Money and Other Financial Rewards in Employee Motivation

Running Head: ORGANIZATIONAL BEHAVIOUR
Topic- Money and other financial rewards are a fundamental part of the employment relationship
and can be used effectively in motivating employees. Discussion of pros and cons of this
argument.
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2ORGANIZATIONAL BEHAVIOUR
“You cannot have a million-dollar dream with a minimum-wage work ethics”- Stephen C.
Hogan
Money is motivation or motivation is money- this paradigm is still unresolved.
Motivation is one of the key attributes of organizational behaviour where well-motivated
employees define the good organizational culture at large. So, what actually is motivation? Well,
in this regard Delaney (2017) and Royal (2017) has defined motivation as the reason that defines
the actions of the people and their willingness for accomplishing goals. It is derived from the
word motive which means satisfaction needs. In the context of work goals, the psychological
factor that stimulates the employee’s behaviour is basically the desire for having money.
According to Gerhart (2015) and Fang (2015) motivation in regard to organizational prospect
can be either intrinsic or extrinsic. Intrinsic motivation is mainly personal motivation from
within. It involves behavioural engagement resulting from personal rewarding. Intrinsic
motivations can be based on autonomy, higher locus of control, self-efficacy beliefs and
employee growth-need strengths. Guillén, Ferrero and Hoffman (2015) mentioned the Job
Characteristics Model which focuses on the use of job design for motivating employees
intrinsically, generally based on skill variety, task identity, task significance, autonomy and task
feedback. On the other hand, extrinsic motivation is the behaviour driven by external rewards
like money, grades, fame, and praise. The origin of such motivation is outside the individual and
is the opposite of intrinsic motivation based on personal needs. In simpler terms, it is a reward-
driven motivation based on operant conditioning. Hennessey, et al. (2015) mentioned that
external motivation can be either tangible (money and rewards) or intangible (fame and praise).
Both reward and punishment act as influencing factors of extrinsic motivation. In consideration
of employee-employer relationship there are four basic elements namely selection and employee

3ORGANIZATIONAL BEHAVIOUR
engagement, salary and wage payment, power of dismissal and power of control and conduct
Kroll and Porumbescu (2018). In this essay the influence of money and other financial rewards
in employment relationship and employee motivation will be discussed along with the various
pros and cons.
First the pros of money and other financial rewards as a form of tangible extrinsic
motivation in workplace is discussed here. Extrinsic motivation is generally used by managers
for galvanizing employees in achieving any work objective Kuvaas, Buch and Dysvik (2018).
Therefore, extrinsic motivation like rewards and bonuses help the organization in accomplishing
their targeted goals in due time. Money is such an important weapon of motivation that can drive
a person to perform a task even if in reality the person is not actually interested in accomplishing
it Law, Chan and Ozer (2017). It helps in easy goal setting and thereby increase employee
survival in the long run. Globalization has increased business competition manifold; in these
circumstances the world has become more artificial and self-oriented. Money has gained its
importance manifold in workplace motivation and present-day jobs are mostly money-centric
instead of people-centric Lee and Raschke (2016). In this context Maslow’s need hierarchy can
be used to explain the importance of financial rewards and money in employee motivation. There
are five basic hierarchical needs namely physiological needs, safety needs, security needs,
esteem needs and self-actualization needs Malik, Butt and Choi (2015). Safety needs emphasis
the need of financial security where money plays important role. Salary and wage payment at
times defines professionalism. That is, in professional contexts of workplaces money
distinguishes it from non-professional contexts. And it is quite obvious that if an employee is not
paid then he/she will not be motivated to work and will look for a job change. A health
employment relationship increased satisfaction level of employees and thereby increases overall