IGNOU : M.COM : MCO 1 : UNIT 10 : Q - 1. ‘Non-financial motivators play a significant role in motivation’ . Discuss. What are the limitations of financial motivators.

 

Ans. Non Financial Motivators : General hypothesis is that financial incentives motivate employees for higher work. However, individuals have variety of needs that they want to satisfy while working in the organisations. People attach more importance to socio-psychological needs that cannot be satisfied by money alone at higher level of managerial hierarchy. Thus management provides non-financial incentives to motivate people in the organisation in addition to the financial incentives. However, the emphasis of non-financial incentives is to provide psychological and emotional satisfaction rather than financial satisfaction. For example, receiving promotion in the organisation gives psychological satisfaction. This is because one gets better status, more challenging job, authority etc., which are more worth than getting more pay by way of promotion. Some important non-financial incentives include: status, promotion, responsibility, recognition, job security, etc.

 

Financial Motivators : Financial motivators relate to money or any other benefits that can be converted or expressed into monetary unit. In the present day context, money has become a means to satisfy the physical needs. It is an instrument of obtaining social position and power. Thus, money became a basic incentive for individuals. Wages, salaries, allowances, bonus, financial incentives, commission etc. are financial motivators. These financial motivators motivate individuals to join the organisations. The financial package should motivate the present and prospective employees.

 

However, it should be borne in mind that money is not an end but a means of an end. It can satisfy both physical and safety needs. Interestingly some people place a little emphasis on money irrespective of their possession. However, certain people are continuously driven by the desire to acquire more money even if they have possessed wealth to satisfy their basic needs. This may be to satisfy their desire for status, esteem and self-actualization. This reveals that money is an instrument by which a person can satisfy various types of needs. Even research supports use of money in satisfying esteem and recognition needs too, as well as basic physiological needs.

 

The above discussion makes it clear that money is a motivator. Its role in motivation is unquestionable. However behavioural theories placed importance on non-monetary rewards and suggested that if money only motivates, there could have been human machines and not human beings.