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Is Money The Best Motivator In A Business?

Updated on March 29, 2016

Introduction

Is it all about the money? This is the key question that entrepreneurs, managers, employees and individuals need to ask themselves. What motivates workers? What inspires geniuses? What stimulates entrepreneurs? Is it really money that governs our every action? No. Money provides a short term solution to problems, however it is not sustainable. It is essentially “money, combined with other non-financial rewards that plays a key role in motivating people in the workplace”. Let us examine this statement by doing an in depth research of the advantages and disadvantages associated with using money as a motivational tool. We will explore said statement by considering the long term effects on sustainability as well as the short term consequences.

Short Term Effects

First we shall delve into the short term effects of using money as a motivational tool for workers. There certainly is evidence to suggest that in the short term there are more advantages than disadvantages. Take an example of a bright, young lawyer out of college. He/she will certainly be persuaded by the prospect of more money as a first pay cheque. Another example is a man in the lower income bracket, struggling to feed his family. He will definitely be drawn to a company offering him a package with more financial incentives. He is not bothered much by his own well-being or gaining the respect of his acquaintances as a primary motivator. In this way it is safe to conclude that money can be used as a gateway motivator. A gateway motivator is used just to attain and retain the services of an employee but provides no guarantee of his/hers work ethic in actually doing the job at hand. This leads us to the ‘smoking gun’ of financial incentives. There is no long-term sustainability in providing money as a motivator. This is not just an opinion. There is ample evidence to suggest this.

"Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants"- Benjamin Franklin
"Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants"- Benjamin Franklin

A Primary Example Of Why Money Doesn't Motivate-Jeffrey Skilling

Jeffrey Skilling is a perfect example of why money is not the best motivational tool. A man primarily obsessed with the fame and riches. This led him to become greedy eventually leading to his downfall and consequent conviction in 2006. Bernard Madoff is another prime example; he was the mastermind in what some consider the largest fraud scheme in the history of the United States of America. He eventually got convicted in 2008. We can go beyond this and look at ‘The American Dream’. A concept used to ensure that hard work and professionalism would pay off. Don’t get me wrong the concept is perfect but human greed and their unending need for overwhelming wealth corrupted this dream. Once again a case wherein money as a motivator lead to detrimental effects. This epitomises the fact that money is probably not the best way to encourage desirable behaviour from a moral standpoint, it is probably the worst way to do so.

Pros and Cons

Let us now take a closer look at the advantages and disadvantages of using financial and non-financial incentives to motivate people in the workforce. Financial incentives as I have mentioned above is a gateway motivator. This means that when combined with non-financial incentives money can lead to ultimately motivating the workforce in a sustainable long term manner. It is a process. Financial incentives will need to be provided to get workers in the door, but from there non-financial incentives will need to be implemented to keep workers motivated. These non-financial incentives can range from person to person. Each individual has his/her own needs. It is the responsibilities of businesses to discover theses needs if they are to be successful. So what does motivate better than money?

"Money won't create success, the freedom to make it will."- Nelson Mandela
"Money won't create success, the freedom to make it will."- Nelson Mandela

Evidence Against Financial Incentives- Frederick Herzberg

For those who follow the authority on motivating employees, Frederick Herzberg, will certainly believe that workers are encouraged by the actual nature and interest factor of their jobs. Recent studies conducted by the neuroscientist Jeffry Schwartz, suggested several motivators that influenced worker behavior more than money. He believed that people want to progress and elevate their status in an organisation. This does not necessarily mean a promotion. A simple informal gesture of recognition of a workers’ hard work can do the trick. He also discovered that autonomy plays a major role as a motivator. The fact that workers feel that they are making their own decisions without constant supervision supplies them with a sense of self-empowerment. It does not matter whether the autonomy is real or only a perception in the workers’ mind, it has proven an excellent motivator. A study conducted with an elite American marine unit consisting of Navy Seals, Green Berets and the Marines proved that feelings of honor, pride and brotherhood was their primary motivator to be part of that group.

As I have discussed above there are many non-financial incentives that prove to be better motivators than money. This is not to belittle the effect that money has on humans as a species. It certainly does motivate to the extent that people want to fill their own self-serving materialistic needs, however if it is used as a sole incentive then businesses and workers are treading on perilous terrain, especially if they ignore more powerful human emotions and morals. As with all rules there are certain outliers.

"Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver."- Ayn Rand
"Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver."- Ayn Rand

A Rare Breed- Money Has No worth

There are businesses and people that do not get motivated by money at all. I am referring here to those special people that are driven by forces more powerful and meaningful than any of us can comprehend. A great example is Alan Turing. A man simply driven by the need to solve a problem. He ended up changing the world we live in. The foundation he gave humanity to build upon has thrown us into an era that many could not comprehend a few centuries ago. For many, money Is just a by-product to provide for their needs such as food and shelter etc. but their primary motivator is incomprehensible to simple minds like ourselves.

Conclusion

In conclusion, I have portrayed all the relevant facts and studies to imply that money is a motivator when combined with other psychological, emotional, and moral factors etc. It cannot and should not be used as the sole incentives for workers and businesses. A business that inspires by throwing money at any situation will not succeed in this modern, dynamic, macro world that we live in today.

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© 2016 Yaseen Essack

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