Human Resource Management Assignment
According to my point of view, the gist of the entire article can be captured in these two sentences.
“The importance of pay in motivating employees tends to be underplayed by surveys and pay is actually a far more potent tool in creating motivation than is commonly believed by Human Resource academicians. However, at the same time, pay is not independent of other factors i.e. pay itself cannot motivate employees if other motivating factors are not aligned”
Hence, I have chosen this to be my thesis statement. The purpose of this critique is to prove or disprove the above statements in the light of facts presented in the article as well as facts known otherwise.
Strengths and Weaknesses:
The article is well researched. The author has considered several different points of view before presenting their own. Thus, the argument is built on strong pillars. We shall consider the merits of the argument in this section on strength of the argument:
- Plausible Explanation of The Perceived Dilemma: The author opens the essay with a well-known dilemma. The human resource textbooks always perpetrate the notion that pay is not a very important motivator. However, in reality, many people have a different experience. For many people, pay is the most important motivator.
The author then tries to find out why is academia different from theory. The answer lies in the fact that academia uses surveys to reach their findings. It is a known fact that our culture does not encourage greed and money mindedness. It is for this reason that when asked in a survey people respond in a manner that makes pay look frivolous and unimportant when in fact it could be the most important factor (Lawler III, 1964). By providing a basis for this apparent dilemma, the author sets the stage for the rest of the argument.
- Importance of Pay for Meeting Higher Order Needs: The second strong point in the author’s argument is the fact that pay is linked to higher order needs such as reliance and self-actualization. For many years, this has been a counterpoint to pay. The purpose was to say that most people do not work for pay but rather they work for meeting their higher order needs. The author, however states the fact that pay is considered to be proof of the worth of a person in our society. Hence, even if a person is not interested in money itself, he/she will still be interested in getting a higher pay package because it is considered to be proof of their abilities and hence meets their esteem needs better. Also, the author states that higher order needs life self-actualization need leisure time. And a person can afford leisure time in the future only if they have accumulated enough money in the past. Hence, higher pay today can actually lead to more chances of meeting a higher order need in the later years. Hence pay and higher order needs are not antagonistic in nature. Rather, the relationship between them is complimentary.
- Comparative Performance and Pay: Another important point which the author makes is the fact that for pay to be actually effective in driving motivation, it must be based on comparative performance. In many cases companies decide to give everyone a pay hike. In other cases, companies decide that the variable pay be increased or decreased based on the performance of the company as a whole. According to the author, these kinds of higher remuneration strategies will not work to create motivation. This is because the employee does not see any direct link between working harder and getting a bigger reward. For high remuneration strategies to work there must be a belief amongst the employees that only and only high performance can lead to a higher remuneration.
- Diminishing Marginal Utility: The last strong point of the argument is that the author recognizes that higher pay will not work for all employees and at all times. An employee who is currently being paid low may have a higher utility for a higher pay and therefore an increment may motivate them more than it motivates others. However, on the other hand, a person who already has a sufficiently high remuneration may see no need to increase their efforts when an increment is offered. The author has used the economic concept of diminishing marginal utility to explain this phenomenon. This means that the first few pay increases will produce maximum motivation. The effect of successive pay hikes on increasing motivation will become smaller and smaller over time and will finally go in the negative. This means that at a certain salary level, an increased pay will actually lead to a smaller effort being made by the employees.
The argument put forward by the authors is quite strong. However, there are certain weaknesses in the argument as well. The weaknesses are generally because of omission (Nadler and Lawler III, 1977). The points stated in the argument are all well-reasoned but there are some factors which have not been included in the argument at all:
- No Clear Link between Other Factors and Pay: For instance, the author states that there is a link between other factors such as importance of work, authority, span of control etc. which also motivates employees to work. The author states that these factors work in conjunction with monetary remuneration. However, what the author forgets to mention is the exact causal relationship between them. Is pay the primary factor or are the other factors more important? What is the relationship between these factors? What is the magnitude of motivation caused by monetary remuneration in comparison to these other factors? The author leaves a lot of these questions unanswered. The reader only knows that other factors are also important. But exactly how are they important? Will they be the make-or-break deciding factors? These questions are left unanswered.
- Ignores Organizational Politics: Secondly the author has conveniently ignored the concept of organizational politics. It is known fact that politics is rampant in any organization today. Nowadays, this fact is also being acknowledged by the mainstream academicians.
Hence, there is a high chance that if a performance based pay culture is established, it may be hijacked by politics. There is a high probability that deserving employees or people with high merit may not end up getting the proposed increment. Rather, people with good political skills may be the beneficiaries. This obviously will be highly counterproductive to the organization as people will stop focusing on work and will instead start focusing on politics within the organization. Any decision with regards to remuneration policy is incomplete unless politics is considered and a plan is devised to ensure it does not hamper the intended purpose of the increment (Tremblay, Sire, and Pelchat, 1996).
- No Distinction between Types of Jobs: Lastly, the author fails to consider the fact that jobs can indeed be very different from one another. Also different jobs require different levels of motivation. For instance, an assembly line job may require far less motivation than the job of a scientist. Hence, considering one size fits all approaches for motivation may not be the best way to deal with the situation. In my opinion, jobs must be classified and the level of motivation sought must be determined before a decision is made whether monetary remuneration must be used for motivation or not.
The argument put forth by the author is commendable. Firstly, it helps us understand that some deeply entrenched beliefs may in fact be faulty and a new way of thinking is required. Then the author begins on this new path. However, in my opinion, the argument is left incomplete.
This framework to look at motivation is better than the ones we earlier had. This framework helps us understand exactly how money affects the willingness of people to work. However, it omits some very important issues. For instance the fact that not all jobs require an equal amount of motivation, higher pay creates better performers. In some jobs like assembly lines, the performance is already standardized. Hence there is no real scope for outstanding performance. Hence, higher pay will obviously be of no use here.
According to me, jobs in an organization must be categorized as jobs that are highly standardized and jobs that require creativity. Standardized jobs do not require too much motivation because the output will be standard regardless of the motivation. Here pay must be used in line with traditional theories i.e. it must be sufficient so that it does not act as a de-motivating factor.
For creative jobs, the culture of high performance and higher pay must be created. These are the jobs that will drive the organization forward and the employees here must be provided with the best remuneration to do so.
- Lawler III, E. E. (1964). `Managers’ job performance and their attitudes toward their pay’. PhD thesis, University of California, Berkeley, CA
- Nadler, D. A. and Lawler III, E. E. (1977). `Motivation: a diagnostic approach’. In: Hackman, J. R., Lawler III, E. E. and Porter, L. W. (Eds)Perspectives on Behavior in Organizations McGraw-Hill, New York
- Tremblay, M., Sire, B. and Pelchat, A. (1996). `A study of the determinants and the impact of flexibility on satisfaction with social benefits’. Working paper, HEC Montreal