Employee Motivation and Reward Essay Example

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In the recent years, employers have recognized that the success of business is closely influenced by the motivation and professional capacity of their workforces. Accordingly, companies are faced with the challenge of increasing the level of employee commitment, job satisfaction and motivation (Greene, 2001). In this regard, it is important for companies to take into consideration the impact of employee needs, morale and expectations and to negotiate appropriate work arrangements for motivating employees as part of performance recognition.

The following paper presents a discussion on the importance of employee motivation in the workplace. The discussion is mainly based on literature review and points that employee motivation is necessary for improved work performance. The paper has explored the important contributing played by work-life balance and financial incentives in improving employee motivation. The research indicates that the two factors foster loyalty by employees, increased performance and commitment, which are essential indications of motivation.

The concept of Employee Motivation and Rewards

According to Jenkins, Mitra, Gupta and Shaw (2001) employee motivation is an intrinsic drive and enthusiasm to successfully accomplish tasks related to work. Greene (2001) has defined it as an internal drive which causes individuals to take initiatives in the workplace. In their article, Rynes, Schwab and Heneman (2001) have noted that employees understand that they need to provide a work environment which creates consistent motivation. However, managers fail to understand the significance of the motivation in accomplishing organizational goals and objectives. Even when they understand the importance of motivation, they lack the necessary skills and knowledge to create an enabling environment, which fosters employee motivation and satisfaction.

According to Greene (2001) besides the moral benefits of altruistic approach to treating employees as human beings and respecting their dignity in all forms, motivating employees makes them more productive, innovative and royal. Jenkins, Mitra, Gupta and Shaw (2001) have concurred with this argument and have explained that extrinsic forms of employee motivation such as good compensation and rewards are key to performance improvement. Essentially, the trick for getting the best out of employees is for the management to figure out how to inspire motivation at the workplace. To create a work atmosphere in which employees are motivated requires an evaluation of intrinsically satisfying and extrinsically encouraging factors.

Rynes, Schwab and Heneman (2001) have explained that improved organizational performance is a product of two actors: ability and motivation. Ability is in turn influenced by various factors which include education, experience, training and its continuous improvement. Unlike motivation which is achieved rapidly, ability takes a long time to achieve.

Well-motivated employees are needed in the rapidly changing, competition-paced work places. Such employees are an essential requirement for organizations to compete effectively for the future. For an organization to be productive in the long run, managers need to understand the factors that motivate employees within the context of the roles they perform in an organization and the desired objectives. Greene (2001) has reckoned in his article that of all the functions that managers perform, motivating employees is the most challenging and complex because employee needs and expectations, as well as, performance expectations change continuously. For instance, as employees income levels increase or the cost of living come down, compensation become less important as a motivator.

In his research study, Jenkins, Mitra, Gupta and Shaw (2001) identified major factors that contribute to employee motivation. The ranked order of these factors is: interesting work; fair wages; appreciation of employee’s efforts; job security; good working environment; opportunities for promotions and growth; loyalty to employees; tactful discipline and sympathetic help with personal or domestic problem. An analysis of these factors provides important insight into ways of motivating employees. Interesting work is majorly a self-actualizing factor and helps employee develop positive attitude towards work. On the other hand, good wages and rewards are merely a psychological factor and helps enhance a positive attitude towards work. Both factors are necessary to foster a motivating atmosphere.

Work-Life Balance and Employee Motivation

Work-life balance is the process of prioritizing between work and personal life commitments. Personal life commitments may include having pleasure, health issues, family matters and spiritual issues all of which are crucial for meaningful enjoyment of life. The concept of wok-life balance is based on the notion that personal life is a major determinant of employee’s attitude towards work hence motivation. This means that paid work and personal life should regarded more as complementary elements of meaningful life than as competing priorities. It is, therefore, critical that employees implement work-life balance arrangements, which offer employees the right to enjoy flexibility in the work place. Woodland, Simmons, Thornby, Fitzgerald and McGee (2003)
have recommended that employers should take care of the changing needs and roles of their employees and make appropriate changes in their human resource practices. Moreover, it is in the benefit of organizations to make their work arrangements more flexible so as to make employees more comfortable and loyal. In the long run, this has the effect of increasing the commitment and morale of employees, which helps to decrease levels of work-related stress.

Rynes, Schwab and Heneman (2001) have asserted that work life balance is an essential determinant of employee motivation in organizations. They further say that organizations which implement good work-life balance programs enjoy more other benefits such as ability to attract new employees and retain highly experienced and productive staff, reduced absenteeism, improved job satisfaction and reduced stress and burnout and enhanced work-relationships.

In a research study on the importance of flexible work arrangements, Jenkins, Mitra, Gupta and Shaw (2001) found that employers are becoming increasingly aware of the costs associated with poor employee motivation. These costs include reduced production, chronic absenteeism, high overhead costs and negative public image. It is for this reason that organizations have resorted to work-life balance programs as an incentive for improved employee motivation and commitment. Greene (2001) has noted that work-life balance programs increase employee motivation by bridging the compatibility gaps between personal life and career life. Essentially, work-life balance does not necessarily mean scheduling an equal number of hours between competing activities in personal and career lives. In stead, it means giving the right attention to every activity.

In his argument, Greene (2001) notes that work-life balance is all about developing supportive and healthy organizational cultures, which offer employees the opportunity to remain loyal to the organizations, notwithstanding personal commitments. By strengthening employee loyalty, such arrangements lead to improved organizational performance and hence the ability to compete effectively in the long run. In a research study on intrinsic and extrinsic factors which contribute to increased employee motivation, Woodland, Simmons, Thornby, Fitzgerald and McGee (2003). Found that employees are more likely to experience increased job satisfaction when they are given opportunities to attend to their personal issues while at the same time maintaining a stead control of their career commitments.

