MGTP102 Management Essay: Remuneration and Motivation

This essay delves into the crucial relationship between remuneration and employee motivation within organizational settings, particularly focusing on the fast-food industry, using McDonald's as a case study. It argues that a well-structured compensation system is a key driver of employee motivation, leading to increased productivity, reduced turnover, and improved organizational performance. The essay explores various motivation theories, including Maslow's Hierarchy of Needs and Herzberg's Two-Factor Theory, to support the argument that money serves as a primary motivator. It emphasizes the importance of managers understanding their employees' social and economic backgrounds to offer appropriate remuneration. The essay also examines the distinction between intrinsic and extrinsic rewards and their impact on employee behavior. The paper concludes by reinforcing the importance of fair remuneration policies for attracting, retaining, and motivating employees, ultimately enhancing productivity and organizational success. The essay is written by a student for Desklib, a platform providing AI-based study tools and resources for students.

Running head: MANAGEMENT
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Introduction
The essay aims at providing an insight into the fact as to how remuneration has been one
of the factors for motivation within society. A distinct system for compensation ensures in
employee motivation that further results in the increase of the productivity. The essay focuses on
relationship between motivation and the level of the pay. Bolman and Deal (2017) put across in
the study that most business acts like an institution of profit maximization such that they place
the efforts for improving performance of the employees through motivation. This finally enables
the organization in increasing the level of productivity. Thus, work motivation remains
interrelated with the job satisfaction.
Money is often considered as the means of rewarding the basic needs of the individuals.
These needs depend on the purchasing power determined by the level of pay or the salary of the
individuals. The various motivation theory including the Maslow’s Hierarchy of Needs,
Achievement Theory, McGregor’s theory of X and Y, Two Factor Theory by Hertzberg and the
Taylor’s motivational theory money acts as one of the key sources in persuading individual
behavior towards the work productivity and the organization. Therefore, it is vital for corporate
executives or the managers in remaining aware with the social and the economic background of
the employees and offer good remuneration according to the skills and talent thereby motivating
to work. The level of pay refers to the basic salary of the employees.
In the present scenario, motivation and management of the human resource have become
a complex task. In the highly competitive and the changing environment remuneration acts as
one of the key tools for managers for improving productivity of employees, attracting the
competent personnel, retaining the present employees and at the same time reduce rates of

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employee turnover and the rate of the absentees, for managing sequences of the job,
strengthening the relationship with the union management and improvement of the public image
of the organization.
The essay tries to portray the process of remuneration with the fast food industry sector
like McDonalds, one of the most renowned fast food outlets across the world. In recent times,
structure of the fast food industry became complicated and the success is primarily dependent
upon the talented and the qualified employees who remain capable of understanding the
requirements and the ever changing needs of customers. Environmental changes and competitive
pressure have resulted in the importance of the motivational practices for the managers for
boosting the employee performance. The essay primarily focuses on how the managers of the
McDonalds will use the level of the pay for motivating employees thereby creating competitive
advantage within industry.
Background Information
McDonalds represents the most renonwned chain of fast food restaurants that has
operation in over 120 countries serving close to 47 million customers in a particular day. This
fast food chain doles out some common and favorite food stuffs across the world such as Big
Mac, French Fries, Chicken Nuggets, Egg McMuffin and Quarter Pounder. The firm’s success
depends on the HRM practices and the efforts made by the employees and the managers. The HR
policies of the company are defined in clear manner for benefitting the stakeholders (Bratton and
Gold 2017). The key aim HRM department lies in offering the best services to customers through
ensuring the fact that company comprises of motivated, committed and skilled employees.

