A Discussion on Whether Financial Rewards is the Best Way to Increase Work Motivation

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When we describe motivation, we frequently denote “why do a group of individuals behave in a certain way, or how would it be possible to influence them to behave in a different or more specific way?

There are in existence various attestations from the field of behavioral sciences, often motivation points out to a psychological concept which is above all involved with maximizing the direction and strength of individual’s in the work sector in order to create a higher performance output. Why do we need to motivate employees? The answer is survival” (Smith, 1994).

Motivating employees is by far the hardest task a manager needs to accomplish simply because the needs of individuals vary and change at any given time Bowen and Radhakrishna (1991). This paper seeks to answer the question as to whether the one best way to increase work motivation for an organization is through financial rewards.

In the old days, employees were merely tools and instruments in a production cycle of goods and services, soon this perception changed most likely due to a research called the “Hawthorne Studies” in which it was conducted by Elton Mayo during the years of 1924 to 1932 (Dickson, 1973).

During the course of the research, it was concluded that humans or employees are not only motivated by money or financial rewards but merely by one’s individual attitude (Dickson, 1973). The study created an overall change in how managers dealt with their employees causing a new era of management to begin (Bedeian. 1993)

Motivation, according to Baron (1991), “is the internal process that activates, guide and maintain behavior’s”. A lot of individuals would acknowledge the fact that ones behavior is influenced by the motivation in one’s task or work, for instance, if an individual was to be told about receiving a reward for the completion of a certain task then that individual would focus his time an energy on order to obtain that reward.

Other writers such as Kanfer (1998) “feel that motivation is only about the free will element of behavior…” in this quote she implies that rewards have little or nothing do to with an individuals motivation rather it is an individuals qualities that provides motivation. Hersberg (1987) continues the explanation by characterizing motivation as “a function of growth from getting intrinsic rewards out of interesting and challenging work”.

Being able to grasp the key that motivated employees and how it was caused was the primary focus of various analysts after the concept that was unveiled by the Hawthorne Study results (Terpstra, 1979).

There exist 5 concepts that created our awareness of “motivation”. They include Skinner’s reinforcement theory, Vroom’s expectancy theory, Maslow’s need-hierarchy theory, Adam’s equity theory and Herzberg’s two-factor theory (HERZEBERG, et al., 2005, p. 126).

Abraham Maslow’s hierarchy of needs

As stated by Maslow, they’re exists 5 levels of needs for an employee (Maslow, 1943) they consist of physiological, safety, social, ego, and self-actualizing. In his theory, Maslow stated that the lower levels on the “need-hierarchy” were to be satisfied before moving up to the next level of need, in this approach motivation would be created among the employees.

According to Abraham Maslow, people need to achieve one level of motivation first. Once an individual has attained a given level of satisfaction, it ceases being a motivator and the next level of achievement.

For instance, a person’s first priority is a psychological level which increases to the next ones such as the safety, social, ego and finally self actualization. This clearly shows that it is not always about money though in the initial stages of satisfaction money plays a significant role on ensuring that these levels of motivations are achieved (Davidson, 2011, p. 89).

In the confinements of Herzberg’s study, he placed motivation in two different factors: motivators and hygienes (Herzberg, Mausner, and Synderman, 1959).

Motivator or Intrinsic motivation “relies on the use of psychological rewards rather that monetary rewards, for instance if an employee has completed a task as instructed he could be rewarded by receiving a certain level of acknowledgment and appreciation that would create job satisfaction Mullin (2007).

CEO of FedEx Kinko’s Gary Kusin quotes “Work is about letting people know they are important, their hard work and efforts matter, and they’re doing a good job. And this kind of recognition, in fact can sometimes be more important than money.”

Organizations should therefore endeavor to provide the employees with motivators and less hygiene factors that aim at ensuring that their productivity at workplace is kept at all time high (Deci and Ryan, 1985, p. 113).

On the other hand, “extrinsic” motivation relies on the “tangible” rewards, which consist of monetary, promotions and various other benefits, extrinsic motivation is primarily determined at the organizational level unlike “Intrinsic” motivation which in controlled by individual managers Mullin (2007).

Vroom’s theory

Vroom came up with a theory that states that employees’ efforts are aimed at a specific performance and in turn, the performance results in a reward (Laming, 2004, p. 86). The reward may either be negative or positive. Positive rewards lead to a more motivated employee while a negative reward leads to a less motivated employee (Levesque, 2008, p. 244).

Many individuals acknowledge Vroom’s (1964) theory which states “outcomes which have a high expectancy of being reached (e.g. sale of five cars a week) and the rewards of which are highly valued (e.g. extra commission) will direct people to exert much greater effort in their task”, in other words, Vroom highlights the benefits of incentives in order to increase work performance and speed, conversely a task that is done at a much higher pace does not always mean good work quality, this is authenticated by Miller’s who arranged a test to be given to students and those who completed it quickly would be given financial reward (Levounis and Arnaout, 2010, p. 103).

The quote that “ those trying to earn the reward made more mistakes than those who weren’t” this brings us back to Baron’s statement on behavior’s, the introduction of an incentive altered the way the individuals were committed to the task, they were more interested in obtaining the reward rather than completing the task.

This method could also have many drawbacks as the employees might become more dependent on the financial benefits of the task rather than on the task itself (Wicker, 2011, p. 118).

