Human Resource Management – Motivation and Financial Incentives and rewards

Motivation and Financial Incentives and rewards

Financial incentives and rewards can motivate. People need money and therefore want money. It can motivate but it is not the only motivator, employees feel associated by recognition in the workplace. Money can serve the following reward functions:

  • It can act as a goal that people generally strive for although to different degrees.
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  • It can act as an instrument that provides valued outcomes.
  • It can be a symbol that indicates the recipient's value to the organization.
  • It can act as a general reinforce because it is associated with valued rewards so often that it takes on reward value itself.

Money motivates because it is linked directly or indirectly with the satisfaction of many needs. It satisfies the basic need for survival and security. It can also satisfy the need for self-esteem (it is a visible mark of appreciation) and status, as it is directly linked with the standard of living of an individual, money can set you in a grade apart from your fellows and can buy you things they cannot afford. It acts as a symbol in different ways for different people and for the same person at different times. Pay is often a dominant factor in the choice of employer, and pay is an important consideration when people are deciding whether or not to stay with an organization.

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