MGTP102 Essay: Debating the Role of Money in Employee Motivation

This essay delves into the multifaceted concept of employee motivation, analyzing whether financial incentives are the sole driving force behind employee engagement and performance. The essay begins by defining employee motivation and its significance for organizational success, distinguishing between intrinsic and extrinsic motivators. It then examines the impact of financial rewards, such as pay increases, on employee morale and productivity, drawing upon theories like Maslow's hierarchy of needs, equity theory, and reinforcement theory. However, the essay also presents counterarguments, highlighting the limitations of money as a motivator and emphasizing the importance of intrinsic factors like recognition, autonomy, and a positive work environment, referencing Herzberg's theory and studies on employee preferences. The essay concludes that while financial compensation plays a role, it's not the only factor, and that a combination of both intrinsic and extrinsic motivators is crucial for long-term employee satisfaction and organizational achievement.

Employee Motivation
2019
Student’s Name
5/21/2019

Employee Motivation 1
Employee motivation reflects how committed the employee is towards the job and the degree
of engagement the employee feels with the goals of the company. The force of motivation
gives rise to a certain behavior of the employees to achieve the goals of the business.
Employee motivation is considered important for enhancing the productivity of the company
and creating a positive working environment. The degree of employee motivation is directly
linked to the performance of the organization. If the employees are highly motivated they feel
happy and valued and are more engaged towards the goals of the organization (Lazaroiu,
2015).
The employees can be motivated through intrinsic and extrinsic motivations. It is analyzed
that when the employees are motivated through extrinsic motivation .i.e. money or status it
leads to an increase in the productive and higher satisfaction among the employees. The
further paragraphs of the essay will reflect that the level of pay is the only thing that affects
the motivation of the employees (Kuvaas et al, 2018).
In accordance with the Maslow’s need hierarchy theory every human possess different needs
which range from physiological to the self-actualization needs. At every stage, the human
requires money to satisfy the diverging needs. The first need consists of the physiological
needs which are the basic needs for the survival of the human but will only be satisfied by
providing money. However in context to the business the employee will get highly motivated
by receiving pay as a source of motivation. Increase in the pay improves the morale of the
employees and make them more dedicated to the goals of the organization (Mikkelsen et al,
2017).
Money is considered as the crucial incentive to work motivation. It is considered as the
medium of exchange for satisfying the diverging needs of the employees. The employee’s
uses pay as a scorecard to compare the value of their services with the pay of the other

Employee Motivation 2
employees. The equity theory of John Stacey Adams states that money has a symbolic value.
The employee of the organization try to create equity between the inputs made and the output
received from the organization and compares it with the input and output of the other
employees. When the ratios of input and output are equivalent the employees get motivated
from getting the fair treatment and in turn exhibit positive relation with the co-workers (Lee
and Raschke, 2016).
The reinforcement theory also reflects the power of money for motivating the employees. The
reinforcement theory states that if the pay of the employees is contingent upon the
performance it will lead to enhancement of the employee’s performance. The employees who
desire to attain higher pay will put extra efforts to increase the pay and in turn, will enhance
the productivity of the company. In accordance with the study analyzed by Locke, it is
analyzed that the only reason for enhancement in the performance of the employees is
money. It is observed that a 30% improvement in the performance was due to the increase in
the pay rather than higher job responsibilities, decision making and improvements in the job
design (Mikkelsen et al, 2017).
It is analyzed that the money is considered as a key motivator for enhancing the employee
productivity but it is based upon certain conditions. For enhancing the employee productivity
it is essential that money is considered important by the employee. The employees must
perceive money as a direct reward for the performance and the marginal amount of money
offered for the performance must be considered significant (Lee and Raschke, 2016).
Contrary to the above views, it is analyzed that money is nice but is not the only way to
motivate the employees. In accordance with the research of Herzberg, the intrinsic factors
create employee motivation and the extrinsic factors create job dissatisfaction. He states that
in order to motivate employees for the longer period of time it requires intrinsic factors

Employee Motivation 3
because fair wage can only provide motivation to an extent while if the working conditions of
the company will be good the company cannot retain the best employees for a longer period
of time (National Business Research Institute, 2019).
To motivate the employees the company must encourage trusted relationships. The employers
must focus on communicating with the employees and developing interpersonal relationships.
This motivates the employees because they feel valued and in turn increases the productivity
of the company. Interpersonal communications help in reducing conflicts and developing
problem-solving solutions (Kruglanski, 2015).
Money is needed but all the employees require more than compensation to get motivated.
Every employee desires to be recognized for its contributions to the company. Praise other
than monetary recognition is essential to motivate the employee and attain higher
productivity. The intrinsic factors include recognition for the achievement, responsibility,
opportunity for personal growth and advancement. The extrinsic factor that creates job
dissatisfaction includes poor working conditions, poor leadership, money, job security and
status of the employees. It is analyzed that the employer must focus on reducing the extrinsic
factors that create job dissatisfaction and must focus on increasing the extrinsic factors that
motivate the employees to increase productivity and achieve the goals efficiently (Damij et
al, 2015).
Sense of achievement and the recognition for the achievement are considered as the most
favourable factors for motivating the employees and retaining them for a longer period of
time. In accordance with the BCG survey of 2, 00,000 employees the appreciation for the
work was considered as the most important factor for on-the-job happiness of employees. An
attractive fixed salary was ranked 8th for the motivation of the employees. It is recorded that
79% of employees prefer additional benefits in opposition to the increase in pay. Proper