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Besides, the remuneration practices followed by company are not only good but designed as per
the theories of motivation.
Remuneration does not represent a newer concept for business organizations. In corporate
world, all members ranging from the owners to the employees belonging to lower level works for
the need of money (Bryant and Allen 2013). Irrespective of the fact of whether it is an MNC or
small shop everyone works for higher level of pay as well as financial needs for the fulfillment
of the basic needs. In the highly competitive corporate world managers and executives uses
motivational theory and the management practice for enhancing productivity and skills of
employees thereby earning higher level of money. Managers therefore make use of the practice
of fair remuneration that leads to satisfaction amongst the employees in fulfilling the needs.
As per the assumptions put forward by the theories of motivation, the level of pay as well
as the incentive acts as the direct tool in motivating the employees (Cheng 2014). In McDonalds,
managers have taken complete overview of the concept and ensured motivating the employees
by paying good performance incentive and remuneration. In present times, companies follow the
level of the pay for determining performance. It is also the experience and qualification that
allows the employee in earning a better pay package.
For instance, a highly qualified marketing manager would not receive higher level of pay
if he is unable in carrying out an effective market research thereby resulting in lower pay. While
a particular sales executive with average qualification and serving more customers through
portraying the abilities and maintaining good relations would not get promoted but also receive a
higher level of pay.

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Therefore, it is a clear fact that the level of pay matters for employees irrespective of the
positions they hold. The level of pay or remuneration is required by employees in fulfilling the
basic needs. A firm also provides non-monetary rewards and compensation for the development
of the job satisfaction and control rate of the employee turnover. The essay would focus on the
McDonald that has efficient human resource (HR) and the compensation policies for paying the
employees and thereby motivating them in putting best efforts for achieving the objectives and
goals of the company.
Objectives
The essay focuses on the importance and the need of the motivation tools for managers
and how the level of the pay helps managers in motivating the employees in McDonalds. The
key objective remains in identification of relationship between the level of pay and motivation
Discussion:
According to Cohen (2015), motivation represents a procedure for pushing the employees
towards work for satisfying a need. Most people works for reaching certain specified goals.
Hence, motivation acts as the goal-directed drive causing an individual to act. Dalkir (2013)
stated that want, desire and need holds similarity with motivation. The aspects portrayed the
importance of understanding motivation within organizations as the reaction towards
compensation. Thus, it can be said that, motivation and compensation remains directly
proportional to one other. Employee performance, rate of the absenteeism and the turnover are
influenced by the level of pay or remuneration that the employee receives.

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Managers use varied tools for motivation for motivating the employees of which
remuneration acts as one of the key tools. Remuneration is defined as a tool for monetary
motivation that has the power to influence the employee behavior towards work. Davis et al.
(2016) put across that each employee should be compensated for the role, responsibilities and the
efforts made by him towards the company. Before deciding on the amount and the form of
remuneration a firm must take into account various considerations which include a particular
business condition, economic climate, qualification of workers, cost of living and productivity.
Various authors have described regarding the relationship that exists between motivation and the
level of the pay. However, for supporting the relationship, Farndale and Kelliher (2013) put
across that the aspect of remuneration is is related to the Herzberg’s hygiene factors. The level of
pay includes various factors like commission, bonuses and the fringe benefits including holiday
entitlement and pensions.
Hislop, Bosua and Helms (2018) however represented that motivation of employees is
not only determined by the level of the pay of the organization but also understanding of
individuals. Thus, remuneration or the level of pay of the employee depends upon various factors
like psychological needs, basic needs, individual performance, productivity, social needs and
profitability. In support of this, Kearney (2018) put across that successful motivation depends not
only on the proper implementation of the remuneration policy but involves other motivators like
HR training and development organization of work, performance appraisal and the tools for
performance management.
According to HR experts, construction of an effective system of rewards is vital for
motivating the employees. However, there exists the need of some enthusiastic and good

