Role of Money as a Motivator

2157 Words Aug 12th, 2005 9 Pages
Introduction

Motivation is defined as a process which account for a person's intensity, direction, and persistence of effort toward attaining a goal. (S Robins, 2004) As an extrinsic rewards and one of the well known motivational techniques, money is proved to be a well-accepted motivator for a long history. It is normally reflected in pay rise, bonus or share option. It is an effective motivator but not in all cases. Drawing from some of the famous motivation theories, this article discusses from the individual employee's perspective on different occasions and effectiveness of money as a motivator. The study will focus on hierarchy of needs theory, expectation theory and equity theory to explore the interaction between a person and the
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(Ruth Bender, 2004)

2. Money is important but should be tightly related to performance to keep up with employee's expectation.

There are two points which every person can easily understand. One is that there is a positive relationship between the effort one inputs and the individual performance one can expect out of the effort. The other one is that everybody joins an organization with a personal goal. The commonest way to meet the goal is to get rewards in the form of salary payment which is always attached to a specific position in the company.

On how to define a salary package for an employee, different companies take different approaches. For e.g. some bosses correlate the payment with longevity in the company, while some others prefer to correlate the payment with the employees' ability in kissing up to the boss. (Steven Robins, 2004) Seems everyone knows that money is an important motivator here, but it is always neglected that the approach of using money motivator does matter in terms of how much the employee is motivated.

According to Victor Vroom in his expectance theory, the reward-performance relationship must be carefully set up. The performance-reward relationship must be strong, (Steven Robins, 2004) so that individual pays effort for better performance which subsequently leads to rewards and achieving his or her goals. If there is a weak performance-reward relationship, as spelled in the previous paragraph, we will see people fully