MGMT2007 | Behaviour | The Pros And Cons Of Monetary Rewards

It has been seen that money is one of the important factor that every individual requires for living a standard life. In context to workplace it has been seen that money plays an important role to motivate employees and also to enhance the employment relations.

In this paper, the emphasis will be given on role of monetary rewards in creating effective relation with the employees. The focus will be given on the organizational theories that will help to understand that how workers are motivated by the financial rewards. Proper analysis will be made of the pros and cons of monetary rewards.

Motivation is also one of the essential aspect on which emphasis should be given by the company so that it can be easy to maintain effective relations with top management and also with other employees. It has been investigated that employees are engaged in making more money and they get attracted towards the companies who offer good packages. To achieve growth and success, it has been seen that productive and motivated employees are necessary so that they can give their best towards the organizational goals and objectives. Now day’s companies are also focusing on recruiting the employees who are efficient towards their work (Nuttin, 2014).

It has also been investigated that the level of competition is enhancing and it is difficult for the companies to survive in the competitive market. So, it is important for the companies to motivate their employees to that they can efficiently complete the assigned activities. If the workers are not motivated then they will not be dedicated towards the work and company will not be able to accomplish its goals and objectives. Therefore, to motivate the employees there are various theories related to organization that should be considered by the managers or the top management so that it can be easy to motivate employees. If effective organization theories are considered than it can give positive outcome on the overall growth of company and also on the motivation level of the workers. It has been seen that behavior of the individuals also get affected. It has been investigated that monetary and non-monetary rewards are offered to the workers by human resource management team of the company so that employees can efficiently complete their activities (Sessa and London, 2015).

It is the responsibility of human resource team to motivate the employees so that they can give their best towards the goals. Human resource management team also focuses on maintain proper relation in the workplace so that positivity in the workplace can be maintained.  The function of the human resource department is to plan effective programs so that employees can be satisfied and also retention rate can be maintained in the workplace (Nyberg, Pieper and Trevor, 2016).

Various activities are completed by the employees but it can be completed with proper efficiency when there is proper motivation in the workplace. If motivation is not there then it can give adverse impact on the overall operations of the company. Due to lack of motivation there are various factors that are affected like productivity, growth and satisfaction level of the employees. It is the responsibility of the top management or the management to know how to motivate the employees.

The rewards are also given according to the performance of employees. Hence, it known as performance based rewards. In this, performance is evaluated by the managers and according to that rewards are offered to employees. To evaluate the level of motivation the managers should focus on considering Maslow hierarchy of needs which is considered as one of the famous organizational theories.  This theory was given by Abraham Maslow. In this theory the requirement of the customers is analyzed and also there are various categories according to this theory. The five stages in this theory are Physiological, safety, belongingness, esteem and self-actualization. This theory was created to motivate the employees by evaluating the requirement of the employees. Employee’s satisfaction can be improved towards the job if management of the company focuses on the needs and requirements. It has been seen that the first stage is physiological stage in which the basic needs are covered like air, food and drink. This stage is mainly for the low level employees and it is the responsibility of the company to satisfy these needs to motivate employees (Shahzadi et al., 2014).

(Source : Mcleod, 2018).

Next stage is safety needs in which security is given to the employees related to stability and freedom from fear. The third stage is related love and belongings needs interpersonal relations are considered. There should be trust, acceptance and friendship so that activities can be completed in a proper manner. Next is esteem needs in which dignity and respect for others are considered so that employees can be motivated. The last stage is related with self-actualization needs in which personal growth and personal potential is taken into consideration. Therefore, it has been seen that workers who are middle and top level position can be motivated by rewards like praise and sense of achievement. Also in enhancing the motivation level money is considered as an important aspect. There are many employees who are earning good salary and they are satisfied with their job but it is also important to enhance the overall satisfaction level of the employees by focusing on positive environment (Wang, Noe and Wang, 2014).

