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

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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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