Pay as Motivator

Is the paycheck a motivator of performance (why or why not?)

Abstract

This article emphasizes, based on literature survey, that in spite of the existence of the many perquisites, money is still the single most motivating factor for a person to work and perform in the organization. Compensation should consist of only two elements basic pay and short-term rewards in cash. The perquisites which come in an intrinsic form should be reduced; but, in practice, to satisfy the ego and prestige of the executives, one cannot reduce all the perquisites. Under these circumstances, the perquisites should be converted into cash and paid to the executives. One should take a short-term vision with regard to performance recognition and motivating employees, as long-term is very uncertain. Moreover, the gap between high salary and low salary is very high in the corporate world and also the working conditions are inhuman in most conditions. These conditions are against corporate governance and if the corporations don't improve in time, then a time will come when shareholders will pressurize the management to usher in changes.

Is the paycheck a motivator of performance (why or why not?)

Introduction

Compensation and motivation are inextricably interwoven as weft and warp in the fabric of management. Various theories of motivation and how they impact executive compensation are briefly discussed. This will, hopefully achieve the following two objectives of this paper:

To argue that executive compensation has transcended all norms of equitable distribution of surplus earned by the corporation and it has ceased to motivate employees at middle and lower levels.

To argue that in view of present evidence, extrinsic rewards, particularly money, is much more important than intrinsic rewards and therefore, compensation should be predominantly in cash based on short-term performance.

As expectancy is the person's belief by its ability in order to improve performance and achieve the required performance. When the worker is doing what in four hours and then determined that the award has done work in the quarter of an hour he would not think to try because it's impossible for him, but if someone tells him that the prize will be awarded to those who perform work in three hours and a half or three hours, it may seriously consider the effort to achieve that goal. Consequently, it's certainly tempting to believe that money can buy happiness in the corporate world, at least when it comes to employees' jobs.

This research paper discusses the factors of motivation that impact the performance of an employee at an organization. The paper focuses on whether pay check acts as a motivating factor for the performance of employees.

Discussion

Wood et al. (1994) defines organizations as collections of people who are working together and cooperating based on a division of labor in order to achieve a common purpose. Generally, it is impossible for the owners of an organization to achieve their organizational objective on their own. Researchers have described two types of motivation according to the source of reinforcement for the work: extrinsic and intrinsic ...