MONEY LIKE MOTIVATIONAL FACTOR
Sebastian Adrian Uriesi
PhD Student at the Faculty of Economics and Business Administration,
“Al.I.Cuza” University, Iasi
E-mail address: md.personal@yahoo.com
Abstract
Material motivation systems for short term attracts and motivate the quality personnel but they have
low power in the retention of the employees on long term - this is the reverse of the material
motivation systems for long term. Research consistently substantiates the effectiveness of financial
incentives on job performance, although companies need to consider the issue of job quantity versus
quality and also be aware of the limitations of financial incentives. Employees can have vastly
different motives for acquiring wealth – including using money to fulfill psychological needs. Thus, it
is not surprising that money alone is less an effective motivator for employees than when it is used in
conjunction with non-financial reinforcements. In times of crisis, what is strange is that some
companies brakes the motivation factors when they have financial problems - when they need, more
than ever, like motivated employees to produce, to create, to develop or, simple, to remain in the
company.
Keywords: motivation, employee, money, factors, workplace, incentives, non-financial incentives,
management, performance, satisfaction.
1. INTRODUCTION
Many business managers today are not aware of the effects that motivation can (and does)
have on their business, and it is therefore important they learn and understand the factors
that determine positive motivation in the workplace. The size of the business is irrelevant:
whether a manager is trying to get the best out of fifty of his staff or just one, everyone
needs some form of motivation. Motivation is something that is approached differently by
different businesses and the responsibility of its integration lies with all immediate
supervisors of staff. However, it is the business owner who must initiate motivation as a
strategy to attain corporate goals.
From one point of view , when we talk about motivational factors, we can say that job
satisfaction may be the main motivator in this case, because the majority of the people have
been to the all kind of schools, universities and spent years striving to do their job in the
present. However these people, in the same time, from other point of view, they have bills
and mortgages to pay so therefore many people will see money as an important motivator.
Motivation and performance are very complex issues affected by many factors; money
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cannot be effectively substituted for good management. Some people think that money can't
be used to motivate employees and that is true for some employees, but for a large
percentage of the workforce it does not have to be that way. Studies show almost everyone
is motivated by money to some degree, many to a moderate degree, and most to a great
degree when compensation is properly designed.
2.
MYTHS ABOUT EMPLOYEE MOTIVATION
The topic of motivating employees is extremely important to managers and supervisors.
Despite the important of the topic, several myths persist -- especially among new managers
and supervisors. Before looking at what management can do to support the motivation of
employees, it's important first to clear up these common myths.
1. Myth 1 - "I can motivate people" Not really - they have to motivate themselves. A
manager can't motivate people anymore than he can empower them. Employees have to
motivate and empower themselves. However, the manager can set up an environment where
they best motivate and empower themselves. The key is knowing how to set up the
environment for each employee.
2. Myth 2 - "Money is a good motivator" Not really. Certain things like money, a nice office
and job security can help people from becoming less motivated, but they usually don't help
people to become more motivated. A key goal is to understand the motivations of each
employee.
3. Myth 3 - "Fear is a damn good motivator Fear is a great motivator -- for a very short time.
That's why a lot of yelling from the boss won't seem to "light a spark under employees" for a
very long time.
4. Myth 4 - "I know what motivates me, so I know what motivates my employees" Not
really. Different people are motivated by different things. I may be greatly motivated by
earning time away from my job to spend more time with my family. You might be
motivated much more by recognition of a job well done. People are not motivated by the
same things. Again, a key goal is to understand what motivates each employee.
5. Myth 5 - "Increased job satisfaction means increased job performance" Research shows
this isn't necessarily true at all. Increased job satisfaction does not necessarily mean
increased job performance. If the goals of the organization are not aligned with the goals of
employees, then employees aren't effectively working toward the mission of the
organization.
6. Myth 6 - "I can't comprehend employee motivation -- it's a science" Not true. There are
some very basic steps that every man can take that will go a long way toward supporting the
employees to motivate themselves toward increased performance in their jobs.
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3.
