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Why Pay Is The Only Determining Factor Of Employee Performance And Motivation Essay

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This paper discusses the belief that pay is the only determining factor of employee performance and motivation is outdated. The discussion encompasses the concept of how different types of rewards, such as extrinsic and intrinsic rewards, are key factors of employee performance and motivation. Additionally, the right mix of rewards will be touched upon, and how it ensures strategic requirements, preferred employee attitudes, required performance inputs and desired work behaviours and results are being achieved.

“A reward is something that is tangible or intangible. It is offered by organisations to employees for their potential or actual work potential. Rewards can be categorised into two broad categories; extrinsic and intrinsic. With the right mix of rewards, performance and motivation can be optimised. This holistic approach to reward management is called ‘Total Reward Management’.” (Nankervis, Baird, Coffey, & Shields, 2014, Page 428) The first element of the ‘Total Reward Management’ system is Extrinsic Rewards. “Extrinsic Rewards also encompass three sub-elements; Financial, Developmental, and Social Rewards.” (Nankervis, Baird, Coffey, & Shields, 2014, Page 429)

Financial Rewards are one of the rewards that all employees look to as it supports their choice of lifestyle. Financial security is also important as employees will feel less stressed knowing that they have a fixed minimum income to rely on for the work that they are doing. If income is not fixed, there
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