- August 11, 2009
- Posted by: admin
- Categories: Blog, Human Resource Management
As people have different needs therefore money’s significance cannot be denied in any era. It is the primary objective of most people to attain the optimum benefits for their efforts in life. Everyone is striving hard to fulfill his/her needs in order to occupy a reasonable position in society.
Never ending necessities and desires compel a person to work day in and day out. All these efforts are centered towards fulfillment of financial obligations. Recent recession has resulted in enormous rise in inflationary rate, affecting the whole world and making lives more mechanical, resulting in further stress, frustration and economic pressure in general.
Now employees require improved salary packages since monetary benefits are the primary source of attraction towards the job for most people, where they can survive and fulfill their requirements once they are done with the basic necessities.
In my opinion, monetary benefits exclusively cannot stimulate employee performance. Besides, formulating reasonable salary packages, employees can be motivated by creating inspiring work environment, enhancing two way communication, increasing job satisfaction, providing encouragement and rewarding them for their valuable (individual/team) contributions as well as having fun along with work.
It is a comprehensible fact that when an individual is at his/her entry or middle level, his drive for monetary benefits is at a higher side in most cases as compared to those, who are working at a superior level. Senior employees by and large seek recognition along with monetary benefits as they wish to satisfy their self esteem and professional ego. Therefore they require greater ownership in what they do.
The needs and priorities change at different levels, even a single homogeneous salary proposal cannot please and satisfy everyone, despite the fact that they are at the same work level because people also differ in their approach towards life. Furthermore, monetary gains can only be used to retain employees on a short term basis. One cannot expect to retain prospects with a never-ending endowment of bonuses and increments – as financial limitations are always there.
In a nutshell, if companies intend to fairly reward and recognize employees, they will be happier, stay longer and will be more productive. In my opinion, “money is the biggest motivator, yet not the ONLY motivator.”
What are thoughts on this? Are there other ways to stimulate employee performance besides a good salary package?
It depends on the person, yet I think money is the primary motivator for most people. It becomes less of a motivator when people have satisfied their basic needs. Some need large amounts of money to satisfy their basic needs. One of the problems with asking if money(or some other thing) is the biggest motivator is the question forces you to choose one thing. A leader who has vision and foresight is going to evaluate the needs and desires of people first. Then that leader is going to develop a plan that includes many things that stimulate employees. That will include money, titles, awards, recognition, pride, etc. Napoleon, who started giving ribbons for bravery, was amazed that people were willing to die for a piece of shiny cloth attached to their uniform. It’s not one thing that motivates, but many things.
personally I agree with you, and I suppose this is not only matter for opinions, as a lot of literature gives confirmations.
Trying to adjust for a synthesis, I suppose that the key concept is: <>.
What “interest” to people, is a lot differentiated (luckily enough you can any case make segmentations, with validity to be periodically review any case: eg. making set for age, gender, organizational level, country culture, religion, and so on).
We can think to an equation like:
Personal interest = A(some idealistic factor)+ B(money factor)+C(benefit factors)+D(some availability to invest on personal development, like a “delayed investment for money return”)+….(other factors)
Each of the parametric values A, B, C, D…. and their variables (what idealistic factor matter for you?, what kind of personal growth do you think will return more future benefit to you ? and so on), differ for each subset of a population.
More you are able to optimize the unit budget you have, distributing it on these parameters, more you will obtain engaged people.
The worst solution, any case, is both:
• to focus only one parameter,
• thinking all are similar to your own stereotype of “employee”.
My 2 cents
I think a goal and its achievement is the biggest motivator and money is the reward. Money is a need to live a desired life style. If companies would focus on an environment where people are happy (CSR, environment, organizational structure) and challenged, where achievement is recognized (there are hundreds of ways to do that) and everybody would clearly work towards a vision motivation would naturally be inspired. Why did I write if? Quiet often:
Recruitment does not use opportunity to set expectations right from the start
Training is provided as a process but confidence is not ensured
Companies vision is set but not clearly communicated
Commitment is not managed
People are not included in strategy design
Performance is not agreed, supported and measured on a regular basis
Lack of appropriate communication across the board
Money is a basic expectation and dictated by the market. In sales it can motivate to some extend but hey in 2009 we have to consider much more than money if we want to be seen as top employers.