SOME ELEMENTS ABOUT MATERIALISM
In generaly, materialism is defined simply as when a person values money, wealth and
possessions over other things in life. Studies have consistently shown that a materialistic
focus in life is associated with a lower psychological well-being. Even though individuals
who are very poor financially demonstrate increased happiness when their income rises,
intensity of desire for wealth remains negatively correlated with psychological wellbeing. There are a few possible reasons for these trends. Specifically, materialistic pursuits
do not provide what people are really looking for in their quest for happiness; the tendency
for those without much in the way of non-material resources to focus on material goods or
the endless and forever evolving supply of goods and services produced in materialistic or
capitalistic societies precludes satiation. They further suggested that people who are
unhappy or lacking in social connections may seek solace in material goods, using external
means to fulfill internal desires and aspirations. Some researchers have argued that the
motives that drive one to focus on money are more relevant than the intensity of the focus
itself, and they subsequently differentiate between instrumental materialism and terminal
materialism.
Instrumental materialism describes using material goods as a means for attaining personal
goals and fulfillment; whereas terminal materialism involves using material possessions to
achieve social status and elicit envy from others. They also divide motives for materialistic
pursuit into three different categories: positive, negative and freedom of action. Positive
motives involve using money for basic necessities and as a measure of achievement.
Negative motives refer to using money to gain power or superiority over others. Negative
motives also include efforts to allay one’s self-doubt. Motives concerning freedom of action
simply imply spending money in any way that one desires. When the significant negative
correlation between subjective well-being and money importance was analyzed while
controlling for the influence of motivation, the correlation lost its statistical significance. In
addition, when calculated independently, the relationship between negative motives and
money importance was both negative and statistically significant. As a result, the
authors attributed the correlation between psychological well-being and money importance
to negative motives alone. This suggests that not all motives for wanting money lead to
decreased happiness. Their findings suggest that it is not the importance of money that
contributes to well-being; rather attempting to use money to alleviate self-doubt and
increase self-esteem leads to problems. They add that such motives become problematic
when money is used for things it cannot provide, e.g., self-esteem, happiness and genuine
friendship. Overall, the research described above suggests that having money is not related
to personal happiness per se. However, whether people who have money or not, the amount
of importance they place on it can actually be maladaptive. Indeed, individuals who consider
money important tend to be less happy than those who place less importance on money.
1. MOTIVATION
Motivation is the force that makes us do things: this is a result of our individual needs being
satisfied (or met) so that we have inspiration to complete the task. These needs vary from
person to person as everybody has their individual needs to motivate themselves. Depending
on how motivated we are, it may further determine the effort we put into our work and
therefore increase the standard of the output.
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When we suggest factors (or needs) that determine the motivation of employees in the
workplace, almost everyone would immediately think of a high salary. This answer is
correct for the reason that some employees will be motivated by money, but mostly wrong
for the reason that it does not satisfy others (to a lasting degree). This supports the statement
that human motivation is a personal characteristic, and not a one fits all option.
Motivation can have an effect on the output of the business and concerns both quantity and
quality. We must see it this way: the business relies heavily on the efficiency of production
staff to make sure that products are manufactured in numbers that meet demand for the
week. If these employees lack the motivation to produce completed products to meet the
demand, then there is a problem leading to disastrous consequences. The number of
scenarios is extreme but this is for getting the general picture. The employees for a manager
are the greatest asset and no matter how efficient the technology and equipment may be, it is
no match for the effectiveness and efficiency of the staff.
Motivation has been studied for many years stretching beyond the 19th century. As a result,
a number of theorists have compiled their own conclusions and consequently a wide variety
of motivational theory has been produced. Without going into the fine details and depth of
all the motivational theory, we will use Fredrick Herzberg's (1966) research to outline the
main issues concerning motivation. In this way, I will present one of the motivational
theories and this is the Herzberg's Two Factor Theory.Thus, in 1966, Herzberg interviewed
a number of people in different professions at different levels to find out two things:
1) those factors that motivated them in the workplace
These were identified as factors that gave employees an incentive to work resulting in job
satisfaction. They are also referred to as 'motivators'. These motivators increased the job
satisfaction of the employee and further increased their efficiency.
2) those factors that prevented job dissatisfaction
These were identified as factors that prevented job dissatisfaction. These did not make the
employees happy (or have job satisfaction): it just removed the unhappiness out of working.
