Pros and Cons of Using Money and Financial Rewards to Motivate Employees

This essay discusses the pros and cons of using money and financial rewards to motivate employees. It explores the role of money and financial rewards in enhancing performance and maximizing profitability. The essay also discusses various organizational behavior theories used by organizations to enhance and motivate employees. The pros and cons of using money and financial rewards are analyzed in detail. The essay concludes that while money and financial rewards are important in motivating employees, they also have their drawbacks.

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Organizational behavior

Organizational behavior
(Essay: 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)
Money and other financial rewards play an important role in enhancing the performance and
further, also help in maximizing the profitability and outputs. The paper outlines that how top
management and managers motivate the workers at the workplace and it also defines roles and
significance of money and other financial rewards that help in encouraging the workers towards
the accomplishment of objectives and goals. Pros and cons of money and other financial rewards
have been defined briefly in the task. More detail of the essay is discussed below.
It is true that money and other financial rewards are an essential part of the employment
relationship and it may be used successfully in inspiring employees. It is noted that most of the
employers are seeking various ways to maximize and enhance employee’s effectiveness and
productivity (Milheim, 2012). Money and other financial rewards play a fundamental and
imperial role in encouraging the workers towards the attainment of goals and objectives. The
other financial rewards include retirement benefits, incentives, medical reimbursement, bonus
and wages. These incentives and benefits not only motivate the workers but also increase and
enhance the outputs of the company. Money is a motivating component that helps in fulfilling
the needs, wants and expectations of the workers. It has been analyzed that monetary incentives
help in satisfying the needs and expectations of the subordinates in a large extent. Money is
considered as chief source of fulfilling the wants and desires of people. Further, it is also helpful
to indulge the social needs and requirements by possessing several materials things. Thus, money
and financial rewards not only fulfill the psychological wants but also the social and security
needs. The monetary rewards also provide a favorable assurance for satisfying the wants, desires
and expectations (Taormina and Gao, 2013).
In order to accomplish the objectives and targets, there are some motivational components
should be put in place to stimulate workers and to get good results at the workplace. Financial
incentives and rewards mean any encouragement involving the payment of money and reduction
in paid for products and services or any type of award. There are various pros of money and
financial incentives that may help to compete with rivalries in the global market. It is analyzed
that monetary incentives can be directed to affect worker’s decisions. Money and financial
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Organizational behavior
benefits are considered straightforward route to affect specific actions of the people in the
workplace. These monetary benefits also improve and augment the morale and retention of the
workers. It is stated that monetary benefits and incentives frequently do attain short term
objectives and goals for businesses, such as enhancing and maximizing productivity or
minimizing problematic actions. An incentives and reward scheme can improve and enhance
worker attitudes and improve the working environment. It is an effective and dynamic way to
give extra remuneration and benefits to excellent performers when there are limitations that do
not permit raises. An incentive program or plan can also be used as a recruiting method. It has
been studied that motivation is a necessary method that managers or leaders use to achieve not
only higher and effective performance but also it provides an inspiration to retain and attract
higher performers to attain higher outcomes and productivity (Prendergast, 2008).
The leader use money and other financial benefits at the workplace to indulge people to work
and to produce better outputs for the business in an effective manner. Monetary benefits also
increase and boost commitment in work performance and productivity. The management offers
monetary and non-monetary benefits and incentives to the workers to augment maximum outputs
and returns (Dartey-Baah and Amoako, 2011). It is really realistic to expect higher and dynamic
financial rewards and incentives to reduce not only intrinsic or internal motivation, but also job
productivity and performance as well. Money can also encourage the lowest grade workers who
feel dissatisfy at the workplace. An effective and attractive management creates a motivational
tool or system which is capable enough of satisfying the various kinds of human wants and needs
(Dörnyei and Ushioda, 2009). Offering the workers with a financial benefits and incentives are
best way of demonstrating to them that the company value their work and effectiveness.
Financial rewards and money are also benefited to the workers because they enhance and
increase the livelihood of personnel staying with the firm, permitting employers and managers to
