“Money Is The Crucial Incentive Because, As A Medium Of Exchange, It Is The Most Instrumental […] No Other Incentive Or Motivational Technique Comes Even Close To Money With Respect To Its Instrumental Value” Discuss.

2806 words - 11 pages

MotivationGiven the following quote by Ed Locke (1980): 'Money is the crucial incentive because, as a medium of exchange, it is the most instrumental…No other incentive or motivational technique comes even close to money with respect to its instrumental value' discuss whether you agree or disagree with this statement based on your understanding of theories of motivation.Name: Max Holnaicher - Student ID: 1107881Introduction: Meaning And Need For MotivationNaturally employers have always been interested in motivating their employees, as motivated employees are more efficient and consequently produce greater outcomes; ultimately leading to higher profits. But what does motivation actually mean? Oxford dictionary (2011) defines it as 'a reason or reasons for acting or behaving in a particular way.' However, to analyse motivation from a business standpoint a more concise understanding will be necessary. Businessdictionary.com (2010) defines it as 'internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job […] and to exert persistent effort in attaining a goal.' This definition is far more meaningful from a business perspective, especially as it refers to internal and external factors resulting in being motivated.The earliest motivation theories were developed during the 19th Century, facilitated by the industrial revolution and the early stages of mass production. As such, the great thinkers of the time, tried to establish ways to motivate their employees to increase their production efficiency, resulting in lower unit cost.As a result, many psychologists have taken great efforts to establish the best ways to motivate employees. Ed Locke established the following perspective: 'Money is the crucial incentive because, as a medium of exchange, it is the most instrumental…No other incentive or motivational technique comes even close to money with respect to its instrumental value'. In short, his view reflects that money is the best source of motivation and no other encouragement can achieve similar results. This is strongly related to Taylorism, established far earlier than Ed Locke's claim. However, many other psychologists have attempted to shift away from this traditional perspective and determine different ways of motivating employees that do not necessarily involve higher pay.Due to the limited depth of this paper, Frederick Taylor's claims will be used as the sole argument for financial rewards, while the analysis of non-monetary, or alternative, reward schemes will be based on the claims established by Frederick Herzberg and Elton Mayo, along with various studies supporting their claims.Main BodyFinancial RewardsFinancials rewards have been thought to be, the main motivator for employees within a business. This type of motivation is often referred to as extrinsic motivation. Oxford dictionary describes extrinsic as 'not part of the essential nature of someone...

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