Money as a Motivator Essay

This paper testament discuss the subject of capital as a inducement. In sum to research and a cohesive review of literature it leading everyow dickens interviews with prominent art objec pockers which bequeath be analyzed to further better the knowledge of the subject by taking advantage of their hands-on experience.I- induction M angiotensin converting enzymey, A incentive? specie That is the violent war between employers and employees. Indeed, motivate employees by dint of the use of funds as a squ be abide by or inducement for consort achievement is and has al dashs been a issue of controersy. Many theorists tackling pauperism theories, human nature in general and indigence in particular, turn over accordingly examined this issue and yet they did non damp the same answer as whether cash fuel motivate players for work or non. This sh solely form the main core of this projectBut before tackling this sensitive issue, permit us pay heed what does Motiva tion in general entails? Motivation suggests the steadfast desire to do ones subscriber line well with an asylum to overhear a complement either of moral or material satisfaction. Employers consent employed material incentives in the form of pleonastic hours with extra fabricate, any(prenominal) separates give too much importance to the stability of the workers with gratifying their necessaries of life whereas opposites have much stressed human sexual congresss, good contacts with prospective outcomes, promotion, and occupation with high responsibilities potential.There is no shortage of theories near penury, and the relation between silver and assume in particular was central to intimately of them since money has al miens been held as the bread and only ifter of severally worker and the carrot or the stick with which the employers control the goal achievement processes. following(a) we briefly review some of the nearly big motivation theories and thither appr oach on money.II- Review of literature and previous studies(A) Theories of Human motivation and their relation to money* The Hierarchy of NeedsThis theory is probably the best-known motivation theory. It was coined by Abraham Maslow during the 1940s and 1950s. In essence, it states that our motivations atomic number 18 dictated primarily by the dowery we bring ourselves in, and that authorized lower needs need to be satisfied before we atomic number 18 make towards higher accomplishments. Maslow indicated five appargonnt stages, starting at physiological needs and expirying at ego-actualization needs. In practice, the first stage in the hierarchy, the physiological stage, which contains the needs the employee first tries to fill such(prenominal)(prenominal) as food, shelter indicates that pay is a good motivator deep down this stage. coin is the supplier of food, medicine, shelter, clothing entirely as before vast as thee basic needs become satisfied and the employee moves to higher stages within the hierarchy, pay becomes less and less a motivator. Money nonifyt buy safety, a backbone of belonging, self esteem or self actualization.* Theory X and Theory YIn 1960, Douglas McGregor advanced the idea that managers had a major(ip) part in motivation mental faculty. He essentially divided managers into dickens categories Theory X managers who believe that their staff ar lazy and allow for do as little as they fag end lay down a track(predicate) with and Theory Y managers who believe that their mass actually postulate to do their best in their work. Theory X managers believe that staff provide do things if they are apt(p) explicit instructions with no wriggle room, and plenty of stick if they dont do what they are so-called to do. Theory Y managers believe their good deal work their best when appoint to make appropriate decisions. motorcoachs who follow theory Xs approach, go to rely greatly on money as both a motivator and a tool of control. Theory Y managers tend to center similarly on non-monetary motivators and rely less and less on money in motivating their staff. With advances in focusing theories, Theory Y has begun to draw up back Theory X as the dominant management philosophy in numerous organizations and money began to seem as a less in effect(p) tool for motivation as we will later see.* soprano reckon TheoryAn separate theory to gain prominence at this clock measure was Frederick Hertzbergs Dual Factor theory. He identified two separate congregations of factors that had a grueling bearing on motivation. He called the first group hygiene factors, because they strongly influenced feelings of dissatisfaction amongst employees. Hygiene factors include working(a) conditions, pay, and job security. According to Hertzberg, they dont motivate employees as such, nonwithstanding if they are not in that respect, they bay window adversely affect job mental process. He referred to the early(a) group as motivation factors because they had a role in positively influencing performance such as achievement, career progression and learning. Hertzberg went on to state that you green goddess for build almost workforce motivation if you dont get the hygiene factors notwithstanding up first of all, so you have to get the pay part of the equivalence right. But he saw pay as not beingness an actual motivator in the work place. You can create disgruntle employees with less money, only when you cant create a motivate employee with much change.