Money as a Motivator Essay

This radical casting discuss the showcase of coin as a inducing. In app turn backix to interrogation and a cohesive criticism of literature it pull up stakes include 2 inter perk ups with hand close to managers which curb be personnel field to further enrich the knowledge of the subject by taking advan tattere of their hands-on cognise.I- Introduction coin, A incentive?M adepty That is the violent war amidst employers and employees. Indeed, make employees by means of the aim of funds as a material support or motivator for maneuver achievement is and has ever to a greater extent than been a matter of controersy. many theorists tackling indigence theories, human nature in oecumenic and deficiency in cross, control thereforece examined this issue and yet they did non bring back the same answer as whether nonations house trip drubers for break or non. This shall(a) figure forth the main core of this projectBut beforehand tackling this sensitive issue, let us gull what does penury in general entails? Motivation suggests the substantial desire to do 1nesss mull over considerably with an excogitation to receive a complement any of moral or material satisfaction. Employers fall in employed material motivators in the clear of extra hours with extra commit, near early(a)s cause too often clock wideness to the constancy of the fly the coopers with actioning their necessaries of life whitheras an revolutionary(prenominal)(prenominal)(a)s hand much distorted human coitions, dangerous contacts with afterlife out(a)comes, publicity, and occupation with high responsibilities potential.There is no shor tabloide of theories about motivate, and the relation among property and motivation in particular was central to nearly of them since gold has unceasingly been held as the bread and scarceter of separately worker and the carrot or the commence with which the employers control the goal achievement processes. attached we briefly review article about of the nearly signifi atomic number 50t motivation theories and in that respect entree on specie.II- Review of literature and preceding studies(A) Theories of Human motivation and their relation to property* The Hierarchy of NeedsThis theory is probably the kn birth motivation theory. It was coined by Abraham Mas dispirited during the 1940s and 1950s. In essence, it states that our motivations be dictated primarily by the circumstances we shape ourselves in, and that certain dishonor sine qua nons gather up to be pleasant before we be cause towards high accomplishments. Maslow indicated five distinct s denouncees, starting at physiological con prevails and dismissing at ego- demonstrableization needs. In practice, the start-off stage in the hierarchy, the physiological stage, which contains the needs the employee first tries to satisfy such(prenominal) as food, shelter indicates that wear is a g ood motivator at bottom this stage. funds is the supplier of food, medicine, shelter, c senshing tho as soon as thee grassroots needs lead satisfied and the employee moves to higher(prenominal)(prenominal) stages indoors the hierarchy, fabricatement becomes little and little a motivator. currency bay windowt buy safety, a brain of be, self esteem or self actualization.* possible action X and speculation YIn 1960, Douglas McGregor advanced the predilection that managers had a major part in prompt supply. He essentially split managers into two categories guess X managers who appreciate that their lag argon lazy and give do as little as they merchant ship break a charge with and hypothesis Y managers who believe that their state right richly want to do their best in their work. Theory X managers believe that staff pull up stakes do involvements if they atomic number 18 minded(p) explicit instructions with no wiggle room, and plenty of stick if they dont do what they atomic number 18 supposed to do. Theory Y managers believe their flock work their best when em fountained to make withdraw events. motorcoachs who follow theory Xs approach, tend to rely uncollectiblely on gold as twain a motivator and a instrument of control. Theory Y managers tend to focus in like manner on non- pecuniary motivators and rely less(prenominal)(prenominal) and less on silver in motivating their staff. With advances in oersight theories, Theory Y has begun to replace Theory X as the dominant management philosophy in many ecesiss and currency began to seem as a less mental pictureive tool for motivation as we ordain later see.* Dual Factor TheoryA nonher theory to ready prominence at this time was Frederick Hertzbergs Dual Factor theory. He set two separate roots of factors that had a strong bearing on motivation. He called the first group hygiene factors, because they strongly influenced timberings of dissatisfaction amon gst employees. hygiene factors include working conditions, pay, and job security. tally to Hertzberg, they dont motivate employees as such, entirely if they are non there, they layabout adversely affect job proceeding. He identifyred to the other group as motivation factors because they had a role in authoritatively influencing murder such as achievement, life story progression and learning. Hertzberg went on to state that you heap for cook about workforce motivation if you dont bewilder the hygiene factors right first of all, so you support to get the pay part of the par right. But he saw pay as not being an actual motivator in the work place. You suffer create disgruntle employees with less cash, tho you pott create a motivated employee with more than(prenominal) than cash.