Business Brief – Differentiating Motivational-Based and Incentive-Based Management Processes

The question of motivating the personnel of an organization to make maximum efforts towards the attainment of its objectives has always occupied the minds of managers, and despite much research, study, and hypothesis, no foolproof rules have been able to be formulated that can be safely said to solve the many problems of motivation in all cases.

No rules can satisfactorily be offered simply because the behavior of human beings cannot be predicted with any certainty except in the most rigid and military style organization where behavior patterns are laid down and imposed, and strict and positive sanctions are known and applied rigorously.

It is the duty of the manager to endeavor to attain the organization’s objectives and this can be done only through people.  To achieve this goal, it is absolutely essential that staff at all levels be motivated to cooperate in the organizations plans and to work as efficiently as possible.

Motivation and Incentives

It used to be thought that enhanced financial reward was sufficient to motivate a worker to maximum effort; however, this is to confuse the two terms “motivation” and “incentive”.

Intrinsically, they are not the same in as much as motivation springs from within – essentially, it is an attitude of mind that may be encouraged by external factors but is fundamentally firmly related to self-discipline.

This motivation can remain even when the external influences that engendered it have ceased to exist and rather, it is entirely self-generated – arising through innate character attributes and remains unaltered by external factors.

On the other hand, “Incentive” belongs to those forces that are applied from the outside and is a positive external influence to encourage improved performance.  The effects of incentives cease as soon as those particular influences are withdrawn.

People at work (including managers) may be encouraged to greater effort by an increase in financial reward – be it earned by effort in the case of commission; bonus payments; and/or a straight increase in the contents of a pay package.

Consequently, this will usually have an effect only while the incentive is applied, and in the case of a rise in pay, only the initial period after the increase is awarded.  In fact, those experienced in management have observed that after a given point an increase in pay without the stimulus of additional work or responsibility may even result in a diminution of effort.

Non-Financial Motivation

If additional financial rewards are incentives and not truly motivational, there must be other means of motivating staff to perform at their best.

If extra money does not motivate, what does?  There are some general ways that are practiced with success by some organizations, and these are based on experience as well as formal research.  They center on the following aspects of work and to some extent also indicate why people work.  Managers should be aware of the fact that people do not work only for money – once a satisfactory income has been achieved pay becomes a secondary consideration even though it may be given emphasis in the yearly pay negotiations.

Reasons for working are different for different individuals, as are the factors that motivate them.

Job Security

A job spells security and is a common positive reason for working.  Further, working within a particular organization may spell even greater security than working within an alternate enterprise, which may motivate a person to accept one post in preference to another.  Central and local government services have a great attraction in this respect.


To be employed gives status in the worker’s own social environment, and if the work has an element of skill of social approbation so much the better.  Both socially and at work some jobs are looked upon as having greater status than others and many workers are motivated to achieve such status.  A skilled tool-maker has a higher status than a cleaner.

Use of Skill or Intelligence

Many workers are proud of their skills and work to employ them to the best advantage.  A dull, repetitive job is not calculated to motivate a worker to give the best possible performance.  One that demands imagination or the use of initiative is more likely to do this.  However, it must be appreciated that there are some workers who are content with routine work requiring no thought beyond carrying out strictly programmed actions – giving such people the chance to use their initiative will in all probability demotivate them.

Goals and Aspirations

Many of the more intelligent workers are motivated by the desire to achieve positions of responsibility and authority.  They see themselves as being in command of a section; department; division; or the entire organization – their motivation is to show their employers how well they can handle their jobs so that they will be promoted higher and higher up the management ladder.  Such staff must be able to see their way to the top if they are not to be lost to the enterprise since otherwise their burning ambition will urge them to seek opportunities elsewhere.  Hence, they are better motivated if a positive promotional policy is evident.

External Aspirations

A large number of workers are not motivated by promotion prospects because of an urge to take on responsibility but rather because of the fruits available consequent upon better earnings.  Such material acquisitions as a better house, a faster car, or long exotic holidays may motivate some to better work-effort so that income is earned commensurate with the cost of these external aspirations.  Equally, social aspirations such as public school education for the children or membership of an elite club may be the basis of the motivation.  It would be true to say that those in line for management are most like to be influenced by social aspirations.

A Congenial Work Environment

Many workers are positively motivated by a congenial environment in which they work.  Unfortunately, this stimulus has only a limited life and its effects disappear when the workers have become thoroughly accustomed to it.  Equally, favorable working hours are a temporary stimulus to positive motivation.

Type of Industry

There are many so-called glamour industries which attract people, particularly the younger ones, and motivation to work in these industries can be very strong.  They include advertising, fashion, and the various branches of the entertainment industries.  Probably, a worker feels some superior status when admitting to working with, say, a newspaper even when the position is only one of a clerk or storekeeper.


Practical Motivation

If financial incentives are not effective as true motivators, what steps can managers take to create positive motivation in their workforce?  It has been pointed out that different workers respond differently to any particular stimulus and it is certainly true that some motivating factors have only a temporary effect.  Nevertheless, there are a number of factors that are generally accepted as being of value in achieving some measure of success in encouraging positive attitudes.


An atmosphere of cooperation and trust must be generated between management and staff.  Perhaps it would be better described as mutual respect.  The old autocratic style of management is now resented by most workers, and a manager is no longer respected just because they are a manager.  Such a management style is indicative of lack of respect for their subordinates by those in authority, and such a situation does not generate respect by the workers for their managers or supervisors.

Without relinquishing their overt authority, a manager must be seen to have concern about their staff and their needs, and must nowadays actively seek their cooperation in making decisions which affect them as individuals.  In other words, there must be generated an atmosphere of participation, cooperation, and mutual respect.  One certain sign as to whether this has been achieved is when the workers, when discussing their employers, refer to “we” rather than “they”.


Human beings have a need to be esteemed and the manager who realizes this and actively recognizes his subordinates as people rather than working units is likely to be successful in motivating them positively.  Some senior executives, particularly, are aware of this as evidenced by the chairman of a substantial company who invariably made it his business to ask after the families of his staff, at all levels, whenever he made a visit to the works or branch offices, remembering personal details from the previous visit.

Recognition of the efforts of workers is also necessary.  All employees like to feel that their efforts are appreciated, particularly if some improvement in performance or some contribution outside the work requirements of the job has been achieved.  Words of praise or encouragement raise the morale of the staff, but they must be justified – mere flattery without a sound basis will have the opposite effect to that intended.


Really linked with recognition, to many workers status within their organization is important to them.  To some, it must be overt but to others, tacit recognition of status is enough.  Status must, however, carry with it commensurate responsibility and authority.  Just naming a worker “X Supervisor” or “Y Manager” without commensurate responsibility or authority, in other words bestowing an empty title, very soon turns sour.  Not only does the worker personally become dissatisfied, the respect of other workers may be lost and this mutual respect between members of a work-force is of extreme importance.

On the other hand, when someone has been carrying out the duties of a supervisor or manager without the formal title, to bestow the title is not an empty gesture, but it is an acknowledgement of status.


The reasons for people working at all are, therefore, many and various, and each worker will have a different combination of attitudes and motivations – some of which may not even be conscious ones.  A recognition that these reasons do exist should assist management to motivate the workers at all levels to give their best efforts.


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