Relationship between money and motivation

BBC - Future - Does money really motivate people?

relationship between money and motivation

Since the start of the ongoing financial crisis five years ago, complex picture of the relationship between money, motivation and performance. But what is the relationship between money and motivation? Does more income lead to higher productivity? It turns out, if you phrase the. Take for example the early research examining the relationship between viewing Locke compared four methods of motivating employee performance: money.

In some cases, common sense beliefs are just plain wrong. This is not true. An overwhelming amount of research indicates that we tend to be attracted to people who are similar to ourselves. The only way to know if money and job satisfaction really influence productivity is to look at the results of scientific studies.

Money and Motivation

Does money motivate employees? Not exactly a definitive answer, is it? Research studies sometimes have conflicting results. The reason has to do with the complexity of human behavior. Take for example the early research examining the relationship between viewing violent content on television and aggressive behavior in children. Early studies indicated that there was a relationship between these two variables and those children who watched violent content on television behaved more aggressively.

However, there were other studies that indicated watching violent television programs did not lead to increased aggressiveness in children.

Money and Motivation: A Shocking Contradiction | Benjamin Studebaker

Are all children alike? Children are different and they vary in their tendencies to behave aggressively. Some children behave aggressively on a regular basis and others will not even harm bugs they find in their homes, preferring to place them outside and set them free.

Do you think viewing violent content on television has the same impact on these two types of children? There is another reason why the early studies resulted in contradictory findings. The impact of viewing violent content on television is also determined by the amount of time spent watching such content. Later studies revealed that viewing violent television content over a period of years can result in greater levels of aggressive behavior in children, even in those who initially were not very aggressive.

Related Employee Surveys Employee Satisfaction Survey — Fairness factors into many of the key topics associated with an employee satisfaction survey.

Money, happiness and motivation

This key factor will play a significant role in improving productivity, job satisfaction, and loyalty. So, what does this have to do with employees?

Employee behavior is also very complex. When we ask whether or not money is a motivator we are asking a very broad question that makes predicting behavior difficult. Money is a motivator to an extent.

Money, happiness and motivation

Money is a crucial incentive to work motivation. It is a medium of exchange and the means by which employees can purchase things to satisfy their needs and desires. It also serves as a scorecard by which employees assess the value that the organization places on their services.

Employees can also compare their value to others based on their pay.

relationship between money and motivation

In addition to its exchange value, money also has symbolic value. John Stacey Adams, a behavioral and workplace psychologist, developed equity theory to explain this value. According to this theory, employees try to maintain equity between the inputs they bring to their job and the outcomes they receive from it.

This is compared to the perceived inputs and outputs of others in the organization. The theory states that employees perceive they are being treated fairly when the ratio of their inputs to their outcomes is equivalent to other employees they work with.

Fair treatment motivates employees to exhibit fairness in their relationships with co-workers and the organization. Reinforcement and expectancy theories also attest to the motivating power of money.

relationship between money and motivation

According to reinforcement theory, if pay is contingent on performance, it will encourage employees to maintain high levels of effort. According to expectancy theory, money will motivate to the extent that employees perceive it as satisfying their personal goals and to the extent they perceive their pay as being dependent upon performance criteria.

Some of the best evidence that money motivates employees to perform comes from the research of industrial psychologist Edwin Locke, Ph.

Money can buy happiness: Michael Norton at TEDxCambridge 2011

Smith School of Business at the University of Maryland. Locke compared four methods of motivating employee performance: In addition, Locke reviewed numerous motivation studies and found that when money was used as a method of motivation it always resulted in some improvement in employee performance.

relationship between money and motivation

It is clear that money is a motivator of employee productivity. First, I think emotional sources of motivation, such as feelings of relatedness and fairness, are more powerful in this context.

These are best conveyed informally through informal interaction, social networks and community, daily perception, respect of peers and the like. Second, having more autonomy motivates people. Much more interesting, however, is the fact that more money does not mean greater perceived autonomy. Ironically, employees usually have to give up autonomy in order to climb up the compensation ladder. Third, focusing on how people feel about their work is an effective way to motivate employees.

It is crucial to focus on the tasks and to identify positive aspects of the work process.

relationship between money and motivation

This will enhance motivation in a more effective way compared to just focusing on the consequences the reward of performing the task. These were only some thoughts about how to boost employee motivation.

Nevertheless, it becomes obvious that there should be a balance between intrinsic and extrinsic motivators and that there is a need for greater clarification of the relationship between money, motivation and performance.

A key problem of Organizational Behavior is the difficulty of measuring motivation using psychological tests and questionnaires. Fortunately, recent technological advancements in neuroscience enable to study thoughts and feelings more effectively through for example brain imaging.

  • The Truth about Motivating Employees to be More Productive
  • Does money really motivate people?
  • The difference between money and motivation

Hence, there is much potential for further research and surely a more and more detailed picture of the complex relationship between money, motivation and performance will arise in the coming years.