How Effective are Monetary Incentives?

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Running head: MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
Name of the Student:
Name of the University:
Author note:

1MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
Table of Contents
Introduction:....................................................................................................................................2
Side A: For the Notion- Monetary Incentives Enhances Employee Motivation.............................2
Side B:.............................................................................................................................................4
Conclusion:......................................................................................................................................6
Bibliography:...................................................................................................................................7

2MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
Introduction:
With the globalization of the business the process of employment has changed as well.
When we talk about the stakeholders of the organization, the first think that comes in our mind
are the customers or the client of the organization, but one of the other most important
stakeholder of a project or an organization are its employees. All the organizational
achievements are mostly the results if the hard work of the employees of the organization. Thus
it is the duty of the organization to find ways to motivate the employees such that they can
improve their performance in the sectors where they are belonging. There are numerous ways in
which the employees of the organization can be motivated and benefited as well, but one
amongst all of them may attract more employees for the organization and that is monetary
incentives. The following discussion argues whether the monetary incentives are responsible for
the employee motivation or not.
Side A: For the Notion- Monetary Incentives Enhances Employee Motivation
I think that money is one of the best way by which the employees can be motivated and
retained in an organization. With the expansion of business globally, the need for employing
more employees by the employers have increased as well. The operational requirements of the
business organizations, have increased, which means that the need for hiring new employees
have increased as well. But these organizations have to work hard to retain the employees as
well.
According to many, money plays a significant role in motivating the employees around
the globe. The monetary rewards was introduced such that the targets of the individuals in an
organization can be met. The primary objective of working or getting employed is to be paid

3MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
handsomely such that the minimal requirement can be fulfilled along with fulfilment of other
desires of an individual. Getting paid more for working extra or working efficiently is a very
positive way in which the employees can be hold back to an origination such that they can keep
the entire business moving towards greater productivity and success. Not only that, employees
mark their own value in the organization based on their pay. According to workplace
psychologist, Stacy Adams, the employees are very sensitive towards the process of effort they
put in the organization and amount of outcome they receive in return. If in any case they feel that
they are not getting the amount of incentive or salary they deserve for a specific post, they are
most likely to leave the organization, or would look for a better alternative. I have seen that there
are numerous organizations who have the system of bonus which is presented to the employees
of the organization as the result of their better performances.
The monetary incentives helps in lifting up the spirit of the employee or the employees. If
certain rewards are provided to the employee as a result of their hard work, they feel valued. This
helps in increasing the loyalty of the employee towards that organization as well. Not only that,
the employee in the organizations where they are rewarded for their abilities tends to perform
better even more and this is due to two reason: one is they want to gain the trust of the
organization more such that they can be promoted to a better post and the second one is for better
incentive schemes. They know that if they work more, they will be rewarded more as well.
Overall performance of the company along with the business increases as the employees work
harder to perform better for money and incentives.
In the contemporary world, every single thing is valued according to money. The basic
requirement of an individual, that is food, water and shelter can be obtained with money. Thus

4MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
earning is the necessity for an individual. In this case, incentive is luxury. Any desire apart from
the basics can be fulfilled with the help of money as well.
While an employee is rewarded with incentives, they receives a recognition in the
origination as well. This helps in motivation of the employees as well which helps them to
develop a positive attitude towards the workplace. Not only that, this acts as a feedback that their
work is appreciated by the authorities and they are wanted in the organization. With this simple
encouragement from the team leads, authorities and management can boost up the employees
performance for the rest of the month or even for a long time.
The monetary expenses includes, the periodic raises, travelling and food allowances,
stock options and many more. These are the trendy fringes which attracts more employees to the
organization. The better are the scopes of incentives for an organization, the higher it goes in the
terms of productivity and benefits.
Thus I can say that the monetary benefits acts as a “power up” for the entire team of
employees and business sectors can benefit a lot just by simply investing a little into this
incentive schemes of the employees.
Side B:
All though monetary benefits are one of the greatest aspect which helps in increasing the
efficiency of the employees which in turn results in the retaining of the employees in the
business, I think that only money cannot be the factor of motivation for employees. Just by
appreciating the employees with money for performing well for the company or achieving some
things is not always healthy.

5MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
There are numerous other ways in which employees can be motivated by the employers
except money and that is valued as well. In this case, one of the most essential part in this case is,
Time off. No matter how much a person likes working or getting involved in incentive scheme,
every one appreciate their lone time or family time. Granting time off is one of the most effective
non-monetary scheme that can be adopted by the companies to satisfy the employees.
Stipend development opportunity of the employees are also one of the best way in which
the employees can be motivated. Self-development is the greatest asset of an individual. This
includes development of knowledge, skills and many more. This cannot be fulfilled when an
employee has to work a minimum of 40 hours a week. Thus, stipend development program helps
in development of the employees and helps in motivating them and increase their loyalty and
satisfaction. Not only has that, the words of appreciation, the company awards played a
significant role in the development of the employee and maintained along with increased
performance and satisfaction of the employees as well.
All though there are numerous ways in which the employee satisfaction and employee
motivation can be obtained by the companies, I think that the monetary incentives is the best
possible way of motivating the employees of the contemporary organization. The prices of the
goods have increased globally. Thus a bit extra out of the box income from the office can boost
up the performances of the employees as well. Not only that, the company awards, words of
achievement can help in developing the employee internally, but this cannot be utilized
externally. These rewards may help in the internal appraisal of the company, but they are not
tangible assets and thus are considered to be less important for the employees. Monetary
incentives on the other hand can be utilized for other important job or aspect of an employee.

6MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
As mentioned earlier, the monetary raises and incentives have the capacity to retain
employees, but they cannot always satisfy them. For the terms of satisfacti0on, the non-monetary
incentives plays a better role. However, as we all know that the money speaks louder than the
most of the perks, the employees of the organization tends to deviate more towards monetary
benefits than the non-monetary ones. All though the psychological benefits of the organization is
obtained from the non-monetary incentives, the monetary schemes works better than for the
motivation of the employees than the later. Thus, according to my opinion, “money is a better
factor of employee motivation than the others”.
Conclusion:
From the above discussion we can conclude that the money serves better in terms of
employee motivation than the other because, money is a tangible asset and employee loyalty
increases with the higher amount of money they are paid. The feeling of being valued is now
obtained with the help of monetary rewards. The employees will of working harder increases as
per the incentive schemes allotted to them by the organizations. However, this is the trick of the
organization to invest in the incentive scheme to gain better outcomes of the employee
performances in the organization. Thus after reviewing all the evidences, we can conclude that
money is the best employee motivation factor for the employees around the world.

7MONETARY INCENTIVE FOR EMPLOYEE MOTIVATION
Bibliography:
De Vito, L., Brown, A., Bannister, B., Cianci, M., & Mujtaba, B. G. (2018). Employee
motivation based on the hierarchy of needs, expectancy and the two-factor theories
applied with higher education employees. IJAMEE.
Furlich, S. A. (2016). Understanding employee motivation through managerial communication
using expectancy-valence theory. Journal of Integrated Social Sciences, 6(1), 17-37.
Jain, A., Gupta, B., & Bindal, M. (2019). A study of employee motivation in
organization. International Journal of Engineering and Management Research
(IJEMR), 9(6), 65-68.
Kuranchie-Mensah, E. B., & Amponsah-Tawiah, K. (2016). Employee motivation and work
performance: A comparative study of mining companies in Ghana. Journal of Industrial
Engineering and Management (JIEM), 9(2), 255-309.
Mohamad, N. H., & Chia, K. V. L. (2018). Impact of Reward and Recognition on Employee
Motivation in Local Creative Industry.