Money as a Motivational Factor


In terms of motivation, money satisfies all employee needs. Essay.



Every organization and business wish to be successful and to attain long-lasting success. But only a few of these businesses consider that employees are the real assets of the organization. The markets have become extremely competitive, and the companies have been facing employee retention challenges. So as to overcome these limitations the companies have been trying to create and maintain a strong relationship with their employees. Therefore, the employees are motivated encouragingly on the fulfillment of the task and achievement of goals for satisfying them so that organization can progress (Shah G. Syed, Muhammad Anka, Bachal Jamali, & Shaikh, 2012,). Kallimullah, et al. (2010) have suggested that the rewards given to employees influence the employees’ performance. 

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Money has been thought as the panacea or supreme in the motivation of the employees (Sara 2004). Taylor (1914) states that money is the primary encouragement and no other motivational or incentive methods can come close to it with regards to the influential value. Money has the supremacy for maintaining, magnetizing as well as motivating the individuals for better performance. Scientific management or Taylorism has described money as the most critical factor for the motivation of the workers so as to attain high productivity (Adeyinka, Ayeni&Popoola, 2007). 
On the contrary, Luthan (1998) stated that there are other factors apart from money that is believed to trigger the employee motivate appreciation engagement, good-working relationship, security, etc. But money cannot be regarded as the panacea for the employee motivation due to different motivators of different employees. 
For using money or salary as an effective motivator, the management takes care of the salary structure which must include the payment as per the performance, fringe benefits, personal and special allowance, pension, etc. (Adeyinka et al., 2007). 

Maslow’s Hierarchy of Needs

According to the Maslow’s Hierarchy of Needs, there are five basic levels of needs. This theory states that every need must be satisfied to a suitable extent so that it ceases to become a motivating factor. Maslow stated that self-actualization and esteem are the two most motivating factors and concluded that these higher order needs have to be at the highest place as a workplace motivator. (Lester, 1990)

Under Maslow’s Hierarchy, money as a motivational factor comes within the category of safety and once the need for money is satisfied the worker move to the next level of the motivational factor.
When money is no longer the motivator, the manager can still motivate the employees for moving up the pyramid. Therefore, the higher level of employees can motivate their workers by giving them confidence and give them an individual project for driving them to satisfy the higher level needs. 

Douglas McGregor’s Theory

The work of Maslow was taken forward by Douglas McGregor, who grouped two theories on the perspective of people on human behavior at their workplace. These theories were termed as Theory X, and Theory Y where the Theory X focused primarily on the “lower order” needs whereas the Theory Y focused only on the “higher order” needs that were identified by Maslow. The management can use any of these theories for motivating their employees, but better results can be expected when conquering over the lower needs first. (McGregor and Cutcher-Gershenfeld, 2006)
 The Theory X stated that the role of management controls and coerce the employees and states:

  1. People having the inherent dislike for their work would continue to avoid it whenever possible.

  2. People must be directed, controlled or even threatened for achieving the goals.

  3. People usually prefer to be controlled and directed and do not want much responsibility with little ambition.

  4. Above all the motivational factors, people seek security first. 

Whereas the Theory Y stated that the role of management is to develop high potential among the employees and further help them for realizing the potential for achieving common goals and further includes:

  1. Just like rest and play, work is also natural.

  2. People who are committed will always exercise self-direction

  3. People eventually learn to seek and accept the responsibility. 

  4. People possess potential.

The Maslow's pyramid indicated that money comes under the category of safety. However, the theories given by McGregor depicted that under Theory X, security is above all the factors. If an organization was running under the Theory X, one would agree that money is one of the most important motivators for the employees. One would also agree that the turnover would increase if the employees get more pay outside that organization. But if the company is operated under Theory Y, money is not the sole factor that will motivate the employees as that would seek the motivational factors of the higher level of needs.

Herzberg’s Motivation-Hygiene Theory.

Lastly, one would also operate their organization under the Herzberg’s Motivation-Hygiene Theory. The theory given by Herzberg focuses largely on the elements that can provide job satisfaction and the factors responsible for employee dissatisfaction. The satisfying elements or the satisfiers are termed as motivators whereas the dissatisfiers are termed as the hygiene factors. The hygiene factors include the maintenance factor responsible for avoiding the dissatisfaction, but themselves are not capable of contributing to the satisfaction. Therefore, these factors are treated like they are opposites of each other in a sense that the opposite for satisfaction is no satisfaction for the employees rather than dissatisfaction. (Herzberg, 1974)
The motivation factors challenge employees to grow further and to lead a positive mental health and do not lead to dissatisfaction. Below are the six motivating factors that lead to high satisfaction among the employees along with some hygiene factors.