Money can be a reliable bridge between otherwise dissimilar goods, values, and services. People make tradeoffs, accepting a job for less money because it is close to home, has better hours, has more flexibility, is more interesting. One thing companies can do is be flexible about the package they offer, listen to the employee and find a balance that best suits the person….and make the balance something that is reviewed periodically.
I am not sure many people honestly and carefully review their own needs and situation in this regard. One of the best things people can do for themselves is regularly inventory how much they make vs. how much they really need to make, how much flexibility they have vs. how much they would like, how much free time they have vs. how much they would like, etc. to see if the balance is really right. And if it is not, have the courage to work toward a more balanced situation.
My personal view is that a job has first to fit with your expectation.
You will demonstrate your capabilities by doing a job you are convinced by.
Therefore, the employer should take care about your strong points and capabilities, in order to propose appropriate challenges and opportunities. You ensure your future challenges and opportunities by acquiring more experience and knowledge, in a motivating environment. Money is a part, or “should be” a part of the motivation. As recognition of the provided effort, it is normal that people are expecting a salary compensation, but it has to be a balance between job interest and salary package. I agree there should be a link between risk level and salary level, but the question is: “Is there still a risk when one year top salaries ensures you enough revenues for all your live, and have you still any motivation for the job you are doing ?
If people like doctors or social workers should consider only a position of the money, I am not sure we could find a lot of people doing such job.
It’s very easy to dismiss money as secondary,
when you have lots of it…
The basis for any answer to the question does money motivate someone must be analyzed including Abraham Mazlow’s Hierarchy of Needs (“A Theory of Human Motivation”, 1943). The needs in progressive order are – physiological, safety, love/belonging, esteem, self-actualization. Unless the lower level needs aren’t met – food, shelter, clothing, transportation, financial stability, then you can’t focus on the upper level needs described. Money is frequently a short-term motivator, satisfying many of the basic needs, and contrbuting to higher level needs such as esteem and/or belonging. But it won’t fulfill the higher level needs either at all, or for some, very long. Once the base needs are met and conquered, then getting esteem and self-actualization needs from one’s work environment come into play, and if not addressed, can actually de-motivate employees.
Money is a primary driver but there are plenty of others.
– quality of leadership
– professional development
– employer brand
– recognition, peer, family and professional
I agree that money is a significant motivator but, not the largest.
Let’s look at the following example:
A candidate is interviewing with 3 companies. The first company is offering the highest pay (let’s say 5% higher than the second company and 15% higher than the third) but has a work environment that is not desirable (think jerk boss, no sense of camaraderie, and excruciatingly long hours).
The second company, as we said above, is offering pay that is 5% lower than the first company, but has a more desirable work environment (think boss that you respect, peers that you like and could partner well with, and long, but not insane work hours).
The third company is offering pay that is 15% less than the first company, but is offering you your absolute dream job. You will have all the control you desire, a boss that you have admired and have been itching to work with for some time, and a work schedule that gives you whatever level of flexibility you desire.
Still think that money is the biggest motivator? Would you really choose the first company? I’m guessing not.
I think we’d all agree that money has to be in the ballpark (+/- some %) but to say that it trumps everything else in plain wrong. If it were true, companies would have shifted all the dollars spent on benefits, recognition plans, training, and employee wellness over to total cash compensation a long time ago.
I have a somewhat different perspective on this. I would first make a distinction between ‘Motivation’, an internally generated feeling of wanting to contribute the best you have to offer – knowledge, expertise, effort, creativity, commitment , time – to your work; and other drivers which lead you to decide to work in the first place and influence many choices you make about your occupation.
