Question

‘Traditional economic theory, which focuses on employees’ interest in money, provides an overly simplistic view of what motivates and directs employees to act in a way that is best for the firm.’

REQUIRED:

Evaluate the degree to which you agree with the above statement. In your answer, use examples where helpful.

[20 marks]

Answer 1

Money is one of the biggest motivating factor for employees but not the only motivating factor.

For instance, if one were to believe that greater the amount of money paid should increase the motivation of employees and thus increase their efficient; every organization would hire employees to whom they would pay a higher compensation to get the best results. But the relationship between the compensation paid to an employee and his/ her efforts towards achievement of organizational objectives is far more complicated than it looks.

Further, research also shows that money receivable in a future time is more motivating than money received. Once money is received, its effect on motivating an employee to work with this highest efficiency fades out quickly. Therefore, may be in the short-term money may motivate one, but in the long-term a deeper incentive needs to be given to every person. An employee needs to feel closer to the organization in order to derive job satisfaction and help the organization.

With the change in outlook of people, many employees have come to believe that their own development is an important criterion to drive their motivation towards working for the organization. People prefer organisations which have avenues for self-improvement like more educational opportunities, rewarding and challenging projects etc. Investing in employees makes employees feel connected to the organization and in turn increases their motivation.

Organisations have also understood the importance of non-monetary incentives for employees. That is why; employers have come out with reward programmes where employees are appreciated for their achievements for the firm. Such a method makes the employee feel important and recognized in the organization which may drive him/ her to work better.

Other than reward programmes, organisations have also initiated schemes like work from home where incase of genuine emergencies can carry out office work comfortably from home. In this way, the person feels that his situation is being understood by the employers and he works at peace making the entire work process more productive. Top management has been putting in conscious efforts to be more approachable to employees, so that employees do not get the feeling that they are just working for money.

Another aspect to be considered is job satisfaction. A person may be getting a huge amount of salary but may not be necessarily satisfied in his job. Job satisfaction has no co-relation with money. Often, employees wonder how it would be to quit his/ her job but never put in their resignation because their job pays them handsome money. The fallout of this is that though they are earning good money, they would not be encouraged to put in best of their efforts. Consequently, average efforts would bring average results to the organization.

From the above, it is evidently clear that though money is important, it may not necessarily drive a person’s potential to work towards the organisations objectives. Other factors like avenues for self-improvement, rewards & recognition, comfort are also very critical for improving the motivation level of employees.