This review focuses on the following question: How useful is pay as a method of improving employee motivation? In the review, the concept of money as a motivator is linked to motivation theory.
Defining Motivation and Motivation Theory
Motivation is the process of persuading individuals to act in a desired way. Within most organizational environments, motivation is the process of persuading members of the organization to perform in a productive manner. The need to motivate members of an organization to perform in a productive manner is a well-accepted premise. Disagreement exists, however, in relation to the best means of motivating individuals within organizational environments (Luthans, 1997).
Several theoretical approaches for the explanation and development of motivation within organizational environments have been advanced. At a general level, these theories tend to fall into content and process categories.
Motivation is closely linked with the concept of job satisfaction. The early efforts to measure motivation and job satisfaction resulted in the development of causal models (Locke, 1983). The causal models were process oriented in that the researchers attempted to identify and assess the types of organizational phenomena that influenced individual perceptions of satisfaction that, in turn, would or would not motivate them to perform productively. Phenomenological factors incorporated in the causal models were primarily those associated with individual needs and individual values. The causal models, then, measured and assessed the effects of motivating factors on organizational outcomes primarily within the context of need value conflict. These models were not completely satisfactory (Locke, 1983).
The causal models did not provide the strength and preciseness of analysis required to accurately define the relationships between motivation, job satisfaction, and various organizational outcomes, and to deve...