Write a three- to four- page paper (excluding title and refe…

Write a three- to four- page paper (excluding title and reference pages) in which you debate the pros and cons of monetary incentive plans from an employee motivation perspective. Ā Research and summarize two companies that have implemented successful motivation plans that did not involve monetary reward/compensation. Ā Discuss why these practices were successful based on needs-based motivational theory. Include two to three APA citations from current scholarly sources.

Title: The Pros and Cons of Monetary Incentive Plans: A Critical Analysis from an Employee Motivation Perspective


Monetary incentive plans are widely utilized by organizations to motivate and reward their employees. However, the effectiveness of such plans in enhancing employee motivation has been a subject of ongoing debate. This paper aims to critically analyze the pros and cons of monetary incentive plans from an employee motivation perspective. Additionally, it will explore two companies that have successfully employed motivation plans that did not involve monetary rewards, and discuss how these practices align with needs-based motivational theory.

Pros of Monetary Incentive Plans

Monetary incentive plans offer several advantages from an employee motivation perspective. Firstly, they provide employees with a tangible and measurable form of reward, which can be highly motivating for individuals seeking financial security and recognition. Through offering bonuses, commission-based incentives, or pay-for-performance systems, organizations can effectively link employees’ effort and performance to monetary compensation, increasing their motivation to achieve targets and meet objectives.

Another advantage of monetary incentive plans is that they allow for easy customization and flexibility. Organizations can tailor these plans to specific roles, departments, or individual performance, enabling a fair distribution of rewards and recognition. This flexibility enhances employee motivation as individuals feel personally acknowledged and valued for their contributions, leading to increased job satisfaction and organizational commitment.

Furthermore, monetary incentives provide a clear and direct link between effort and reward, fostering a sense of fairness and equity in the workplace. Employees who perceive that their efforts are directly rewarded are more likely to invest additional resources and exert greater effort to achieve desired outcomes. This, in turn, contributes to higher levels of productivity and performance, benefiting both the individual and the organization.

Cons of Monetary Incentive Plans

While monetary incentives have their merits, they also have inherent drawbacks that must be taken into consideration. Firstly, they may lead to short-term motivation at the expense of long-term commitment. Employees who are primarily motivated by financial rewards may become less engaged once they attain a certain level of compensation or face diminishing returns. Thus, reliance on monetary incentives alone may fail to sustain long-term motivation and commitment among employees.

Moreover, monetary incentives may have unintended consequences, such as the erosion of intrinsic motivation and the potential for unethical behavior. When individuals are exclusively motivated by extrinsic factors, such as monetary rewards, their intrinsic motivation to perform tasks for the sheer satisfaction of accomplishment may diminish. This can result in a decline in creativity, innovation, and overall job satisfaction, ultimately impacting the organization’s long-term success.

Additionally, the reliance on monetary incentives may inadvertently encourage unethical behavior, such as gaming the system or engaging in unethical practices to achieve targets and increase bonuses. When monetary rewards become the sole focus, employees may be willing to compromise ethics and engage in behaviors that prioritize personal gain over organizational values, leading to reputational damage and overall organizational harm.

Success Stories: Non-Monetary Motivation Plans

Despite the prevalence of monetary incentive plans, there are successful examples of motivation practices that do not rely on financial rewards. One such example is Zappos, an online shoe and clothing retailer known for its superior customer service. Zappos implemented a unique motivation plan called the “Zappos Culture Book,” which allows employees to express their passion for the company and share stories of exceptional customer service experiences. These stories are published and shared, fostering a sense of pride, camaraderie, and intrinsic motivation among employees.