Compensation and Benefits Analysis Report: Motivation and Performance

This report analyzes the article "Does Money Really Affect Motivation? A Review of the Research" by Tomas Chamorro-Premuzic, focusing on the impact of compensation and benefits on employee motivation. The article suggests that intrinsic motives are more strongly linked to employee engagement than extrinsic motives like money. The report connects this information to class materials, specifically chapters nine and ten, which discuss factors like organizational culture and leadership. The author reflects on how the article changed their perspective on performance-based pay, highlighting that other factors are crucial for motivating employees. The report concludes by identifying three key points from the article to share with a compensation professional, emphasizing the importance of considering factors beyond monetary rewards to enhance employee satisfaction and performance. These points include that top-half earners had similar job satisfaction to bottom-half earners, tangible rewards decrease intrinsic motivation, and intrinsic motivation predicts job performance more efficiently than extrinsic motivation.

Running head: COMPENSATION AND BENEFITS
COMPENSATION AND BENEFITS
Name of the Student
Name of the University
Author Note

1COMPENSATION AND BENEFITS
Compensation and benefits are considered to be vital aspects of human resource
management as these elements help in motivating the workforce of an organisation. This
paper shall choose and elaborate an article and provide the impact of the article.
The article chosen on which this paper will be based is “Does Money Really Affect
Motivation? A Review of the Research” by Tomas Chamorro-Premuzic. This article was
published on April 10, 2013.
This article is states that not all employees in an organisation are motivated to deliver
their best performances because of monetary rewards presented to them in the organisation as
compensation. According to research and readings from several other articles it has been seen
that the engagement levels of the employees were about three times more related strongly to
intrinsic motives in comparison to extrinsic motives like money (Harvard Business Review.,
2013). However, the article also suggests that it is not that money does not affect any level of
motivation among the employees as it is subjective and perceived differently by different
poeple but when compared it has been seen that employees at managerial levels and other
smaller levels both had same engagement level even with the difference in salaries which
points out that employees mainly focus on intrinsic motives to be motivated to deliver fruitful
performances.
This article relates to chapters nine and ten which were taught in class which focused
on other factors that were considered to be high motivational factors for employees to work
in an organisation. The chapters suggested that basic necessities like computer, working desk,
chair and other factors like organizational culture, positive environment, team building
activities and efficient leadership have a huge role in motivating employees in an
organisation and helps in providing a satisfaction level which is evident from the
performances produced by the employees.

2COMPENSATION AND BENEFITS
This article had a huge impact on me as I highly believed that money is one of the
biggest motivational factors which are why organisations always incorporate incentive
schemes for employees. However, after reading this article my perception changed on
performance based pay as I now believe that there are other aspects and factors which are
necessary to motivate and engage employees for better performances and when employees
know how much they are going to be compensated they automatically get demotivated and
lose their level of engagement.
Given a choice if I had to drive three vital points from the article in order to share the
ideas with compensation professional I would state that the employees who were earning the
top half according to the research paper had similar level of job satisfaction when compared
to the employees earning in the bottom half of the data. The second point would be that when
the rewards are tangible it automatically decreases the intrinsic motivation by about 36% and
the last one would be intrinsic motivation helps in predicting of the job performances more
efficiently when compared to extrinsic motivation. I would mention these points to explain
the person in charge that why when considering benefits and compensation it is not just to
focus on money and why they should come up with other factors that might help in
motivating and engaging employees for fruitful outcomes.

3COMPENSATION AND BENEFITS
Reference
Harvard Business Review. (2013). Does Money Really Affect Motivation? A Review of the
Research. Retrieved 9 February 2020, from https://hbr.org/2013/04/does-money-
really-affect-motiv