* Equity Theory tin can Stacy Adams posited an different theory in 1965, looking at how motivation was affected by the degree of fairness within an organization, particularly within a group of peers. Con incliner the situation where nine gross sales exercises are given a company Mercedes, hardly one of them is given a Toyota, even though that person believes he did exclusively as good a job as his colleagues. How would th at run sales representative feel? Now theres nothing wrong with a Toyota, but by comparing ones own circumstances to the treatment of others in a similar situation, very intense feelings can be experienced. These feelings could lead to intense positive or negative motivations. Its here that money can become a serious de-motivator or even a source of fighting if distribution was not seen as fair. No occasion how insignificant the monetary apprize, a lower get up will be seen as an unfair evaluation of ones self-conceived performance congenator to others and the intended motivating effect will be transformed into a strong feeling of inferiority and injustice. In practice, managers need to be careful in distributing money incentives within a group of peers because of the emotions this can engender.*Expectancy TheoryVictor Vroom in 1964 empower forward the touch that people are driven by the likelihood of genuine triumph in achieving particular objectives. Three barriers need t o be jumped by managers if they want to motivate their people to succeed. First of all, they need to connect the task to be performed to the likelihood of better results. Secondly they need to set expectations that there are positive benefits to the employee in achieving those results, and thirdly they need to ensure that these benefits are of rate to the employee. For instance, there is no point asking your employees to be happy round coming in a half-hour early in futurity if you cant properly explain how this will lead to eventual(prenominal) real benefits for theemployees themselves. Benefits also should be properly assessed, some employees rank money low on their priority lists, and others give it precedence over other benefits. Setting expectations for benefits that are not valued by employees will not work, managers should not pee-pee for granted that money is all that matters and probe for other benefits the employees whitethorn consider A-one.* Money as a MotivatorThis theory states that all workers are motivated primarily by the need for money so if you want to get the most out of your workforce, you pay them more. This has particular effectivity in areas where payment is directly linked to the accomplishment of objectives. This theory is plethoric in many pedigreees in the form of performance-related pay, incentives, bonuses and promotion schemes. While some would argue that it does not have some validity (indeed it is the driver seat most sales forces the world over), it is not an all-encompassing theory. It doesnt really address the some quantify complex reasons why people are motivated by money. It excludes people who are not driven primarily for money. It does not, for modelling, break to voluntary organizations. In addition, it may not work if meeting the fiscal objectives dexterity threaten other en actments, creature-comforts or rights, such as an employees location, network of friends, employment conditions or current take aim of job satisfaction. some(prenominal) other related theories such as the ERG and AAP theories also tried to find out what motivates employees the most, and where does pay rank among motivators. The motivational power of money is clear in the ace that more sawbucks buy more things (but not all things as we discussed before), but why is money sometimes seen as a low quality motivator?(B) Money, an Over Estimated MotivatorIn our research and readings we were able to describe several(prenominal) problems with using money as a motivator in the work place. These points are summarized below and should be taken into consideration by the manager in his frets to promote rough-and-readyness and efficiency.(1) Cash becoming allowance The great thing about choosing a monetary reward is that theres no extra distribution method necessary. Employees view cash incentives and awards as part of their annual compensation,Because those dollars just become part of what you take home, theres nothin g particular(prenominal) about them. The money tends to get spent paying observations, and you dont really do anything thats memorable, so theres no lasting effect inter parentage to the dollars that youre putting into those incentive schemes. It just becomes a part of that masses of money that you find a way to spend every month and every year.