Importance Of Money As A Motivator To Good Performance

In 2011 Market Tools Inc. collected a response that 39% of employees did not feel appreciated at work while a further 77% of employees said they’d work harder if their efforts were recognised (Hay Group, 2013). These figures raise the question, how important is money as a motivator to good performance? Motivation is different for everybody, with differing values, socioeconomic backgrounds and personality traits; employer’s need to recognise money will motivate different employees to certain extents as motivation is not ‘one-size fits all’. This essay will explore the effectiveness and importance of money as a motivator, potential implications and alternative means of motivation in the workplace. Ultimately, not only is it important to pay people …show more content…
There’s no denying humans are motivated by money. This is why managers who implement pay for performance models have seen successes, particularly in sales type situations and achieving short-term goals (Yerre, 2012). Moreover, money is essential to live and with the cost of living rising steadily each year and pay increases closely linked to performance and promotion this in itself is motivating for lower socioeconomic classes (McMahon, 2016). Monetary incentives aren’t just limited to reward good performance, rather a key attractor in enticing talented candidates as base pay is the foundational component to employee remuneration. Base pay can be an important motivator, more so in person-based pay where the employer bases the pay based off the skills, abilities and experiences …show more content…
These types of unethical behaviours crossover into the workplace in a much more discrete way in the way of taking short cuts or even bribes in order to achieve a bonus. This is prevalent in sales roles, where stealing sales off colleagues and deceiving sales pitches are used in order to meet targets with monetary bonuses attached (Duff, 2014). The wider effects of unethical practices for achieving individual and organisational goals, whether they breach company policy or the law can not only have a detrimental effect to company moral at the time, but if not managed and disciplined could have a flow-on effect further on. Furthermore, as found by the Federal Reserve Bank in the United States, raising money beyond a certain ‘threshold’ can lead to a detrimental effect of employee performance. This is because it’s perceived higher pressure from higher pay or bonuses attached to which could overwhelm the employee and lead them to ‘choke under pressure’ (Shields et al., 2016). Psychology and motivation go hand in hand which is why managers need to be careful when implementing reward systems which are going to benefit both the organisation and the individual in the most effective