The Only Way To Motivate Employees is by Giving Them More Money


It is undeniable that managers and employees in the workplace use high salaries and bonuses to not only attract workers but to also motivate and retain them. Motivation plays an integral role in the workplace. However, its absence could be a major issue for managers and employers. for instance, its absence could result to decreasing productivity, increased rate of absenteeism, and passive behavior (Dobre, 2013). Thus, it is necessary for managers and employers to motivate employees at all levels. Small and large companies motivate employees through the use of different methods. For instance, some use bonuses and salaries, while others improve the working environment, relationships in the workplace, training, and development, and other motivational strategies. The reason why employees must be motivated is to retain them in the workplace, increase productivity, and create a competitive edge over competitors (Lunenburg, 2011). Companies rely on the expertise and skills of the workforce to gain a competitive edge and reduce employees turnover. The paper evaluates theories of motivation in relation to the statement: the only way to motivate employees is by giving them more money. The theories evaluated and discussed with regard to their applicability in today’s workplace are: Maslow’s hierarchy of needs, Vroom’s expectancy theory, and the Hertzberg’s two factor theory. Money is not the only approach that can be used by an organization and its management to motivate employees.

Motivation in the Workplace

According to Ball (2012), motivation is the act of promoting a goal-related behavior within an organization with the aim of achieving organizational and strategic goals. It is the inner energy that makes employees in the workplace to undertake a particular action. In addition, it strengthens employees’ ambition, provides direction, initiates initiatives, and the determination to follow set goals (Borstorff & Marker, 2007). Notably, motivation could be external or internal. La Brosse (2010) established that managers are supposed to create a workplace culture that promotes motivation of the employee. Lack of adequate degree of motivated behaviour in the workplace can negatively affect the productivity and behaviour of employees.  Dobre (2013) noted that motivation is a powerful tool which is used by organizations to reinforce behavior and initiate the urge to continue. Thus, motivation is an internal drive employed to satisfy employees’ unsatisfied needs and to realize a specific goal. It is can be perceived as a procedure that starts via physiological as well as psychological needs, which encourages people to perform and achieve an objective. Kallimullah, Yaghoubi, and Moloudi (2010) pointed out that motivated employees have their goals in line with those of the company and guides theirs efforts to that direction. Motivating employees allow them to realize their full potential at the workplace.

Each employee looks forward to earning reasonable salaries because money is representative of the most important form of incentive. This is because money has an influential value that compels employees to feel motivated to work and be productive (Spector, 2003). More importantly, financial rewards are regarded as resources that have the ability not only to maintain but to also motivate persons towards higher performance, particularly employees from production companies, because people may use the monetary rewards to satisfy their personals needs (Dobre, 2013).  Thus, pay which is provide in form of money a significant effect because it establishes employees’ commitment and diligence, making it a primary motivator. However, past studies have indicated that that money in terms of bonuses, pay, and rewards do not necessarily boost productivity in the workplace in the long run (Whitley, 2002). Furthermore, money does not significantly improve employees’ performance, although it can be used to motivate employees in the short term. Moreover, when an organization focuses more on money, employees’ attitudes may deteriorate, because they might only pursue financial gains. However, there exist other non-financial factors such as social recognition, rewards, and performance feedback that that positively influence motivation.

 Employers are motivated intrinsically and extrinsically. When employees are extrinsically motivated, it implies that motivators are applied to influence the efforts of an employee to increase performance (Colquitt, Lepine & Wessen 2009). Monetary compensation is used by managers and employers to motivate employees and indirectly satisfy their needs, most significantly via monetary compensation. Thus, “Extrinsically motivated coordination in firms is achieved by linking employees’ monetary motives to the goals of the firm” (Nelly, 2004, p. 109). The ultimate motivation system is focused on pay-for-performance. Money though necessary motivates not offer direct utility but it acts as an incentive to attain desired services and goods. Furthermore, rewards are efficient tools that can be used by management to influence a person or group's behavior, to increase an organization’s effectiveness. The majority of companies apply to pay, bonuses, promotion, and other forms of rewards to significantly motivate employees and at the same time to increase their levels of performance. Nelly (2004) established that in used to use salary, wages, and bonuses as motivators, managers are required to design and implement salary structures, based on the importance of every job, special allowances, and individual performance in the workplace.