They are also referred to as 'hygiene' factors. Such hygiene factors, if not satisfied, had an
effect of reduced employee efficiency. Herzberg believed that all factors fell into one of
these categories and therefore had separate consequences. His research concluded that some
factors fell into both categories although they held a stronger position in one of them. See
the diagram below for examples of the factors that he determined for each category.
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By looking at the diagram, it shows that a sense for achievement, recognition of their effort,
the nature of the work itself, and the desire for responsibility are all strong factors for
motivation. At the bottom of the diagram, the way the business is run, how they are
supervised, the work conditions and their pay, are all factors that can lead to job
dissatisfaction if not met to the standards of the employee. The size (or width) of the bars
that represent each factor compensate for the level at which it is a concern. For example,
from the diagram, the way the business is run is a higher dissatisfaction cause (if it is run
badly) then the concern of bad working conditions. You may look at 'pay' and think that this
bar should be a lot wider on the job dissatisfaction side, but most people would not take the
job in the first place if they considered the pay as 'totally unacceptable'. Take another
example: the employee does not see the lack of personal responsibility as a major job
dissatisfaction, but when people do seek responsibility, it is a huge motivational factor for
them: hence the long extension of the bar more on the motivation side of the diagram.
We easily can see that those factors encouraging motivation (job satisfaction) have little
connection with money and are more associated with personal development and
achievement. Hygiene factors concern more the employees personal attitudes towards the
context of their job and involve money in most cases to provide a solution to the issue. We
can also observe that two bars on the diagram (achievement and pay) are shaped differently.
This is to illustrate that, for Achievement, it is something that is only acquired for a short
term and is therefore an ongoing need that is searched for over and over again. In other
words: one week you may achieve, say, a good personal sales figure, and the following
week your standard drops to a disappointing level in which you seek to achieve this figure
yet again. The Pay factor (salary) also has a similar concern: you may increase an
employee's salary that removes job dissatisfaction at first, but in time (can be as low as
days) the employee will increase their personal spending to what they are earning and will
eventually, again, become dissatisfied. In such a case, it may be for the benefit of the
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manager if that he offer an additional incentive to keep the employee further satisfied to
prevent this on-going cycle from occurring.
5.
WHAT A MANAGER CAN DO TO INCREASE MOTIVATION
Motivation is achieved through different factors with different people. It is therefore
important that every manager must to find out these factors for each employee which can be
put into action once identified. The best way of identifying these factors is to issue
an employee appraisal. If, for example, the business has a small number of employees that
the manager can supervise and control easily, then he will probably have an idea what
motivates each person and therefore not have to use the appraisal process to determine such
factors (although he should use one for other reasons that concern the performance of the
employees). But if the business does have a large number of employees that the manager
cannot control at any one time, then he may decide to delegate the task of identifying
motivational issues to HR department or immediate supervisors of the employees, etc. For a
manager to motivate his employees, he has to identify which approach to take: does he offer
a financial or non-financial incentive? This will depend on what factors motivate the staff
member but it may also be restricted by his company budget which cannot compensate for
any wage increases or bonuses and therefore non-financial incentives have to be introduced.
Poor pay may lead to staff being dissatisfied at work and therefore any non-financial
incentives will not be effective for motivation. It is therefore important that every manager
to find the right balance between the two.
a) Financial Incentives
Increasing motivation through financial rewards is a method that is most common when
businesses rely on the quantity of the output of employees. For those employees involved in
production, the manager could issue a piece rate system where they are paid for each
individual product they produce. In which case, they would be motivated to produce as
much as possible in order to achieve a high pay: but the manager must to ensure that his
quality control is effective to ensure customer focused areas are not traded-off for quantity.
He could also introduce a commission payment scheme if the business relies on selling the
product or services through the means of personal sales (telephone, door-to-door, etc). The
manager may even introduce othet kind of benefits instead of increasing wages or salaries
such as company cars, private health, or interest-free loans from the business. These benefits
are often valued higher than wage increases and can be less expensive for the business to
provide. Another financial incentive is the offer of a share of the company profits, say, 5%,
which is split between the employees. Profit sharing does not encourage motivation in all
employees although it is highly effective in businesses with a few employees. This is
because they know that their performance will make a difference and will be evidenced by
an increase in the business profits.
