ASSIGNMENT #04

TOPIC: HOW WOULD YOU INTERLINK MONEY AND MOTIVATION

NAME: ADEEBA MUKHTAR

ROLL NO # 10

COURSE TITLE: HUMAN RESOURCE MANAGEMENT

COURSE CODE: MGMT-2013

CLASS: MBA-5A

SEMESTER: SPRING-2019

SUBMITTED TO: DR BASHIR AHMAD KHILJI

DATE: 09-07-19

DEPARTMENT OF BUSINESS ADMINISTRATION & ECONOMICS

UNIVERSITY OF CENTRAL PUNJAB

FAISALABABAD

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How would you interlink money and motivation?

Money is an effective, powerful and simple motivator. Self-evidently, money motivates and
extra money motivates people to work extra hard. It’s natural to compete, and when rewarded
with money for better work then productivity and standards are raised for all. Further, because
it is not always wise or indeed possible to promote individuals, money can be used as an
equitable and very acceptable way to reward all workers. More important, because money is a
“generalized reinforcer” it is always acceptable to all people everywhere and at all times.
Money talks, and it talks loudly and clearly.

Equivocal:

Money sometimes, but not always, motivates. For those who are very well paid, even quite
large amounts have a minimal motivational effect. Worse, money rewards can and do set
employees against one another, leading to conflict, disharmony and reduced teamwork. It
leads as much to a win-lose as a win-win philosophy. Also, it is very difficult in many jobs to
determine or measure an individual’s work performance accurately and equitably to decide
how much money to award.

Against:

Money is not effective and only has the power to demotivate. Money actually trivializes work:
it turns those who are intrinsically motivated at work into extrinsically motivated workers.
Money rewards (bonuses, performance-related pay) may bear little relation to what the worker
does, or feels. If money works and is so motivating, perhaps the base salaries are too low.
There are better ways to motivate people, other than cold cash. It is a naive nonsense to
believe that if a person’s salary is increased by, say, 20 percent this will generate a 20 percent
increase in his/her productivity (or even morale)

Is Money, the Biggest Motivator at Work?

As people have different needs therefore money’s significance cannot be denied in any era. It
is the primary objective of most people to attain the optimum benefits for their efforts in life.
Everyone is striving hard to fulfill his/her needs in order to occupy a reasonable position in
society.

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Never ending necessities and desires compel a person to work day in and day out. All these
efforts are centered towards fulfillment of financial obligations. Recent recession has resulted
in enormous rise in inflationary rate, affecting the whole world and making lives more
mechanical, resulting in further stress, frustration and economic pressure in general.

Now employees require improved salary packages since monetary benefits are the primary
source of attraction towards the job for most people, where they can survive and fulfill their
requirements once they are done with the basic necessities.

In my opinion, monetary benefits exclusively cannot stimulate employee performance.

Besides, formulating reasonable salary packages, employees can be motivated by creating
inspiring work environment, enhancing two way communication, increasing job satisfaction,
providing encouragement and rewarding them for their valuable (individual/team)
contributions as well as having fun along with work.

It is a comprehensible fact that when an individual is at his/her entry or middle level, his drive
for monetary benefits is at a higher side in most cases as compared to those, who are working
at a superior level. Senior employees by and large seek recognition along with monetary
benefits as they wish to satisfy their self esteem and professional ego. Therefore they require
greater ownership in what they do.

The needs and priorities change at different levels, even a single homogeneous salary
proposal cannot please and satisfy everyone, despite the fact that they are at the same work
level because people also differ in their approach towards life. Furthermore, monetary gains
can only be used to retain employees on a short term basis. One cannot expect to retain
prospects with a never-ending endowment of bonuses and increments – as financial
limitations are always there.

In a nutshell, if companies intend to fairly reward and recognize employees, they will be
happier, stay longer and will be more productive. In my opinion, “money is the biggest
motivator, yet not the ONLY motivator.”

Advantages of Using Money to Motivate Employees

Business leaders are always considering the best incentive programs to motivate employees
and get the highest levels of performance. The most common incentive is money as a

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motivator. There are certainly a lot of advantages to using monetary incentives, but business
owners must consider the underlying motivators, any potential negatives and the right
structure to get the best results.

Money As a Motivator:

Money is the foundation of everyone's lifestyle. We live in a material society where people
are looking to get the latest fashion, newest smartphone or sweetest car. It doesn't matter what
class you fall into, most things revolve around money, which is why monetary rewards are an
effective motivator. It isn't just about getting the extras in life either. Money is how people
provide for their family. Without it, people might have to work multiple jobs or cut their
standard of living. When hiring new employees, one of the primary concerns is how much the
job pays, because people want to plan and budget their lives.

Money alone isn't always enough to motivate employees to do well. As a business leader, you
must create a company culture that promotes career fulfillment. Employees must believe in
the products and services and care about doing the right thing for customers.

Structuring Money Rewards

Monetary as a motivator can actually be structured in different ways. A business leader can
survey employees and consider industry standards as the starting point in developing the
structure of money incentives. Sales programs usually structure money incentives as a
commission or bonus based on sales. It could be per sale or as an aggregate for a time period.
But this isn't the only way to use money as an incentive.

A business leader might take a team goal and offer a bonus at the end of the goal evaluation
period as a reward. For example, if the accounting team has less than two percent errors for
the month, everyone in the department might get $20 as a reward. This fosters teamwork
where everyone has a reason to help each other.

Pay for Performance Cons

There is pay for performance pros and cons. Among the pros are the motivation of individuals
to perform better and teamwork for groups that will get a team reward. It might not seem like
there are any negatives to using money as an incentive, but there are. It can create animosity

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and frustration with those who don't qualify for the reward. This is especially true if rewards
are "top performer" rewards but can also lead to poor morale with someone who tries hard but
just never gets to that level.

