With employers looking for ways to increase productivity and efficiency of employers, there have been diverse opinions on how this can be achieved. Motivation remains one of the ways through which employee productivity and efficiency can be maximized(Harunavamwe&Kanengoni, 2013). This has seen employers turn their efforts to providing bonuses and monetary incentives to employees to change their behavior positively with the achievement of set organizational goals and objectives. However, this approach has pros and cons that ought to be considered before its implementation in various organizations and platforms.
Regarding pros, the monetary incentive plan approach is an easy and seemingly straightforward way to influence specific behaviors of employees. Also, with organizations and businesses prioritizing short-term goals such as an increase in productivity or reduction in problematic or undesirable behaviors, the monetary incentive plan approach is the best way of accomplishing this(Harunavamwe&Kanengoni, 2013). Surveys conducted indicate that money is a key motivating factor in real life, and thus, monetary incentive plans would result in the improvement of employee attitudes as well as the working environment. Of course, the monetary incentive system is deemed fairer as an extra effort from employees is tied to extra money; and this can be considered better than other systems where all employees are paid the same irrespective of their efforts. Most importantly, implementing incentive programs can make employees have a feeling that they have a say or control over their income levels (Shields et al., 2015).
Despite the benefits of the mentioned system or approach, there are potential pitfalls that can accompany its implementation in organizations. One of the cons of the system is that when used continually, employees can come to see monetary incentives as an entitlement rather than a motivating factor(Harunavamwe&Kanengoni, 2013). In most cases, monetary incentives are tied to group performance, and as such, can result in frustration because of possible unequal contribution among group members. At times, monetary incentives are based on competition among employees, which often creates an environment where employees struggle to out-do one another. Thus, employees could sabotage the efforts of their teammates to the disadvantage of the achievement of set organizational goals. Moreover, over time, monetary incentives can be considered less effective than nonmonetary incentives, especially where the former is scarce.
Successful motivation plans are not solely dependent on monetary rewards or compensations. Several companies have succeeded in motivating their employees without providing monetary rewards or compensation, and perfect examples are Google and Southwest Airlines, in the US. When it comes to motivation of employees, there is no doubt that Google stands out from the rest, and this is despite the fact that it does not give consideration to monetary reward or compensation. In place of monetary reward or compensation, Google offers remarkable perks and other nonmonetary benefits that have seen its employees exhibit increased productivity and efficiency over the years(Belfo& Sousa, 2011). Examples of these include maternity benefits of a maximum of 18 weeks off at about 100 percent pay; on-site car wash, dry cleaning, gym, and massage therapy; as well as access to free lunch, dinner, and other meals. Google also motivates employees by allowing them to bring pets to work, which provides them with a relaxed environment where group thinking and teamwork are elevated. On the other hand, Southwest Airlines (SWA) in the US is considered one of the most profitable and successful airlines in the US since January 2009; which can be attributed to its employee motivation strategies. Like Google, SWA capitalizes on nonmonetary rewards or compensation for its employees to achieve increased employee production and efficiency. Some of the elements that have helped motivate employees include its strong set of values that determine the behavior of all employees at all levels in the organization, prioritization of employees (employees come first before anything else), the distributed leadership in place, as well as performance transparency that emphasizes employee wellbeing. As for performance transparency, it is seen that employees at SWA have a clear image of the environment and background in which they work. This gives them a platform where they can easily comprehend how their performance is measured and how or what they can do to improve the same.
According to needs-based motivational theory, the satisfaction and performance of employees are based on how an organization meets the needs of the employee. Based, on this theory, Google’s and SWA’s practices can be considered successful as they focus on meeting employee needs. Maslow states that employees can be motivated when they are provided with physiological needs such as food and water, safety needs, esteem needs, and self-actualization needs(Jerome, 2013). Through practices such as providing free meals and offering maternity benefits, Google meets employees physiological and safety needs resulting in their motivation. SWA’s practices such as prioritizing employees or making them come before anything else is a way of meeting their esteem needs, which has resulted in the motivation of employees over the years thereby paving the way for increased employee productivity and efficiency.
In a nutshell, motivation, especially through monetary rewards or compensation, remains one of the ways through which employee productivity and efficiency can be maximized. However, there are pros and cons of monetary compensation that should be considered by organizations before embrace of the same. An organization should embrace monetary incentive plans if they will influence employee behavior positively thereby improving their productivity and efficiency.
Belfo, F. P., & Sousa, R. D. (2011). Workforce Incentives at IT companies: the Google’s Case.
Harunavamwe, M., &Kanengoni, H. (2013).The impact of monetary and non-monetary rewards on motivation among lower level employees in selected retail shops. African Journal of Business Management, 7(38), 3929.
Jerome, N. (2013). Application of the Maslow’s hierarchy of need theory; impacts and implications on organizational culture, human resource and employee’s performance. International Journal of Business and Management Invention, 2(3), 39