Sometimes staff may only have motivation to get a task done quickly without care to the
quality of the outcome. In this case, the manager can introduce quality related bonus pay
which determines their salary. This salary will be up for review twice a year and reflects
their value in the business with respect to, for example, the standard they complete tasks as
well as personal sales records, achievements, and so on. This will give the employee the
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motivation to complete tasks to a high standard and a desire to further excel in the future in
order to gain a higher salary: and of course, the feeling of achievement (priceless).
b) Non-financial Incentives
|A manager for example, may feel that money is not an effective motivator in his business
although it may have some effect in the short term: his employees may also see factors aside
from money as prime motivators. For whatever reason he decide that non-financial
incentives are more effective in his business, there are many forms in which they can be
given. The manager can increase the motivation by giving employees more responsibility so
that they feel their contribution is more valuable to the business and that their role is of
higher importance. Further, he can promise the chance of promotion if they reach a certain
standard or target. I briefly introduced the process of appraisal which is a huge motivator to
employees. This is because they will be recognized for the value they add (or do not add!) to
the business by reviewing their progress and achievements over a certain period. The
following are also motivators that can be introduced in almost every business. To some
degree they can also be seen as processes that reduce job dissatisfaction:
-
-
-
job enlargement: this involves expanding the job of an employee that has them
doing more work of a similar nature to what they already do. This may be allowing
them to complete the whole task instead of just part of it, for example, packaging
the products as well as manufacturing them. This process ideally removes the
boredom out of the job by eliminating the repetitiveness out of tasks and allowing
them to complete the whole process, further increasing their responsibility.
job rotation: this involves allowing employees to change the nature of their job
periodically. For example, tha manager may give the employee administration
duties one week, marketing the week after, and then back to their original job of
sales the following week. This cycle will then be on going. The purpose of this is
that the employee, again, is satisfied by reduced boredom and also motivated by the
achievement of increased skills. The business owner gains from cross-training and
the potential for feed-back and improvement ideas.
job enrichment: similar to job enlargement, the manager can enrich an employee's
job by expanding their tasks to give a higher level of responsibility in the nature of
work they do. For example, they can be given the responsibility of ordering
materials and making delivery arrangements instead of just manufacturing the
products. This will not only expand their skills, but also give them an increased
challenge (responsibility).
But, there are also a lot of measures that can be done by a manager in supporting his
employees to motivate, to motivate themselves in the organization:
a) To make of list of three to five things that motivate each employees – the manager must
read the checklist of possible motivators then, fill out the list for each of his employees and
then have each of his employees fill out the list for themselves. Afterwards, it must compare
the answers to theirs. First, the manager have to recognize the differences between his
impression of what he thinks it is important to them and what they think it is important to
them. Then, the manager must to meet with each of his employees to discuss what they
think are the most important motivational factors to them. Lastly, tha manager have to take
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some time alone to write down how he will modify his approaches with each employee to
ensure their motivational factors are being met.
b) To work with each employee to ensure their motivational factors are taken into
consideration in the reward systems - for example, their jobs might be redesigned to be more
fulfilling. The manager might find more means to provide recognition, if that is important to
them. He might develop a personnel policy that rewards employees with more family time,
etc.
c) Have one-on-one meetings with each employee - employees are motivated more by the
manager’s care and concern for them than by his attention to them. So, the managers have to
know their employees, their families, their favorite foods, names of their children, etc. This
can sound manipulative -- and it will be if not done sincerely. However, even if the manager
sincerely wants to get to know each of his employees, it may not happen unless he
intentionally set aside time to be with each of them.
d) Cultivate strong skills in delegation - delegation includes conveying responsibility and
authority to the employees so they can carry out certain tasks. However, the manager leave
it up to the employees to decide how they will carry out the tasks. Skills in delegation can
free up a great deal of time for managers and supervisors. It also allows employees to take a
stronger role in their jobs, which usually means more fulfillment and motivation in their
jobs, as well.