(2) A Tough Incentive to Take Away beyond cashs poor ability to change behaviors, it actually can be harmful. In good economic times, when everyone is flush and goals are being reached, cash can be easy to give out, but when times are bad, and the cash goes away, employees will wonder where their money went. And studies award that they will consider it their money. Discontinuing a noncash incentive program has a well less negative impact on employee motivation than killing a cash program.(3) Buyers Remorse Affects Money Incentives A family man receiving a cash award from his company is faced with a stout decision Put the money in savi ngs or a college fund, or use it to pay bills, or splurge on a family vacation or buy them something special. If he decides to splurge, he may repent the decision later on when a particularly large bill comes due. That quandary can have a negative effect on the boilers suit quality of the award, an opportunity will be considered as careworn if the money is spent or saved. Many non-cash incentive awards are considered luxuries, and earning them through with(predicate) hard work can give employees a sense of achievement.(4) execrable Trophy Value Cash lacks trophy value and social supporting attributes that increase the perceived value of the non-cash award over cash, the trophy value associated with noncash incentives is just immense. An employee will always find it more pleasant to scold about a company all-expenses- paid trip, movie tickets or even a warm pad on the back from the boss, than a two hundred dollars bonus check.(5) Money Is Not Promotable The trophy value associ ated with non-cash awards can have a positive effect on other employees who didnt reach their goals and take home the award. Its harder for the boss to say do better and youwill get a certain cash reward, than to elevate a position for the employee of the month award for example. Money is less promotable than other forms of motivation.(6) Cash Satisfies Needs-Not Wants Cash is easy for companies to give away, and everybody needs it. But for straight motivation, you need to give people something they want or desire, not something they need. A trip to Hawaii, on the other hand, generates memories, and a plasma-screen TV is something theyll look at every day for eld to come-and remember how they got it, a hundred dollar bill gained for an extra ordinary selling week is soon not incompatible from a hundred dollar bill received as wage.(7) Money Is Im person-to-person Sure, everyone could use more money, but whats special about that? The best rewards cater to a particular groups inte rests, and having that personal edge makes a big difference in how in effect(p) your program will be.(8) One Size Doesnt Fit entirely There are no average employees, average has become wider and wider more or less the means over the past few years, and will continue to do so. So one really cant provide one option and think that its going to be appealing or motivating to the entire staff.(9) Managers Prefer Noncash A recent larn of 235 managers by the Forum for People Performance Management and Measurement showed that managers prefer non-cash employee perception programs. According to the study, managers view non-cash awards as more important, more effective and for the most part superior for achieving the majority of specific organizational objectives.(10) No Global similarity In economic terms, its called purchasing power parity, which means, roughly, that the cost of living-everything from the worth of a nice dinner for two to a months rent-can be vastly different in diffe rent parts of the world. Companies with worldwide footprints need to make sure their award offerings are equal on a global scale. A dollar, after all, goes a lot further in some corners of the world than in others. Non-cash awards such as giving cards allow companies to offer parity in termsof the overall worth of the award.(11) Money Is Insufficient for Some Employees in addition for the person idiosyncrasies of individual employees, money may not be sufficient for some people. Highly paid employees for example may prefer other benefits such as an award ceremony, a club membership, a parking shoes closer to the office(12) Evaluation of Performance its hard to put a price tag on performance. Even clear rules, such as sell x items and y dollars, may be seen as unfair. Employees may complain about their store location, their shifts, and their managers to give an unfair tincture to a peers bonus. Non-cash motivators are less likely to be thoroughly criticized and have a greater mo tivational value.(13) A trouble oneself Maker money may set employees against each other, leading to conflict in the company. Employees may also feel forced to compete and so Money becomes a fosterer of a hostile work environment preferably than a motivational tool.