I certainly agree that the need for money and the security (on many different levels) and desired lifestyle it can help you attain are important drivers for getting people into the workplace. On the other hand, as part of my consulting work, I have provided career coaching for hundreds of people at all stages in their careers – from entry level to CEOs considering a major job change. I have never had anyone say to me, “I don’t care what my next job/ position is; I just want loads of money”.
My experience is that there are other equally or more important drivers (different for different people), such as : Finding a profession or functional/technical /managerial position that fully utilises a person’s talents, creativity and interests; Challenge; Earning respect for one’s expertise or achievements; Being able to invent or create a new product, service or enterprise; Being ‘better’ – more competent, knowledgeable, successful than others; Having power; Being of service/making a difference to society. I have had many people make a radical career change in which they gave up extremely lucrative compensation packages for more fulfilling work. For example, one client was a highly paid engineer, who found his work ‘ok’, but rather boring and not really satisfying. He left his job, went back to University and is currently a happy and successful cancer researcher working in a small lab at half his engineering salary.
In terms of motivation, I agree with Frederick Hertzberg that money (or rather the lack of it) can be a huge dissatisfyer or de-motivator. In organizations, the main compensation-related issues that I hear are ones in which an individual, work group or entire function have made comparisons of their compensation with others’, and perceive their own as inequitable. So, I do think a great deal of time and effort needs to be made to ensure that the entire compensation system is transparent, robust and well integrated.
However, over the years, as part of my company’s organisational and cultural transformational projects, we have conducted an exercise called ‘Peak Experience’ with literally thousands of people from the Board room to the shop floor. In this exercise we ask sub-groups of 6 to 8 people, to first individually think of a job, project or assignment when they consistently felt energized, motivated and working at their personal best. Then identify the factors that created that feeling and experience. Next members share their stories and identify the common factors that generated high motivation and performance. These invariably – across all levels, functions, industry and service sectors – included the following:
A sense of challenge
Having broad responsibility versus being ‘a pair of hands’)
Being empowered and given authority and autonomy over their work
Feeling trusted by Sr. Management (not micromanaged)
Doing work that made an important contribution
Being part of a strong team
Interestingly, no group ever listed money, or monetary rewards as a motivating factor.
These are all things that can be built into the work environment to stimulate and maintain motivation and high performance that do not require increasing everyone’s compensation. And in our successful change processes in which such a work environment was created, high motivation, performance and dramatically increased job satisfaction were sustained. (Metrics included comparisons of ‘before and after’ performance appraisals, hard measures of quality , productivity, absenteeism and turnover; employee surveys).
I’m surprised that no one’s mentioned Maslow’s hierarchy. First, meet basic needs. Then, as you have them nailed, take on self-actualization (I always forget step two because I’m usually either fighting to make it or working out what I really want to do when I grow up).
Money isn’t the main thing, but it’s the basic thing. And anyone who tries to downplay a rational desire for money is someone I’m going to watch. It may be a function of the corporate culture, in which case you weigh your options and decide if being a part of that culture is worth it. It may be that the money just isn’t there, in which you decide whether the opportunity is worth the risk of working with an underfunded or struggling company.
Or it may be a nonprofit and/or educational or social venture, which I take on a case-by-case basis. I listen hard for consistency. If I’m going to starve, and the CEO’s got Persian rugs, and HR is talking about how money isn’t everything, there’s service and self-sacrifice, I’m going to run because there are some nonprofits that do that. I don’t do that.
Money is a huge factor but so is feeling like you are making a difference. I guess I’d call it being satisfied that our work means something to ourselves and others. A sense of accomplishment and contribution can certainly add motivation to any career, but I still want to be compensated!
While money is one of the biggest motivator across the globe workforce but it’s not the only one.
I think motivating factors are based on a person cultural affiliations and orientations, it also depends on which generation a person belongs, how money is or was perceived by people from various generations – x or y or baby boomers.
Also, depends on “how much money you have right now?”
Amongst the various motivation theories such a Maslow, equity theory, process theory or Adam’s theory, the motivation theory for ‘knowledge workers’ (Tampoe 1994) fits in well as they talk specifically about knowledge workers.
