"Money talks." "Put your money where your mouth is." "Money does not motivate." "Pay for performance." "Financial incentives." she became too concerned about money." As these phrases suggest, money plays a complex role in employee motivation.
More than 20 years ago, a researcher on employee motivation coined the phrase, "Money does not motivate."
However, numerous monetary incentive plans have proved that phrase to be wrong.
Perhaps the researcher would have been more accurate to say, "Under some conditions, money does not seem to motivate employees to greater performance."
Money can have positive or negative effects on performance because of the following roles of money.
* Need fulfillment. Employees, for the most part, need money to buy the necessities of life. In fact, many workers dream of obtaining large sums of money so they can quit their jobs. Thus, money motivates these people to work so they can survive.
RF * Status. At the other end of the spectrum, many multimillionaires
work very hard trying to increase their wealth. As one states, "I don't need the money, but I get excited about 'doing the deal.' "
Many employees are motivated by higher earnings because the money brings status and recognition to them.
* Score-keeping. Some very competitive individuals use their earnings as a way to keep score. They work at improving their earnings in much the same way that they try to lower their golf score.
* Confirmation. Confirmation of value is perhaps one of the least recognized roles of money. "When I was getting above-average pay increases," a worker said, "I knew, without any doubt, that the company valued me."
Because money is so tangible, pay increases, whether in the form of merit increases, bonuses, incentives or profit-sharing, will almost always have a positive or negative impact on motivation.
Managers who see that financial rewards go to individuals and groups who contribute most to the organization's success are likely to obtain a greater positive impact from money.
Respond "true" or "false" to the following. For most employees, money:
1. Is not a motivator.
2. Is necessary to live comfortably.
3. Becomes a score of how well they are doing.
4. Is tangible evidence of their value to the organization.
5. Can be a powerful motivator.
6. Is relatively unimportant.
7. Eventually reduces motivation.
8. Is merely a by-product of successful contributions.
9. Would have more impact if distributed equally to all.
10. Causes many dysfunctional organizational behaviors.
Although not all authorities would agree, numbers 2, 3, 4, and 5 tend to be true while 1, 6, 7, 8, 9, and 10 tend to be false. Seven or more correct answers suggests an above-average score.