Employee Motivation and Job Satisfaction

This assignment delves into the crucial connection between employee motivation and job satisfaction. It requires a thorough examination of various factors that influence these elements, including pay, recognition, work-life balance, and organizational culture. Students need to analyze relevant research studies and draw insights into how organizations can effectively motivate their employees and foster a positive work environment.

Running head: EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
How Does Salary Affect Employee Engagement?
Name of the Student
Student Id
Name of University
Author Note

2EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
Table of Contents
Introduction:....................................................................................................................................3
Selection of Sources:...................................................................................................................3
Rationale behind the Choice of Sources:.....................................................................................4
Discussion:.......................................................................................................................................5
Money vs. Leadership:.................................................................................................................9
Conclusion:....................................................................................................................................12
Recommendation:..........................................................................................................................13
Reference List................................................................................................................................14

3EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
Introduction:
The following report succinctly elucidates and illustrates the impact of salary upon
employee engagement in an organization. In order to do this, three different scholarly articles
and their research technique has been focused. Salary indeed plays an important role in deciding
employee retention in an organization. The international labor market is so vast and contented
that there remains a thorough competition among the companies to retain the most competent
and skillful and dedicated employees1. The decisive factor for the employee engagement is
rudimentarily and predominantly the salary structure offered by the companies to the employees.
It includes the mode of payment, regularity of payment, transparency in the mode of payment
and most importantly the amount the employees are paid by the companies. More the amount
companies’ offer, stronger their employee engagement and retention capacity becomes.
Selection of Sources:
i) Olafsen, Anja H., Hallgeir Halvari, Jacques Forest, and Edward L. Deci. "Show them
the money? The role of pay, managerial need support, and justice in a self‐
determination theory model of intrinsic work motivation." Scandinavian journal of
psychology 56, no. 4 (2015): 447-457.
ii) Mykhailovska, O. P., and I. L. Malpa. "Increasing Employee’s Motivation in the
Process of Improving Management System." Теорія та практика державного
управління 2 (2016): 178-184.
1 Olafsen, Anja H., et al. "Show them the money? The role of pay, managerial need support, and justice in a self‐
determination theory model of intrinsic work motivation." Scandinavian journal of psychology 56.4 (2015): 447-
457.

4EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
iii) Tukhvatulina, Liliya, Natalia Cherepanova, Jun Dow, and Nataliya Mirza. "The
Practice of the Motivational Process in Contemporary Management." In SHS Web of
Conferences, vol. 28. EDP Sciences, 2016.
Rationale behind the Choice of Sources:
In order to build a constructive thought process pertaining to salary and its elementary
courses on motivating the employees in an organization, three important journal and research
articles have been chosen. These articles are going to support the discussion. Olafsen et al.
pointed out in the paper “Show them the money? The role of pay, managerial need support, and
justice in a self‐determination theory model of intrinsic work motivation” succinctly focuses on
the monetary benefits of the employees that would effectively impact upon their job satisfaction.
The scholars have effectively used the process on its different understanding on its issue
provided to its actually courses as this has been taken into order to the most effective cause.
Moreover, the authors have also brought into effect the Self determination theory in assimilation
with workforce motivation. Money undoubtedly plays an important role in motivating the
workforce in an organization. However, it has to be taken into account that the specific
understanding has to be highly sequential.
On the contrary, Mykhailovska and Malpa’s paper “Increasing Employee’s Motivation in
the Process of Improving Management System” has contemplated on psychological orientation
of the employees in terms of getting satisfactory amount of salary. I would also help develop the
theoretical concept for this specific paper.
On top of that, Tukhvatulina et al. in their paper “The Practice of the Motivational
Process in Contemporary Management” have also focused on different strategic practices

5EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
undertaken by the organizations in terms of creating chances to retain maximum number of
potential employees in an organization. The paper has multi dimensional overview on the
motivational process whereby they include leadership, monetary and non-monetary benefits.
Discussion:
The basic requirement for each and every employee who is working with an organization is
the amount of money she or he is offered2. However, in the international labor market, the
process and differences in salary structure and CTC determines whether the employees are
satisfied with the organization. In most of the cases this has to be taken into the basic structure of
the employees where they are highly engaged in the operational process. In the branch of human
resource management, more than non-monetary facilities, the monetary facilities are emphasized.
In this case, following three scholarly articles have been discussed:
i) “The importance of pay in employee motivation: discrepancies between what people
say and what they do”
ii) The Job Demands-Resources model: state of the art
iii) Work engagement and financial returns: A diary study on the role of job and personal
resources
The aforementioned papers are based on stringent and diligent research work. With the help
of proper research method, this has been taken into certain consideration pertaining to the
effective understanding of the process with its different understanding of the process. The
researchers in the aforementioned works have conducted survey methods in some of the
organizations to validate the point of salary being effective in terms of employee motivation,
retention and engagement in the workplace. However, in terms of salary consideration, the
2 Lu, Chang-qin, et al. "Does work engagement increase person–job fit? The role of job crafting and job
insecurity." Journal of Vocational Behavior 84.2 (2014): 142-152.

6EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
cultural differences also take place as an important factor3. In some of the countries where job
engagement is solely dependent upon the mode of payment, rather than workplace culture, salary
has direct impact upon employee engagement. The following diagram demonstrates the
importance of monetary benefits on employee motivation, as reviewed by Harvard Business
Review:
Fig 1: Motivating Workforce
Source: hbr.org
The 2004 paper “The Importance of Pay in Employee Motivation: Discrepancies between
what People Say and what They Do” by Rynes, Gerhart and Minette strictly follows the structure
3 Huang, Yueng-Hsiang, et al. "Beyond safety outcomes: An investigation of the impact of safety climate on job
satisfaction, employee engagement and turnover using social exchange theory as the theoretical
framework." Applied ergonomics 55 (2016): 248-257.

7EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
of a qualitative research based on descriptive feedback from different employees in the
organizations. The paper succinctly talks about the role of the managers in regulating salary s
the motivational factor of the employees. In this context, it can be stated that the specific reason
for the understanding feature of what this would buy the perfect employee force within the
organization4. With the qualitative survey method the researchers have vividly stated the need of
monetary motivation in a company. Because of this specific reason this has to be taken into
certain consideration where his would actually focus on the issues for the entire understanding of
the case5.
The general rule for making the motivation effective in nature among the employees is
the effectiveness of money, which has to be non-linear across all the level of pay. This can be
explained in a better manner with the help of the diminishing marginal utility that is one of the
principles of economics. An example of this would be the opportunity for a person who is at a
poverty level to earn an extra $100 would act as a motivation for the person than a person who
has an income of $100,000 per year6. The reservation of the wages is another important factor as
well, as the level of pay for the individuals needs to be considered after the person has accepted
the job in the company. Therefore, the companies that offer low salary to the people at the
starting of their career will face severe shortages of employees within the organization, as the
4 Rynes, Sara L., Barry Gerhart, and Kathleen A. Minette. "The importance of pay in employee motivation:
Discrepancies between what people say and what they do." Human resource management 43.4 (2004): 381-394.
5 Handa, Meenakshi, and Aastha Gulati. "Employee engagement: Does individual personality matter." Journal of
Management Research 14.1 (2014): 57.
6 Lee, Hung-Wen, and Mei-Chun Lin. "A study of salary satisfaction and job enthusiasm–Mediating effects of
psychological contract." Applied Financial Economics 24.24 (2014): 1577-1583.

8EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
companies that are offering better rate of wages will help in attracting most of the employees
towards their company. Thus, the factor of wages is an important factor in determining the
motivation of the employees within the company7.
Another important factor that needs to be considered is the standard and the practices of
the employees that are comparative in nature, which helps the employees in judging the sense of
justice that affects their wages. For instance, the change in the payment structure by the
employers keeps the employees alert regarding the changes that may create an impact on the
level of motivation among the employees8. The suggestions that can help the company in
increasing the level of engagement among the workers is that the complaints that are related to
the payment of the employees have to be dealt in a serious manner so that it does not lead to
dissatisfaction among the employees. The increase in the level of dissatisfaction may result in the
chances to increase for the employees to look for an alternative, which might affect the level of
productivity within the organization9.
The companies cannot decrease the rate of the wages below the average rate of pay that is
prevailing in the market, as it can turn out to be a disadvantage for the company. The chances of
increased disadvantages may increase the level of attrition among the employees, as they will be
7 De Spiegelaere, Stan, et al. "On the relation of job insecurity, job autonomy, innovative work behaviour and the
mediating effect of work engagement." Creativity and Innovation Management 23.3 (2014): 318-330.
8 Cahill, Kevin E., et al. "Linking shifts in the national economy with changes in job satisfaction, employee
engagement and work–life balance." Journal of Behavioral and Experimental Economics 56 (2015): 40-54.
9 Tolentino, Laramie R., et al. "Does domestic intimate partner aggression affect career outcomes? The role of
perceived organizational support." Human Resource Management 56.4 (2017): 593-611.

9EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
looking for jobs that will help them in earning a proper and suitable income10. The company
needs to take in to consideration the factors that will help in keeping the best employees engaged
in the production of the company. The employees that are consistent with their level of
performance will help the company in generating better revenues, which will help them in
earning better profits. This needs to be given prior importance and these employees need to be
with held by the company by offering them better structure of salary11.
Money vs. Leadership:
In terms of human resource management understanding, it has often been studied that the
organizational leadership plays an important role in ensuring employee engagement. However, it
needs to be considered that specific reason for the entire understanding of the process needs to be
specified with its different understanding of the process where needed. However, more than
leadership, money plays an important factor for excelling motivation to the employees. In order
to keep the maximum number of the employees, payment structure needs to be strengthened by
the organizations. More than basic salary, monetary benefits such as incentives, superannuation
plan and others are the basic strength for the employee engagement. Due to certain
understanding of the fact, there is a need to find out how effectively this would address to the
greater number of the employees. Considering three of the important sources that have been
retrieved in due course of study, it has been noticed that in most of the cases the books and the
articles pertained to the effective CTC structure and benefit of the company pertaining to the
10 Bakker, Arnold B., and Evangelia Demerouti. "The job demands-resources model: State of the art." Journal of
managerial psychology 22.3 (2007): 309-328.
11 Xanthopoulou, Despoina, et al. "Work engagement and financial returns: A diary study on the role of job and
personal resources." Journal of occupational and organizational psychology 82.1 (2009): 183-200.

10EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
monetary expense of the employees. in this aspect, it has been taken into certain account that the
cost borne by the company for an individual employee is the obligation12.
In the contemporary era, there is an incline in the bargaining power of the employees,
high transparency in the job market and drawing the attention of the highly skilled workers has
becomes a highly competitive activity. The companies are undertaking thorough investigations
regarding the factors that causes the employees leave their jobs and the concept of culture and
engagement are being taken into considerations by all the business leaders13.
The business leaders have been considering the issues relating to engagement, which is
another significant challenge that is faced by an organization. There has been a change in the
employment –work contract where people are performing their duties more like a free agent as
contrary to how they used to work in the past14. In other words, the power balance has moved
from the employers to that of the employee, compelling the organization leaders to build an
organization that deals with employees as passionate, emotional and creative contributors.
Majority of the organizational management would agree with the fact that productive and
motivated employees are indispensible for an organization irrespective of the size or corporate
12 Crawford, Eean R., et al. "The antecedents and drivers of employee engagement." Employee engagement in
theory and practice (2014): 57-81.
13 Olafsen, Anja H., et al. "Show them the money? The role of pay, managerial need support, and justice in a self ‐
determination theory model of intrinsic work motivation." Scandinavian journal of psychology 56.4 (2015): 447-
457.
14 Lu, Chang-qin, et al. "Does work engagement increase person–job fit? The role of job crafting and job
insecurity." Journal of Vocational Behavior 84.2 (2014): 142-152.

11EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
strategy of the company. The most crucial question for any company is what can be done to
motivate such productive employees so that they remain motivated and enhance the growth of
the country. The offering of incentive based on the production of the employees is a common
approach, which takes place either through bonuses, that is offered to the employees on the basis
of their performance or they are offered as profit-related payments also known as organization-
wide incentives.
Several survey reports which examined the extent to which each payment scheme was
related to the experience of the well-being of the employees, revealed that payments offered
based on the performance of the employees had positive connection with organizational
commitment, job satisfaction and trust in management of the organization15. On the other hand,
the payments related to profit that is offered to an employee did not have similar positive impact.
In fact, consequence of the profit related pay at some levels has indicated lesser commitments
and low trust of the employees on the management of the organization. Such consequences leads
to the fact that profit-sharing initiatives does not always results in optimistic employee outcomes.
However, any positive outcomes rely on the extent to which a large part of the workforce has
been subjected to such profit-related pay. In the event of low to medium levels of employee
participation in the profit related pay, it has been observed that there is a decline in the job
satisfaction of the employees, the trust level of the employees is low and an incline in the
commitment of the employees towards the organization16.
15 Haider, Maqsood, et al. "A literature Analysis on the Importance of Non-Financial Rewards for Employees' Job
Satisfaction." Abasyn Journal of Social Sciences 8.2 (2015): 341-354.
16 Cahill, Kevin E., et al. "Linking shifts in the national economy with changes in job satisfaction, employee
engagement and work–life balance." Journal of Behavioral and Experimental Economics 56 (2015): 40-54.

12EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
In regards to the organization-wide incentive, it has been observed that in the absence of
significant relationship with the employee commitment and trust in the management, there is a
direct dissatisfaction among the employees with respect to their jobs17. Amongst the above
discussed incentive pay schemes, the incentives paid based on the performance of the employees
have a positive outcome where the employees seem to be satisfied with their jobs. In addition, it
is not only the incentives, but a good communication opportunity between the employers and the
employees also act as a motivation where the employees feel free to communicate their issues
with the expectation that the management would redress the issues effectively. An incentive
based on performance and a significant relationship between the employee and employer also
elevates motivation of the employees of an organization.
Conclusion:
Therefore, it can be concluded that the factor of money is the primary motivator for the
employees along with the other necessary tools that helps in engaging the employees within the
work place. The various types of rewards and incentives that are given to the employees helps in
increasing the level of motivation so that they can help the company in increasing the level of
output. The recognition of the employees within the organization for their performance helps
them in boosting the motivational levels as well, as they will strive hard to get congratulated by
the senior management and the managers. The monetary rewards for the employees help them in
getting acknowledged within the system, which increases their chances of getting favored for a
better position within the organizational structure of the company.
17 Handa, Meenakshi, and Aastha Gulati. "Employee engagement: Does individual personality matter." Journal of
Management Research 14.1 (2014): 57.

13EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
Recommendation:
It has often been discussed that leadership, organizational behavior and fun activities in
the business organizations often keep the employees motivated. However, to add a notch to it,
the employers are highly expected to provide good salary to the employees so that the
organization can remain competitive in the labor market. On top of that, it has to be taken into
certain consideration pertaining to the effective salary structure whereby the employees do not
search for alternatives.

14EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
Reference List
Bakker, Arnold B., and Evangelia Demerouti. "The job demands-resources model: State of the
art." Journal of managerial psychology 22.3 (2007): 309-328.
Cahill, Kevin E., et al. "Linking shifts in the national economy with changes in job satisfaction,
employee engagement and work–life balance." Journal of Behavioral and Experimental
Economics 56 (2015): 40-54.
Crawford, Eean R., et al. "The antecedents and drivers of employee engagement." Employee
engagement in theory and practice (2014): 57-81.
De Spiegelaere, Stan, et al. "On the relation of job insecurity, job autonomy, innovative work
behaviour and the mediating effect of work engagement." Creativity and Innovation
Management 23.3 (2014): 318-330.
Handa, Meenakshi, and Aastha Gulati. "Employee engagement: Does individual personality
matter." Journal of Management Research 14.1 (2014): 57.
Haider, Maqsood, et al. "A literature Analysis on the Importance of Non-Financial Rewards for
Employees' Job Satisfaction." Abasyn Journal of Social Sciences 8.2 (2015): 341-354.
Huang, Yueng-Hsiang, et al. "Beyond safety outcomes: An investigation of the impact of safety
climate on job satisfaction, employee engagement and turnover using social exchange theory as
the theoretical framework." Applied ergonomics 55 (2016): 248-257.

15EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
Lee, Hung-Wen, and Mei-Chun Lin. "A study of salary satisfaction and job enthusiasm–
Mediating effects of psychological contract." Applied Financial Economics 24.24 (2014): 1577-
1583.
Lu, Chang-qin, et al. "Does work engagement increase person–job fit? The role of job crafting
and job insecurity." Journal of Vocational Behavior 84.2 (2014): 142-152.
Olafsen, Anja H., et al. "Show them the money? The role of pay, managerial need support, and
justice in a self‐determination theory model of intrinsic work motivation." Scandinavian journal
of psychology 56.4 (2015): 447-457.
Rynes, Sara L., Barry Gerhart, and Kathleen A. Minette. "The importance of pay in employee
motivation: Discrepancies between what people say and what they do." Human resource
management 43.4 (2004): 381-394.
Tolentino, Laramie R., et al. "Does domestic intimate partner aggression affect career outcomes?
The role of perceived organizational support." Human Resource Management 56.4 (2017): 593-
611.
Xanthopoulou, Despoina, et al. "Work engagement and financial returns: A diary study on the
role of job and personal resources." Journal of occupational and organizational psychology 82.1
(2009): 183-200.
Olafsen, Anja H., Hallgeir Halvari, Jacques Forest, and Edward L. Deci. "Show them the
money? The role of pay, managerial need support, and justice in a self‐determination theory
model of intrinsic work motivation." Scandinavian journal of psychology 56, no. 4 (2015): 447-
457.

16EFFECT OF SALARY UPON EMPLOYEE ENGAGEMENT
Mykhailovska, O. P., and I. L. Malpa. "Increasing Employee’s Motivation in the Process of
Improving Management System." Теорія та практика державного управління 2 (2016): 178-
184.
Tukhvatulina, Liliya, Natalia Cherepanova, Jun Dow, and Nataliya Mirza. "The Practice of the
Motivational Process in Contemporary Management." In SHS Web of Conferences, vol. 28. EDP
Sciences, 2016.
"Motivating Salespeople: What Really Works". 2017. Harvard Business Review.
https://hbr.org/2012/07/motivating-salespeople-what-really-works