(C) Research Study resultsseveral(prenominal) research studies were through on the effects of money as a motivator, and its position relative to other motivational incentives. The results of a NOVA Group study under the title Factors employees Find Motivating re affirmed several previous studies in which employees class-conscious money as fifth among motivation factors. Money was proceeded by Interesting Work, Appreciation and Recognition, Feeling of being in on things, and transaction Security. A more recent study on done by the Hay Group on retentiveness factors found that money ranked a staggering tenth among employee retention factors. A research study for 57 managers conducted by Meudell & Rodham showed through analysis of questionnaires that managers saw an increase in performance among their employees for an average of just two weeks after a pay farm followed by a relapse into the prior performance levels. Several other research papers we saw which conduct research on the effects of money as a motivator on employees of variant professions showed similar results. Although the position of cash as motivator varied just about among different working groups, it still showed that money has limited motivational power. For example In a much publicized study, Gupta and her colleagues analyzed thirty-nine studies conducted over four decades and found that cold-hard cash motivates workers as expected, but the research group acknowledges that money is not the only thing that concerns employees, noting that beyond a certain point higher salaries will make employees happier, but it will not buy better performance.III- Interviews, Analysis and Findings(A) The interviewsIn the process of researchin g the motivational power of money, we were favorable to interview two prominent managersMr. Sami Gheriafi , Process and Institutional Planning Manager -AUBDr. Saad Andary , Deputy General Manager -BBAC BankAs a basis for the interviews, we prepared a questionnaire to address all the questions that were raised during our review of literature. Through out the interviews many more clarifying questions were asked, the end result was put into a Q&A format, and both interviews are posted in the annex at the end of the paper.(B) Interviews analysisIt was striking how the answers of two managers from two different organizations convergencyped in key issues. Of course one will find differences in some approaches, but the overlap in addition to the findings we uncovered in our literature review gave us confidence in our results.Both managers gave non-monetary forms of motivation priority over money. Whether direct over-performers out of the country for advanced training to show the organiza tions commitment in improving their career opportunity, or verbal and create verbally appreciation, non-monetary motivators were found to be superior. Empowerment, delegation of authority and freedom of decision are also very important tools utilize in the organizations to motivate employees. On the other hand, and in compliance with our research, both managers agreed that money is important e oddly in a region under economic stress, butthey also argued against using it primarily. Dr. Saad Andary noted that money according to his experience may play a good role as a retention factor, noting the huge pay gap between Lebanon and the Gulf, but he doesnt consider it as motivating. Both Mr. Sami Gheriafi and Dr. Saad Andary also indicated that money has a clock impact that is they as managers notice an increase in performance when a monetary reward is handed out, but this increase tend to dwindle down down as the raise is spent. Non-monetary motivators tend to have a agelong lasting effect on performance.On the use of money, Dr. Saad Andary pointed out that in current economic conditions, money is the managements easy way out, and even though both managers disagreed on managements ability to put a pecuniary tag on performance, both agreed that it is not productivity that should be an issue, but also commitment to work, enthusiasm and the feeling of belonging to the company that should matter to managers. Money has a tempting impact on new comers it refreshes the employees and energizes their performance is an expected part of the motivational basket and if used properly and in an accurate sense will boost performance in times when a push is needed. But the use of money has its negative side as well. Money has shorter lasting effect on employees, it is less effective with employees higher up in the organizational hierarchy, money is also mate with the firms emolumentability rather the employees performance in a sense that a hard working employee may not get a raise because the firm is not profitable that year, a thing which will caution the employee especially if in more profitable years less effort lead to more money.Money also will put a huge financial burden on the company especially when employees receive to see bonuses and raises as part of their pay, they will grow more underage on monetary rewards and this will produce a high employee perturbation rate and a decrease in performance. Money, and depending on the management approach, qualification easily become a tool for manipulation rather than motivation. For these reasons Dr. Saad Andary forecasts that management will try to limit the negativities of money as a motivator by making reward more institutionalized, in a sense that staff will become shareholders and be granted stocks rather than raises. This will give rise to a partnership between the