While this theory states an employee concentrates on the rewards thus it can lead to substandard quality, the issue of high quality standards can be introduced such that a person who does poor work in terms of the set standards receives negative reward (Wlodarczyk, 2011, p. 88). This can therefore be used with other equity theories to ultimately influence the employees’ behavior and thus their motivation.

Adam theory of motivation

John Stacy Adam, a psychologist, came up with this equity theory that states that motivating individual is a relative rather than absolute factors.

As such, an individual’s own perception of the work environment is the greatest motivation determinant. This theory together with other equity theories recognizes some variable factors that affect an employee’s output.

Adam states that employees get motivated if the output matches or exceeds their input into the organization (Wong, 2000, p. 121). On the other hand, they get demotivated if the output fails to match their input. This with other equity theories seek to discredit the Hawthorne’s research finding that concluded that employees are not motivated by monetary rewards. They put a strong case for a reward mechanism that motivates employees.

Skinner’s theory

B. F. Skinner was a psychologist who came up with his theory when the world was being dominated by behaviorists such as Ivan Pavlov who claimed that everything that human beings did was triggered by a reflex. Skinner sought to prove that not every human act is triggered by stimuli and, as such, came up with a theory that proposed that an individual’s behavior will be determined by the perceived consequence (Wentzel and Wigfield, 2008, p. 209).

If a person perceives a desirable consequence, he/she will tend to repeatedly act in a manner that is likely to enhance the perceived consequence.

On the other hand, if an individual perceives a negative outcome, he may want to avoid such a behavior. Managers can use this skinner’s theory of operant conditioning to manage their employees in a way that the employees will engage in behaviors that will enhance rewards and refrain from negative consequences such as punishment.

Application of motivation theories

The modern day organization management is faced by various challenges that require managers to make decisions that will maximize the output of their employees. As such, the equity theories of motivation can come in handy to help mangers to effectively condition their employees’ behaviors.

According to Adam’s theory, the employees input should match the output so that the employee can get the positive motivation to keep on improving the work output. Some examples of inputs from employees are enthusiasm, flexibility, ability to perform his/her duties, loyalty and so on. These are some of the inputs that employees provide to the organization and help in ensuring that their work delivery is of the best standards.

In effect, the employee needs to find output that matches these inputs and ensure that the employees are able to relatively predict the output from their input. An example of some of the outputs includes salary received, job safety, recognition, and so on. It can be clearly seen that of all the outputs, salary ranks the highest and thus remains the best way to increase the employees’ motivation.

How employees inoculate motivation

On normal occasions, employees compare themselves with their colleagues. If a colleague has less input yet he/ she gets a higher output, they perceive an unfair treatment as compared to their colleagues and as such detect an imbalance between their input and output.

Motivating employees is therefore complicated task since the managers ought to understand the expectations of their employees. This would help them in matching the employee’s expectation through matching their inputs and expected outputs. In doing this, the management is able to control most of their employees’ behavior and thus making sure that productivity of the workers is kept at its best (Laming, 2004, p. 180).

In light of this, motivation is a concept that needs to be approached from different fronts. Most employees seek to satisfy the basic needs first which are largely met by means of finances and then move to the other motivators. Managers who employer one or all of the above approaches of motivating the employees often find it easy to motivate their employees since they communicate their expectations to the employees who can in turn predict the outcomes of their performances.

Initial studies on motivation such as the Hawthorne’s studies stated that employees are not primarily motivated by finances. There are other causes such as their attitudes which largely contribute to their motivations. Such beliefs led to aeries of other studies that brought up the issues of equity motivation theories. From the preceding discussion, it has been established through employees are largely influenced by the outcome of their performance.


An understanding of the equity theory of motivation brings out the fact that even though the employees have their attitudes on the work and the managers, the most determinant of their choice of behavior is the perceived outcome. Those that predict a positive outcome in form of a reward will tend to modify their behaviors in a manner that will enhance their productivity.

As such, it can be authoritatively concluded that the management can set out reward mechanism in the organizations to influence the behavior of the employees. In addition to these conclusions, it has been noted that monetary rewards play an important role in determining the motivation of an organization.


Davidson, JP & Davidson, JP 2011, 60 second solutions: Motivation, David and Charles, Cincinnati, Ohio.

Deci, EL & Ryan, RM 1985, Intrinsic motivation and self-determination in human behavior, Plenum, New York.

Herzberg., F, Mausner., B, & Snyderman., BB 2005, The motivation to work, Transaction Publishers, New Brunswick.

Laming, DRJ 2004, Understanding human motivation what makes people tick?, Blackwell Pub. Malden, Mass.

Levesque, P 2008, Motivation: powerful motivators that will turbo-charge your workforce, Entrepreneur Press, Irvine, Calif.

Levounis, P & Arnaout, B 2010, Handbook of motivation and change: a practical guide for clinicians, American Psychiatric Pub, Washington, DC.

Wentzel, KR & Wigfield, A 2008, Handbook of motivation at school, Routledge, London.

Wicker, D 2009, Motivation: an interactive guide, Author-house [S.l.].

Wlodarczyk, Andrzej Z 2011), Work Motivation A Systemic Framework for a Multilevel Strategy, Author-house, USA.

Wong, R 2000, Motivation: a bio-behavioral approach, Cambridge Univ. Press, Cambridge [u.a.].

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