Does an Increase in Wage Motivate Workers to Work Harder?

Introduction

Employee motivation and performances are critical elements that foster the sustainability and success of a business. Organization performance is said to be a combination of the workforce motivation level and workers' ability to execute an assigned task (Mahady & Hossain, 2017). The motivation for the workers to perform harder is a psychological impact which determines the course of one's behavior, efforts, and level of persistence within an organization. Monetary and other related factors play a crucial role imparting a positive motivation which is correlated to their workers' overall performance. This paper will present an argument that an increase in wage and salary motivates employees to work harder, through improved efficiency and proficiency.

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Pro-Argument

Workers require money to cater for their primary and luxury needs. Human wants are unlimited and satiable, which implies that they require resources to be satisfied. The main reason behind an individual seeking an employment opportunity is to enhance his financial ability in accomplishing both essential and secondary wants. It follows that employees will always be provoked to work harder with an objective of getting higher wages since they need more money to cater to their needs (Venkatachari, 2016). People need money to live, and it improves a person's ability to lead a comfortable life. For example, an increased income enables an individual to access quality healthcare services, purchase a decent house and cars, buy clothes, food and other necessities and luxuries. The allure of acquiring these commodities as a result of increased wages can propel workers to work harder.

Maslow hierarchy theory of motivation also demonstrates that an increase in wages can provoke workers to perform at relatively higher levels. According to Abraham Maslow, who is a humanist psychologist, people's actions are motivated by desires to accomplish specific needs in life. Through the 'theory of human motivation,' Maslow presented a hierarchy of human wants which implied that individuals are driven by the desires of fulfilling basic needs before moving to the comforts and luxuries (McLeod, 2018). At the bottom of the bottom of the hierarchy is physiological needs (hunger and sleep), followed by safety needs, social needs (self-respect and being involved in social activities), self-esteem and self-actualization. Through the hierarchy of needs, Maslow demonstrated that human beings are motivated to fulfill basic needs of food, shelter, and clothes before moving to the higher level needs (luxuries). Using Maslow Motivation Theory, it can be asserted that increased wages will intrinsically provoke workers to harder, attributed to the expectations and allure of fulfilling the basic needs as highlighted by the hierarchy of needs.

Higher wages increase employee productivity, which can be attested by the scenario at Walmart Inc., which is a crucial retail store in the United States. Current organizations are concerned with the implementation of the operational strategies which can yield a productive workforce and happy customers (Spencer, 2017). According to the Walmart's financial reports on the 2015 fiscal year, the company had recorded a fall in its total revenue, for the first time in over 50 years. Before the publication of the report, it had been revealed that customers had shown displeasure in long queues, dirty bathrooms and unmotivated staff (Spencer, 2017). As a way of resolving the issue, Walmart Inc. embarked on increasing the basic salary of its workers in 2015. The 2016 financial reports indicated that the sales had started rising. According to this scenario, it is suggested that increasing wages can motivate workers to work harder, which can be manifested in the company's overall productivity.

Increased wages is an indication that an organization appreciates the input of its staff. According to Spencer (2017), improvement in wages is a necessary approach applied by an organization to boost the morale of its workforce, which demonstrates that their efforts are valued. The way people feel at the place of work determines their levels of productivity. Mahady & Hossain (2017) reiterated that employees who feel respected, valued, engaged, given equal opportunities to grow and fairly treated would be motivated to work harder than those workers who are less appreciated and paid relatively lower salaries. Lower wages encourage employee absenteeism and higher turnover which are deterrents of employee productivity. This suggests that increased wages improve employee loyalty, thus prompting workers to perform at the optimal levels.

Improved wages provide working conditions, which enable employees to be more efficient and committed to their assigned tasks. Efficiency wage theory asserts that increased wages facilitate an improvement in labor productivity. Whenever firms increase their minimum wages, the higher costs will be compensated through increased staff retention and higher labor productivity (Wolfers & Zilinsky, 2015). Application of the efficiency wage theory foster loyalty amongst employees, ultimately making them more willing to work harder for the betterment of the company. On the contrary, discontent workers who feel exploited and unfairly treated due to lower wages will perform at their minimum potential, will be unwilling to work extra hard and take more breaks from work. This implies that increased wages create conducive working conditions for the staff to excel.