Employee Motivation 4
incentive programs and recognition for the employee are designed by various large and small
companies to boost the morale of the employees and improve team performance (Himelstien,
2015).
The organization culture also plays a major role in motivating employees. The organization
must provide the opportunity of different leadership roles and the attention of the leader. The
employees feel valued when they receive higher responsibilities and get the opportunity to
lead the team. These motivations make them more committed towards the organization and
effectively integrate the personal goals and the goals of the organization (Herzberg, 2017).
The flexibility and autonomy in the working style motivate the employees and leads to the
achievement of the higher results. Employees get motivated when they got the chance of
taking individual decisions. Flexibility in the working hours provides work-life balance to the
employees and reduces the stress which in turn affects the performance of the employees and
helps them to concentrate more and achieve better results. The continuous feedback must be
provided to the employees to gain mastery and must involve employees in designing the
incentive program. The employers must provide the opportunity to learn new desired skills to
enhance the personal growth of the employees and derive creative solutions for the problems
of the organization (The Globe and Mail, 2017).
Development of community enhances the relationship among the members. It allows
developing interaction and encourages in understanding each other. This helps in reducing
interpersonal conflicts and promotes a positive working environment. However, it is analyzed
that money is not the only motivator. The intrinsic factors play a major role in developing the
desired behavior of the employees. The power of money in motivating the employees ends
very quickly and thus requires the intrinsic motivating factors for changing the behaviors of
the employees (Aguenza and Som, 2018).

Employee Motivation 5
The employees must have the clarity of the work and must be provided with the challenging
jobs to increase the confidence and trust the abilities of the employees. It provides the
opportunity to learn from the complex works and enhance the skills of the employees.
However, it is analyzed that the intrinsic factors contribute more towards the high
performance of the employees rather than the extrinsic factors i.e. pay or the cash benefits.
The psychological desire of the employees motivates them to be more committed towards the
organization (Sodexo, 2019).
From the above discussion, it is concluded that money only motivates for a shorter period of
time. It does not help in retaining the employees for a longer period of time. From the survey
of 2, 00,000 employees it is observed that recognition for the achievement was considered as
the main motivator for the employees and job security was ranked at the eight positions. The
employee motivation must be considered at the highest priority because it helps in increasing
the productivity of the company and provides the opportunity to efficiently achieve the goals
of the organization.
It is analyzed that intrinsic factors play a major role in motivating employees. The employees
get highly motivated through recognition for the achievements and development of the
appropriate incentive programs. They feel valued when they are assigned with higher
responsibilities and the opportunity for personal and professional growth. The flexibility in
the working style provides work-life balance and helps in enhancing the performance of the
employees. However, from the above discussion, it is critical to note that money is the only
way to motivate the employees in the organization.

Employee Motivation 6
References
Aguenza, B.B. and Som, A.P.M., (2018) Motivational factors of employee retention and
engagement in organizations. IJAME
Damij, N., Levnajic, Z., Skrt, V.R. and Suklan, J., (2015) what motivates us for work? An
intricate web of factors beyond money and prestige. PloS one, 10(7), p.e0132641.
Herzberg, F., (2017) Motivation to work. London: Routledge.
Himelstien, C. (2015) Base Pay vs. Recognition: What's More Important? [Online].
Available from: https://www.entrepreneur.com/article/243258 [Accessed 21/5/19]
Kruglanski, M.W., (2015) Endogenous attribution and intrinsic motivation. In The hidden
costs of reward (pp. 103-126). Psychology Press.
Kuvaas, B., Buch, R. and Dysvik, A., (2018) Individual variable pay for performance,
incentive effects, and employee motivation. In annual meeting of the Academy of
Management, Chicago, USA.
Lazaroiu, G., (2015) employee motivation and job performance. Linguistic and Philosophical
Investigations, (14), pp.97-102
Lee, M.T. and Raschke, R.L., (2016) Understanding employee motivation and organizational
performance: Arguments for a set-theoretic approach. Journal of Innovation &
Knowledge, 1(3), pp.162-169.
Mikkelsen, M.F., Jacobsen, C.B. and Andersen, L.B., (2017) Managing employee
motivation: Exploring the connections between managers’ enforcement actions, employee
perceptions, and employee intrinsic motivation. International Public Management
Journal, 20(2), pp.183-205.

Employee Motivation 7
National Business Research Institute. (2019) the truth about motivating employees to be more
productive [Online]. Available from:
https://www.nbrii.com/employee-survey-white-papers/the-truth-about-motivating-employees-
to-be-more-productive/ [Accessed 21/5/19]
Sodexo. (2019) Employee motivation: is money the only answer? [Online]. Available from:
https://blog.sodexoengage.com/employee-motivation-is-money-the-only-answer[Accessed
21/5/19]
The Globe and Mail. (2017) why money is not an employee motivator [Online]. Available
from: https://www.theglobeandmail.com/report-on-business/careers/leadership-lab/why-
money-is-not-an-employee-motivator/article33755286/[Accessed 21/5/19]