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The greatest asset for any organization is its personnel; persons who are involved in the daily running of the organization. It is in this regard therefore that there has been great interest in ways of maintaining a good working force which has led to studies and great inventions in Human Resource Management (Abowd, Kramarz & Margolis, 1999).
Central to the Human Resource initiatives is the intention to motivate workers since performance is increased with proper motivation of workers. There are many different intentions and things that motivate workers no wonder Human Resource Departments of any organization are usually obsessed with the focus on different theories that help them understand how to motivate their workforce (Abowd, Kramarz & Margolis, 1999).
One of these areas of motivation for workers’ performance is the monetary reward they receive for their work; salaries. This paper takes a critical look at how far high salaries for workers works towards improving their performance, productivity, motivation and overall job-satisfaction with the view of quantifying the increment of salaries as an element of employee motivation.
There are many authorities that have written a lot about this issue given its centrality in corporate organizational performance and this paper will draw insights from some of these authorities to help in answering the research question which is, ‘to what extent will high salaries improve workers’ productivity?’
Henry Grant (1913) is one such authority that has tackled the issue of employee motivation through salary increment in depth in his book, Work, Wages and Profits. In the book, Grant argues that financial reward is one sure way of ensuring accountability and hard work for employees without using forceful means, threats and coercion (Gantt, 1913).
The basic reason given for this surmise is that increased salaries for workers create a level of appreciation in the workers as they are better placed to cater for their daily needs and are even enabled to afford higher-profile lifestyle. This inclusion of material things in the workers’ lives is the one that motivates them into working harder with the assured hope of financial appreciation for their performance (Gantt, 1913).
In further discussing this human resource management issue, theories of employee motivation will be used to help answer the research question. For this, two of the theories of employee motivation that will be used will help to explain the effect of financial motivation on people’s behavior at their workplace. These theories are:
- The Theory of Hierarchy of Needs by Abraham Maslow
- The Theory of Motivation-Hygiene by Fredrick Herzberg
These theories seek to explain the effect of improved salary on employees’ behaviour and extrapolate that effect to their performance and overall output at their places of work.
According to the Theory of Hierarchy of Needs, Maslow surmises that provision of the needs of employees and guarantee of their (needs’) continued provision is the greatest motivator as to why people work. This means that instances where salaries are increased, workers’ motivation is increased and this in turn increases their productivity (Black, McKinnish & Sanders, 2003).
In the same breathe, Herzberg argues through the Theory of Motivation-Hygiene that poorly paid workers show little (if any) interest in their work and rarely grow economically and the corollary of this usually is reluctance to perform reducing the general output of their productivity (Black, McKinnish & Sanders, 2003). They are dissatisfied, deprived, lack sense of belonging in their workplaces and can therefore not afford modern and improved life due to their financial status.
Black et al (2003) point out in their work that if low skilled workers are awarded high salaries, they are likely to increase output out of the motivation they receive in the remuneration perks they are given. These increased salaries in turn enhance their status which brings them comfort further encouraging them to do even better and this propels them into better performance.
This shows that in essence, there is no difference between them and the skilled ones because since out of the motivation they receive, they can just be as perfect at their work as anyone else (Herzberg, 1987). In an expansive country like Saudi Arabia where there is a lot of competition, salary increases is a great factor that maintains workers to a given place for a given time (Herzberg, 1987).
In a snapshot, these two theories point to one thing: the central place taken by salaries and wages in determining workers’ motivation. What is observed from increment of workers’ salaries can best be described as having some element of domino effect in that the increment triggers something into operation that affects everyone from the workers themselves to the entire corporation and eventually the market and industry they are in.
Increased salaries increase workers’ motivation which in turn causes them to work harder increasing their productivity/output and this in turn increases the business’ profitability. When corporations and organizations are making appreciable profits in their respective fields, the general performance of the economy of the industry is improved and this positively contributes towards improving the entire economy (Abowd, Kramarz & Margolis, 1999).
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A social approach to the research question has been well explained by Maslow (1943) when he asserts that the one basic reason that people work is to survive. When they start earning, they seek to create a niche and establish themselves by making new friends with whom they seek to further improve their lives.
Everyone who starts working usually has expectations of growing to greater economic and financial freedom through their places of work and therefore well remunerated employees have better job satisfaction thereby becoming better performers which increases their output (Maslow, 1943).
The most important objective for any organization is to have its personnel at their optimal performance at all times and this is the reason a lot of money is spent in instituting strategies that implement theories that motivate workers to be at the very best they can ever be in any organization (Abowd, Kramarz & Margolis, 1999).
This has forced the professional world to have workers educated and informed about their rights as workers and this has caused them to demand reasonable salaries that befit the work they do for their employers. This demand is not only restricted to remunerations but also permeates such non-economic areas of workers’ lives as proper working conditions and workers’ rights.
Bringing all these things into workers’ expectations makes motivation a complicated phenomenon that is highly dependent on individuals. Each individual having unique things and areas of interest that motivate them, motivation is therefore thought to be worker-specific in many regards and therefore conceptualizing it is not such an easy thing.
This notwithstanding, remuneration is one area of need that remains constant for every worker in whatever place of work and therefore whatever model or theory is used to study worker motivation, salary and wage remuneration is always a factor that motivates every worker (Abowd, Kramarz & Margolis, 1999).
Other things such as praise and recognition, job security, dignified treatment, opportunity for expansion among others can be considered supplemental to monetary need. This is because good salary payment is a factor from which all other factors are likely to emanate from thereby acting as the mother determinant of employee motivation.
In conclusion, as regards the research question which is to what extent salary increment will increase employ performance, it can be strongly concluded that salary increase is among the core aspects of motivation that ensures workers’ increased performance and motivation.
All other motivational strategies such as empowerment, opportunity creation, appraisals, and recognition among others stem from the remuneration benefits into such endeavours that give workers voice for recognition. It is therefore incumbent upon any organization to ensure that their salary and wage schemes are most favourable for their workforce to ensure optimal performance that translates into profitability for the organization.
In this regard therefore, corroborated with the evidential discussion preceding, it is recommended that every employer accords salary and remuneration increment the attention it is due to ensure that their personnel are always performing at their best optimal level to ensure maximal productivity and profitability.
Abowd, J., M., Kramarz, F., & Margolis, D., 1999. High Wage Workers and High Wage Firms, USA: Dept. of Labor Economics, Cornell University.
Black, D., McKinnish, T., & Sanders, S., 2003. ‘Does Availability of High-Wage for Low-Skilled Men Affect Welfare Expenditures?’ Harvard Business Review, 87, (9-10), pp. 1921-1942.
Gantt, H., 1913. Work, Wages, and Profits: Their Influence on Cost of Living. USA: Dept. of Labor Economics, Cornell University.
Herzberg, F., 1987. ‘One More Time: How Do You Motivate Employees?’ Harvard Business Review, (e-jounal) 1 (5). Web.