lose all their ethics, because money is a powerful drug. In the workplace competition for money can make workers turn against each other and pursue their own investments. The utilization of money can hinder many negative effects. Money cannot buy ethics or morals and workers should not sellout to employers(Sandel,2012).

Money Can’t Buy Everything

Often, many safety issues are not taken care of due to insufficient funds. Money may be able to purchase the necessary products, but cannot teach safety tips. This article observed how safety can be a very motivational component of performance. Workers desire to feel safe while they are working, this is especially true in factory type jobs. Monies that could go towards safety gear, is being spent on pay increases and other unnecessary expenses. I am certainly, not saying, by any means that employees should not be compensated, but most often the owners of these business’s keep a large portion of the profits and do not distribute them fairy. Money can’t buy safety training, and that is what is needed in many jobs (Griffin, Neal,2000).

When so many other issues are ignored, we can assume that money is not being spent wisely in a business. No one should fear performing at work, because many implications were enacted to fight against this. Much legislation was created for fair working conditions and so forth, workers have rights that should be upheld to the highest degree. Not only can workers be hurt under unsafe work conditions, but employers will be forced to compensate for any harm done. Money can’t buy proper safety or safety training. Money doesn’t have to be the only motivation for workers (Griffin, Neal,2000).

Money Can’t Buy Everything

Extrinsic rewards such as money can harm intrinsic motivation. And money can’t replace the sensation of self-accomplishment. Extrinsic rewards are anything physical that can be given, such as money and other physical rewards. Prior to obtaining such rewards, workers worked for the sake of feeling proud of themselves. This article offered a good explanation for this concept. For instance, say you loved mowing lawns, but you never were paid for them. You simply did the work because you enjoyed it, but once money was offered, the brain reconstructs its thinking (Deci, 1971).

It is apparent that in the work field, that employees expect some sort of income. However, money incentives are an additive on yearly salaries. Which makes this fit in with this article. People can be motivated without money. People should be concerned with their work and want to make improvements naturally, this is in their blood. This is part of intrinsic value. Workers should not depend on money to motivate their practices (Deci, 1971).

Methodology

The research question explored handles how money can manipulate the motivation of the human race. Tang conducted the first research that brought in the basic of how the human population identified money as. Seventeen percent of the variance described money as good, or the positive attitudes (Tang, 198). This first part just described what people thought about money and whether they were positive. The second factor conducted within the research was considered the “evil” portion. This is where the variance, about 8.2% of them, depicts with negative attitudes towards money (Tang, 198). Factor three involves achievement. Did the respondents have their own version of successful achievements when it came down to money? About 5.8% of the variance agreed with the statement that money provides achievement (Tang, 198). They believe we keep score of how well a person does by the amount of money they make. The fourth factor that comes into play is respect. About 4.4% of the variance believes that money is a cause of respect and self-esteem through the individuals being able to express their competence and abilities to gain the self-respect and self-esteem (Tang, 199). Factor five brings in the process of budgeting. Money is the key factor of how you budget. About 4.1% of the variance believes that the ability of budgeting shows retention as well as effort/ability to maintain the money (Tang, 199). Factor six, which covers about 3.3 of the variance, and covers the topic of freedom (Tang, 199). People associate this with them having autonomy, freedom, and security. They believe money is power.

Sandel has done the research in order to determine what money cannot buy. He begins by discussing areas that are truly big reasons to why money cannot buy everything. Sandel discusses the gap between the rich and the poor, where the lower class households saw a decrease in income where as the rich saw an increase of 50% during the 16 years between 1976 and 1992 (Sandel, 118). One of the other issues he discusses when it comes to money is voting. Bribery of politicians and just flat out the cost of campaigns as well. A recent campaign in the USA cast $800 million to just operate (Sandel, 115). Another discussion brought up is how American civilization has a military service that is completely made up of volunteers, of which you cannot buy that (Sandel 110).

Nelson begins his discussion by mentioning how money is the number factor that motivates people and how management believes this. He goes on to discuss his own experiences shows that this is not the case (Nelson). He discusses research done back in the 1940s that indicates that feeling “in” on things and having interesting work were also factors besides money that pushed them to do their best (Nelson). In 1994 a new study showed that open communication was a major factor, besides money (Nelson). This response was also ranked as very important to those entering the work force and how they would choose their job (Nelson). Now he goes on to say that money does have its value, even though most people prefer instant recognition. Money has the obvious role of being needed in order to pay bills and maintain a standard of living to which each individual is accustomed.