Motivation to work

One of the important management tasks is to support employees to work more and better, and
motivation plays an important role within. Business successes of the company or organization
cannot be achieved without employees who are devoted to their work. Managers must take
care about employees' motivation all the time and they must use appropriate motivation tools
or mechanisms.

Only when a motivational mechanism connects the business and individual goals of an
individual to his or her individual needs; the use of the same is effective (Svetic, 2010). 572
Author Svetic (2010) the author presents several factors that enable effective employees’
motivation. For the employees, especially those who are focused on goals and strive to
achieve high performance, new working challenges have to be always assured. In such a way,
employees can show their competencies and personal growth. It is also very important to
involve employees in the process of reciprocal work. It has been proven that the employees
involved in such decision-making are better motivated to work. For employees it must be
enabled to use all their knowledge and skills to prove. The next step is getting to know the
purpose, which affects employee motivation. With proper communication, employees are
familiar with the company's goal and vision.

It is necessary to emphasize the importance of direct, two-way communication between the

employees and the management of the company which enables the management to verify if
the employees correctly understood the received information. The introduction of team work
is the next factor, which has a motivating effect on employees. Employees who are part of the
team feel affiliated with the group and are better motivated to work. Employees are better
motivated in the case when their reward is linked to the performance, having in mind that the
employee's contribution is measurable and accurately defined. Motivation in the organization
of a company is the outburst or the existence of a reason for provoking the will or willingness
to work and work performance (Economic lexicon, 1975). The Need-Want-Satisfaction chain.
Motivation can be seen as a chain reaction: the needs we feel lead to the wants or goals we

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strive which causes tension (i.e. unfulfilled demands) that leads to the actions for achieving
the goals that ultimately result in satisfaction.

Types of Motivation: What They Are & How to Use Them?

To help, below are the top types of motivation and how they work:

1. Intrinsic Motivation & Extrinsic Motivation

Broadly speaking, there are two general types of motivation: intrinsic motivation and extrinsic
motivation. Intrinsic motivation states that people are motivated by internal rewards like
fulfillment and contentment. Conversely, extrinsic motivation states that people are motivated
by external rewards like a bonus or raise as well as negative external factors like getting fired.

However, while the opposite of each other, intrinsic and extrinsic motivation can be used
together. For example, you might be motivated by a potential raise but end up loving the more
complex work. Conversely, you might be motivated by the fulfillment of a job well done and
then be rewarded with a bonus or raise that’ll motivate you further. For more information on
these types of motivations and how to balance them, check out this article on intrinsic vs
extrinsic motivation.

2. Achievement Motivation

Achievement motivation states that people are driven by the desire to pursue and achieve
specific goals. People who are motivated by this type of motivation are driven by the
achievement of a task or goal itself, and not necessarily because of the reward that’s attached.
For example, an entrepreneur might build a business for the joy of building a world-class
organization, and not necessarily because there’s money attached.

If you’re driven by achievement motivation, you are typically self-motivated and process-
oriented, meaning that you value the process of getting better more than the end result itself.
While the achievement of a goal might be seen as an external reward, the actual reward that
this type of motivation gives is largely internal. This is because you aren’t enamored by the
glitz and glamour of a reward like money, but rather the feeling of accomplishment you get
when you complete a worthy task.

3. Incentive Motivation
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Incentive motivation, unlike achievement motivation, says that people are motivated more by
the reward than by the achievement of the goal itself. Instead of being motivated by the
pursuit of a goal or task itself, those who are motivated by incentives are driven to take action
because of an expected (and often specific) reward. For example, if you want a promotion
because of the higher salary and not because you’ll feel more fulfilled, you are motivated by
incentives rather than by achievement.

4. Fear Motivation

Fear motivation is a motivational type that uses consequences to drive people into action. Fear
motivation can be thought of as a “negative motivator” in that you aren’t motivated by a
reward but by the avoidance of pain or consequences. Rather than incentivizing yourself or
others with positive motivators, fear motivation uses punishment or negative motivators – like
getting fired – as a way to keep you productively moving towards specific goals, tasks, or
deliverables.

5. Power Motivation

Power motivation is a motivational factor that says people are motivated by control over our
own lives and/or the lives of others. Everyone wants choices, and people are often motivated
to increase their overall life-options. For this reason, power motivation manifests itself in the
desire to affect the direction of our lives and sometimes the lives of those around us.

Does Money Really Affect Motivation?

Many small-business people believe that if you get the right people on the bus, they won't
require external motivation. While these high performers will insist on receiving market rate
compensation, they don’t require extrinsic motivation. They are driven. They couldn’t
conceive of doing less than their absolute best, regardless of the circumstances.

Conclusion:

Motivation is an important concept that has been receiving considerable attentionfrom

academicians, researchers and practicing HR managers. In its essence,motivation comprises
important elements such as the need or content, search andchoice of strategies, goal-directed
behavior, social comparison of rewardsreinforcement, and performance-satisfaction.The

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increasing attention paid towards motivation is justified because of severalreasons. Motivated
employees come out with new ways of doing jobs. They arequality oriented. They are more
productive. Any technology needs motivatedemployees to adopt it successfully.Several
approaches to motivation are available. Early theories are too simplistic intheir approach
towards motivation. For example, advocates of scientificManagement believe that money is
the motivating factor. The Human RelationsMovement posits that social contacts will
motivate workers.Mere knowledge about the theories of motivation will not help manager
their subordinates. They need to have certain techniques that help them change thebehavior of
employees.

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