1. Personal growth, especially self-developments rather than developing managerial or professional skills ,
2. Autonomy, freedom to work within the rules.
3. Creative achievement, where work is of commercial value.
4. Financial rewards, where salary plus bonus or personal effort is recognized.
So, money is an important and a critical one but it’s not all about money for all individuals.
Yes money is big on the wish list as if your not getting paid enough you will move on. However, many companie ubnerstand the prospects of finding a job in the current climate is very difficult so they know their employees will mnost likely stay put for the time being.
Money motivate me but more than that it is job security and with that praise. There is nothing worse than coming to work, doing your job and not be praised for doing a good job. being battered down by being told you have to do better makes people ill. managers and Director should take heed that their employees are not all there for the money but to do the job they like.
I find it alarming when people are not praised for trying their best or for producing results.
yes i agree with you money is not the only one employees need the positive atmosphere the recognition of their efforts and rewards good insurance and justice and u can also read these articles at http://articles.onlineweblibrary.com/Art/1231/31/Motivating-Your-Employees.html
these articles i think it will help u best wishes
Yes, you are correct, there are things besides money that are important. Benefits, security, a sense of contribution and value, ability and room to grow, fun, sometimes flexibility, and other benefits can inspire employees.
I often see motivated people related to career/job satisfaction, not related to money.
•to take things to a whole new level, in the end make a quantum leap
•to take on big challenges, attain major achievement, empower self /others
•to advance ideas, to elaborate concepts, programs, positions or policies
•to have authority, be the one others come to or look to, “have the answers”
•to be accomplished (have capability), maximize efficacy, “be in control”
•to expand power and authority, direct people’s activity, “take charge”
•to self-improve, be exemplary, have products or services highly valued
•to advocate, plea the case compellingly for an idea, agenda or remedy
•to prove myself
First, your question is too big to read, understand and then answer ! Please keep it short.
Coming to the question, here is my point of view
1. Money – still it is the biggest motivator. If some one says, they dont work for money, it means either they have money and/or some one else is paying for their expenses.
3. Growth – growth in the organization.
4. Respect and recognition – both in side the company as well as outside.
5. Felxibility and freedom
The Human Search Engine
first of all motivation is something individual, and organizations must face this simple concept that implies that is difficult to work on it without knowing many theories and practices… how often you hear a manager say “let US go and motivate YOUR people” ? And in that moment who will dare to say “well boss, you know, about motivation there are the content theories and even the process theories, could we spend 5 minutes to explain some implication in our practices?”. Organizations are often (always) seeking immediate response, developing people and facing their “basics” underneath their motivation is a lifetime issue…
Having good salary packages is just a good “toolbox”, but working with the right tools you must face the perceived fairness issue!
Communication is key: you could have the best goal-setting process in the world but who cares if nobody knows it?
Please refer to the links i listed as “web resources”, you can find some basics about the theories involving motivation.
A certain level of money is important because everyone has to pay bills etc however I work with mega rich people and I was surprised to find that no all of them are mega happy. If fact some of them are downright miserable and dysfunctional because they’ve worked so hard and not focused on other areas in their life that are important.
Sex in the Boardroom
If it’s to be: It’s up to me
High Achievers (being written)
Good question, Salima, but the answer you get when you survey employees may be misleading. In my 20 years of work with employee recognition and motivation I find that if employees are asking for money rather than true recognition, it’s a training problem, not an awards problem. The secret to motivation is to get your people to believe you really mean, otherwise whatever you do is seen as manipulation and leads to the survey answer, ” . . . show me the money!”. The psychology is simple; money is Level One on Maslow’s Heirarchy of Needs, true recognition is Level Four, where most employees live their lives. So, while everyone says they want and need money (which is true) it is very short lived, and needs to escalate every year to get the same results. For more information, you might want to download the articles on my web site that makes this theory easier to share. Just go to http://www.VocationalShrink.com and click on Articles.