Nelson discusses that money for sure motivates individuals, but the main motivation that has our attention changes as soon as we can meet our monthly expenses (Nelson). Motivation that people have will change numerous times throughout their lifetime. Normal changes that everyone knows can occur in someone’s life will make the primary motivating factor be money. This can include unexpected medical bills, new home, and much more. People begin to look at other responses from work once they can afford their monthly expenses. They tend to look for the feeling that they are making a contribution, having their manager tell them they did a good job, respect from peers and colleagues, being involved and informed of what is going on in the company, and having meaningful and interesting work. Nelson has the best saying when it comes to money and motivation. Salary alone isn’t a motivator (Nelson). People now want more than just their salary as the job goes on.

Research was also conducted on how there is a difference between what the employees say motivates them and what their supervisors say. Based on surveys done, employees showed that sympathetic help is the number one reason is completely different than what the supervisors think. The chart provided shows the significance and support to the previous statement (Appendix 1).

Incentives are another form of compensation that will hopefully motivate people to do something. Research was done to show why incentives could be bad. Based on Kohn, one reason why incentives are an unscrupulous idea is because of a concept of temporary compliance. Based on Kohn research, a response by Heber H. Meyer (professor of psychology at the University of South Florida) was used in order to further discuss temporary compliance. He describes that offering incentives act as extrinsic motivators, that which do not alter the attitudes that underlie the original behavior (Kohn). One thing that is common knowledge is that they do not create commitment from the employee. Lastly, Kohn goes on to show evidence that previous studies have done show that most of the surveys done prior focused on quantitative date rather than qualitative data. They look for a faster completion rate versus the quality of the products being produced at the faster rate.

Herzberg is another who looked into the factors that motivate employees. Based on the exhibit located in his literature, provided in the appendix (2), money was not at the top of the list. Achievement was the biggest factor that motivated employees (Herzberg, 8). Achievement through the company with recognition not far behind, is not a surprised based on previous authors research. Workers want to feel as though they accomplished something and of course they want their boss to say something about it. Based on the chart again, people also like the work itself, responsibility, and advancement. People today want to be able to advance within a company and people like the responsibility. Another motivator that most think of but do not usually mention, that is hygiene based on the chart provided in the appendix (2) (Herzberg). Hygiene of the workers now is huge, because how you represent yourself is how you represent the company. Again showing that other factors besides money are considered in what motivates workers.

Griffin discusses work safety and how it can affect performance and motivation. He discusses how work behavior can be conceptualized in the same way as other work behaviors that constitute work performance (Griffin, 348). Work performance can be based on safety, in that companies apply certain core safety compliance rules that each worker must follow. Most individuals who have work experience understand why this is important to an organization. Located in the appendix as number three is a chart that directly correlates safety with performance. A study done in Australia showed that safety communication and participation ranked high amongst participants (Griffin, 351). The safer the work conditions supports the mind set of workers for better motivation and production.

Deci discussed an experiment where the motivating factor for the first hypothesis was an external factor that involved things such as money. The second hypothesis involved verbal sayings from management. The goal was to see if any kind of external reward would help with their intrinsic motivation (Deci, 108). As depicted in the table provided in the appendix (4) the direct result of adding a monetary reward had a positive affect on the intrinsic motivation of the individual seeing that their productivity went up (Deci, 109). However, the productivity went down significantly after the reward was taken away further proving that the motivation is temporary if the rewards is temporary. The overall affect when compared to the control group says that things such as money have an overall negative affect on the worker (Derci, 110). When it came down to just verbal cues from management, they had better results. The experimental group showed more of a positive affect when there were different motivations given in the forms of formal feedback and appreciation (Derci, 114). This can be shown in the chart provided in the appendix (5).

Lastly, Camerer discussed through his research indicates that incentives can increase performance but often do not. His results further the reasoning that money is not the main factor of motivation that people have. No matter the route taken to provide the incentive, whether a tournament version or lottery ticket version, just do not do what the organization wants it to (Camerer, 19). There still are other variables that provide questions that still need to be answered.

Conclusion

From the research conducted by the above literature, it shows that there have been numerous studies conducted about how money (incentives) determines how well an employee works. Temporary results are what the incentives will create based on basic psychology. Research does prove that some kind of incentive does show that they do increase the productivity of the employees. Verbal incentives rather than monetary incentives return a more generalized positive result. Professionals, for example the ones mentioned above, show that positive and negative results can occur, but it depends on the incentive that you use. Money is not all bad, but you have to watch in how it makes people react.

Future Research Suggestions

Future research regarding these issues should include job-specific motivations. For instance, I feel the values and incentives of one profession are unique to that area. Business men tend to think alike, therefore, they should to some degree share similar motivational drives. Individuals are unique, some work more efficiently than others naturally, while some are lazy. I feel that behavioral circumstances can also provide great insight for future research. Understandings of the several variables that go into motivation can provide management with clear pictures and proactive strategies.

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