Money As A Motivator Essay

5338 words - 22 pages

This paper will discuss the subject of money as a motivator. In addition to research and a cohesive review of literature it will include two interviews with prominent managers which will be analyzed to further enrich the knowledge of the subject by taking advantage of their hands-on experience.I- Introduction: Money, A motivator?Money! That is the violent war between employers and employees. Indeed, motivating employees through the use of money as a material reward or motivator for work achievement is and has always been a matter of controversy. Many theorists tackling motivation theories, human nature in general and motivation in particular, have accordingly examined this issue and yet they ...view middle of the document...

It was coined by Abraham Maslow during the 1940s and 1950s. In essence, it states that our motivations are dictated primarily by the circumstances we find ourselves in, and that certain 'lower' needs need to be satisfied before we are motivated towards 'higher' accomplishments. Maslow indicated five distinct stages, starting at physiological needs and ending at self-actualization needs. In practice, the first stage in the hierarchy, the physiological stage, which contains the needs the employee first tries to satisfy such as food, shelter… indicates that pay is a good motivator within this stage. Money is the supplier of food, medicine, shelter, clothing… but as soon as thee basic needs become satisfied and the employee moves to higher stages within the hierarchy, pay becomes less and less a motivator. Money can't buy safety, a sense of belonging, self esteem or self actualization.* Theory X and Theory YIn 1960, Douglas McGregor advanced the idea that managers had a major part in motivating staff. He essentially divided managers into two categories - Theory X managers who believe that their staff are lazy and will do as little as they can get away with; and Theory Y managers who believe that their people really want to do their best in their work. Theory X managers believe that staff will do things if they are given explicit instructions with no wiggle room, and plenty of stick if they don't do what they are supposed to do. Theory Y managers believe their people work their best when empowered to make appropriate decisions. Managers who follow theory X's approach, tend to rely greatly on money as both a motivator and a tool of control. Theory Y managers tend to focus also on non-monetary motivators and rely less and less on money in motivating their staff. With advances in management theories, Theory Y has begun to replace Theory X as the dominant management philosophy in many organizations and money began to seem as a less effective tool for motivation as we will later see.* Dual Factor TheoryAnother theory to gain prominence at this time was Frederick Hertzberg's Dual Factor theory. He identified two separate groups of factors that had a strong bearing on motivation. He called the first group 'hygiene factors,' because they strongly influenced feelings of dissatisfaction amongst employees. Hygiene factors include working conditions, pay, and job security. According to Hertzberg, they don't motivate employees as such, but if they are not there, they can adversely affect job performance. He referred to the other 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 can forget about workforce motivation if you don't get the hygiene factors right first of all, so you have to get the pay part of the equation right. But he saw pay as not being an actual motivator in the work place. You can create disgruntle...

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