The possibility of advancement can further challenge the employee to grow. An employee works harder for advancing in his career to become the manager. This motivates the employee for working hard and to grow continuously as an employee; this can bring satisfaction to the job. And once the employee becomes the manager, he tries to incorporate the same values in his employees. But the hygiene factors ultimately lead to the dissatisfaction in the workplace. 
In case, the hygiene factors are not sufficient the employee becomes dissatisfied with his job. However, the presence of these factors does either not promise satisfaction. This can be explained by giving the example of favorable working conditions, which do not necessarily motivate the employees and do no satisfy the employee but in turn do not bring dissatisfaction either as the employee is comfortable in his workplace. The money factor also works the same way, if the employee gets a raise for his job, it does not necessarily motivate him to work harder. Similarly, if the person does not receive much salary, he becomes dissatisfied with the management and his position. Therefore, money can be considered as a hygiene factor and not primarily a motivator. Money being the biological needs provides us food, shelter and water. Because of this truth, money, therefore, becomes a drive for the people. Money can, therefore, be a motivating factor only for a short duration of time, but only the motivational, and intrinsic factors can determine job satisfaction.
According to this theory, it is clear that the management should provide hygiene factors so as to avoid dissatisfaction among employees and should further provide the motivational factors for satisfying their needs. In the nutshell, the theory states that the true motivation comes from the employees and not from the external factors. These external factors can only lead to dissatisfy or discourage the employee but can be avoided if management looks into the matter.

Is money really a motivator? 

After studying all the three theories, one can easily conclude that money is only a biological needs and is an important factor so as to sustain the modern life. It is at the bottom of the Maslow's Pyramid and is placed wisely in the Theory X given by McGregor’s Theory X by focusing on the Maslow’s Pyramid. Similarly it has been placed under the category of hygiene factor in Herzberg’s theory. All these theories have stated that money is only a short –term motivator. If the employees are devoid of any money, they are determined to earn some and therefore work hard to fulfill their basic needs. Once the employee earn money, and his needs are met, he no longer considers money as a motivator and therefore money does not help to drive him to go above in his area of work. When considered as a long-term motivator money loses its prime position and is not considered as a primary motivator. Once the employee's basic needs are met, he finds new motivating factors like relationships, respect, satisfaction, and advancement.  


While considering all the three theories one can consider that money is more of a necessity and drives people to become dissatisfied if the salary offered it not up to their expectations. But at the same time, one would see that money is not going to motivate the employee for taking next higher steps for advancement in his career. Once the necessity is met, the organization should try to bring other factors for improving the workplace and to increase the motivation amongst the employees.  

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  • Shah G. Syed, A., Muhammad Anka, L., Bachal Jamali, M. and Shaikh, F. (2012). Motivation as a Tool for Effective Staff Productivity in the Public Sector: A Case Study of Raw Materials Research and Development Council of Nigeria. Asian Social Science, 8(11).

  • Kallimullah, A. R., Yaghoubi, N. M., &Moloudi, J., (2010). Survey of Relationship between Organizational Justice and Empowerment (A Case Study). European Journal of Economics, Finance and Administrative Sciences, 24, 165-171

  • McGregor, D. and Cutcher-Gershenfeld, J. (2006). The human side of enterprise. New York: McGraw-Hill.

  • Sara, P. (2004). Learning and skills for sustainable development: developing a sustainability literate Society. Forum for the future

  • Taylor, F.W., (1911). The Principles of Scientific Management. New York: Harper & Row.

  • Adeyinka T., Ayeni, C.O, Popoola, S.O., (April 2007). Work Motivation, job Satisfaction and Organizational Commitment of Library Personnel in Academic Research Library in Oyo State Nigeria

  • Luthan, F., (1998). Organizational Behavior. (8th ed.)

  • Lester, D. (1990). Maslow's hierarchy of needs and personality. Personality and Individual Differences, 11(11), pp.1187-1188.

  • Herzberg, F. (1974). Motivation-hygiene profiles: Pinpointing what ails the organization. Organizational Dynamics, 3(2), pp.18-29.

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