The Long Road

06/11/2004 Archived Entry: "MSCI A2"

Money is not the ultimate motivator.

Money can only have a small influence on those for whom it doesn’t matter. A person in need of financial resources will be more motivated to obtain the rewards, while the person who is not in need of money will be looking for some other form of satisfaction from their work. For example, based on Maslow’s hierarchy of needs, someone who has their material (physiological, safety) goals fulfilled will be less motivated by money since it cannot buy any of the higher needs (love, esteem, self-actualization).

When working for a monetary reward, the actual work can sometimes be lost in the desire to obtain the reward. This is analogous to some students who when studying for an exam and want to get good grades, the reward in this case, will not study to learn and understand the material because they are interested in it, but instead study specific questions they know will be on the exam, or memorize the steps to a mathematical proof without understanding the semantics of it. Although the student may get a good mark for having studied “to the exam”, their understanding of the material is fleeting and incomplete. Likewise, an employee who is working with the sole goal of obtaining a reward may take shortcuts, and not do the job to the same level they would if they were interested in the work itself.

Likewise, a monetary reward for a set of specific goals can limit the quality of work being performed. As Alfie Kohn stated, with a monetary incentive in place, an employee’s goal becomes receipt of the reward over the actual work. This can lead to employees being motivated to work “just enough” to achieve their goals but not going above and beyond the call of duty since there would be a lack of reward beyond that point. An employee doing work the he or she enjoys is likely to work passed the pre-set goals because they have an intrinsic interest in their work and its quality.

Monetary incentives can also stifle risk taking. For example, a major video game company recently instituted a reward system wherein the developers behind a game get bigger bonuses depending on amount of positive reviews a game garners. A possible outcome of this new system is that developers become afraid of spending time on designing new gaming techniques, which may prove to be neither entertaining nor popular, and instead focus solely on new variations of existing games which are guaranteed to sell. There is no external motivation to develop something new and different when it is possible for the developers to simply make a fun game based on a proven model and receive greater financial rewards for doing so. This would be a result of Kohn’s theory that obtaining rewards would supplant any internal motivation to take a risk when taking that risk might not lead to being rewarded.

Replies: 5 comments

That first line still pisses me off! Good essay tho.

Posted by Hyperion @ 06/11/2004 11:20 PM EST

the first line is a little ... drastic ... and it's not really a black and white issue

and money can be an extremely important motivator ... it all depends on the situation ... also you have to look at the whole design of the rewards system ... not just the reward itself ...

sure some systems might penalize failure so that employees will choose the safe bet over the innovation ... but not all systems are like that ... for example, one of the biggest innovators in the world, 3m ... they reward trying

and sure not everyone is motivated by money (blah blah maslow ... it's not followed that much anymore in organizational behaviour as their are more refined models to look at ... some based on maslow ... but others not ... maslow is just a good starting point) ... but some ppl are extremely motivated by money ... and even when some ppl get all the money an individual could possibly need ... they want more and more (e.g. warren buffet, donald trump, etc, etc)

sales people are often motivated by money and there have been experiments in changing from individual monetary rewards to team rewards and that hasn't work out so well ... showing that those individuals would rather have the money for themselves than work to make money for everyone (if that makes any sense)

those are my comments for now

(p.s. you used the wrong "passed" at the end of the second last paragraph ... if you haven't handed it in yet)

(p.p.s. good use of examples *giggles*)

Posted by melpie @ 06/14/2004 09:50 AM EST

Mel, why not say third paragraph rather than second last paragraph???...:P!

Posted by dAN @ 06/14/2004 11:02 PM EST

The question that was asked is "Is money the ultimate motivator?". I took it as "Can money motivate anyone into anything", and my answer is no.

Yes, there are some people who'll do anything for the $$, I would never refute that.

Also, for the salesman example, would money be able to motivate him/her into teamwork?

Funny thing is, I looked at that "passed" for a bit thinking it over but decided to go with it.

Posted by Rayne @ 06/15/2004 12:46 AM EST

dan ... i wasn't sure whether to call it the third or the fourth paragraph ... b/c the first line is kinda like a stand alone paragraph

and rayne, money definitely isn't the ultimate motivator for many ... there have been studies done to show that people would much prefer a happy work environment, prestige, good benefits, recognition, etc etc, over money

but it sure is one heck of a powerful motivator (e.g. survivor, fear factor and the like)

Posted by melpie @ 06/15/2004 09:30 AM EST