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Runninghead:CIRCUMSTANCES UNDER WHICH PAY INCREASE MOTIVATE PEOPLE 1
Circumstances under Which Pay Increase Motivate People
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CIRCUMSTANCES UNDER WHICH PAY INCREASE MOTIVATE PEOPLE 2
Circumstances under Which Pay Increase Motivate People
Introduction
Motivation has been one of the topic of interest that is often discussed and presented by a
number of people and groups. Motivation cannot just be created or observed directly on an
individual but it is something that must come from the inside of an individual, the point where a
person is driven from inside to act and achieve a goal. Therefore, it is a very complex topic that
is within an individual and is being influenced by a number of variables. Pay increase to
employees in any organization is likely to provide pleasure and satisfaction that they actually
can’t get from the task they are doing (Rynes, Gerhart & Minette, p.22, 2004). It was discovered
that some of the individuals whose salary are increased, they tend to work on the task even when
they have little interest towards the task because of the unexpected satisfaction that they are
likely to get from the pay increase.
According to research it is true to say that pay increase for employees who have worked
for a company for more than three years through an economy that is recovering from recession is
more enticing to the employees of the organization. According to the studies that has been
conducted, all employees are expect to be treated fairly when they think to have contributed to
their jobs. This is the point where employees feel that they should be rewarded by their
employers after have done well at place of work. It was discovered that for most of the
employees who were pleased with their wages when they got to the job, they will suddenly fill
that it is rubbish when they find out that the people they are doing with the same job, are all paid
twice their wages.
Maslow Hierarchy of Needs Theory

The Maslow law on the hierarchy of needs is a theory that has been applied for a number
of years. In psychology it is considered as a motivational theory that is composed of five model
of human needs. According to Maslow, individuals are motivated to achieve a number of needs
in their lives and he made it clear that some needs come before others. According to him, all
individuals will be motivated to fulfill their basic needs in order to survive (McLeod, p.13,
2007). Once a person fulfills the needs of one level, they are motivated to fulfill the needs of the
next level and so on. Therefore, it is of great importance for any person to understand that all
employees are working to satisfy needs from one level to another and for this to be possible, one
needs money.
Pay increase to employees in any organization is likely to motivate them at a broad extent
since they will now be in a position to easily fulfill the needs from one level to another. Most of
the needs according to Maslow motivate individuals when they are not met yet. Therefore, the
need to have the needs is likely grow more when they take more time before they are met
(Koltko-Rivera, p.36, 2006). Since the employees are motivated to be in the next level, they are
likely to work harder for pay increase at the place of work.
Herzberg Two Factor Theory
According to Herzberg, there are some factor in life that can cause satisfaction while at
the same time there are a set factors in life that can cause dissatisfaction at places of work. A
manager in a given company should understand the extrinsic motivators and make sure that they
are met for their employees. This type of motivators include salary, status and job security. There
are other motivators which are less tangible which are referred to as intrinsic motivators.

Therefore it is important for one to understand that pay increase is a form of encouraging
extrinsic motivators (DeShields & Kaynak, p.128, 2005).
All managers in any organization should understand the importance of keeping into such
motivators even if they are not part of the traditional of their workplace since they enhance team
performance. According to Herzberg, the extrinsic and intrinsic motivators are very inverse.
Intrinsic factors tend to motivate people at place of work when they are there while extrinsic
motivators tend to decrease motivation among individuals when they are absent Lundberg,
(Gudmundson & Andersson, p.890, 2009). According to Herzberg, intrinsic motivators are a
source of additional motivation when they are present while extrinsic motivators is what is
expected with any individual at the work place and they are not likely to increase motivation but
tend to cause dissatisfaction when they are absent. Hence salary increase at the place of work
will tend to cause more satisfaction to employees unlike when there is no pay increase to
employees.
Alderfer ERG Theory
According to Alderfer’s theory, human needs can all be satisfied at once instead of
following a certain hierarchy as per Maslow’s hierarchy theory. He says that when one need of
an employee is satisfied, employees will strive to satisfy the next need. It is therefore, important
for one to understand that for one to satisfy any need, money is very crucial. Therefore, pay
increase at the place of work is a motivating factor. According to him, there are three main needs
that an employees will struggle to fulfill. Therefore, the time an employee fulfills one need,
he/she attains the motivation of fulfilling the other need Arnolds & Boshoff, (p.697, 2002).
According to him, one is motivated to fulfill need to exist (health and safety), need to relate
(recognition and social status) and need to grow (meaningful work). According to him a number