staff and the firm, the employees will no longer feel as pones moved by management, but ratherthey will develop a genuine sense of belonging, and a consecutive interest in the well being of the organization.IV- Conclusion Money as a MotivatorAll the popular motivation theories have their flaws and detractors, but they do give us an insight into some of the mechanisms at work in day-to-day organizational life. A number of key messages ring true firstly, people are not automatons and their reasons for behaving in a certain way are more complex than just money or laziness. Secondly, different people are motivated differently there is no such thing as a simple, all-encompassing solution. Thirdly, its important to get the work environment right if you want to get the most from people and finally, managing perceptions and expectations is very important if you want to help people get the most from their work. As a summary, Money is found not to be a default and automatic motivator, its importance is subjective and its effectiveness in motivating is relative to the type of job and the way management uses it, non- monetary motivational approaches are superior in many ways (as explained above). So if we want to covering up with one message we think that the best conclusion readiness be Avoid the Cash Trap.V-Annex(A) Dr. Saad Andary interview1)What are the motivation techniques followed in your Institution?What is the role of money in the above techniques?One major form of motivation is to send staff out for training ( specially out of the country New York, London) this is major motivating because it enhances the employee career and gives photograph to more advanced markets ( only the outstanding people are selected) . The other form of motivation is to promote and to empower the staff (to give him the freedom of decision).Money incentives an environment which is under economic stress with high unemployment and gloomy salaries and wages and also coupled with price inflation required to have constant individual raises , although this does not compensate to the huge job determine differenti al between Lebanon and the Gulf) so money plays the role of retaining employees here and not motivating.2)Do you think Money is the easy way out?In our environment, yes it is, until we have sufficient economic growth to benefit from the oil boom.3)How can you put a price tag on performance?The appraisals to be reflected in the annual raises. BBAC is an institution working in the financial market where jobs can be easily assessed and priced (especially jobs related to sales, dealing, treasury, marketing) where the management can pass with flying colors revenues or loss leading to the evaluation of the employee performance.4)Do you notice an increase in performance after a money raise (bonus, financial reward)? And how long does it last?It gives an immediate improvement in performance and lasts until the raise dissolve according to its amount (depend on the value of the reward). The bad thing about this is that if its regular bonus or reward then its no longer conceived as merit whe re it becomes more as a salary = thats why a money raise cant be that effective motivator to count on.5)From your experience, how did the concept Money as a Motivator develop through the past years? And where do you see it going?In the banking industry money became a norm ( bonus at end of the year for example) which is reflected by the profit of the form , so staff is identified with the concept of the profitableness = there is functional relationship between money as motivator and positivity .See it going towards becoming more institutionalized , in the sense that staff will become share holders (partners) employees will not be granted money but stocks which is a way of partnership that involves the staff in ownership = develops sense of belonging and last relation of employees with the firm.6)What are the positive/negative aspects in using money as motivator (conflicts and competition between employees)? Positive refresh the employees and energize their performance (althoug h for just a period of time). Negative money is coupled with the firm profitability and not directly related to the employee performance and results the criteria setfor the rewards are not usually clear and standardized decreases the sense of belonging towards the firm.7)Doesnt money downplay work and weaken sense of belonging?Yes, money minimise work and stock option can be the right choice for improving sense of belonging8)Money Motivation or Manipulation?Money is light of the surplus created by the staff cant be considered full motivation or manipulation.9)What is your conclusion (experience & personal opinion) about Money as a MotivatorMoney cant be used as a direct and effective motivator due to several constraints mentioned above.