Pros and Cons of Using Money and Financial Rewards in Employee Motivation

Running head: Organizational behavior
Organizational behavior

Organizational behavior
(Essay topic: Money and other financial rewards are a fundamental part of the employment
relationship and can be used effectively in motivating employees. Discuss pros and cons of
this argument).
The main and primary motive of this paper is to outline and explain the significance of money
and financial reward to attract and retain wide range of employees. The paper discusses how
financial rewards and money help in maintaining favorable relationship with workers at the
workplace. It discusses the benefits and drawbacks of these rewards and incentives. The essay
also provides brief information about the managerial interventions that help in reducing and
preventing cultural and ethical issues.
There are ample of pros and advantages of money and financial reward in the workplace. It is
analyzed that money and financial rewards are also help in achieving long term goals and
objectives of the company (Fryer Jr, 2011). It is one of the significant benefits of the money and
financial rewards to motivate the workers. Furthermore, it also increases profitability and
productivity of the firm as well. Money plays a significant and vital role in motivation and
encouragement. Management makes use of financial incentives such as income, salaries,
departure benefits, bonus, medical reimbursement, health insurance etc (Burton, 2012). to
encourage and promote the employees towards the attainment of long term mission and vision.
Money plays an empirical role in satisfying the needs, wants and requirements of the workers.
However, these incentives and rewards might not always be inspiring (Bailey et al, 2018).
Sometimes, management might have to augment the financial incentives to keep the workers
within the corporation. It shall be noted that money and financial reward are really motivating
element when the security and psychological needs and wants of the workers have not been fully
attained. Money provides support in fulfilling the communal needs and wants of the workers to
some extent just because money is generally known as a basis of esteem, power and status
(Berdou, 2010).
Money is always be considered as a means of receiving a minimum standard of living. Employee
incentive comes in various forms within the organization. The financial incentive programs and
seminars are designed to inspire and motivate worker loyalty, trust and maximize performance
and productivity among the employees (Burton, 2012). For all financial incentive programs and
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Organizational behavior
money, workers need to understand the criteria for getting the incentives and how the amount is
identified. Money and financial incentives is easy tool to motivate the workers in the workplace.
Rendering a monetary wage or reward maximize is also unique in terms of tax liability. In
today’s modern era, employers and managers pay a maximizing attention to reduce cost and to
enhance efficiency and effectiveness (Young, Beckman and Baker, 2012). When talking about
financial rewards and incentives, it means that the manager and employer spend lot of money on
the remuneration directly or the worker gets monetary reward. The financial rewards can be short
term or long term motivators to improve and enhance the performance and productivity of the
subordinates at the workplace (Mowday, Porter and Steers, 2013). These financial rewards also
are able to provide job satisfaction and job security to the workers. Bonus and incentives
motivate the workers to understand exactly what the company goals and how to achieve these
goals in an effective manner. Bonuses and rewards benefit the workers and managers as well
(Fullan, 2011). An employer and manager can also provide benefits and incentives to its workers
as a way of compensation and a recruitment method to attract and encourage the workers in the
workplace. All these are considered major pros of money and financial rewards. The benefits and
rewards can be different from one organization to another. No company can survive and grow its
business without using money and financial rewards within the organization. Along with this,
monetary rewards are called financial rewards that given to the workers to encourage and
motivate her or him. A possible way of doing this is through profit sharing. Performance related
pay and wage also are considered monetary rewards. Various organizational theories can be
applied in an organizational setting. These theories include Maslow’s theory and X and Y theory
of motivation. The theory X and Y was proposed by Douglas McGregor. It explains two
contrasting sets of assumptions that employer and manager make about their people. According
to theory X, employees do not like work and they try to escape and avoid the work. In simple
words, it is noted that employees dislike the roles and responsibilities (Latham, 2012). Theory Y
suggests that workers can perceive their employment as normal and relaxing. They exercise their
mental and physical efforts in a hassle free manner in their job or employment. If the
employment is satisfying and rewarding then it will result in worker’s commitment and loyalty to
the organization. It shall be stated that organizations should use theory Y to create a dynamic and
unique working environment and culture at the workplace (Reiss, 2012). Theory Y also promotes
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