By various studies, it can be stated that to enhance the motivation level of employee’s, money is one of the effective method but motivation can be for short time. There are various factors that help the employees to be motivated for long time like environment and also behavior of other employees in the workplace.

Next theory which is related to organizational behavior is two factor theories. This theory was introduced by Frederick Herzberg. It has been seen that there are two factors in context to this theory. One is motivator factor and second is hygiene factors. It can be analyzed that employees cannot be motivated when basic salary is low and also policies are implemented by the company. By focusing on this theory it has been stated that monetary rewards should be offered to employees so that operations of the company can be completed with efficiency.  It can also be analyzed that monetary rewards should be offered to employees to enhance their efficiency (Pegler, 2012).

It can be analyzed that satisfier can assist in maintaining relation with employees which will give positive impact on the overall operations of the company. Therefore, it has been seen that monetary rewards can assist in motivating the employees and also it will focus on managing the retention rate of the employees (Miner, 2015)

If monetary rewards are considered then it has been seen that there are various drawbacks that are related to it. In the company there are employees who are not satisfied with the policies and the salary which company offers. So, it can be seen that people who are dedicated can get job anywhere but culture of the company is also one of the factor on which focus is given.  Motivation can be considered in context to the culture of the company.

To enhance the motivation level it is important to have proper culture. Also in the workplace it has been analyzed that jealously factor arises when other employees earns incentives, so it generate the negative feeling in the employees.  So, these are the pros and cons that can be considered in context to financial reward and motivation to employees. It is essential to manage the overall activities so that goals can be attained and also it can be done by emphasizing on the needs of the customers (Smith and Wiggins, 2017).

So, it can be seen that managers of the company should consider the needs so that motivation level of the employees can be enhanced. Also the organizational theories should be considered so that it can be simple for them to manage the operations. Performance level of the employees is also one of the factors that can help to earn profits. By giving emphasis on the level of performance in relation to the operations it has been seen that rewards should be given to employees.

Therefore, by analyzing the paper it can be concluded that motivation is related with the non-monetary and monetary benefits. It is recommended that organizational theories should be considered by the managers so that motivation can be given to the employees. If motivation level is enhanced of the employees then direct impact can be seen on the overall employee relations. Therefore, money has an important role in maintain relations and also in motivation the employees to give their best towards the activities.

References

Mcleod.S., 2018. Maslow’s Hierarchy of needs, [Online] Available at: https://www.simplypsychology.org/maslow.html, [Accessed on: 19 aug 2018]

Miner, J.B., 2015. Motivation-Hygiene Theory: Frederick Herzberg. In Organizational Behavior 1 (pp. 77-90). Routledge.

Nuttin, J., 2014. Future time perspective and motivation: Theory and research method. Psychology Press.

Nyberg, A.J., Pieper, J.R. and Trevor, C.O., 2016. Pay-for-performance’s effect on future employee performance: Integrating psychological and economic principles toward a contingency perspective. Journal of Management, 42(7), pp.1753-1783.

Pegler, C., 2012. Herzberg, hygiene and the motivation to reuse: Towards a three-factor theory to explain motivation to share and use OER. Journal of Interactive Media in education.

Sessa, V.I. and London, M., 2015. Continuous learning in organizations: Individual, group, and organizational perspectives. Psychology Press.

Shahzadi, I., Javed, A., Pirzada, S.S., Nasreen, S. and Khanam, F., 2014. Impact of employee motivation on employee performance. European Journal of Business and Management, 6(23), pp.159-166.

Smith, V. and Wiggins, N., 2017. Do incentive schemes encourage motivation in the workplace?. Journal of Aesthetic Nursing, 6(2), pp.104-105.

Wang, S., Noe, R.A. and Wang, Z.M., 2014. Motivating knowledge sharing in knowledge management systems: A quasi–field experiment. Journal of Management, 40(4), pp.978-1009.