Pay Scale and Employee Motivation: Understanding the Role of Monetary Incentives

Running head: PAY SCALE IS THE ONLY MOTIVATION FOR EMPLOYEES
Pay Scale is the Only Motivation for Employees
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1PAY SCALE IS THE ONLY MOTIVATION FOR EMPLOYEES
It is a universally acknowledged fact that level of pay influences employees to deliver
better performance in their workplace. People work for their living and earning money is
equal to increasing the quality of lifestyle. As mentioned in Dal Bó, Finan and Rossi (2013),
everybody wants to maintain a healthy and prosperous lifestyle and undoubtedly, level of pay
is one of the basic factor which drives employees to improve their skills in order to earn
better with the progression of time. It has been observed employees tend to work for longer
hours to achieve incentive oriented targets. Productivity has been increased as well if an
organisation provides monetary rewards as appreciation. Money often decides the value of an
employee and an employee’s perception of being appreciated matters a lot when it comes to
motivation. This essay will elaborate how the level of pay has been influencing and
motivating current corporate culture with the help of examples and role of monetary
incentive in influencing both the employee production and efficiency.
There are numerous positive feedback which have been received from employees as
far as the level of payment is concerned. The impact on regular performance of employees is
noticeably positive if employers offer them right salary evaluating their potential. An
employee is likely to perform exploiting all his potent if at the end of the month he is feeling
valued by the received amount. As stated in Alhassan et al. (2013), an increased salary
creates a sense of responsibility among them and boost their motivation to deliver their best.
There are numerous psychological aspects which work behind motivating an individual to
perform better, balance both the quality and quantity and stay loyal to the employers. Staying
loyal is equivalent to the positive efforts of retaining the designation and ensuring security for
future. As mentioned before and as supported by Atambo, Munene and Mayogi (2013),
employees have a tendency to work for longer hours if they feel appreciated and valued by
the monetary incentives provided by the organisation.

2PAY SCALE IS THE ONLY MOTIVATION FOR EMPLOYEES
It has been understood by now that such incentives are planned as a form of
inspiration to keep the employees loyal and productive. Employers need to make their
workforce aware of the incentive plan precisely to explore full potential of entire workforce.
The well understood simple monetary incentive programmes are beneficial for the
organisation. Employees mostly have individual targets. While achieving the targets they
think for individual objectives, consequently, with increased productivity they help to
accomplish overall organisational business goals as well. Organisations have realised the
importance of such financial reward based appreciation programmes to make the workforce
feel valued and productive at the same time. For the small companies, sharing profit based
amounts is motivational enough. Employees deliberately try to make higher profit for
receiving higher salary. The need of dealing smart and cost effective deals is greater when all
the employees are responsible for monetary crisis and sales at the same time. Besides,
according to Acar (2014), if incentives and profit based raise have not been imposed, from
traditional to current corporate culture has been serving employees with performance based
yearly appraisal and festive bonuses. These gestures from employers are important as a part
of employee retention programme and to promote gradual growth of a certain organisation.
Apart from regular salary, there are other monetary benefits an employee may receive
according to company norms along with based on responsibility and performance. Basic level
of pay is the most general criteria of joining a job. Offering employees to be part of serving
partnership helps too. Most importantly, employers must offer retirement benefits like
pension, provident fund and gratuity to show gratitude for employees’ dedicated service to
the organisation. It can be considered as a system of ensuring after retirement security to
employees. While serving an organisation, if the organisation helps a worker to explore
benefits of home and car allowance or help to loan children’s education; an employee feel
motivated to deliver his best and even works for longer hours for lowering the baggage of

3PAY SCALE IS THE ONLY MOTIVATION FOR EMPLOYEES
loan as soon as possible. Some people feel elated by the support received from the
organisation for personal growth and likely to perform better for retaining their job with
respect and dignity.
Although, Job satisfaction is a different psychological aspect which lies far from
financial incentives and pay scales; satisfaction deals with paid amount too as it is considered
as determinant of an employee’s value in front of organisation. In order to satisfy needs of
lifestyle and for personal growth employees try to retain the position and strive for better
position with time. In case, an efficient employee is feeling underpaid, most of the time they
seek for better opportunity. According to Anitha (2014), and other surveys performed to
establish relationship between job satisfaction and employee engagement, it has been
observed that employees consider the factor of pay level as the third most significant
parameter as far as satisfaction is concerned.
As employees are likely to stay loyal for organisation based on benefits and incentives
along with level of monthly salary, HR managers yearly revise salary plan and regulations to
retain efficient and skilled employees to boost organisational performance thorough
motivating workforce. According to Misra, Jain and Sood (2013), in case any company
facing high rates of voluntary turnover of skilled employees, the reason has to be their feeling
of being underpaid and less beneficial as compared to their given efforts. Therefore, an
appropriate salary and added benefits can help an organisation to retain best talents and
motivates them to deliver honest efforts for accomplishing organisational objectives.
Undoubtedly, a highly skilled and efficient human resource adds competitive edge to the
business within the industrial range.
As described in Fapohunda (2013), creating individual competition among employees
is another trick to penetrate production. Performance oriented incentives not only helps to