Pros and Cons of Using Money as a Motivator in Employment Relationships

This research essay discusses the pros and cons of using money as a motivator in employment relationships. It explores the impact of monetary rewards on employee motivation and the potential challenges they may bring. The essay also examines alternative non-monetary rewards and their effectiveness in the long run.

organisational behaviour
Research Essay
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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.
In organisational behaviours theory, employee motivation and employment
relationship are considered as key drivers that motivates employees to achieve
organisational objectives. In today’s competitive business world, managements look
for various ways that can motivate employees to enhance organisational productivity
and utilise human capital to its fullest (Singh, 2012). Motivation through money and
other monetary rewards are mostly preferred by organisations as many researchers
and authors pinpoints various pros behind it. Nevertheless, few behavioural
scientists claim that non-monetary rewards prove to be more effective in the long run
and thus underplayed the concept behind monetary rewards (Cummings & Worley,
2009). This research essay proposes to make further discussions on the above-
mentioned research essay topic to analyse pros and cons related to money and
other monetary rewards for enhancing employment relationships and employee
motivation purposes. This essay will conclude after recommending ways through
which employee motivation and employment relationship can be established in the
firms as per current literature and future trends seen in organisational behaviour
concept.
Al-Madi, et al. (2017) explains that employee motivation is divided into two
types, intrinsic and extrinsic motivation. Intrinsic motivation adds in building positive
relationships that employees experiences directly from their job and thus proves to
be very effective in building employment relationships. They remain self-motivated
as employee enjoy performing their job role while achieving accomplishments,
praises, gratitude or recognition in the firm. Extrinsic motivation, on the other hand
are those which stems out of external work environment related to the work and is
typically applied by another person than the one who is being motivated. External
motivation maintains relationship between the motivator and individual’s behaviour
that is further moderated by affection and cognition of outcomes in the form of
tangible rewards. Lee & Raschke (2015) identifies that though externally motivated
employees may not enjoy the task generally, but remains motivated to perform for

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accomplishing praise, promotion, pay or for avoiding any negative consequences
present in their job.
In past few years, many researchers and authors developed various
employee motivation theories in organisational behaviour studies. The basic concept
behind every theory is to understand basic human psychology that involves self-
regulation, personal goals as well as rudimentary necessities for getting motivated
within their workplace environment. As per Salah (2016), to motivate employees
effectively, monetary or extrinsic rewards proves more advantageous as they deliver
a systematic system through which positive consequences and fundamental
purposes is provided, thereby contributing in getting desired outcomes. This view
remains parallel to Osabiya (2015) thoughts where the author says that the only way
that can fulfil every individuals’ requirements and dreams is by sharing their vision
through the mechanisms of financial rewards which usually includes money,
bonuses and other external tangible rewards that can satisfy every individual
domestic and goal-oriented needs. Looking from the lenses of cognitive evaluation
model of motivation theory, the external consequences effects individual motivation
strongly. Though intrinsically motivated staff performs work in a motivated manner,
extrinsic rewards might help them to gain financial benefits also thereby inspiring
them to work productively (Kanfer & Chen, 2016).
On the contrary to the above notion, Cosma & Gilceava (2014) argues that
although money can prove efficient in solving short-term issues, they tend to bring
challenges in the long-term interest of organisations. Moreover, hidden costs of
monetary rewards can strongly influence three major psychological processes:
impaired self-esteem, impaired self-determination and impaired possible
expressions. Such influences can considerably shift locus of control from
organisation perspectives to the external characteristics of individuals. Therefore,
monetary rewards can prove to be very harmful, especially if managed
inappropriately that not only effects employment relationships negatively, but also
decrease workplace efficiency. Psychological contract theory further represents the
positive effects of employee motivation through unwritten and informal agreement
which are not even discussed in the pay systems, but establishes strong
relationships between employers and the employees. According to Yu (2016), “This
concept serves to illustrate the relationship between employers and employees be