(B) Mr. Sami Gheriafi interview1)What are the motivation techniques followed in your Institution?It is at the discretion of the managers of each department to use various techniques to motivate employees. Among many, there is empowerment, delegatio n of authority, added state commensurate with seniority and financial incentives, promotions, commitment to employee professional development (mostly through training and development of talent, skills and competencies), and appreciation either verbally or in writing (aka psychological support) or, as specific to AUB, attainment of Presidents Service Excellence Award, an annual award given to employees with exceptional and superior customer service and notable productivity over the prior 3 years. My personal experience has led me to the following equation Productivity = contentment x Appreciation.What is the role of money in the above techniques?Money is a major motivator, however, in my opinion it has a times impact By virtue of human nature, people tend to feel motivated with money, but after a short period of time, usually not more than 3 6 months, people tend to forget about the financial increase. The money reward will for sure help improving the employees performance in th e short term, but its impact will elapse out as time passes.2)Do you think Money is the easy way out?The use of easy way out is a numeralon the negative side, as when you refer to a situation where people circumvent a process or get a way with minimal loss or damage. On the other hand, Money has a strong buy-in and buy-out impact in that it elevates the level of personal satisfaction notwithstanding the longer term fading effect. Money losses its value with time and so does the money based motivation techniques.3)How can you put a price tag on performance?In financial terms, No However, performance is measured in productivity of an individual. If the individual is satisfied with the job responsibilities and is being appreciated (both soft and hard), the performance is priced and reflected by commitment to work, enthusiasm, and personal ownership (not physical but psychological).4)Do you notice an increase in performance after a money raise (bonus, financial reward)? And how long d oes it last?Performance increase is always noticed after a financial reward. What I would like to point at is that the financial reward should be the consequence not the pre-requisite for an improved or increased performance. In my business life, I have seen many people who work and enjoy what they do with lesser amount of money, but have a great working atmosphere and very appreciative bosses.5)From your experience, how did the concept Money as a Motivator develop through the past years? And where do you see it going?From what I have seen in the past +15 years, money may have a tempting impact on a new employee or a new comer, but as time passes, and as people grow in hierarchy and mature on the personal level, the more motivating is the work responsibilities, assignments, business setting, atmosphere, stability of the organization, and so on and this is where the motivation is heading. In some cases, money becomes a way to bye out when an offer is made If the business setup, set ting, culture, modus operandi is not appealing, people mogul not want to burn bridges by refusing an offer, but might as well increase their expectation to a higher level that the employer might and/or will not be able to afford.6)What are the positive/negative aspects in using money as motivator (conflicts and competition between employees)? Absolute use of money as a motivator has significant negative impact on the employee and the organization equally. The organizations direct budget will inflate with sky rocketing salary budgets and employees will be heavily dependant on monetary rewards. There will be a high employee turnover, resultant reduced productivity, resultant impact on the organizations turnover, etc. This is a vicious cycle.The basket of motivational techniques, including financial reward, is a healthy approach to the organization and the employee. Both will benefit from what each party will give to the other. Organizations will receive productivity, commitment, ow nership, improvement on the part of the employee who in return will also enjoy the basket of appreciation, work atmosphere, investment in his/her professional development, etc. This is what I call a win-win approach.7)Doesnt money trivialize work and weaken sense of belonging?Yes, sometimes it does.8)Money Motivation or Manipulation?Again, the answer depends on the approach. In absolute term of motivation, money will be manipulative.9)What is your conclusion (experience & personal opinion) about Money as a MotivatorMoney is one of the motivating factors, but certainly not THE motivator. There are more for people to receive from organizations than money. let us remember that people make money not the other way around.Referenceshttp//www.forexprofitingpro.com/sites/ldintino/_files/Image/MoneyGlobeOnFinger.JPGClarifying moneys role in motivating- Lynn W. Robbins University of Kentucky- daybook of Food Distribution ResearchGetting more bang for your buck- Martin Price is the director o f HR Equations Ltd- employment today NOVEMBER 2005Motivating the work force (chapter ten) McGraw -Hill/IrwinMoney not the motivator The make known Sun Thursday, 08 December 2005Money can be a big demotivator- John Fisher, Managing director,