With reference to motivation theory discuss the psychological foundations of pay

Length: 955 words

Financial reward or pay is a core component of employee motivation. Eminent thinkers such as Maslow, McGregor, Tolman, Locke, Pavlov, etc have contributed to our understanding of workplace motivation. Based on a synthesis of their theories, we are in a position to ascertain how key a role pay plays in motivating employees and enhancing their performance. The rest of this essay will attempt to do the same.

Motivation theory is not a single monolithic framework of analysis, but rather a product of contributions from various fields/disciplines within humanities. The intellectuals mentioned above have offered their theories from the perspective of their respective fields/disciplines. For example, Maslow, McGregor, Alderfer, McClelland have emphasized the physiological basis of employee motivation, whereas scientists such as Locke, Vroom, Kelly and Tolman have presented the cognitive basis of motivation. Social/behaviourist theories of motivation comprise the third school of thought, where seminal contributions were made by Pavlov, Taylor, Thorndike, Skinner, etc. An understanding of psychological motivations of pay is achieved by gleaning relevant points from these three schools of thought.

The behaviourist theory lays emphasis on the “effect of learning and reinforcement, and as a result the behaviourist theory of motivation is closely connected

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to the psychological theories of learning and reinforcement.” (Hume, 1995) Abraham H. Maslow’s ground breaking thesis the Hierarchy of Needs gives insight into human motivation (in the workplace or elsewhere). He notes that “all individuals have a set of human needs which are prioritized on an ascending scale, primary needs dealing with physiology and safety, and secondary needs dealing with the psychological aspects of human existence, etc. These needs in ascending order are: physiological, safety, social/love, esteem, and self actualization.” (Hume, 1995) Firstly, pay helps satisfy primary needs of physiological needs of safety and security by allowing for housing, clothing expenditures. Secondly, it satisfies the social/psychological need by bestowing a social status to the individual. Though this secondary need is subjective and less tangible, it is a powerful source of motivation nevertheless.

Coming to the Cognitive theories of motivation, the most important contribution comes from American psychologist Edward C. Tolman, who articulated his Expectancy Theory of Motivation. Here, he suggests that

“that the behaviour of individuals is not based on needs or drives but is determined by the presence of goals and the probability or expectancy that their behaviour will lead to the attainment or achievement of these goals…therefore, people are not driven by deprivations and needs but rather are guided to important goals by perceptions and cognitions.” (Hume, 1995)

Hence it is often the case that pay is a cognitively constructed goal, made possible by the viability of its achievement.

Contribution to motivation theory from social/behaviourist theories comes from Edward L. Thorndike’s Law of Effect. Thorndike formulates that the behaviour of animals (and also humans) is “directly affected by the consequence of such action”. (Hume, 1995) More specifically, those behaviours that are followed by rewards (including pay) are likely to be enacted again. Similarly, those behaviours that lead to punishments tended to subside over time. Hence, rewards such as pay have a positive effect, encouraging employee performance. The Law of Effect places high emphasis on “the concept of reinforcement – maintaining specific forms of behaviour by reinforcing consequences, be they positive or negative. It is this concept of reinforcement which remains central to the behaviourist theory of motivation.” (Hume, 1995) The Law of Effect is associated with the stimulus-response concept, which was further expanded by psychologists Ivan P. Pavlov and Burrhus F. Skinner.

Frederick Herzberg’s conception of ‘job enrichment’ also indicates the psychological foundations of pay. Herzberg believed that there are key motivators for work. They are achievement, recognition, responsibility, advancement, growth in competence and work itself. (Hume, 1995) Though these motivators sound quite abstract, one easily associate pay with each of these concepts.

Hence, it is fairly obvious that while pay plays an important role in the employment relationship, “it is not the be all and end all in all circumstances to everyone”. (Is Pay a Motivator?, p.6) For HRM practitioners, it is essential to “consider how much evidence there is that pay and rewards motivate people in similar jobs, organisations and cultures, what other factors are as important in motivating people and which methods provide an effective and efficient rewards system.” (Is Pay a Motivator?, p.6)

In order to translate the findings of motivation theory into effective practice, HRM professionals can adopt a number of proven methods of motivation. These include scientific management, ergonomics, work design, performance appraisal, etc. Scientific management of work involves answering this basic question – ‘What is the best way to do a job?’ and then proceeding to systematically design the work flow, schedule, allocation, streamlining team dynamics, etc. The implementation of scientific management will be a cost to the company, which is a cost borne on behalf of employees. Hence, the cost is an implicit form of payment to the employee.

Likewise, the HR team can ergonomically arrange the work environment so as to maximise productivity. By creating an environment with adequate and ideal heating, lighting, ventilation, rest breaks, work station and shift patterns for employees, the HRM department is indirectly incentivizing employee performance. Work Design is an allied method of motivating employees, whereby principles of job rotation, job enlargement and job enrichment work hand in hand to enhance the employees’ perception of work and consequently their satisfaction. Finally, performance appraisal and remuneration are more direct ways of motivating employees. This is achieved by way of interactive feedback between managers and workers and by quantitatively linking pay to performance.


Foundations of Pay, Is Pay a Motivator?, Department of Human Resources, University of Strathclyde Business School.

Hume, D. (1995), Reward Management: Employee Performance, Motivation and Pay. Oxford, Blackwell Publishers.

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