Role of Monetary Rewards in Building Relationship with Employees and Motivating Them

Organisational Behaviour

Role of money and other financial rewards in building relationship with
employees and motivating them
In today’s competitive business world, the importance of highly productive and motivated
employees has grown substantially. The competition in industries is considerably high, and
organisations focus on gaining a competitive advantage in order to sustain their future
growth in the market. As per Li and Cai (2012), the top-level management of companies
implements various organisational behaviour theories in order to increase the productivity
of employees and motivate them. It is referred to the study of individuals and groups
behaviour who are working in an organisation. The organisational behaviour theories enable
the management to evaluate the key aspects which include the job satisfaction of
employees and such information allow them to enact business strategies which are focused
on improving their overall performance. Motivated employees are highly productive, and
they work towards achieving organisational objectives. The human resource department of
corporations provides both monetary and non-monetary rewards to their employees in
order to motivate them to work at their highest capacity which benefits the company.
Monetary and other financial rewards assist the HR managers in building strong
relationships with employees which result in increasing their job satisfaction level (Miner,
2015). This essay will focus on the role of monetary rewards while building relationships
with employees. This essay will evaluate a number of organisational behaviour theories to
understand how financial rewards can enable corporations to motive their workforce.
Furthermore, pros and cons of monetary rewards will be discussed in the report by
evaluating various organisational behaviour theories.
Motivating employees is a vital step in every organisation because a motivated workforce
means highly productive staff members who work towards achieving corporate objectives.
In order to motivate employees, the management is required to understand what motivates
their employees. According to Miner (2015), they have to develop programs which are
focused towards both motivating and retaining talented employees. In this context, the
hierarchy of needs theory assists the management. The theory is developed by Abraham
Maslow which divides employee needs into five categories which include physiological,
safety, belonging, esteem and self-actualisation. Maslow provided that in order to motivate
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employees, the management is required to assess and fulfil their needs which increase their
job satisfaction level and motivate them to perform better. Lower level employees have
physiological and safety needs which can be fulfilled by extrinsic rewards such as money
increase in salary, bonus, fringe benefits, and others (Ozguner and Ozguner, 2014). On the
other hand, mid-level and top-level employees are motivated by intrinsic rewards such as
sense of achievement, recognition, works of praise, work freedom and others. Money is the
most obvious and effective way of motivating employees. Well paid employees are satisfied
with their job, and they have a positive relationship with their management. Many
organisations also introduce performance-based monetary rewards to motivate their
employees to perform better to achieve more rewards (Taormina and Geo, 2013).
Along with the development of countries, the living conditions of people have improved as
well. Studies have shown that although money is the easiest way of motivating employees,
however, it is effective in a short run. Generally, in the long run, employees look for factors
such as positive working environment and job satisfaction rather than high income. ‘Two
factors theory’ or ‘Motivation-Hygiene theory’ was developed by Frederick Herzberg. The
theory provides that job satisfaction is affected by motivators and dissatisfaction with
hygiene factors (Ali, 2013). It provides that the reasons for job dissatisfaction include factors
such as working conditions, salary, co-worker relationship, policies and rules. On the other
hand, job satisfaction is affected by recognition, achievement, responsibility, personal
growth and others. Herzberg argued that improving the satisfier factors result in increasing
job satisfaction, whereas, improvement in hygiene factors decreases job dissatisfaction.
Based on this theory, it can be concluded that lack of monetary rewards or basic pay results
in dissatisfying employees (Pegler, 2012). However, satisfier factors contribute to increasing
the job satisfaction of employees. Both these factors play crucial role in motivating
employees and retaining them in the organisation, but, it shows that monetary rewards are
not enough to motivate and retain talented employees.
While using monetary rewards, there are a number of benefits received by corporations.
Firstly, they are the fundamental part of an employer-employee relationship. The first step
in attracting talented employees is paying them the highest salary package than
competitors. People have basic needs which are fulfilled by money, thus, it is a good way of
motivate employees to the company (Park and Ryoo, 2013). Furthermore, well-paid
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