e) Reward it when you see it - a critical lesson for new managers and supervisors is to learn
to focus on employee behaviors, not on employee personalities. Performance in the
workplace should be based on behaviors toward goals, not on popularity of employees. The
managers can get in a great deal of trouble (legally, morally and interpersonally) for
focusing only on how you feel about their employees rather than on what they
are seeing with their eyes.
f) Reward it soon after you see it - this helps to reinforce the notion that every manager
highly prefer the behaviors that he is currently seeing from his employees. Often, the shorter
the time between an employee's action and the reward for the action, the clearer it is to the
employee
that
the
manager
highly
prefers
that
action.
h) Implement at least the basic principles of performance management - good performance
management includes identifying goals, measures to indicate if the goals are being met or
not, ongoing attention and feedback about measures toward the goals, and corrective actions
to redirect activities back toward achieving the goals when necessary. Performance
management can focus on organizations, groups, processes in the organization and
employees.
i) Establish goals that are SMARTER - SMARTER goals are: specific, measurable,
acceptable, realistic, timely, extending of capabilities, and rewarding to those involved.
j) Clearly convey how employee results contribute to organizational results - employees
often feel strong fulfillment from realizing that they're actually making a difference. This
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realization often requires clear communication about organizational goals, employee
progress toward those goals and celebration when the goals are met.
k) Celebrate achievements - this critical step is often forgotten. New managers and
supervisors are often focused on a getting "a lot done". This usually means identifying and
solving problems. Experienced managers come to understand that acknowledging and
celebrating a solution to a problem can be every bit as important as the solution itself.
Without ongoing acknowledgement of success, employees become frustrated, skeptical and
even cynical about efforts in the organization.
l) Let employees hear from their customers (internal or external) - let employees hear
customers proclaim the benefits of the efforts of the employee. For example, if the employee
is working to keep internal computer systems running for other employees (internal
customers) in the organization, then have other employees express their gratitude to the
employee. If an employee is providing a product or service to external customers, then bring
in a customer to express their appreciation to the employee.
m) A manager has to admit to himself (and to an appropriate someone else) if he doesn't like
an employee - managers and supervisors are people. It's not unusual to just not like someone
who works for you. That someone could, for example, look like an uncle you don't like. In
this case, the manager hhas to admit to himself that he doesn't like the employee. Then he
must to talk to someone else who is appropriate to hear about his distaste for the employee,
for example, a peer, his boss, his spouse, etc. The manager must indicate to the appropriate
person that he wants to explore what it is that he doesn't like about the employee and would
like to come to a clearer perception of how he can accomplish a positive working
relationship with the employee. It often helps a great deal just to talk out loud about how
you feel and get someone else's opinion about the situation. As noted above, if the manager
continue to focus on what he sees about employee performance, he will go a long way
toward ensuring that his treatment of employees remains fair and equitable.
6. CONCLUSION
There is no doubt that we live in a money-motivated world. Sometimes, any amount of
human relations cannot compensate for a lack of monetary reward. If the reward is right,
good human relations will give that extra zest to a team, motivating them to give of their
best efforts. Insufficient monetary reward cannot be compensated by good human relations.
But, in the same time, about all these, from over angle, it is not surprising that money alone
is less an effective motivator for employees than when it is used in conjunction with nonfinancial reinforcements. Without motivation in the workplace, every business will suffer
from the lack of efficiency that the employees may fail to apply. This is because they have
no incentive to perform tasks to a high standard or complete them on time. It is therefore
important that the manager give them something to work for as a reward for their high level
of performance, all being essential to the success of the business.
Everyone is motivated by different things and a majority of these factors are not money
orientated: instead they react more effectively to incentives that offer personal recognition
and achievement. In this case, every manager should determine what motivates individual
people and further determine whether a financial or non-financial incentive is the solution.
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There is a fine line between factors that motivate people and factors that prevent job
dissatisfaction. In other words, some things do increase the level of efficiency in employees
by reducing job dissatisfaction but are not motivators themselves. This is because the staff
need to eliminate unhappiness in their job before they can begin to be motivated and this
usually, and some say must, begin with an acceptable wage that they can live on.
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