Herzberg’s Two-Factor Theory is another example of content motivation theory. He and his associates developed a theory known as a motivator-hygiene theory. This theory distinguishes the sources (factors) of satisfaction from dissatisfaction in a workplace. In order to improve satisfaction, motivating factors should be used. These factors are related to what people actually do in their work and according to Herzberg has a strong link to better performance. On the other hand, dissatisfaction (hygiene factors) are related to the work setting and should be minimized as much as possible in order to prevent employees from feeling unhappy about their job (French et al., 2005).
Money in the Herzberg’s theory is defined as a hygiene factor. Although hygiene factors (e.g., salary, working conditions, interpersonal relationships, etc.) are vital in order to prevent dissatisfaction at a workplace, it will not contribute to the feeling of satisfaction thus will not increase motivation. Motivational factors, on the other hand, are a set of intrinsic factors (e.g., achievement, recognition, responsibility, etc.) associated with the work itself. When they are absent, the work provides little or no satisfaction, which means that the job is not motivating (McLean, Smits & Tanner, 1996). Herzberg treats money as a need that must be met for the purpose of survival (McLean, Smits & Tanner, 1996). According to this theory pay in the form of a base wage or salary can prevent dissatisfaction but cannot lead to motivation, although merit pay rises or bonuses given as a special reward for improved performance can cause an increase in satisfaction and motivation (French et al., 2005).
There was an investigation carried out by Development Dimensions International, and published in the UK Times in 2004. It was based on a panel composed of 1,000 staff from companies employing more than 500 workers. It revealed that many employees were thinking about another job mainly because of boredom and lack of commitment while only a few stated that pay was the reason for thinking about leaving their jobs. This data proves the idea of money being a hygiene factor rather than motivator because the main reasons provided by workers were lack of motivating and challenging tasks and no opportunities for advancement - classic Herzberg motivators. Also, findings of a more recent survey, carried out by National Training Awards (2010), revealed that 76% of employees chose their jobs because of the salary, but only 32% of them maintained to be motivated by pay to perform well in their job. These surveys supports views of Herzberg that money is only a hygiene factor and does not contribute to increased motivation.
Both of the motivation theories discussed before were content theories. Those theories mostly emphasize the “what” aspect on motivation while process theories analyses the “why” and “how” aspects (French et al., 2005). In order to understand what motivates people a further investigation has to be made about the reasons why people choose to work harder and how they decide to choose one action over another. Victor Vroom’s expectancy theory is one of the well-known process theories that can be applied to pay and motivation. This theory suggests that in order for the employees to become motivated, they have to believe that their efforts and increased performance will lead to a desirable outcome. If the rewards being offered are directly linked to performance and employees estimate that they are capable of improving their skills or accomplishing certain tasks then they will be motivated to take an action and perform well to get their desired rewards (Wilson, 2005). Expectancy theory suggests that work-related behavior such as increased attempts on boosting performance or increased motivation can be predicted. Also, it states that intended effort might turn into visible effort if people believe that their efforts will result in a good performance. It is important to note here that not only extrinsic rewards such as bonus payments can motivate people and improve their performance but also knowing that they are capable of expanding and applying their skills. Altogether this theory tells us that people will do what they are capable to do when they want to if the reward is desirable (French et al., 2005). This theory supports the idea that financial rewards are important in order to motivate the employees (generally high valence rewards include salaries, bonuses, promotions). But in order for this given reward to motivate an individual all of these factors – expectancy that the employee will assign to a certain task or improve his performance (expectancy), capability of accomplishing the task or increasing performance (instrumentality), and desirability of the reward and the value that the person attaches to it (valence) must be high and positive (French et al., 2005).
As it was discussed earlier high material rewards might be a good motivators. However, people tend to get used to an increase in their salary or bonuses really fast and then they start to require for even bigger salary or bonus in order to remain motivated. Thus, a person receiving high compensation may be inclined to move for an even higher reward if he or she can get it (Heneman, 1992).
Dan Ariely a behaviour economist at Duke University Fuqua Florida school of business has studied the question of introducing bonuses in companies and the possible benefits of it. He created a study that consisted of six tasks ranging from physical activities to creative and cognitive tasks with three groups. The groups got a bonus payment for performing well. First group was set to receive a one-day payment bonus for good performance. The second group – two-week pay bonus and the third group were able to get a massive six-month pay bonus if they performed well. In groups one and two a slight increase in performance was noticed. Interestingly, the third group performed worst even though they were given a chance of getting the biggest bonuses. This research showed that the thought of receiving huge bonus payments obsessed individuals who were able to get them and therefore they focused on the rewards too much what made them stressed and obviously reduced performance. Dan Ariely concluded that the effectiveness of performance-based pay is seen only in specific situations. He believes that introducing bonuses can increase a physical task performance but when the task is cognitive and related to creativity there can be no increase in performance. According to him this is because the thought process cannot be rushed.
The success of financial incentives also depends on employee’s ethnical and cultural backgrounds. The wealth of possible motivations for humans is massive and it might indicate that each culture selects for emphasis only a certain motives that can activate its people. “Thus, in a sense, culture rather than human nature determines a man’s motives and drives” (Al-Issa, 1970, p. 98). It means that introduction of bonus payments in one culture might prove as successful motivator while in other culture it would not affect job performance at all (French et al., 2005). That is why assuming that people are motivated by the same things in every culture is wrong and should be avoided (Hofstede, 1993). “So talking about money motives – one culture would hardly recognize monetary values while another has made them fundamental in every field of behavior” (Al-Issa, 1970, p. 103).
In conclusion, it can be said that every human is an individual and is motivated differently and that reflects different motivation theories. Maslow’s hierarchy of needs theory states that money satisfies lower order needs and might contribute to higher order self-esteem needs. Herzberg’s two-factor theory concluded that money does not contribute to improved performance and is only a hygiene factor. Vroom’s expectancy theory supports the idea of motivating people through financial incentives as long as the people have desires for them. But in general we could agree that money does motivate. People will always need more money. As a famous German American oil magnate John D. Rockefeller once was asked: “How much money is enough?” Rockefeller replied: “Just a little bit more!”
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References:
Heneman, R. L. (1992). Merit pay: linking pay increases to performance ratings. New York: Addison-Wesley.
Al-Issa, I. (1970) Cross-cultural studies of behavior / edited by Ihsan Al-Issa, Wayne Dennis; New York, Lodon: Holt, Rinehart & Winston
French, R., Rayner, C., Rees, G., Rumbles, S., Schermerhorn Jr, J., Hunt, J., Osborn, R. (2005), Organizational behavior 2nd edition, London: John Wiley
McLean, E.R, Smits, S.J. and Tanner, J.R. (1991). “Managing new MIS professionals”, Information and Management. Elsevier
Wilson, F. M. (2004). Organizational Behaviour and Work, 2nd edition. Oxford: Oxford University Press.
Maslow, A. H. (1970). Motivation and Personality, 3rd edition. New York; London: Harper & Row
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