Guthrie (2001) has hailed work-life balance programs as an important recognition of the difficulties that employees have outside the work place. These programs are a valuable mechanism for increasing an organization’s ability to retain and motivate high performing workforces. Greene (2001) has, however, noted that poorly-implemented work-life balance programs can have deleterious impacts on companies and their employees. Implementing these programs not only requires considerable resource allocation but can also lead to conflicts in the work place. This can be the case especially when employees take advantage of these programs to attend to personal issues at the expense of work.

Financial Incentives and Motivation in the Workplace

Financial incentives are an important factor that determines workplace motivation. According to Guthrie (2001) financial incentives are those incentives which satisfy workers by providing them with rewards in terms of money. For a long time, money has been recognized as a chief source of satisfaction for people’s needs. Therefore, money not only satisfies the psychological needs of employees but also the social needs. It is for this reason that in many companies, various wage plans and rewards are implemented to motivate employees and stimulate them to work.

Obviously, employees want to earn good salaries and fair wages while at the same time feeling that they are doing the right work. It is, therefore, logical that employers and employees view money as a fundamental incentive for job satisfaction. The use of monetary incentives to improve job satisfaction and hence motivation is based on the reinforcement theory, which focuses on the relationship between job targets (such as improved performance) and its consequences (such as pay) and is based on the principles of organizational behavior. According to Woodland, Simmons, Thornby, Fitzgerald and McGee (2003) organizational behavior provides a framework within which employee behaviours are identified, monitored and evaluated in terms of their functional consequences. Financial incentives have significant consequences on employee behavior, especially motivation and job satisfaction and are, therefore, a major determinant of organizational performance.

An empirical research study by Rynes, Schwab and Heneman (2001) found that good compensation and consistent rewarding of employees motivate employees regardless of whether their jobs are mundane or exciting. The researcher, however, acknowledges that money is not the only factor that motivates employees. He notes that beyond certain points, money will make employee happier and more committed to work but other factors such as recognition and appreciation of employee efforts also add to increased motivation. Guthrie (2001) has warned that employers who give out small salary increases kill employee motivation because employees feel irritated that their efforts yield very little.

To a great extent, good compensation, rewards and other financial incentives improve job satisfaction and work performance, although their effectiveness is dependent upon organizational culture (Woodland, Simmons, Thornby, Fitzgerald & McGee, 2003). It is the case that differences in institutional arrangements can contribute to the effectiveness of monetary incentives as well as differences in employee preferences for particular incentives. As such, companies should study these issues before implementing changes to incentive plans. This is especially the case in service-based companies where financial reinforcements tend to produce stronger effects on task performance and motivation than non-financial rewards. Guthrie (2001) has explained that in jobs where compensation is closely related to performance, financial incentives can be a big motivator for increased job performance and productivity.

Rynes, Schwab and Heneman (2001) have explained that financial incentives work with non-financial incentive to satisfy the ego and self-actualization needs of employees. Although non-financial needs cannot be measured in terms of money, they play an important role in complementing the motivational effects of financial incentives. Examples of non-financial incentives include praise and recognition, security of service and suggestion schemes. Moreover, involving employees in decision making helps improve employee motivation by inculcating a spirit of participation.

In a nutshell, financial incentives are an important determinant of employee motivation, good compensation schemes help employees cope with social needs and hence make them more prepared to face work needs with little or no stress. Companies which offer good salaries to employees inculcate the feeling of appreciation for their efforts, innovativeness and commitment. Although financial incentives are positively associated with increased workplace motivation, such incentives can only be effectively where the work requirement creates an enabling environment. As such, it is imperative that organizations recognize the contributions of their employees through non- financial incentives in addition to financial incentives.


Organizations need the commitment of motivated employees to achieve desired business objective. Motivated workforces give organizations the ability to compete effectively for the future. For motivation to be achieved in the workplace, it is important that employers understand the factors that contribute to employee motivation in the context of the duties and roles that they perform. Some of the factors that lead to improved employee motivation include financial incentives and flexible work arrangements. The two factors make employees more satisfied with their jobs and hence inculcate the feeling of motivation. When employees are poorly motivated, they tend to underperform and this can easily lead to failure of an organization to achieve desired business objectives.


Guthrie, J. (2001). “High-Involvement Work Practices, Turnover, and Productivity: Evidence from New Zealand”. Academy of Management Journal, 44, pp. 180-190.

Greene, C. (2001). “A Longitudinal Investigation of Performance Reinforcing Leader Behavior and Subordinate Satisfaction and Performance,” Mid-West Academy of Management proceedings, 157-85.

Jenkins, D. G., Jr., Mitra, A., Gupta, N., & Shaw, J. D. (2001). Are financial incentives related to

performance? A meta-analytic review of empirical research. Journal of Applied Psychology, 83, 777–787.

Rynes, S. L., Schwab, D. P. & Heneman, H. G. (2001). The role of pay and market pay variability in job application decisions. Journal of Organizational Behavior and Human Performance, 31, 353–364.

Woodland, S., Simmons, N., Thornby, M., Fitzgerald, R. and McGee, A. (2003). The second Work-Life Balance Study: Results from the Employers’ Survey. Department of Trade and Industry Employment Relations Research Series No. 22. London: DTI