Financial motivations essential to achieve goals


Because of the importance of being more competitive in the market, to effectively motivate employees is vital to a business because employees who are highly motivated will lead to high productivity at work. Both financial motivation and non-financial motivation are utilized by businesses in order to motivate their employees and achieve business goals. Financial motivation aims to satisfy employees' needs through financial rewards, such as extra payments. Separately, non-financial motivation aims to motivate employees through non-financial rewards, such as job enrichment. However, non-financial factors are frequently overlooked in the workplace by businesses, which lead to more employers considering that financial motivation is more effective. This essay will discuss financial motivation, including Maslow's hierarchy of needs and Taylor's scientific management, and non-financial motivation, including Herzberg's two factors theory, as well as the necessity of combination of both financial and non-financial motivations.

According to Hall et al. (2008), the majority of firms utilize financial motivation because financial rewards are regarded as the vital purposes to work by a significant number of employees. Frederick Taylor argues that money is the most appropriate motivation to maintain high productivity in his scientific management theory (Hall et al, 2008). According to Tutor2u (n.d.a), Maslow divides the needs of people into a 'hierarchy of needs' pyramid, which includes physiological needs, security needs, social needs, esteem needs and self-actualization. To satisfy employees' different level of needs, businesses utilize various financial motivational methods. To begin with, providing fringe benefits to workers, such as health insurance or company cars, might benefit both companies and employees. According to Maslow's hierarchy of needs, fringe benefits could satisfy the physiological and security needs of employees (Hall et al, 2008). For example, Sony UK has set working policies more flexibly to provide workers more fringe benefits, such as eldercare needs, which led to an increase of motivation to employees (Debbie, 2010). Moreover, according to Hall et al. (2008), business shares profit with employees may satisfy employees' social needs, and may directly lead to employees being more motivated to achieve objectives. In the case of John Lewis, employees are highly loyal because of 'happiness'. To maximize the happiness of employees at work, John Lewis utilizes profit sharing to represent 'egalitarianism' between workers and shareholders, which means the profits flow to employees rather than shareholders. Thereby, employees are more loyal to the company. Besides, performance related pay is frequently utilized by business to set a distinction of performance level to incent employees to work harder. For example, 'one worker may be rated excellent and receive a ten percent bonus, another good and receive a five percent bonus, another satisfactory and receive no money' (Hall et al, 2008: 383).

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In contrast, there is a considerable number of workers prefer non-financial rewards rather than financial motivation. Hall et al. (2008) mentions the necessity of identifying non- financial factors which are considered more important by employees. Herzberg argues that motivator and hygiene are two factors which might cause job satisfaction or dissatisfaction (NetMBA, 2007). The existence of non-financial rewards in the workplace, for instance recognition, more responsibilities and challenges at work, will lead to an increase of motivation (Tutor2u, n.d.b). To begin with, enriching in jobs is one successful motivational method in which workers will get more opportunities or challenges to develop comprehensive career abilities. Nick Read, the chief executive of Vodafone, emphasizes that companies should focus on employee training because what talented workers really need are different types of experiences instead of material rewards (Times Online, 2007). In the case of McDonalds', invests in their high level training systems to focus on developing their employees to increase motivation. According to The Sun (2008), employees at McDonalds' can now successfully run hamburger bars which are world-class. Furthermore, to encourage employees, team working has also been adopted by businesses particularly in car companies. The complex work in car companies leads to team-work being necessary; working in team thereby can lead to an increase of motivation (Hall et al, 2008). For instance, workers who are skilful in Honda UK are working in teams in order to increase productivity. Additionally, employees may consider that work-life balance is more important because of the stress. For instance, a number of entertainments were designed by Sony UK where employees can relax after work, such as playing games on Sony Playstations in order to reach work-life balance and maintain high productivity (Debbie, 2010). Consequently, non-financial rewards are regarded as important elements of work by a number of employees.

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In reality, although more employers are considering that financial motivation is more effective, the sole utilization of financial motivation would result in a considerable number of problems. According to Tutor2u (n.d.c), profit sharing may cause job dissatisfaction. Hall et al. (2008: 384) mentions that 'employees at John Lewis will receive a profit handout of more than twenty percent of their salary in a good year'. Although John Lewis can provide egalitarianism between employees and shareholders, merely a few share of profit could be earned by each employee when recession occurs; thereby result in a debate on whether sharing profit can effectively motivate employees (Hall et al, 2008). Moreover, performance related pay may result in dissatisfaction at employees' physiological and social needs (Hall et al, 2008). In the case of the failure of an employee to achieve satisfying extra payments may result in de-motivation rather than attempt to improve performance. Additionally, Herzberg argues that employees' needs cannot be satisfied by solely utilizing financial motivation, because the development from non-financial rewards, such as more challenges and opportunities are extremely important to employees. In the case of Tesco supermarket, which is becoming the largest private sector employer in the UK, resulting from making employees feel more satisfied. According to Tesco (2010), the combination of financial and non-financial motivation leads to the success in motivating employees. Tesco shares success with their employees, which is reflected in employees have personal bonus and opportunities to discuss ideas which are more favorable to their work in the Viewpoint survey each year. Obviously, what employees concern about are not solely financial rewards, but other more important rewards from the company. Tesco supermarket sets financial motivation as the primary motivator, while non-financial rewards as the secondary motivator, which leads to benefits to both the company and employees, because happier employees will lead to consumer services being better (Tesco, 2010). Thereby, it can be proved that if a company aims to effectively motivate employees, both financial and non-financial motivation are vital.

In conclusion, Taylor mentions that financial motivation could be more effective to motivate employees, such as fringe benefits, which can satisfy employees' physiological and security needs. As Maslow's hierarchy of needs and Herzberg's two factors theory to motivate employees and maintain high productivity at work, managers usually utilize non-financial motivational methods, such as job enrichment. Nevertheless, a lack of consideration of motivation may directly result in de-motivation of employees at work, such as the failure to receive satisfying extra payments. Briefly, because of the result of high productivity from well motivated employees, it is vital for managers to set financial motivation as the primary motivation whilst non-financial motivational methods as the secondary motivation to incent employees and easily achieve business goals.