of needs can be satisfied at the same time. Therefore, the difference between Maslow and
Alderfer is the fact that Maslow believed that only one need can be satisfied at a given moment
of time while Alderfer believed that any need can be satisfied at any given time (Bowditch,
Buono & Stewart, p.33, 2007).
Need for Achievement Theory
McClelland postulated this theory with considerations of motives that make people work
towards certain goals and they lie in the imaginations of an individual. Therefore, he suggested
that goals are somehow complicated as far as they are to be achieved in the future depending on
the permission of our imaginations. His original interest on this theory was on long-term motives
and goals with a major focus on determinants that lead to the achievement of the long-term
motivations on several individuals and the society as a whole (McClelland et al, p.34, 1976).
Therefore, he meant that there are determinants that lead to motivation and goal achievement
both to individuals and to an organization. For instance, the imagined goals have to be achieved
with a certain motivation. If an organization wants to achieve some goals, it is in such a need and
it must use all means to see to it that these goals are met fully. In such a circumstance, the
company may choose to increase the payment of employees while giving them the full
information for such action, and that is having them work extra harder to achieve the set goal.
According to Weiner (p.96, 1972), the employees will have to work extra hard to equalize the
increased pay with a much higher output so that they maintain their increased payment and
maybe secure a much higher payment again for posting exclusively exceptional and excellent
results or outputs in the organization.
Equity Theory

Adams postulated this theory, a behavioral and workplace psychologists in 1963. His
major proposal was that the motivation of employees gets affected if the employee has a belief
that the rewards of employment at the work place are unequal on several employees yet they put
the same effort in the work (Adams & Freedman, p.50, 1976). If in any case the employee finds
out that there is inequitable in the organization’s reward compared to other workers, they get
demoralized and loose the self-esteem of their work because they feel an injustice pinch in their
hearts. At this circumstance, the only solution that can motivate such employees is increasing
their pay so that they get an equitable amount just like the other employees of the same
categories. For the employee to maintain their input to the firm, their pay must be increased at
that very moment they launched complain so that they keep on working and putting more efforts
in their work. According to Mowday (p.116, 2011), if such measure of increasing their pay
cannot be considered, the employees might do something dangerous to the organization like
suing it in the court of law or even leaving the organization abruptly and looking for an
organization that has equitable reward to all its employees.
Goal Setting Theory
Locke postulated this theory in the 1960’s after researching about goal setting and
motivation by showing the clear goals and feedback that is appropriate give motivations to
employees. He also asserted that an easily attainable goal does not give motivation to employees
to have desired increase in performance (Locke & Latham, p.159, 1994). However, this setting
of difficult goals has some limits because in as much as the organization seeks to employ
difficult goals, they have to be realistic and attainable so that employees work over something
that has attainability. However, if employees have high income in the organization, they will
tend to set up more difficult goals so that they achieve them and make sure that they deserve the

