Is Financial Compensation Beneficial Or Detrimental In An Empowerment

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What is an Empowerment ? Basically empowerment means giving the employee the ability to do their work, i.e. through the right training, the right environment, the right information, the right tools and the authority that they need.

It is thought that by giving the employee increased power and responsibility that the employee will have increased motivation.

Organisations have developed a number of new programs in which it is hoped that employees will have empowerment and so increased motivation.

What is an Empowerment Program ? There are six different forms of empowerment programs.

i. Pay for Performance. This gives employees rewards in relation to their performance on the job. ii. Gain Sharing. Employees are rewarded when performance targets are met. iii. Employee Stock Ownership Plan (ESOP). Employees are given shares in the company and so co-own the company which allow them to share in the improved profit performance. iv. Lump-Sum Bonuses. Rewards are given to employees in a lump sum based on performance.
v. Pay for Knowledge. When employees learn new skills they are rewarded. This leads employees to learn new skills and so become more flexable within a company. vi. Flexible Work Schedules. Workers can set their own working times.

Motivation is a force which pushes a person to take a particular course of action, i.e. being motivated to go to school, to get something out of it, be it, to learn new things or just to get a good job out of it at the end which will bring high earnings.

A basic model of motivation is shown below:


This shows motivation in action, from the previous example we can show that the need is the desire to learn or to get a good job, the behavior is to go to college or university and then the reward is gaining knowledge or a good job.

There are two different types of reward ; intrinsic rewards and extrinsic rewards. Intrinsic are rewards gained in performing an action, i.e. f...

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...with his two factors that workers have a set of motivators that it is best to concentrate on as this will lead to more job satisfaction and so improved motivation, of these motivators none of these were financial rewards. Improving financial rewards will lead to less job dissatisfaction and not job satisfaction or improved motivation for the work.
Taylor argues that workers are like donkeys and that money is the main motivation, this is because in the capitalistic world today money does make a lot of difference and as in Maslow’s hierarchy of needs to satisfy the lower levels of the needs, money does make the difference and employees will be influenced by the amount of money that they can have, it will leave them feeling secure.
Overall I feel that financial rewards can be very beneficial in an empowerment program and lead to job satisfaction which will lead to increased motivation from workers.


Management, Fourth Edition. Richard L. Daft.

Business Information Technology, Systems, Theories and Practise. Geoffrey Elliot and Susan Starkings.

The Practise of Management. Peter F. Drucker.

Information Systems – A Management Prospective, Second Edition. Stephen Alter.

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