Does Money Motivate Employees?
Motivation and performance are very complex issues affected by many factors. No one factor can guarantee motivation or performance in the absence of other critical factors (see my article on Managing for Peak Performance at http://personnelsystems.com). Money cannot be effectively substituted for good management. Some people think that money can’t be used to motivate employees and that is true for some employees, but for a large percentage of the workforce it does not have to be that way. Studies show almost everyone is motivated by money to some degree, many to a moderate degree, and most to a great degree when compensation is properly designed. Some psychologists would argue that money doesn’t change behavior because they do not consider it properly termed a “motivator”, but rather they call it a “director” of behavior. This is a semantic argument. The idea is whether money can be used as a tool to change employee behavior in a desirable direction. It is unfortunate that in most comp
