Define “ Money cannot motivate all people under all circumstances”?

Different things motivate different people, (Maslow's hierchy of needs) and there comes a point for some people where money does not affect productivity. Things like motivation, recognition and career progression seem more defined goals.

Money plays a vital role in motivating human beings - but thats not everything.  For many it is not primary motivational factor !Challenging tasks / assignments often tend to attract the best of talent, as they are not bothered how much they get in terms of money, rather they are more keen to develop their skill base.  In this kind of stimulating environment, the human brain is challenged and it is this factor that spurs thinking and employees get lot of satisfaction completing the challenging tasks assigned to them.Sense of achievement and pride are what associated with taking up challenging jobs !  

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. 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 companies and for most jobs, pay is a small factor in managing and changing employee behavior. However, inadequate use of incentive plans and problems with compensation design and strategy are usually to blame.

 

Good question! :)

 

It greatly depends on the type of jobs involved. Regardless of whatever incentives we use to motivate people, it greatly depends on whether those are in fact wanted or essential in their life.

 

For people who are in the industries that have a lower pay scale, money would have a huge impact as motivation. Assuming someone gets paid minimum wage of about $11/hr, increasing their salary by $1/hr is already roughly about a 10% increase. That accumulates down to about +2k per year for that individual to spare. That amount means a lot for someone who's in a low income situation

 

On the other hand, even if we increase the salary of individuals who already have millions or billions of assets by the same percentage, it would not mean the same to them because at that point, $$ is merely a number to them. 

 

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

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. The idea is whether money can be used as a tool to change employee behavior in a desirable direction.

How to Motivate with Pay

In jobs where significant variability in pay occurs in compensation and where it is closely related to key performance factors, then pay can be a big motivator. But remember that the good performers prior to such money based compensation plan implementation remain good performers and may not improve much because they are already giving close to 100% effort, but the middle and the bottom performers are where there is significant opportunity for change. Most are money motivated when they perceive the target is achievable and within their reach and where the rewards are also significant for target achievement. If a company is able to get significant differences in behavior from 50% to 70% of people because they are motivated by money, then the payoff for the compensation plan can be great.

Failure to Motivate only with money (behavioral change)

One of the biggest single impediments to the use of money as motivator is the manager's inability or insufficient effort to measure employee performance accurately and regularly, give performance feedback to the employee regularly, and set goals/standards that are challenging, realistic, and have strong relationship to business success. Since it is easier to measure performance and set performance standards/objectives in some jobs than others, money as motivator is more effectively used in some jobs than others. Nevertheless, company wide incentive plans can be powerful in the right circumstances.

 

Another major impediment is when employee motivation and effort, is overwhelmed by the impact of poor business strategy or poor business environment (i.e. the economy).

 

Money cannot motivate all people under all circumstances and we can prove it by means of

 

Maslow's hierarchy of needs. The most fundamental and basic four layers of the pyramid contain what

 

Maslow called "deficiency needs" or "d-needs": esteem, friendship and love, security, and physical needs.

 

When people have enough money to meet the physical needs they start to look for needs of higher layer

 

that very often don’t depend on money. The most compelling answer to this question is a meta-analysis

 

by Tim Judge and colleagues. The authors reviewed 120 years of research to synthesize the findings from

 

92 quantitative studies. The combined dataset included over 15,000 individuals and 115 correlation

 

coefficients. The results indicate that the association between salary and job satisfaction is very weak. The

 

reported correlation (r = .14) indicates that there is less than 2% overlap between pay and job satisfaction

 

levels

 

Great answers by the colleagues I don't think I have anything to add.

"If All the things remain unchanged", then i think it is true " Money can not motivate all people under all circumstances”

But truth is as follow:

To earn money is ultimate goal (necessity) to spend life (@all level) for every human being in the material world, however exceptions are always there but very rare in example (like "SADHA"). 

Anyone of us refused and say that i do not want  annual increment, bonus, commission and Market adjustment in corporate world. 

Money doesn’t make you happy.But one size does not fit all. Our relationship to money is highly idiosyncratic and based heavily on area of personalizayion and human or social behaviour.But that doesn’t answer the question: does money actually motivate all people under all circumstances? Some have argued it does, that there is a natural tension between extrinsic and intrinsic motives, and that financial rewards can ultimately depress or “crowd out” intrinsic goals (e.g., enjoyment, sheer curiosity, learning or personal challenge). Theortically, Maslow in his pyramid or hierarchy of needs argues that the most fundamental and basic four layers contain "deficiency needs": esteem, friendship and love, security, and physical needs. When people have enough money to meet the physical needs they start to look for needs of higher layer that very often don’t depend on money.Despite the overwhelming research carried out by Hersberg evaluates this argument — about the degree to which higher pay may demotivate shows that employee engagement levels are more strongly related to intrinsic than extrinsic motives, but that both motives tend to cancel each other out. In other words, when employees have little interest in external rewards, their intrinsic motivation has a substantial positive effect on their engagement levels. However, when employees are focused on external rewards, the effects of intrinsic motives on engagement are significantly diminished. This means that employees who are intrinsically motivated are more engaged than employees who are extrinsically motivated (such as by money). Quite simply, you’re more likely to like your job if you focus on the work itself, and less likely to enjoy it if you’re focused on moneySo, Intrinsic motivation is also a stronger predictor of job performance than extrinsic motivation — so it is feasible to expect higher financial rewards to inhibit not only intrinsic motivation, but also job performance. The more people focus on their salaries, the less they will focus on satisfying their intellectual curiosity, learning new skills, or having fun, and those are the very things that make people perform best.The fact that there is little evidence to show that money motivates us, and a great deal of evidence to suggest that it actually demotivates us, supports the idea that that there may be hidden costs associated with rewards. Of course, that doesn’t mean that we should work for free.

All the Yes points 1. The greed caused by pursuit of money is damaging. 2. spiritual damage 3. there are alternatives to money 4. Family damage 5. If money was such a good thing then IT would serve the people. Instead people serve IT. 6. Money equals a social status 7. money causes interest ...

Money is a powerful tool of motivation but it is not necessarily that every time employees get motivated by money.

 

Other techniques also can be used as motivatorssuchaschallengingjobs,goals, and participation in decision-making and other non-monetary incentives for motivatingemployees.   The opposition   of behavioral scientists   to money as amotivator   is understandable    forat least six   reasons.

 

1. Money is notimportant toallpeople. High achievers, forexample, are intrinsically   motivated. Money haslittleimpacton suchpeople.
2. People fail to seea directlinkage betweenmonetary rewardsandperformance. In these daysofunionization, protective legislation, seniority-based promotions, and thecostoflivingindexation, paylikes do notdependonperformance.  
3. Formoney tomotivate thedifferenceinpayincreases between a high performer,andanaverage performermust besignificant. In practice, it rarely is.
4. Managementmusthavethe discretion to reward high performers withmore money. This isnotpossible, thanks tostrong unionization.
5. Relationships amongemployeesare oftenruptured, becauseofthescramble formonetaryrewards.
6. Financial incentives discourage risk-taking propensity ofpeople. Whenever people areencouraged tothink about what they willget forperforming a task, they becomeless   inclinedto take risks orexplore possibilities.

 

The conclusion is that money can motivate some people under conditions. Put in another way, money cannot motivate allpeople underallcircumstances.