However, people in general seem to reach a balance between money and effort, between money and the calls of family and interests. For instance, commission schemes are supposed to motivate increased effort in sales people. The truth of the matter is that for most sales people, they do not. The sales person works as hard as they need in order to get to a level of income that they require. At this point they are said to have "satisficed" and their needs and income are in balance. Offering more money will not necessarily increase effort beyond this point.
Successful organizations use motivational techniques in order for its workforce to be highly efficient and effective. However on the contrary don’t essentially offer monetary rewards in every situation. There are drawbacks of using cash as the only motivator. Though it can motivate employees to be a good workforce, it can make them dishonest. Moreover, there are other ways to motivate people at very low cost, which give the same or even better results as using money. As mentioned above, money can buy almost everything people want, but only almost. There are many things that can not be traded for money. Due to these weak points, money is not as good motivator as it is viewed.
First and foremost, money could lead to bad or unlawful performance. Money can really motivate people because, as it is well documented, money can buy satisfaction. Theoretically, workforces will perform better as they know that they will get more money from bonus or a raise. The problem is that in the real world, they do not perform “better” but perform to “look better” in their bosses’ eyes. For example, some might try to give an image of high workload by sitting in front of the computer and typing all the time, though they have nothing to type. In some case, they might stagger around the office, especially in front of the bosses’ rooms, so that they will be seen as busy and diligent. The worst case scenario is that they will try to serve their bosses the best, not the company. These are absolutely not the results the company expected from the motivation program. Moreover, if the company implements this program for some time, it may become company culture: money-oriented. Employees will only be concerned about how much money they make and not motivated by the job itself. They might excel as that can generate more earning but they will do something to get more money also.
In a company that uses a stock option policy, managers get stocks as their bonus, and this policy can lead to illegal performance and inappropriate actions as Ivan F. Boesky found out to his disadvantage. He was accused of insider trading that led to huge personal profits and eventually a $100 million fine. This scandal was described as one of the worst on Wall Street history, and unsettled public confidence with the fear that stock trading may be fixed.
‘Money is often used for motivating, but it also addresses itself to human greed, which dulls the conscience and may lead to unethical and illegal behaviour.’ (Weihrich and Koontz, 1988)
Secondly, companies can use other low cost motivators to motivate their workforces to perform better. “A personal organiser, complete with a leather case, is one of the gifts being offered to British Telecom employees as part of BT’s “Living Our Values” initiative. BT is using non-cash benefits to reward exemplary behaviour. The BT initiative is an example of an employer using gift items to enable managers to show gratitude to employees for such things as continuous improvement and teamwork.” (Rue and Byars, 1977)
If the company use bonus’s as motivation, it will face a problem if it does not have good strategies to execute it with. For example, if the company gives a bonus every month, this bonus will do no good as a motivator. The reason for this is that if the company gives a bonus to employees every month, employees will feel that the bonus is what they must have as part of their salary, not as a reward for good performance and also the company will not make much profit and in the long run will eventually get rid of some staff. Therefore, if the company really wants employees to work better and better, it has to raise the bonus again and again.
In addition to this, there are many utensils that can motivate workforces better than money. In fact, studies have found that non-monetary compensation is an even more vital factor many people. According to Hagemann, ‘the motivation factors ranked with importance by Japanese, American and German companies in the first, second and third places were clearer strategic directives, more information about work and more participation in the job while money was ranked in the ninth place.’ Money can be better motivator as it can indicate the status of the person. This statement is true but not for all situations. There are many people who gain respect from other people because of their good and honest habit though they earn little money. In the meantime, some who are rich but have bad reputation might be considered as dirty people or of a very low status.
Nonetheless, there is another argument that an increasing salary is an indicator of success. It might be true but there are many things that can also show success such as more participation and more responsibility, for instance the Prime Minister of Great Britain is not that greatly paid when comparing him with CEO’s of major corporations, lawyers, barristers, footballers…………. The list goes on, yet the PM’s position is one of the most important and prestigious position in the country.
Thirdly, money can not satisfy all needs of people. In reference to Maslow’s theory on motivation ‘money can satisfy only the needs at the lower level.’ According to Plunkett and Attner, “the physical needs can be satisfied by increasing pay, safety needs can be satisfied by reassuring that jobs will not be eliminated.”
For social needs, there are many ways to cope with such as letting the new employee interact in recreational activities of the firm. In these levels of needs, money can be best used only at the lowest level. For example, money cannot buy the sense of belonging in the society, social need. There are many people who are extremely wealthy but can’t interact on a professional and social level with their fellow workmates in the organization well and have to quit their jobs. Some people do not want more money as they are satisfied with their current status or they are more concerned with other things more. For example, some wealthy and successful CEO’s whose needs are in the top levels like self-esteem or self-actualization may not necessarily be motivated by money. To motivate these people, the company might try to make them feel that the job is challenging or make them realise that this is another goal of their lives. The company might provide more opportunities in other fields of the job and send them to some training course to make their job more challenging. Changing the structure of the job is another way to motivate workforces, as it will make them feel that they have more challenge than their routine work. As seen, money is not a good motivator for everybody, as each employee will have dissimilar needs in the hierarchy.
Although money is not always seen as a reliable motivator by a number of critics, it does possess its advantages in terms of it leads people towards a goal, it gives them direction and clarification. If there are no bonuses or low wages, where would the motivation be for a worker to work to his/her best ability? If there is a limited reward for your efforts then where will the incentive be to do well? Such questions are always raised in board meetings and meetings between employees and management. Management tend to use money as armour in their toolbox and release their ‘weapon of extra incentive’ when required.
On the whole money is not always top employee priority although it is important, because ‘the money that you bring home buys the bread.’ People are also motivated by variety of items and using money as the only motivator is not as good a strategy as it should be. It can motivate people to perform better but only as the external motivator. People do not feel that they really want to work because of “intrinsic interest in a task” (Kohn, 1998) but they work just for money. This can lead to inefficiency and illusion of performance and also cause corruption and illegality in work. In fact there are many motivators that can bring about the same or even better result as money. Furthermore, using these motivators can reduce the cost of the company also. Last but not least, although money can buy many things, it cannot buy satisfaction and not all employees’ needs can be satisfied by money. Therefore, monetary motivators can not motivate everybody. As seen in this essay, motivating people by money can create some disadvantages and money is not the ‘be all and end all of motivation,’ so the company has to be very wary when using it.
