The main and primary motive of this paper is to outline and explain the significance of money and financial reward to attract and retain wide range of employees. The paper discusses how financial rewards and money help in maintaining favorable relationship with workers at the workplace. It discusses the benefits and drawbacks of these rewards and incentives. The essay also provides brief information about the managerial interventions that help in reducing and preventing cultural and ethical issues.
There are ample of pros and advantages of money and financial reward in the workplace. It is analyzed that money and financial rewards are also help in achieving long term goals and objectives of the company (Fryer Jr, 2011). It is one of the significant benefits of the money and financial rewards to motivate the workers. Furthermore, it also increases profitability and productivity of the firm as well. Money plays a significant and vital role in motivation and encouragement. Management makes use of financial incentives such as income, salaries, departure benefits, bonus, medical reimbursement, health insurance etc (Burton, 2012). to encourage and promote the employees towards the attainment of long term mission and vision. Money plays an empirical role in satisfying the needs, wants and requirements of the workers. However, these incentives and rewards might not always be inspiring (Bailey et al, 2018). Sometimes, management might have to augment the financial incentives to keep the workers within the corporation. It shall be noted that money and financial reward are really motivating element when the security and psychological needs and wants of the workers have not been fully attained. Money provides support in fulfilling the communal needs and wants of the workers to some extent just because money is generally known as a basis of esteem, power and status (Berdou, 2010).
Money is always be considered as a means of receiving a minimum standard of living. Employee incentive comes in various forms within the organization. The financial incentive programs and seminars are designed to inspire and motivate worker loyalty, trust and maximize performance and productivity among the employees (Burton, 2012). For all financial incentive programs and money, workers need to understand the criteria for getting the incentives and how the amount is identified. Money and financial incentives is easy tool to motivate the workers in the workplace. Rendering a monetary wage or reward maximize is also unique in terms of tax liability. In today’s modern era, employers and managers pay a maximizing attention to reduce cost and to enhance efficiency and effectiveness (Young, Beckman and Baker, 2012). When talking about financial rewards and incentives, it means that the manager and employer spend lot of money on the remuneration directly or the worker gets monetary reward. The financial rewards can be short term or long term motivators to improve and enhance the performance and productivity of the subordinates at the workplace (Mowday, Porter and Steers, 2013). These financial rewards also are able to provide job satisfaction and job security to the workers. Bonus and incentives motivate the workers to understand exactly what the company goals and how to achieve these goals in an effective manner. Bonuses and rewards benefit the workers and managers as well (Fullan, 2011). An employer and manager can also provide benefits and incentives to its workers as a way of compensation and a recruitment method to attract and encourage the workers in the workplace. All these are considered major pros of money and financial rewards. The benefits and rewards can be different from one organization to another. No company can survive and grow its business without using money and financial rewards within the organization. Along with this, monetary rewards are called financial rewards that given to the workers to encourage and motivate her or him. A possible way of doing this is through profit sharing. Performance related pay and wage also are considered monetary rewards. Various organizational theories can be applied in an organizational setting. These theories include Maslow’s theory and X and Y theory of motivation. The theory X and Y was proposed by Douglas McGregor. It explains two contrasting sets of assumptions that employer and manager make about their people. According to theory X, employees do not like work and they try to escape and avoid the work. In simple words, it is noted that employees dislike the roles and responsibilities (Latham, 2012). Theory Y suggests that workers can perceive their employment as normal and relaxing. They exercise their mental and physical efforts in a hassle free manner in their job or employment. If the employment is satisfying and rewarding then it will result in worker’s commitment and loyalty to the organization. It shall be stated that organizations should use theory Y to create a dynamic and unique working environment and culture at the workplace (Reiss, 2012). Theory Y also promotes and motivates decentralization of authority, decision making and teamwork. The employees shall be given ample of opportunities to contribute for organizational well being (Hung et al, 2011).
Maslow’s theory is proposed by Abraham Maslow in 1943. It consists a five tier model of human needs within a specific pyramid. The five tiers include self actualization need, esteem needs, belongingness and love needs, safety needs and physiological needs. Money and financial rewards help to fulfill the physiological and safety needs of the workers in an effective way. Maslow considered physiological needs the most effective and significant as all the other needs. Along with this, safety needs include security, stability, freedom and order. Thus, money helps to make good and reciprocal relationship with workers in the workplace. Belongingness and love needs are considered third significant need of Maslow’s theory. It includes intimacy, trust, acceptance and friendship. Furthermore, esteem needs include status, dignity, achievement and prestige. At the end, self actualization needs that include self fulfillment and personal potential. On other hand, money renders for the job security and satisfaction of security and physiological and safety need only which are called hygiene elements by Herzberg hygiene elements including salaries, wages and other fringe advantages (Turner, Chandler and Heffer, 2009). The existence of these components at a satisfactory level reduces and eliminates job disappointment. They are unable to provide job satisfaction and security to the employees and thus, they cannot be considered as motivational factors. Herzberg’s findings are based on various significant and unique research. According to Herzberg, it is essential to provide job satisfaction, and security for motivating the workers effectively and successfully. The employees can be motivated by money and financial reward only if the money is sufficient to increase and enhance their standard of living and status in the community. Therefore, good and dynamic management must create a motivational system that is proficient of fulfilling the various kinds of human wants and needs. Money and financial rewards help in making strong and good communication and collaboration with employees in a large extent (Nuttin, 2014).
Money and financial rewards provide benefits to the workers largely but it also consists ample of drawbacks that affect the capabilities and efficiency of the employees. One of the significant and biggest drawbacks of using money to motivate workers is that it is expensive process. Each and every time employer offers a bonus and reward or raise to workers in exchange for the productivity and effectiveness, thus employer has to give up some profit and revenue. Moreover, the workers may come to expect or demand a monetary reward and bonus for each and every time they exceed (Breines and Chen, 2012). Along with this, many times employee motivation tools and techniques do not involve money. Financial rewards may be less effective than non-financial rewards or incentives, especially over time. In this way, it creates ample of misunderstandings and barriers among the workers (Sadri and Bowen, 2011).
Due to lack of motivation, various organizational problems issues such as team problem, employees issue and job satisfaction issues would be encountered by the organization that can downfall the company in the competitive market. After the various analysis, it is stated that various cultural, ethical and social issues could be faced by top management and managers while initiating the business activities and operations widely. The ethical issues are related to code of conducts, norms and ethics and on the other hand, social concerns include values, beliefs and faith of the workers (Parker, Bindl and Strauss, 2010). Apart from this, cultural issues may affect the productivity and effectiveness of the employees. Thus, the company should maintain favorable working environment at the workplace to promote the workers towards the attainment of desired targets and goals (Eyal and Roth, 2011). It has been analyzed that various managerial, social and ethical intervention are formulated by the top management and managers. The managerial interventions help in preventing and dealing with the situation that precedes the behavior and culture. The aim of proactive strategies and policies is to reduce and eliminate the future probability of the action and behavior. On the other hand, reactive strategies are interventions that are used only once behavior occurs. Preventive and reactive are significant managerial intervention that helps in reducing various issues related to behavior, ethics and motivation (Dweck, 2013).
It is concluded from the above mentioned analysis that money and financial rewards play a vital role in encouraging and promoting the maximum employees in the workplace for conducting the business actions and functions effectively. These financial rewards and money also help in maintaining strong and powerful relationship with employees at the workplace. The paper outlines the demerits and merits of these rewards and incentives in a large extent.
References
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