retain knowledge, skills and experience base, and rendering employees with a measure of
familiarity and steadiness. Financial rewards are effective source to augment self esteem and
level of confidence of the workers. In this way, money and financial rewards provide ample of
benefits to the employees in the rivalries market (Herzberg, 2008).
Various facts and evidence show that money and financial incentives motivate people and a great
deal of facts and evidence recommends that it actually dissatisfy employees because there are
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Organizational behavior
ample of cost associated with rewards and incentives. One cons of motivating and encouraging
workers with financial rewards like commissions and bonuses is that such benefits and incentives
are frequently inconsistent. Team work and collaboration is effective and unique to productivity
and performance in many businesses. Financial rewards and benefits may restrict teamwork and
cooperation because these benefits and financial rewards are generally considered individual
achievement instead of group attainment that can cause divisiveness and competition at the
workplace. Performance based rewards and incentives may put direct adverse impacts on clients
if workers are rewarded based on customer relations. The other demerit of financial reward or
incentive is that they can lead to burn out. Overwork can also lead to issues and concerns such as
low self esteem and lower productivity (Dweck, 2013). One of the significant disadvantages of
monetary and financial reward is that rewards seen just an entitlement to the workers. It also
creates a discrimination and inequality among the workers at the workplace. It involves lots of
time to frame a fair monetary incentive and reward plan. Along with this, such incentives and
rewards might be less effective in some special circumstances. If a worker is doing work from
home or is working late hours at home and in the office, then it can become quite difficult for the
firm to track the record of the workers in these circumstances. Aside this, there is a risk of
unintentional consequences and issues and in addition, there is a cost of execution. All these are
considered the drawbacks of money and financial rewards that help in inspiring and motivating
subordinates at the workplace (Kaur, 2013).
There are various organizational behavior theories used by the organizations to enhance and
motivate the workers for performing task and duties effectively and successfully. Theory X and
theory Y is a significant theory that initiated by the company. This theory is categorized in two
parts such as theory X and theory Y. In theory X workers ignore work and they dislike roles and
responsibilities. The employers and managers implements punishments and enforce rules to
encourage the workers. In theory Y, the workers put efforts to attain long term objectives and
goals in the workplace (Markova and Ford, 2011).
Equity theory is one of the dynamic theories that initiated by the firm in the workplace to
motivate the subordinate. Equity theory argues that workers are encouraged when they perceive
their treatment at the workplace to be fair and unmotivated when treatment is perceived to be
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Organizational behavior
inequitable. According to this theory, equal opportunities are provided to the workers within the
organization (Zeigner, 2018).
Maslow’s hierarchy theory is also used by the top management to enhance the effectiveness and
performance of the employees. This theory contains five levels that generally shape motivation
styles in the association. To motivate the employees, the company focuses on the five levels of
Maslow’s theory. The five level of Maslow’s theory includes self actualization, esteem needs,
love needs and belongingness, safety needs and physiological needs. These theories might be
applied in an organizational setting and goals (Black and Rosen, 2011).
It is noted that managerial or organizational interventions are essential to handle and control over
the various problems related to culture, society and ethics. The cultural issue includes values,
customs and religious. Sometimes, people are failed to understand the culture of the organization
therefore, various difficulties are faced by them while working in the organization. On the other
hand, ethical issue includes confidentiality, unethical behavior, competence, consent and
disclosure. It also may hamper the image and financial position of the organization. The social
issue is also a big concern for each and every organization that needs to be taken care by top
management at the workplace (Keynes, 2018).
It is concluded from the above mentioned analysis that no company can expand and flourish the
business without motivating and inspiring the workers towards the attainment of desired
objectives and targets. It is recommended that the company should focus on the financial and
non-financial rewards to compete with rivalries and to indulge the efficiency and productivity of
the subordinates at the workplace. Further, they should maintain good communication and
collaboration with workers to handle and resolve their issues and queries.
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Organizational behavior
References
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Organizational behavior
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