high payment they receive. In this regard, it means that increasing the payment of such
employees at this circumstance will motivate them to set much higher but attainable goals and
they will be working extra hard in order to make sure that their increased pay can be accountable
with their results. With regard to Lee et al, (p.27, 1989), it is obvious that the workers will need
an extra motivation after getting a positive feedback concerning the attainment of the difficult
goals that had been set for them. As much as the positive feedback encourages better
performance, they also need to be motivated by some significant increase in the payment and
rewards.
Expectancy Theory
Victor Vroom postulated this theory in the 1970’s after developing an assumption that if
there are several alternatives, conscious choices result into behavior. People therefore tend to
minimize pain and maximize pleasure in such circumstances. This theory appears to separate
efforts that results from motivation, outcomes and performance unlike Maslow and Herzberg
observed the relationship between internal needs and the efforts needed for fulfillment.
According to Vroom & Thierry (p.81, 1996), the expectancy theory has an assumption that the
performance of employees depends on factors like the right skills for the job, abilities,
personality and experience in the filed in which they are. The theory has the aspect of expectancy
that has a belief that an increase in effort will definitely lead to a significant increase in the
performance. In this regard, the support from the job includes the increase in payment to the
employees as a motivation to a better performance. The employees also have a notion that if they
do something good for me, there is always something good in the end for them (Heneman &
Schwab, p.78, 2012). Therefore, at this circumstance, there is an urge to increase the payment of

the employees to motivate them to work harder towards the attainment of the organization’s
goals.
Therefore, it is evident that pay increase for employees who have worked for a company for
more than three years through an economy that is recovering from recession is more enticing to
the employees of the organization. There are theories postulated by several scholars that support
the notion of circumstances under which increase in pay motivates employees. As it has been
discussed, the theories include; Maslow’s Hierarchy of Needs, Herzberg’s Two Factor Theory,
Alderfer’s ERG Theory, McClelland’s Need for Achievement Theory, Adams’s Equity Theory,
Locke’s Goal Setting Theory and Vroom’s Expectancy Theory. Therefore, according to these
theories, there are several circumstances as it has been discussed in which increasing the
payment of employees leads to motivation.

References
Adams, J. S., & Freedman, S. (1976). Equity theory revisited: Comments and annotated
bibliography. Advances in experimental social psychology, 9, 43-90.
Arnolds, C.A. and Boshoff, C., 2002. Compensation, esteem valence and job performance: an
empirical assessment of Alderfer's ERG theory. International Journal of Human Resource
Management, 13(4), pp.697-719.
Bowditch, J.L., Buono, A.F. and Stewart, M.M., 2007. A primer on organizational behavior.
Wiley.
DeShields Jr, O.W., Kara, A. and Kaynak, E., 2005. Determinants of business student
satisfaction and retention in higher education: applying Herzberg's two-factor theory.
International journal of educational management, 19(2), pp.128-139.
Heneman, H. G., & Schwab, D. P. (2012). Evaluation of research on expectancy theory
predictions of employee performance. Psychological Bulletin, 78(1), 1.
Koltko-Rivera, M.E., 2006. Rediscovering the later version of Maslow's hierarchy of needs: Self-
transcendence and opportunities for theory, research, and unification. Review of general
psychology, 10(4), p.302.
Lee, T. W., Locke, E. A., & Latham, G. P. (1989). Goal setting theory and job performance.
Locke, E., & Latham, G. (1994). Goal-setting theory. Chair in human resources at the State
University of New York.159.

Lundberg, C., Gudmundson, A. and Andersson, T.D., 2009. Herzberg's Two-Factor Theory of
work motivation tested empirically on seasonal workers in hospitality and tourism.
Tourism management, 30(6), pp.890-899.
McClelland, D. C., Atkinson, J. W., Clark, R. A., & Lowell, E. L. (1976). The achievement
motive. 13-67
McLeod, S., 2007. Maslow's hierarchy of needs. Simply Psychology, 1.
Mowday, R. T. (2011). Equity theory predictions of behavior in organizations. Motivation and
work behavior, 5, 111-131.
Rynes, S.L., Gerhart, B. and Minette, K.A., 2004. The importance of pay in employee
motivation: Discrepancies between what people say and what they do. Human
resource management, 43(4), pp.381-394.
Van Eerde, W., & Thierry, H. (1996). Vroom's expectancy models and work-related criteria: A
meta-analysis. Journal of applied psychology, 81(5), 575.
Weiner, B. (1972). Theories of motivation: From mechanism to cognition. 66-113

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