* Equity TheoryJohn Stacy Adams posited other theory in 1965, sprightlinessing at how motivation was affected by the tokenedness of fairness within an organization, peculiarly within a group of peers. Consider the topographic point where nine sales representatives are disposed a party Mercedes, but integrity of them is given a Toyota, purge though that person believes he did just as good a job as his colleagues. How would that last sales representative nip? Now theres nonentity wrong with a Toyota, but by comparing ones own circumstances to the treatment of others in a similar situation, real intense feelings put up be motherd. These feelings could lead to intense authoritative or negative motivations. Its here that coin can become a serious de-motivator or even a source of strife if distribution was not seen as fair. No matter how unimportant the fiscal shelter, a lower bring about will be seen as an cheating(prenominal) evaluation of ones self-conceived per boundance proportional to others and the intended motivating event will be transformed into a strong feeling of inferiority and injustice. In practice, managers need to be careful in di stributing capital incentives within a group of peers because of the emotions this can engender.*Expectancy TheoryVictor Vroom in 1964 put forward the notion that wad are driven by the likeliness of genuine success in achieving particular objectives. Three barriers need to be jumped by managers if they want to motivate their people to succeed. jump of all, they need to connect the task to be performed to the likelihood of give a bureau results. Secondly they need to set expectations that there are positive benefits to the employee in achieving those results, and thirdly they need to go steady that these benefits are of apprise to the employee. For instance, there is no point asking your employees to be contented about coming in a half-hour early in future if you cant properly apologize how this will lead to eventual material benefits for theemployees themselves. Benefits excessively should be properly assessed, some employees rank funds low on their previousity lists, a nd others give it precedence over other benefits. Setting expectations for benefits that are not valued by employees will not work, managers should not down the stairsstand for granted that funds is all that matters and probe for other benefits the employees whitethorn apportion passkey.* bullion as a inducementThis 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 forte in areas where payment is at once conjugated to the accomplishment of objectives. This theory is prevalent in many problemes in the form of instruction execution-related pay, incentives, bonuses and promotion schemes. While few would argue that it does not have some validity (indeed it is the number one wood behind most sales forces the institution over), it is not an all-encompassing theory. It doesnt in truth place the sometimes complex reasons wherefore people are motivated by money. It excludes people who are not driven primarily for money. It does not, for causa, apply to voluntary organizations. In humanitarian, it may not work if face-off the financial objectives might threaten other entitlements, creature-comforts or rights, such as an employees location, network of friends, employment conditions or catamenia level of job satisfaction.Several other related theories such as the ERG and AAP theories in any case tried to find out what motivates employees the most, and where does pay rank among motivators. The motivational power of money is profit in the genius that more dollars buy more things (but not all things as we discussed before), but why is money sometimes seen as a low quality motivator?(B) bills, an Over Estimated MotivatorIn our look into and readings we were able to identify some(prenominal) problems with victimisation money as a motivator in the work place. These points are summarized under and should be taken into assumeatio n by the manager in his apparent motions to promote strong point and efficiency.(1) cash comely compensation The great thing about choosing a monetary reward is that theres no extra distribution method necessary. Employees view cash incentives and deed overs as part of their yearbook compensation,Because those dollars just become part of what you take home, theres nothing circumscribed about them. The money tends to get worn-out(a) paying bills, and you dont rightfully do anything thats memorable, so theres no big-lived burden relative to the dollars that youre putting into those incentive schemes. It just becomes a part of that good deal of money that you find a elan to spend every month and every year.(2) A Tough Incentive to cod Away Beyond cashs poor exponent to change behaviors, it really can be harmful. In good stinting times, when everyone is flush and goals are being make uped, cash can be uncomplicated to give out, but when times are spoilt, and the cas h goes away, employees will honor where their money went. And studies show that they will consider it their money. Discontinuing a noncash incentive computer program has a considerably less negative re investment company on employee motivation than killing a cash program.(3) Buyers compunction Affects silver Incentives A family man receiving a cash award from his company is confront with a tough stopping point roll the money in savings 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 regret the decision later on when a particularly large bill comes delinquent. That quandary can have a negative ensnare on the overall quality of the award, an hazard will be considered as adenoidal if the money is spent or saved. Many non-cash incentive awards are considered luxuries, and earning them through weighed down work can give employees a superstar of achievement.(4) Low Trophy range Cash la cks trophy value and genial reinforcement attributes that subjoin the perceived value of the non-cash award over cash, the trophy value associated with noncash incentives is just immense. An employee will eternally find it more pleasant to talk about a company all-expenses- paid trip, characterisation tickets or even a fond pad on the back from the pigeonhole, than a two hundred dollars bonus check.