Money Is Not Everything

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Money isn’t everything … or is it? A preliminary research study into money as a motivator in the licensed house sector Karen Meudell Department of Business and Management, University of Portsmouth, Southsea, UK Karen Rodham School of Management Studies for the Service Sector, University of Surrey, Guildford, UK The aims of this paper are to consider the role of money as a motivator for managers and staff in the licensed house sector of the hospitality industry and to consider the implications of the findings from both an academic and an industry viewpoint. As part of a one-day training event, a pilot study was undertaken with 57 managers and employees of an independent public house operator in an attempt to establish what makes people work and what makes them work harder. The research was then transposed into an academic context and related to underlying theories and research studies. Initial findings indicate that the traditional approaches to motivation do not necessarily apply to this particular industry sector. There are marked differences between managers and staff and these differences appear to be influenced by demographics and level in the organisation.

Theoretical background
“One more time: How do you motivate employees?” is, as Herzberg delighted in telling us, the most reprinted article in the history of the Harvard Business Review (Herzberg, 1976, p. 49). Although there have been criticisms of Herzberg’s theory (see, for example, King, 1970), whatever the answer, Herzberg, like so many behavioural scientists tends to lessen the comparative importance of money as a major motivator, preferring to concentrate on issues such as challenging jobs, the provision of feedback, a contribution to decision-making and the like. Kohn (1993a; 1993b; 1993c), echoing a point made previously by Lee and Lawrence (1985), argues that incentive pay schemes produce only temporary compliance and are ineffective at producing long-term attitudinal and behavioural changes; rewards merely motivate individuals to seek more rewards and can undermine intrinsic interest in the job which is then perceived as being merely a means to an end – an expensive and short-term motivator. Both employers and academics in the service industries have tended to concur with this idea: the notion that people enter the industry because they “like dealing with people” rather than to attain high salaries is one which is long-standing and firmly entrenched. However, there have been some dissenting voices: the basis of expectancy theory (Lawler, 1973; Porter and Lawler 1968; Vroom, 1964) suggests that money will motivate to the extent that it is seen as being able to satisfy an individual’s personal goals and is perceived as being dependent on performance criteria. Indeed, Lawler is one of the strongest advocates of the desirability of linking reward to performance because pay has certain optimal characteristics: it is valued by its recipient, the size of the reward can be flexible (unlike, for example, a promotion, its value remains relatively constant and the relationship of money to performance is a very visible one.) Locke (1980) reviewed four methods of motivating employees towards improved performance – money, goal setting, participation in decision making and job redesign – and found that money was

International Journal of Contemporary Hospitality Management 10/4 [1998] 128–132 © MCB University Press [ISSN 0959-6119]

overwhelmingly the most important. Robbins (1996) suggests that money can be considered to act as both a “scorecard” which enables employees to assess the value the organization places on them in comparison to others, and as a medium of exchange in that individuals can purchase whatever “need satisfying” things they desire. Vecchio (1995) specifically argues against Kohn’s proposition by suggesting that rewards do not necessarily control or manipulate behaviour, but can provide a focus and reinforce good performance; the detractors of the...
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