Pros and Cons of Monetary Rewards in Employee Motivation

organisational behaviour
Research Essay
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P a g e | 1
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.
Employee motivation, employment relationship and organisational behaviour
is concerned with those energetic forces that originates within oneself as well as
beyond self-being that influences to work more. Individual motivation can be defined
as mental representation that comes out of desire and do not exist in isolation, but
within organisation’s hierarchical networks which are modified and developed with
time (Kanfer & Chen, 2016). The concept of monetary rewards for motivation has
been considerably downplayed by many behavioural scientists who pinpoints value
behind feedback, job challenges and cohesive team works along with other non-
monetary factor that act as stimulators of motivation. Nonetheless, money still plays
a crucial role to motivate employees as they serve the purpose of fulfilling core
domestic and other financial needs along with enhancing employment relationship.
This research essay will critically examine employee motivation in organisational
behaviour theory to find out pros and cons of money and other financial rewards
while establishing employee relationship and motivating employees to work
effectively.
Rewards can be both, monetary or non-monetary in which monetary rewards
enhances direct satisfaction within employees whereas non-monetary rewards help
them to gain recognition which acts as a motivational tool to lead them and remain
engaged with their work. Employment relationship further depends on employees’
attitude and opinion towards organisation which are built by the firm internally
(Montibeller & Winterfeldt, 2015). The majority of literature highlights current trends
and significance of employee engagement, but often neglects real factors behind the
concept. Stakeholder theory ascertains that organisations must have social
responsibility which lets them consider common interest of parties affected through
actions performed by them. An organisation is said to be socially responsible only if it
utilises all its sources effectively along with benefitting society and creating positive
employment relationships (Waqas & Saleem, 2014).

P a g e | 2
In literature, a remarkable progress can be seen concerning employee
motivation in past few decades, especially for comprehending the basic
psychological pattern involved in personal goals, self-regulation as well as decision
making to motivate explicit abilities for workplace processes. One of the motivational
theories, cognitive evaluation theory explains the effects external consequences
have on individual’s motivation (Singh, 2012). Intrinsically motivated employees
perform for fulfilling domestic needs as well as other non-monetary benefits like
recognition and gratitude, however, external elements like monetary reward and
other financial benefits might lead employees’ question about their own performance
behaviour. Korlen, et al. (2017) argues that, “the motivational effect of external
rewards is dependent upon the extent to which it is internalized and consistent with
the individual’s values” (p. 128). However, Lee & Raschke (2015) ascertains that
intrinsically motivated workforce attributes the cause behind internal need to perform
in a behaviour that brings intrinsic rewards and job satisfaction.
Looking upon at Maslow’s theory of motivation, his hierarchy of needs model
focusses upon basic human needs in a line format where lower or psychological
needs requires to be fulfilled first so that higher order level motivators can be
approached in the line of self-fulfilment. The five categories of human needs
classified by Maslow includes in a row: psychological, survival, safety, love and
esteem (Kanfer & Chen, 2016). Similarly, by applying universal reward system,
money can be used as a motivational tool that can be used by employees as for
many of them, to fulfil their line of hierarchy, money acts as the most appreciated
reward provided by their company. It can help them in acquiring material needs
along with enhancing professional and personal experiences that have been putting
off due to insufficient monetary position. For example, some of them might buy new
car or take a family vacation to fulfil their psychological and family needs. Therefore,
financial rewards prove highly advantageous and can be used for end number of
reasons in motivating employees and gaining employment relationships
(Harunavamwe & Kanengoni, 2013).
Expectancy theory of Vroom states that people act to gain expected
satisfaction along with outcomes. It can be said that monetary rewards can prove
advantageous to the organisations as it gives employees with reasons for performing
in best manner. The expectancy theory suggests that individual motivation within