ESSAY QUESTION:
"Monetary compensation is the most powerful stimulus for improving employee productivity."

Discuss the extent to which you agree or disagree with the position stated above. Support your viewpoint using reasons and examples from your own experience, observations, or reading.

RESPONSE:
Some people argue that the most powerful way to motivate employees & increase productivity is to ensure appropriate monetary rewards. While money is definitely one of the prime factors for people to work, it certainly is not the most important factor. There are many other tangibles & intangibles that go into motivating an employee and thereby increasing his contribution to the work place.

When a person looks for employment, in most cases, it would be driven by his needs for economic prosperity. This is what can be called the basic need. However, once he joins a work place, this alone cannot motivate him to perform better. It can ensure that he comes regularly and does his eight hour shift. But whether he enjoys doing it or whether he is effective is completely different. And any organization that looks towards innovation, growth & higher productivity needs workers who are inspired and zealous. These are intangibles and cannot be achieved by simply paying more. It is equally important to look at what culture is fostered in the company. To list a few - how conducive is the work place, is there good team work & knowledge sharing, does the work place encourage employees to think 'different' & innovate, is the company focusing on skills improvement to better employee productivity. And the most important of all, is there a career growth path & system of rewards & recognition for good performance. Rewards here does not mean only monetary. There is a widely accepted theory called 'Maslow's Hierarchy of Needs'. It states that human beings first need basics like housing, clothing, food, GMAT etc, but as they evolve, the need becomes more refined. For example, in any community once basic needs are addressed, man craves for higher'culture & art. Similarly, in an organization, money would be the main criteria for employee starting fresh, but as he moves up the value chain, he needs rewards & recognition from peers to satisfy and motivate him. And at the highest level of this pyramid, say the CEO of the company, the only motivation is to have a sense of achievement & leave behind a legacy.

Coming to tangibles, there are many other other benefits which an employee craves besides just money. It could be a job safety net, flexible working hours which allows better management of his personal life or even leave benefits. It can be even a minor convenience like office offering pickup & drop service.

Hence, companies looking at building system of motivation rewards for their employees would do well to consider both intangibles like those related to work environment & culture and other benefits, say a better work life balance. Monetary compensation will continue to be an important factor for employee productivity, but to treat this as the most important influencer and ignore other mans, can lead to failures.