To what extent do you agree that financial remuneration is the key motivating factor for employees?
04/09/2014 One of the reasons why most people work is that they want to live, thus they need money, which can also be named as financial remuneration, as reward. Although money is important, the topic of how important is financial remuneration as a motivating factor for employees has long been the subject of debate.
Although some experts argue that financial remuneration is the key motivating factor for employees as money can elevate employees’ purchasing ability and has an influence on employees’ life satisfaction, others take a different view and claim that compared with money, which is a tangible reward, intangible “psychological” rewards such as recognition and achievement are more important as they can motivate employees in an internal way. Many past studies focused on whether or not financial remuneration is the key motivating factor for employees, only a few studies mentioned that this can be varied because of employees’ different circumstances. Thus, this essay is an attempt to argue that to what extent financial remuneration is the key motivating factor for employees depends on employees’ different personal circumstances such as age, level of income and the personality of “love of money”.
In order to demonstrate this, this essay will first focus on Maslow and Herzberg’s theories which regard money as a low level motivator for employees and then introduce Prather, C and Zweig, D’s finding about the key motivating factors, such as the climate for innovation and responsibility. Second, this essay will bring in the concept of “love of money” to argue that for some people money is a high motivating factor. In order to support it, it will then be shown that on a practical way, younger employees with low income actually find money more important.
A key argument for financial remuneration not being the key motivating factor for employees is that money, as a motivator, has limitations. This can be shown from both Maslow’s Hierarchy of Needs and Herzberg’s Hygiene-Motivation Theory. Neither of the two theories uses financial remuneration as a high level motivator. Maslow’s Hierarchy of Needs regarded financial remuneration as a basic need in which money is necessary in order to avoid dissatisfaction and creates a lower level motivation. But money will not be a high level motivator even if employees are well satisfied with their salaries. Herzberg also argued that salary is a hygiene factor and would de-motivate employees if it is absent. Money therefore does have a little connection with motivation but is not a key factor in achieving high level of employee motivation when compared with growth factors such as recognition and achievement. In fact, in Herzberg’s original theory, money does not have any direct connections with motivation. Thus, it seems clear that money is not the key motivating factor for employees.
Also, different experts recognize different factors except money as the key motivating factors for employees. As Prather, C (2009) mentioned in his book, setting a climate for innovation is what really matters to motivate employees. He also claimed that the key point to motivate employees is to not pay them so much in order to prevent employees from focusing on money only. Zweig, D (2014) argued that for employees who don’t like to be recognized by the public, the key point to motivate them is to make their work more interesting and give them more responsibilities, as they mainly focus on their work and they savor responsibility. Although these two experts have different views about what motivates employees...
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