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

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