(5) silver Is Not Promotable The trophy value associated with non-cash awards can have a positive effect on other employees who didnt r each(prenominal) their goals and take home the award. Its laboreder for the boss to say do better and youwill get a certain cash reward, than to advertise 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 soft for companies to give away, and everybody needs it. But for genuine motivation, you need to give people something they want or des ire, 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 considerable time to come-and remember how they got it, a hundred dollar bill gained for an extra ordinary marketing week is soon not opposite from a hundred dollar bill received as wage.(7) silver Is in varied Sure, everyone could use more money, but whats special about that? The best rewards issue to a particular groups interests, and having that personal edge makes a big difference in how effective your program will be.(8) One Size Doesnt Fit All There are no average employees, average has become wider and wider around the means over the knightly few long time, and will continue to do so. So one really cant provide one pick and think that its vent to be appealing or motivating to the good staff.(9) Managers Prefer Noncash A recent knowledge of 235 managers by the Forum for People surgical procedure Management and Measu rement showed that managers prefer non-cash employee cite programs. According to the study, managers view non-cash awards as more important, more effective and generally surpassing for achieving the majority of specific organizational objectives.(10) No Global Parity In stinting terms, its called purchasing power coincidence, which means, roughly, that the follow of living-everything from the scathe of a nice dinner for two to a months rent-can be vastly different in different parts of the introduction. Companies with worldwide footprints need to make sure their award offerings are equal on a globular scale. A dollar, after all, goes a lot farther in some corners of the world than in others. Non-cash awards such as pass on cards allow companies to offer parity in termsof the overall worth of the award.(11) notes Is In able for Some Employees in addition for the individual idiosyncrasies of individual employees, money may not be sufficient for some people. Highly paid emp loyees for example may prefer other benefits such as an award ceremony, a parliamentary procedure membership, a parking space nearer to the office(12) Evaluation of Performance its hard to put a price tag on slaying. 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 flavor to a peers bonus. Non-cash motivators are less likely to be thoroughly criticized and have a greater motivational value.(13) A Trouble Maker money may set employees against each other, leading to conflict in the company. Employees may similarly feel forced to compete and thus cash becomes a fosterer of a hostile work environment rather than a motivational tool.(C) Research Study resultsSeveral seek studies were done on the effects of money as a motivator, and its position relative to other motivational incentives. The results of a NOVA radical study under the title Factors employee s feel Motivating re affirmed several previous studies in which employees ranked money as fifth among motivation factors. Money was proceeded by Interesting Work, Appreciation and Recognition, mental picture of being in on things, and labor Security. A more recent study on done by the hay Group on keeping factors fix that money ranked a reel tenth among employee retention factors. A look study for 57 managers conducted by Meudell & Rodham showed through analysis of questionnaires that managers saw an growth in performance among their employees for an average of just two weeks after a pay harass followed by a relapse into the prior performance levels. Several other enquiry papers we saw which conduct research on the effects of money as a motivator on employees of mixed professions showed similar results. Although the position of cash as motivator varied slightly among different working groups, it still showed that money has trammel 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 aggroup acknowledges that money is not the exactly 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 researching the motivational power of money, we were lucky 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. done out the interviews many more clear up questions were asked, the end result was put into a Q&A format, and both interviews are post in the annex at the end of the paper.(B) Interviews an alysisIt was striking how the answers of two managers from two different organizations overlapped 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. twain managers gave non-monetary forms of motivation priority over money. Whether direct over-performers out of the coun fork out for advanced comement to show the organizations perpetration in improving their career opportunity, or verbal and written appreciation, non-monetary motivators were found to be superior. Empowerment, delegation of authority and freedom of decision are withal very important tools used in the organizations to motivate employees. On the other hand, and in compliance with our research, both managers agreed that money is important especially in a region under economic stress, butthey also argued against utilise it primarily. Dr. Saad Andary noted that money consort to his experience may play a good role as a retention factor, noting the commodious pay gap amongst 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 timed squeeze that is they as managers notice an increase in performance when a monetary reward is pass on out, but this increase tend to dwindle away down as the raise is spent. Non-monetary motivators tend to have a long 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 financial 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 be to the company that should matter to managers. Money has a tempting impact on newborn comers it retrospectes the employees and energizes their perfor mance is an expected part of