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managers who are capable of driving the people towards better performance. Thus, for creation
of an effective process of motivation process, it is vital for the organizations to have an effective
remuneration policy for the employees. According to Kehoe and Wright (2013) there exists two
different kinds of rewards which are intrinsic as well as extrinsic. Intrinsic rewards mostly relate
to the rewards that come naturally with the job. This particular reward is received by the
individuals when they remain successful in achieving own objectives while the extrinsic rewards
represent rewards outside the job which includes security, working condition, promotion, service
contact and work environment.
In recent times, for motivating the employees, both the intrinsic and extrinsic rewards
should hold a portion in the remuneration policy. It is to be noted that the individuals effectively
works towards the extent of job if they remain motivated intrinsically. In comparison to this, it
can be said that if the employees are motivated extrinsically they work effectively in the manner
that helps them in attaining the external rewards from job. Therefore, it can be said that if
remuneration remains intrinsic then the desire for the motivation also remains intrinsic while it
remains extrinsic in case of extrinsic remuneration.
Stredwick (2013) stated that in the new era of the government, to increase productivity
and performance of employees, managers’ needs to adopt good policies for remuneration. This
will aid business organizations in offering quality products and services and to its customers. It is
also the reason why most managers use the policy of remuneration for attracting, retaining,
motivating and satisfying employees. It has been found that remuneration based on the
performance motivates the employees in working harder.

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It is also found by the researchers that employees remain motivated by the varied
monetary remuneration. Thus, an efficient pay structure helps in reducing the not only the
turnover intentions and absenteeism but enhances the organizational attractiveness towards the
various job seekers thereby contributing in enhancing the productivity of the employees.
Muogbo (2013) put across that the managers in the different organizations consider the level of
pay as the key factor helping in enhancing the productivity of employees.
Remuneration is thus a crucial tool focusing on performance motivation and behaviour of
employees. Dobre (2013) asserted that an organization must have appropriate rewards for
motivating and satisfying the employees. In contrast to this, Gupta and Shaw (2014) mentioned
that other factors like the job, morale, participation, discipline and appropriate feedback are
important as they have a direct impact on remuneration.
Conclusion:
On a concluding note it can be said that, remuneration represents a tool that acts as the
impartial measurement of employees since they would not be motivated to work if they receive
more facility compared to the level of pay. The increment in salary enables the employees in
maintaining their status and at the same time ensures financial security. Remuneration also
enables in boosting the employees’ self-confidence thereby motivating them towards
performance. Lastly, it can be said that remuneration is also responsible for enhancing employee
productivity through motivation.

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References:
Bolman, L.G. and Deal, T.E., 2017. Reframing organizations: Artistry, choice, and leadership.
John Wiley & Sons.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Bryant, P.C. and Allen, D.G., 2013. Compensation, benefits and employee turnover: HR
strategies for retaining top talent. Compensation & Benefits Review, 45(3), pp.171-175.
Cheng, S.Y., 2014. The mediating role of organizational justice on the relationship between
administrative performance appraisal practices and organizational commitment. The
International Journal of Human Resource Management, 25(8), pp.1131-1148.
Cohen, D.J., 2015. HR past, present and future: A call for consistent practices and a focus on
competencies. Human Resource Management Review, 25(2), pp.205-215.
Dalkir, K., 2013. Knowledge management in theory and practice. Routledge.
Davis, T., Cutt, M., Flynn, N. and Mowl, P., 2016. Talent assessment: A new strategy for talent
management. Routledge.
Dobre, O.I., 2013. Employee motivation and organizational performance. Review of Applied
Socio-Economic Research, 5(1).
Farndale, E. and Kelliher, C., 2013. Implementing performance appraisal: Exploring the
employee experience. Human Resource Management, 52(6), pp.879-897.
ge.

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Gupta, N. and Shaw, J.D., 2014. Employee compensation: The neglected area of HRM
research. Human Resource Management Review, 24(1), pp.1-4.
Hislop, D., Bosua, R. and Helms, R., 2018. Knowledge management in organizations: A critical
introduction. Oxford University Press.
Kearney, R., 2018. Public sector performance: management, motivation, and measurement.
Routledge.
Kehoe, R.R. and Wright, P.M., 2013. The impact of high-performance human resource practices
on employees’ attitudes and behaviors. Journal of management, 39(2), pp.366-391.
Muogbo, U.S., 2013. The impact of employee motivation on organisational performance (a study
of some selected firms in anambra state nigeria). The international journal of engineering and
science, 2(7), pp.70-80.
Stredwick, J., 2013. An introduction to human resource management. Routledge.