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able to predict the set of implicit, unspoken expectations” (p. 621) and hence a
mutual contract assures honesty and fair commitments which are very significant in
building employment relationships.
Maslow theory of motivation is used by many business practitioners while
determining which factors will motivate employees so that they remain loyal and
committed to the firms. His hierarchy of needs reveals basic human requirements in
a line form, categorised into five levels from lower to higher order pertaining
individual needs. Maslow cited that individuals must satisfy their lower needs so that
they can look upon other levels that comes in the line (Korlén, et al., 2017).
Consequently, financial rewards may help employees in fulfilling their basic needs so
that they can further look for other psychological or safety needs that comes in the
line. Furthermore, Cosma & Gilceava (2014) pinpoints that application of universal
reward systems in which money is used as a motivational tool can benefit employees
in fulfilling their line of hierarchy along with accomplishing material needs that may
not be possible through basic pay. However, Al-Madi, et al. (2017) argues that
monetary rewards might not fulfil every employee needs as for some employees,
money or other financial rewards might not prove as important as a personal
gratitude or a positive gesture from employer that can eventually develop
belongingness from within.
Salah (2016) supports the above view and adds that uncertainly, if any
employee who performs in his/her best manner but still gets underpaid or neglected
totally may show relentlessness towards work and hence monetary rewards then
acts negatively on organisational behaviour. Furthermore, the author also pinpoints
that employees who receive money as rewards might try to outperform others
through any possible means, including unethical ways that might hurt organisation’s
reputation along with affecting overall workplace atmosphere. Even Herzberg’s
motivation hygiene theory downplayed the concept behind money as motivator and
claims feedback, interesting work, cohesive group works and other non-monetary
rewards as stimulants for employee motivation ( Antoni, et al., 2017). Nevertheless,
looking from the lenses of Vroom’s expectancy theory, it can be said that money and
other monetary rewards can provide many benefits to the employees as well as
organisations as money act as a reason for which every employee try to work in an
enhanced manner. Expectancy theory proposes that every employee gets motivated

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for a particular reason which usually are categorised in two ways: attractiveness of
the results and relationship between efforts and outcomes. Nabi, et al. (2017)
reveals that money usually act as a prime motivator that establishes motivated
workforce and hence expectancy level of employees remains fulfilled.
Rehman & Ali (2013) argues that monetary rewards can assist organisations
while creating a balance between need for motivation and desired employee’s
productivity level for risk sharing purpose. The authors finds that if monetary rewards
are implemented effectively, they establish well-structured and strategically
governing management by giving employees with opportunities to gain more and in
return, organisations accomplishes positive employment relationship. However,
Korlen, et al. (2017) argues that though monetary reward systems are easy to be
implemented, they may become difficult while evaluating individual performances
and thus many organisations considers it as a complicated procedure. Moreover,
Cosma & Gilceava (2014) also supports the above con and says that even though
money motivates employees instantly, they may not prove effective in long-run.
Which means, that employees who are motivated through money will perform to gain
appreciation in the form of money which might get diminished with time. However, if
non-monetary rewards like statuses or job security is provided, it will remain forever
and provide long-lasting effects in motivating employees.
Cost related factors again adds to cons of monetary rewards for employee
motivation purpose and thus many organisations have to reconsider budget factors
before implementing such motivational tools (Rehman & Ali, 2013). Even if
employees are provided with annual bonuses or a raise, they may ask for more
whenever any extra efforts are provided by them. Along with it, many employees
may show reluctance for performing competitively if they are not rewarded in
expected manner. Nevertheless, Antoni, et al. (2017) argues that pros like employee
retention and highly motivated teams must not be overlooked by the firms and thus
spending money for employee motivational purpose will always get repaid by them
through high operative workforce. Even, employees who gets more than basic
remuneration will feel job stability and security and thus they will not show
willingness to change workplace’s due to monetary dissatisfactions. Employers, on
the other hand saves themselves from costs and time for searching new employees
through effective employment relationship established with older ones.

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The above essay identified cons behind monetary rewards like resentment for
work seen among non-rewarded or underpaid employees, reduced motivation
among some employees who considers other non-monetary rewards more
motivating, cost and time-consuming process for organisations, hampering
employees mental and physical health due to excessive work for attaining money
etc. Therefore, this essay recommends organisations to consider rewarding system
in a well-designed way that develops a link with positive contribution towards
employee motivation. This link can be created by defining reward goals in clear and
understandable manner so that it influences employees work only rather than
influencing inner feelings. Alongside, organisations must implement monetary
rewards to motivate employees for performing competitively along with other non-
monetary rewards that can act as an instant motivating booster while employees
perform for the targeted goal (Salah, 2016). Major pros identified includes increased
organisational productivity, establishing effective group works, fulfilment of targeted
objective and positive employment relationships due to praises identified by
employees’ in the form of monetary rewards. From the identified pros and cons
related to the research essay topic, this essay concludes on the note that monetary
and money rewards certainly motivate employees effectively as they satisfy basic
human needs along with creating a sense of belongingness with the firm.

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References
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Rehman, R. & Ali, M. A., 2013. Is Pay for Performance the Best Incentive for
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