How Much Money Should People Earn - Assignment Example

How much money should people earn? This is even if the resources that an organization is controlling are unlimited. This is a question that has seen a considerable number of debates amongst the stakeholders of an economy, and business magnates. Whiteley (2002) explains that money is not the major source of motivation, and this is because there are other factors that an organization should implement, which can result to an increase in the manner in which employees of a business organization or institution are motivated. On a general perspective, people would think that payment of higher salaries is an effective motivator. However, Thomas (2000) explains that without good working conditions, it is impossible for high salaries to be a good motivator to the employees of an organization. Thomas (2000) therefore explains that, the link between compensation, performance and motivation is very complex, and difficult to understand. Research indicates that if people were left to decide on how much money they should earn, then chances are high that they would not get satisfaction in their jobs. Human resource experts, who advocate for money as a motivator, also accept the notion that money alone cannot act as an effective motivator. Other factors such as a good working environment, cooperation between employees and the management, ability for growth are other motivational factors that are effective in increasing the morale of workers. The basic question to ask in this debate is on whether money plays a role in making our jobs enjoyable or not. Furthermore, the question to ask is whether high salaries play a role in motivating or de-motivating the employees of an organization. Whiteley (2002) explains that in as much as money is not the major motivator, in an organization, lack of good salaries can become a de-motivator. We are living in a capitalistic world, where everything we do, is monetized. It is very difficult to survive without making good money, or earning a good salary. The social status of an individual is also motivated, based on the kind or amount of money that he or she earns. It is based on these factors that employees of a business organization normally want to be paid high salaries, or a decent income for their services to an organization. Whiteley (2002) explains that a good theoretical framework that explains the importance of money is the Hierarchy of Needs theory, formulated by Abraham Maslow. The second level of these needs is security. Maslow explains that employees of an organization always have a desire of safety needs. Safety needs are always reflected or they manifest themselves in a variety of ways, and this includes job security, protection from unilateral authorities, insurance policies, etc. Security and safety needs normally include financial security, health and well being, personal security, and safety against the adverse effects of illness and accidents. It is impossible to achieve this level of need without having a good and proper salary or compensation. For example, it is impossible to get health security without a good medical insurance cover. This would cost money, because the policy holder will have to pay insurance premiums. Furthermore, it is also impossible to achieve financial security without good wages and compensation. This is because to have a financial security, there would be a need of investing the income an individual gets. This is difficult to achieve with poor wages and compensation structure. On this basis, lack of a good remuneration, is one of the major causes of de-motivation amongst the employees of an organization. Take for example a company such as Wal-Mart. Wal-Mart is one of the largest retailing organizations in the world. It is a multi-national company that has branches all over the world. The company is known for pursuing a cost leadership strategy. This is a strategy that involves the sale of its merchandises at a lower price when compared to its competitors (Tracy, 2013). To achieve profitability while pursuing this strategy, the company needs to look at areas whereby it would reduce the various costs of its operations. This includes a reduction of the administrative costs that the organization normally incurs. Based on these facts, Wal-Mart normally pays its employees very little wages, when compared to its competitors within the industry. The result of this action is that the company has been unable to retain approximately 50% of its workforce. Latham (2007) explains that Wal-Mart has an annual labor turnover of 50%. The major reason why Wal-Mart is unable to retain a large portion of its employees is based on the fact that it pays very little salary or wages to its workforce. This acts as a de-motivator, and it consequently leads to resignations. This is a proof that money, can act as a de-motivator, and hence there is a need of providing good remuneration packages to the employees of an organization. This is a strategy that has been effectively used by companies such as Microsoft, Apples, Samsung, Google, Yahoo, etc. These companies normally pay their employees good wages, and they have better motivational policies, such as opportunities for growth, recognition off an individual’s input, etc. It based on these factors that employees normally want to work for these organizations. Mcreynolds (2012) explains that high wages is the factor that attracts employees to these organization, while other motivational policies, such as reward systems, opportunities of growth, appraisal of employees, are factors that play a role in the retention of these employees. Money as motivators is a highly contested issue. Thomas (2000) believes that high salaries are the main cause of de-motivation amongst the employees of an organization. This is because employees would lack focus on whatever they are engaged in, as a result, they would begin to focus on how much money, they are being paid after accomplishing a certain task. Focusing on money, as opposed to focusing on work, would lead to inefficiencies, in the manner in which an organization achieves its objectives and aims. This is the reason why Mcreynolds (2012) explains that high salaries act as a de-motivator, as opposed to a motivating factor. Mcreynolds (2012) maintains that the use of money to motivate employees might act as a de-motivator, because the company may attract a lot of interest from prospective employees, some of whom do not have the necessary skills of handling the operations of the company. Chances are high that the company may recruit these employees, hence fail to get or acquire the right talent, for the operations of the company. This would mean that the company would fail to meet its objectives and aims. Based on this fact, Latham (2007) maintains that the best incentive is to initiate a good working environment, where people would work, and be motivated to excel. Furthermore, financial rewards should only emanate after the employees of the company have proved themselves to be effective. However, Mcreynolds (2012) maintains that the company or the organization under consideration should strive at paying their employees a decent income that can help them live decently. Failure to do, the company may witness a large labor turnover, making it difficult for the company to achieve its objectives and mission. Mcreynolds (2012) maintains that even if employees are able to earn a large amount of money, and it micro-manages its employees, then chances are high that the employees of the organization will not be motivated, and their performance will be low. Other factors that act as a de-motivator includes, lack of progress, job insecurity, and lack of confidence on the leadership of the company (Kanfer, 2008). For example, when employees of an organization are stagnant in one position, then chances are high that they may look for companies that offer them some growth opportunities. Lack of confidence on a leader can act as a de-motivator, because employees would not respect the leader under consideration. This would impact on the manner in which the organization achieves its own objectives and aims. Therefore, Latham (2007) explains that despite the existence of good monetary rewards or compensations, employees of an organization will not be effective if these de-motivators exist. In conclusion, many people are always motivated by money. This is because the higher the amount of money an individual has, the higher the social class that an individual under consideration enjoys. Furthermore, people who are earning a lot of money can manage to effectively carter for their daily needs. For example, they can afford health insurance; hence, there is health security. They can also afford to take their children to good schools, and eat good food. This is an aspect that almost every people want. However, the motivational aspect of money normally wears off. This is if the employees of the organization remain in their current level of remuneration or compensation. A variety of studies are able to prove the fact that even if employees are paid a considerable amount of money, money is not their main motivator. Most people are motivated by the kind of job they undertake, and their work environment. Based on these facts, it is therefore essential that the reward and compensation system that a company offers its employees, should comprise of non-monetary and monetary ideas. Bibliography: Kanfer, R. (2008). Work motivation: Past, present, and future. New York: Routledge. Mcreynolds, J. (2012). Motivational theories & psychology. Delhi: English Press. Latham, G. (2007). Work motivation history, theory, research, and practice. Thousand Oaks, Calif.: Sage Publications. Thomas, K. (2000). Intrinsic motivation at work building energy & commitment. San Francisco: Berrett-Koehler. Top of Form Bottom of Form Top of Form Bottom of Form Top of Form Bottom of Form Tracy, B. (2013). Motivation. New York: AMACOM, American Management Association. Top of Form Bottom of Form Top of Form Bottom of Form Whiteley, P. (2002). Motivation. Oxford, U.K.: Capstone Pub. Read More