Motivating Employees: Equitable Pay vs. Performance Scheme

This paper discusses the effectiveness of providing equitable pay and meaningful work in motivating employees compared to pay for performance schemes. It explores the impact on employee satisfaction, productivity, and retention. The study concludes that while equitable pay is important, performance schemes are more effective in motivating employees.

Managing People And Organization

ORGANISATION BEHAVIOUR 1
This paper is about the different ways which an organisation is adopted to motivate
the employee for better performance. Equal Pay and Performance based method are the ways
from which the company motivates the employee to perform better. This paper is based on
the statement of “Providing equitable pay and meaningful work is a more effective way to
motivate employees than pay for performance schemes”. I am disagreeing with the statement
because better performers are always demotivated with the equal pay method. Meaningful
work is also important to motivate the employee to perform better in the workplace but at the
same time performance scheme is more appropriate and right way method.
Motivating the employee is a biggest challenge for the manager in the organisation.
Employee motivation is a key to achieve the success for the organisation but it is a fact that
the employees are more motivated with the rewards and compensations. Providing equitable
pay and meaningful work means to provide the equal pay and fair pay to employees. The
method of providing the equal pay is appropriate because it is necessary to provide the equal
pay to the equal position employees in the context of self-esteem (Equality and Human
Rights, 2018). It is observed that if the employees are not treated equally the performance of
employees getting down. As per the Maslow theory of Hierarchy of Human needs, the
motivation is the result of fulfilling the basic needs such as physical, safety, social, esteem
and self-actualisation. This theory states the satisfaction level of employees in the different
categories as per the hierarchy. In this hierarchy, the self-actualisation is in the higher level
which states the self-respect and equity. Equal pay is also a major concern in order to
motivate the employees. Equitable pay is the right way to treat the employee equally without
any biasness but it is also an in-appropriate way as per the best performers of the company.
There are many employees in the organisation performs well their performance but they are
treated same as the other employee then they gets demotivated.

ORGANISATION BEHAVIOUR 2
(Source: iEdunote, 2018)
Although, the method of equitable pay and meaningful work is appropriate to provide
the job satisfaction to the employees but it has some negative aspects as well. The employees
are getting demotivated by attaining the equal pay even by putting their more efforts in the
organisation. Motivation is a psychological process which is performs by the manager to
improve the performance of employees. The thoughts of the employees is change as per the
motivation, if the employees are treated equally even by putting more efforts then their
performance will goes down because they think to not put their efforts and attain the same
pay. Productivity of the employees is decreases as getting demotivated by the equitable pay.
The other negative impact of the equitable pay is decreasing the chances of employees
to stay more in the organisation. Employee retention is increases which is not beneficial for
the company in order to achieve the success. Equitable pay demotivates the employees and
encourages switching the organisation. The employees want to put their efforts in the other
organisation where they get the more advantage of their efforts in terms of rewards. Putting
the efforts in the other organisation helps them to achieve the success in the terms of money
and non–financial transaction. Reward system is an appropriate method for the best
performers to motivate them. The performance scheme method helps to identify the
performance of employees (Demirtas, & Akdogan, 2015).

ORGANISATION BEHAVIOUR 3
The performance scheme method is a way due to which the manager can motivate the
employee to perform well towards their performance. The employees have to compensate for
their efforts and their performance in order to motivate them for their performance. The
performance scheme improves the effectiveness of the company by motivating the employees
at their work place. According to Muhammad (2019) employees did not work for free service
most of the business compensate the employees as per their efforts. Extra benefit motivates
the performers to perform their performance more appropriate in the organisation to attain the
benefit. According to Nathaniel et al. (2010) incentive is the method of compensating the
employees as per their performance. According to the author Puwanenthiren (2011), the
performance scheme attracts the employees to join the organisation and perform well in their
responsibilities. According to the Ibrar and Owais (2015), there are two main methods of
rewards those are intrinsic rewards and extrinsic rewards.
(Source: Positive Psychology Program, 2018).
It is right to provide the equitable pay to the same position of employees but paying
the same amount on the different quantity of work is wrong. The Self Determination Theory
states that the human motivation that concern people inherent growth and innate
psychological needs. The theory contains the two types of rewards such as the intrinsic and
extrinsic motivation. Intrinsic rewards are the method which is not in the terms of money.
This reward system is non-financial system which states the real appreciation,
acknowledgment certificate and other facilities in order to motivate them for their

ORGANISATION BEHAVIOUR 4
performance. Extrinsic reward system is financial method which are tangible rewards and in
terms of money (Cherry, 2018). The rewards are provided in the terms of incentives, bonus,
promotions and job security as per the efforts of employee. The rewards are providing to the
best performer so that they are motivated and put their best efforts in future as well. It is well
known that the motivate staff are more productive, working efficiently and proactively as
compare to the others. The method is not only motivating the best performer but also
motivate the other employees as well to attain the rewards. As per the analysis, it is founded
that the people shown the sign of psychology ill-being such as depression, anxiety and low
self-esteem when they are not appreciated and rewarded for their performance. It is also
founded that the employees are psychological well-being when they appreciated and
rewarded as per their quality of performance. Intrinsic aspiration, extrinsic motivation and
autonomous motivation tend to be correlated.
The study shows the different aspects of employees in the context of satisfaction. The
satisfaction of employees is depends on the motive of doing the performance well. People
motives for pursuing wealth were more integrated and need more satisfaction and less
frustrating (Bullock, Stritch, & Rainey, 2015). The employees who have the motive of getting
the higher position require the appreciation from the different manager and it can be said that
he requires the intrinsic rewards. Extrinsic rewards are suitable for those who require to
satisfying the basic needs and luxurious needs as per the Maslow’s theory. Performance
scheme is the best method which helps the employees to deliver the satisfaction to the
employees as per their requirement. The employees have the opportunity to achieve the
objective in the terms of their requirement. In the domain of work, research also showed that
the autonomy is positive work for the outcomes in non-individualistic culture. As per the
research, it is founded that the American culture also in the favour of performance scheme
which believes to provide the rewards to the employees for their efforts (CliffsNotes, 2018).

ORGANISATION BEHAVIOUR 5
The organisation of United States also motivates the employees with the rewards and
incentives. Both the countries culture believes in order to provide the rewards as per the work
performance of employees. This study states that the different cultures across the countries
have different technique to motivate the employees but purpose is same to provide the
rewards (LMA, 2018).
From the above limelight discussion, it has been concluded that the providing
equitable pay and meaningful work is an appropriate decision to reduce the conflict and many
others. The equitable performance maintains the effective structure of the organisation which
is beneficial for the company. However, the equitable pay is appropriate for the organisation
but the employees who putting their extra efforts are getting demotivated and their
productivity is decreases. Performance pay scheme is the method which appreciates the
employees for their extra efforts. In this method, employees are appreciated and rewarded for
their excellent performance in order to motivate them for the future. The company earns the
profit due to the extra efforts of the employees that is why it is the responsibility of the
manager to provide them rewards in terms of appreciation and rewards. Intrinsic and extrinsic
are the methods of distributing the rewards to the consumers. As per the theories and models,
it is founded that the performance scheme is more appropriate to motive the employees as
compare to equitable pay.

ORGANISATION BEHAVIOUR 6
References
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ORGANISATION BEHAVIOUR 7
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