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Role of money in motivation:
Money plays an important role in motivation. Managements generally make use of financial incentives like wages and salaries, bonus, retirement benefits, health insurance, medical reimbursement etc, to motivate the workers. However, such incentives may not always prove to be motivating. In many cases, management may have to increase the financial incentives to keep the workers with the organization. This can be appreciated form the practise of making wages and salaries competitive b/w various enterprises so as to attract and maintain good work force. Money is a real motivating factor when the psychological and security needs of the workers have not been fully satisfied. Money plays a significant role in satisfying these needs. Therefore management can use financial incentives for motivation. Money helps in satisfying the social needs of the workers to some extent because money is often recognized as a basis of status, respect and power. Money is also an important means of achieving a minimum standard of living although this minimum has the tendency to go up as people become more affluent. But this should not lead one to conclude that money will always be a motivating factor to all people. To some people, importance of money will be reduced after a certain stage. To them, non financial rewards are more important. They are motivated by money only upon the stage they are struggling for psychological and security needs.
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