Organisational Behaviour: The Role of Money in Motivation - Essay Example

?Organizational behavior: The role of money in motivation Introduction Organizational behavior defines the study of the effects of actions on an organization. Individual members or groups within an organization or the organization itself may initiate such actions. Motivation is an example of organizational initiatives that triggers behavior among employees. This paper seeks to discuss the role of money in motivation. The paper will explore the influence of money as a motivation factor and the relationship between the motivation factor, management, and improvement of organizational behavior. The role of money in motivation Money, being a common medium of exchange, is recognized and desired by almost every individual in an organization. As a result, money factor influences people’s behavior, either positively or negatively. Motivational theories such as the Maslow’s theory of needs and McClelland’s theory for example explains the motivational drive that employees derive from advancements such as monetary awards in remunerations and rewards. “Maslow’s hierarchy of needs” theory explains that human beings are motivated by the drive to satisfy needs. The hierarchical postulation of needs, according to Maslow, offers the general opinion that availability of resources for satisfying needs will motivate employees in an organization towards positive behaviors. As a result, Maslow’s theory of motivation identifies money as a motivational factor in an organization. Maslow’s postulate that human need never end, and that satisfying a need results into another need for motivation implies that availability of rewards such as money would continually motivate employees in an organization. This identifies money as an instrumental tool towards motivation (Armstrong, 2009). Armstrong explains that money is a common reward that is appreciated by a majority of employees. The author however argues that money can have both negative and positive motivational impacts. While failure to offer monetary rewards to members of an organization may demoralize them, provisions for such rewards may motivate or fail to motivate. Money may also fail to motivate because of diversity of people’s needs. A person who does not value money may for instance not derive motivation from monetary reward. A recipient’s capacity to attain set objectives for rewards also explains effectiveness of monetary rewards in motivation. While a person with the potential and confidence to attain the desired objectives is motivated by rewards in money, incompetent individuals or those who lack confidence in a task often respond negatively to rewards. Money therefore plays a dual directional role in motivation (Armstrong, 2009). Benabou and Tirole (2003) further explains that in cases of positive impacts of money, effectiveness in the motivational role decreases with time, an indication of psychological aspects. The psychological role of money in motivation is further explained by the fact that people do not only value the reward in money but also attach it to other factors. Fairness for instance plays an instrumental role in motivational effects of money. An unfair reward, with this effect fails to achieve motivational roles. Research has also shown that money may improve people’s utility in their jobs without necessarily motivating the individuals to higher performance (Armstrong, 2010). Similarly, money plays fundamental social role in motivating workers in an organization. Social needs, based on Maslow’s motivational theory as well as McClelland’s theory explains money’s social role in motivation. The need for “achievement, affiliation, and power” for example generates utility in money that in turn develops motivation (Armstrong, 2009, p. 125). The need for social identity and association with a respectable social class that are attainable through financial capacities further explains the indirect role of money in motivation. This means that besides the derived utility from rewards, people are motivated to work harder and generate more income as a tool to gaining social status. Mukherjee also supports the opinion that money, as a medium for satisfying needs, motivates individuals into gaining capacity to satisfy the different Maslow’s category of needs besides direct motivational factors of rewards (2005). This classifies the motivational role of money into two categories. While rewards in basic remunerations create utility into motivation, other rewards such as ‘performance-based’ rewards motivates employees to work towards achieving the rewards. Money therefore plays both pull and push roles in motivation (Mukherjee, 2005). When offered after successful completion of a task, especially when the recipient had no prior knowledge of possible reward, money boosts “self esteem or intrinsic motivation” (Benabou and Tirole (2003, p. 504). This is because rewards after achievement appreciates specific ability and builds confidence. Money therefore plays a significant role in motivation. While it may not greatly impacts individuals who value its worth and may negatively affect those who are incompetent to achieve objectives, money used as a reward motivates people through both social and psychological factors intrinsically or extrinsically (Benabou and Tirole, 2003). Relevance to managing organizational behavior The role of money as a tool towards motivation establishes its relevance and significance in managing organizational behavior. The established motivational aspect of money for instance corresponds to managers’ duty of controlling productivity levels in an organization. Based on the scientific management approach that advocates for a productivity oriented reward system, money can be used by the management to motivate employees’ behavior towards high productivity levels. Managerial decisions towards effective monetary reward systems will therefore positively change employees’ attitudes and commitment levels towards achieving set objectives (Saiyadain, 2009). The scope of managing organizational behavior that includes “identifying the behavioral challenge, identifying the cause of current behavior, and choosing a strategy for attaining behavioral goals” also identifies the relevance of motivation role of money in management of organizational behavior. Management identifies possible remuneration problems that negatively affect employee behavior into performance. Decisions can then be made over necessary efforts to rewards employees for higher performance (Sweeney and McFarlin, 2001). Guidelines to improving organizational behavior The relationship between money and motivation as factors towards organization’s behavior and the relationship with managerial role means that motivational strategies can be applied towards influencing organizational behavior. Armstrong explains that developing “policies and practices” towards higher performance levels are examples of guidelines that influences organizational behavior (2009, p. 322). Such guidelines may include adoption of “total reward systems and performance management processes” as well as motivating employees (Armstrong, 2009, p. 332). Conclusion The central role of money in satisfying human wants has established it as an instrument towards motivation in workplaces. Explained through motivational theories among other avenues, money plays both social and psychological roles in motivating employees either intrinsically or extrinsically. Application of monetary rewards may however have negative effects instead of motivating employees, especially if the reward system is poorly designed with highly set targets. The role of money in motivation therefore directly relates to management whose strategies influences organizational behavior. References Armstrong, M. (2009). Armstrong's Handbook of Human Resource Management Practice. London, UK: Kogan Page Publishers Armstrong, M. (2010). Armstrong's Handbook of Reward Management Practice: Improving Performance Through Reward. London, UK: Kogan Page Publishers Benabou, R. and Tirole, J. (2003). “Intrinsic and extrinsic motivation.” Review of economic studies. 70. P. 489- 520. Mukherjee, S. (2005). Organisation & Management And Business Communication. New Delhi, India: New Age International Saiyadain, M. (2009). Human Resources Management. New Delhi, India: Tata McGraw-Hill Education Sweeney, P. and McFarlin, D (2001). Organizational behavior: solutions for management. London, UK: McGraw-Hill Irwin Read More