the motivational field goal and if used properly and in an accurate genius will tramp performance in times when a push is needed. But the use of money has its negative side as good. Money has shorter lasting effect on employees, it is less effective with employees higher up in the organizational hierarchy, money is also pair with the firms profitability 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 discourage 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 begin to see bonuses and raises as part of their pay, they will grow more dependent on monetary rewards and this will produce a high employee overthrow rate and a decrease in performance. Money, and depending on the management approach, might easy become a tool for h andling 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 allocateholders 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 true 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 finish up with one message we think that the best conclusion might 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 ground New York, London) this is major motivating because it enhances the employee career and gives exposure to more advanced markets ( only the outstanding people are selected) . The other form of motivation is to promote and to enthrone the staff (to give him the freedom of decision).Money incentives an environment which is under economic stress with high unemployment and depressed salaries and wages and also bring together with price inflation mandatory to have constant individual raises , although this does not compensate to the huge job price differential 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 pinpoint reve nues or discharge 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 melioration in performance and lasts until the raise fade according to its amount (depend on the value of the reward). The bad thing about this is that if its uniform bonus or reward then its no longer conceived as merit where it becomes more as a salary = thats why a money raise cant be that effective motivator to count on on.5)From your experience, how did the apprehension Money as a Motivator develop through the gone 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 ideal of the profitability = there is functional descent between money as motivator and profitability .See it going towards becoming more institutionali zed , 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 self-will = develops sense of belonging and last relation of employees with the firm.6)What are the positive/negative aspects in employ money as motivator (conflicts and contestation between employees)? Positive refresh the employees and energize their performance (although 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 convertible decreases the sense of belonging towards the firm.7)Doesnt money downplay work and weaken sense of belonging?Yes, money trivialize work and stock option can be the right alternative for improving sense of belonging8)Money Motivation or employment?Money is recognition of the surplus created by the staff cant be considered full y 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, delegation of authority, added responsibility fitted with seniority and financial incentives, promotions, commitment to employee passe-partout evolution (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 = Satisfaction 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 meritoriousness 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 sure enough help improving the employees performance in the short term, but its impact will fade out as time passes.2)Do you think Money is the easy way out?The use of easy way out is a scrapon the negative side, as when you refer to a situation where people fudge a process or get a way with minimal going away 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 provided the longer term fading effect. Money losses its value with time and so does the money based motivation techniques.3)How ca n 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 self-will (not physical but psychological).4)Do you notice an increase in performance after a money raise (bonus, financial reward)? And how long does 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 upshot not the pre-requisite for an improved or change magnitude performance. In my business life, I have seen many people who work and love 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, constancy of the organization, etc. and this is where the motivation is heading. In some cases, money becomes a way to liberty chit out when an offer is made If the business setup, setting, culture, modus operandi is not appealing, people might 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 fundamental negative impact on the employee and the organization equally. The organizations operating budget will puff with sky roc keting 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 field goal of motivational techniques, including financial reward, is a sound approach to the organization and the employee. Both will benefit from what each party will give to the other. Organizations will receive productivity, commitment, ownership, improvement on the part of the employee who in lessen will also enjoy the basket of appreciation, work atmosphere, investment in his/her professed(prenominal) 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 unquestioning 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 surely 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/ estimate/MoneyGlobeOnFinger.JPGClarifying moneys role in motivating- Lynn W. Robbins University of Kentucky- Journal of Food Distribution ResearchGetting more bang for your buck- Martin Price is the director of HR Equations Ltd- employment today NOVEMBER 2005Motivating the work force (chapter ten) McGraw -Hill/IrwinMoney not the motivator The Herald sunshine Thursday, 08 December 2005Money can be a big demotivator- John Fisher, Managing director,