Money acts as a motivator to employees and improves productivity. Nonetheless, for money to motivate people, certain conditions must be realized. For instance, money must not only be important but also perceived as a direct reward for better performance (Reed, 2013). In addition, it must be perceived as the marginal amount of money provided for the performance as important. Lastly, it is for the discretion of the management to reward high-performing persons with more rewards in terms of money (Reed, 2013). Money when used to motivate workers culminates into temporary obedience from workers and it cannot be used to transform the behavior and attitude of workers in the workplace (Kochan, 2002). Employee pay satisfaction has an influence on job satisfaction and it can result in higher worker productivity.

Motivation Theories and Applicability in the Workplace

Maslow’s Hierarchy of Needs

The Hierarchy of Needs Theory was developed by Abraham Maslow. The motivation theory is based on the Hierarchy of Needs Theory; each person has five hierarchy needs that must be satisfied before one pursues the needs in the next level.  Maslow (1943) believed that when an employee has been satisfied with the job, that person is motivated to purses the next need (Armstrong, 2009).  Maslow (1946) established five levels of hierarchy that have to be self-actualized. Thus, employees in the workplace have various personal needs related to the condition of jobs and the environment. Maslow’s hierarchy of needs includes social needs, safety needs, esteem needs, psychological needs, and self-actualization needs.

Maslow’s motivation theory stated that in the workplace, employees need to realize a sense of achievement, care, and support.  For instance, in order to realize basic needs, rewards such as bonuses or an increase in salary could help employees in the workplace to achieve self-actualization (Gorman, 2003). Physiological needs are significant in life and they comprise food, water, air, and sleep. Maslow noted that when these needs are not achieved, other needs can be used to motivate the employees. Employees require safety needs that are related to the need to feel safe, physically and emotionally. Psychological needs include medical insurance, job security, and financial reserves. Huitt (2007) pointed out that money can be used to motivate employees to achieve psychological needs.

Social needs include social interactions, a sense of acceptance, affection, belonging, and friendship. Maslow (1946) noted that self-esteem needs are related to the feelings of self-confidence that are acquired when a person achieves something.  Jerome (2013) noted that self-esteem needs can be provided not only in financial or monetary means but also through spiritual means and mental motivations, including recognition and praises. In the workplace, it is, therefore, the role of the management to set specific awards, rather than monetary needs to achieve specific goals and tasks. In addition, the awards must not only be monetary motivations, they could also include employees promotions founded on achievements, instead of seniority to make them feel valued and appreciated. Self-Actualization needs are such as wisdom, justice, and truth, and they are related to the realization of dreams and potential needs. These needs cannot be achieved through money or bonuses, but they can be achieved by challenging employees to undertake assignments that compel employees’ to explore creativity and innovation ability (Jerome, 2013).

Hertzberg’s Two Factor Theory


Herzberg Theory was developed in 1959 and it is based on two factors that are believed to influence motivation at work. The two factors are hygiene factors and motivation factors, and they determine what causes employees’ satisfaction and dissatisfaction in the workplace (Herzberg, 1968).  The theory also referred to as the motivation-hygiene theory is based on assumption that motivation emanates from the job itself, and not from other external characteristics. In addition, the motivation factors lead to job satisfaction, whilst hygiene factors lead to job dissatisfaction (Herzberg 1966). Some examples of hygiene factors are such as level of supervision, work conditions, job status, interpersonal relationships, and remuneration (Herzberg, 1966). On the other hand, motivators positively influence work situations, resulting in improved productivity. This may include motivators such as recognition, an increased degree of responsibility, promotion (Herzberg, 1966). Herzberg (1974) pointed out satisfiers and dissatisfiers determine the level of job satisfaction in the workplace. Satisfiers are related to the type of work, whereas, dissatisfiers focus on the treatment of employees in the workplace. Managers are advised to focus on hygiene factors to increase satisfaction before they can focus on motivation factors.

Hygiene factors must be fulfilled in the workplace to fulfill the pain avoidance needs of the employees. Examples are such as security, salary, company policies, and working conditions. Hygiene factors negatively influence job satisfaction, but motivation factors are used to motivate employees in order to be satisfied. Bassett-Jones and Lloyd (2005) noted “Herzberg’s results have been translated into the axiom that while inadequate financial reward can demotivate, nevertheless, beyond a limited threshold, money is a hygiene factor and does not motivate” (p. 932). Thus, unlike Maslow’s Hierarchy of Needs, money is not always a motivational factor to the employees. Thus, when money is beyond the minimum threshold, it is no longer a motivator, rather than a hygiene factor (Herzberg, 1966). This is contrary to the point made by Colquitt, Lepine, and Wessen (2009) that money was a motivating factor and it can be used in terms of bonuses, increase in salary and wages and paid leaves and rewards to motivate employees.