An increase in wages attracts a higher quality workforce. A firm which utilizes employee compensation and benefits plan which is above the clearing draws highly skilled personnel, who are seeking a relatively better-paying job. Assembling of the talented pool of employees is vital when it comes to boosting the morale of workers. Akerlof (1982) observed that labor market could be likened to a 'gift exchange' the goodwill between an employer and employee is determined by best labor relations implemented. Using this assertion, companies paying wages which are above the clearing levels nurture workers who are readily able to assume more responsibilities and initiatives. Furthermore, who are given improved salaries are often motivated and require less managerial supervision, thus lowering administrative costs, which in return improve the overall productivity of an organization.

Improved wages can curb disciplinary issues and absenteeism, which is a crucial factor in increasing productivity among employees. Cappelli and Chauvin (1991) demonstrated that in factories where the wages were higher than those offered the local labor market, fewer disciplinary cases were recorded. The survey documented a decline in disciplinary cases among the workers who had been given a wage rise (Cappelli & Chauvin, 1991). Similar studies indicated that the incidences of staff absenteeism were lower when the pay is higher as compared to the cases where the wages were relatively lower. A disciplined workforce, characterized by higher levels of commitments and engagement, is highly productive and ready to work harder for the accomplishment of the organization's goals.

Counter-Argument

Higher wages do not necessarily motivate employees to work harder in an organization. Effective communication, provision of challenging and exciting working conditions, availing career development opportunities and recognition and rewarding performance are considered to be essential factors that motivate employees to work hard. Management that effectively communicates and addresses the employees' concerns is likely to develop a highly motivated and productive workforce (Mahady & Hossain, 2017). Through the implementation of the career training and advancement programs, an organization is likely to reward top-performing employees, thus promoting accountability and transparency amongst workers. Apart from money factor, employees also require to be trusted by giving them control over their job, lest they are demoralized and demotivated, hence being less productive.

The approach of a higher wage to enhance employees' productivity advocate the use of the warnings, through salary increments, with the hopes of provoking the staff to work hard can fail. Workers can oppose the strategy, causing managerial crises (Akerlof, 1982). Under such scenario, an organization is required to explore other strategies that can boost employee motivation levels that encourage workers to increase productivity, other than a wage increase. This implies that an administration should investigate different factors which improve satisfaction and happiness levels amongst workers, other than money.

Conclusion

The money factor has an overwhelming impact on people. Human nature dictates that individuals strive to make their lives better by seeking jobs that have relatively a higher income. Since human wants are satiable and competitive, individuals are always exploring ways which can boost their financial ability to cater to their needs. Different organizations have integrated the monetary aspect in their managerial strategies to ensure they maximize employees' potential, which attests that an increase in wages can motivate the workers to improve their productivity levels.

References

Akerlof, G. A. (1982). Labor Contracts as Partial Gift Exchange. The Quarterly Journal of Economics, 543-569. Retrieved from https://doi.org/10.2307/1885099

Cappelli, P., & Chauvin, K. (1991). An Interplant Test of the Efficiency Wage Hypothesis . Research Gate , 1-3.

Leddy, C., & Gazette, H. (2013). Do Employees Work Harder for Higher Pay? Research & Ideas, 1-3.

Mahady, T., & Hossain, A. (2017). Impact of Motivation on Employee Performances: A Case Study of Karmasangsthan Bank Limited, Bangladesh. Arabian Journal of Business and Management Review, 1-3.

McLeod, S. (2018). Maslow's Hierarchy of Needs. Simply Psychology , 1-4.

Spencer, D. (2017). Higher Real Wages Would Raise Productivity and Boost Demand. The London School of Economics and Political Science, 1-3.

Venkatachari, M. (2016). Human Wants| Their characteristics - A study of Needs, Comforts and Luxuries. Hubpages , 1-3.

Wolfers, J., & Zilinsky, J. (2015). Higher Wages for Low-Income Workers Lead to Higher Productivity. Peterson Institute For International Economics, 2-6