 When the efforts of employees in the workplace are recognized and accorded in form of money, employees are motivated. Tan and Waheed (2011) used Herzberg’s dual-factor theory and found that making additional money was a motivating factor, although achievement in the workplace was regarded as the highest motivating factor for employees to perform in the workplace. Chances of recognition and promotion were ranked third below achievement and making more in the workplace.  This is supported by Kochan's (2002) findings that money only motivated workers who sought further rewards, and it is not related to the workplace, job satisfaction, and productivity. Thus, money can be an undermining factor for the intrinsic interest of employees in their jobs. However, as Maslow's hierarchical needs theory established, money in form of salary and bonuses is only useful when applied for lower levels needs, including security and physical needs. Therefore, rather than concentrating on money, Herzberg's theory pointed out that managers and employers must concentrate on motivators through the provision of employment opportunities, including career development and training, and career advancement (Ramlall, 2004). Dartey-Baah  and Amoako (2011) have criticized the use of employees from the industrial sector to explore what motivates employees. This is because not all workers derive motivation from Herzberg’s ‘motivator needs’, because some of the employees could be more motivated by hygiene needs such as money.

Vroom Expectancy Theory

 Developed by Victor H. Vroom, the Expectancy theory is based on the supposition that employees efforts result into improved performance, while the employees are expected to be rewards. Rewards can be negative or positive. Positive rewards motivate employees, while negative rewards include suspension or punishment, and are less likely to motivate the employees (Vroom, 1964).  Fang (2008) noted that the "Expectancy theory proposes that work motivation is dependent upon the perceived association between performance and outcomes and individuals modify their behavior based on their calculation of anticipated outcomes" (2). Thus, a person performs at a specific level because they expect the organization and management to reward them. The Expectancy Theory is based on Valence, Instrumentality, and Expectation (Spector, 2003). Isaac, Zerve, and Pitt (2001) pointed that the theory is based on the supposition that employees need to increase pleasure and abstain from pain linked to work.  With reference to valence, Isaac et al. (2001) contended that employees in the workplace are attracted by the value given by the leader through rewards. Such rewards include time off, appreciation and recognition, and monetary motivation. Thus, in the workplace, the Expectancy theory is applied to motivate employees through money in terms of bonuses.

Lunenburg (2011) pointed out that Vroom’s expectancy theory is different from other theories such as Maslow’s, Herzberg’s, and McClelland’s because Vroom’s theory only provides the cognitive variables which can be used to show that changes in work motivation. Thus, it fails to provide specific suggestions on the kind of attributes or rewards that motivates members. Thus, although points out that there is performance-to-reward expectancy, effort-to-performance expectancy, and reward valences, it is different from Herzberg’s and Maslow’s hierarchy because it focuses on what employees focus on (Lunenburg, 2011). Thus, when an employee believes that money can motivate them and perform better, then that is the kind of reward which is accorded. Love for money is just a reflection of the wants and values of an employee, and a person who values money more than other factors such as promotion is satisfied with an increase in salary and bonuses. Thus, from the Expectancy theory, a salary that is satisfactory to the employee increases the desire to work more and be committed in the workplace. However, money cannot be enough and people will always want more money, which can be an expectancy of some employees.


Money is used to motivate employees, but it is not the only motivator that could be used by managers and employers to motivate employees. When employees are motivated they perform better. Thus, money motivates employees’, although it does not significantly improve performance in the short term. However, money can be a motivator to some people, while to others it sets room to pursue further rewards. Vroom’s expectancy theory, Hertzberg’s two-factor theory, and Maslow’s hierarchy of needs theories of motivation have all established that money can be used to motivate employees. However, the Hierarchy of Needs Theory established that people have other needs such as social needs, safety needs, esteem needs, psychological needs, and self-actualization needs that have to be satisfied and not necessarily by money. Herzberg's Theory established that though money can motivate people in the workplace, too much of it can be a demotivating factor. Thus, employers should pursue motivation factors such as recognition, increased degree of responsibility, promotion, rather than health factors such as money. The Expectancy theory is based on assumption that employees’ performance is rewarded, and money can be used as a reward. Employees who are driven by money tend to perform better if the salary is high.




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