Money : Does It Really Affect Hotel Employee's Performance As A ...

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R E S E A R C H C O M M U N II C A T II O N
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VSRD-IJBMR, Vol. 2 (2), 2012, 38-46
Money : Does It Really Affect Hotel Employee’s
Performance As A Motivational Factor !!!
ABSTRACT
1 Sunil Panwar* and 2 Nitin Gupta
Money is the most obvious Motivational factor for starting level hotel employees, whether it is in the form of
pay or some other kind of remuneration. Everyone wants to earn fair wages and salaries, and every employer
wants their employees to feel that he is the best paymaster. Thus it can be said that employees and employers
view money as the basic factor for job satisfaction. Employees can have different motivational factors; only
money cannot motivate an employee to change his job or only money cannot give proper job satisfaction to the
employees. In case of hotel employees’ hotel associates want more tangible rewards while the managers want
job security, recognition by management and time for their family. Thus Money may or may not motivate
people. Money serves as a highly tangible means of recognition. Though there are many reasons why people
work for a living, it cannot deny that money, or other financial rewards, play a key role in motivating people in
the workplace.
Keywords : Financial Rewards, Hotel, Job Satisfaction, Money, Motivational Factors, Remuneration.
1. INTRODUCTION
The hotel industry is a significant part of the tourism industry world wide and its employees play a key role in
delivering the service to customers. The motivation of employees, whether professional, skilled or unskilled, is a
major issue in all service organizations. For the hotel industry, employee motivation is a major issue. It is a
challenge for the hotel industry to motivate employees, to stay on the job, and to offer the efficient, good service
which customers expect. The purpose of this study was to assess the role of money as a motivational factor for
hotel employees.
1 Assistant Professor, Department of Hotel Management, Swami Vivekananda Subharti Institute of Hotel Management,
Meerut, Uttar Pradesh, INDIA. 2 Research Scholar (Management), Mewar University, Chittorgarh, Rajasthan, INDIA.
*Correspondence: sunil1982.hotelier@gmail.com

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2. LITERATURE REVIEW
2.1. Motivation
Motivation in simple terms may be understood as the set of forces that cause people to behave in certain ways.
Many people know motivation as the driving force behind an action. This may be the simplest definition of
motivation. Motivation can be considered the state of having encouragement to do something.
In any organization a motivated employee generally is more quality oriented. Highly motivated employees are
more productive. Motivated employees are needed in our rapidly changing workplaces. Motivated employees
help organizations to survive. To be effective, management need to understand what motivates employees
within the context of the roles they perform. For the hotel industry, employee motivation is a major issue. It is a
challenge for the management of the hotel industry to motivate employees, to stay on the job and to offer the
efficient, good service which customers expect (Cheng, 1995).
2.2. Motivation Theories
Five major approaches of motivation are Maslow's need-hierarchy theory, Herzberg's two- factor theory,
Vroom's expectancy theory, Adams' equity theory, and Skinner's reinforcement theory.
According to Maslow, employees have five levels of needs (Maslow, 1943): physiological, safety, social, ego,
and self- actualizing. Maslow argued that lower level needs had to be satisfied before the next higher level need
would motivate employees.
Herzberg's categorized motivation into two factors: motivators and hygiene (Herzberg, Mausner, & Snyderman,
1959). Motivator or intrinsic factors, such as achievement and recognition, produce job satisfaction. Hygiene or
extrinsic factors, such as pay and job security, produce job dissatisfaction.
Vroom's theory is based on the belief that employees efforts will lead to performance and performance will lead
to rewards (Vroom, 1964). Rewards may be either positive or negative. The more positive the reward the more
likely the employee will be highly motivated. Conversely, the more negative the reward the less likely the
employee will be motivated.
Adams' theory states that employees struggle for equity between themselves and other employees. Equity is
achieved when the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs
(Adams, 1965).
Skinner's theory simply states those employees' behaviors that lead to positive outcomes will be repeated and
behaviors that lead to negative outcomes will not be repeated (Skinner, 1953). Management should positively
reinforce employee behaviors that lead to positive outcomes. Management should negatively reinforce employee
behavior that leads to negative outcomes.
2.3. Importance of Motivation
Motivation is required for the organizations, because:
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� Motivated employees are always looking for better ways to do a job.
� A motivated employee generally is more quality oriented. This is true whether we are talking about a
manager spending extra time in handling a restaurant or hotel or an associate taking extra care when
arranging a function.
� Highly motivated worker are more productive than apathetic worker.
� Main purpose of motivation is to attract employees not only to join the organizations but also to remain in
it.
� Motivated employees perform the tasks in a dependable manner.
3. SOME OF THE MOTIVATIONAL FACTORS FOR HOTEL EMPLOYEES
There are many motivational factors which can be used or are using to motivate the employees:
3.1. Communication
Within a hotel organization, communication is utmost important for passing information from one individual or
group to another. It can be in different ways such as verbal, nonverbal, upward, and downward. Lack of good
communication causes low productivity, poor service, and increased costs (Drummond, 1990).
Communication is one of many factors to motivate employees into a cohesive working module which results in
objectives being achieved (Morgan, 1990).
3.2. Training
Powers and Barrows (1999) noted how training becomes an important activity for any hotel organization.
Training provides on-the-job experiences and information that help employees become more proficient or
qualified at a task at their current jobs. A well trained employee results in a reduction of costs, stress, turnover,
and absenteeism and a corresponding increase in efficiency and customer satisfaction (Mill, 1998). Steven
Hickey, senior vice president of T.G.I Friday’s, noted “training is probably the most important aspect of reduced
turnover because it minimizes mistakes and that minimizes a lot of reasons for turnover” (Powers and Barrows,
1999).
3.3. Wages and Salaries
Salaries are the most obvious motivational factor when it comes to our jobs. Employees constantly compete for
positions that offer the quickest, most easily accessible reward. Sometimes, many other motivational factors
may sacrificed by employees to attain job satisfaction. That is why whenever any associate got good pay in
another hotel or another service sector he moves.
Pay, is a major consideration in human resource management because it provides employees with a tangible
reward for their services (Bohlander, Snell, and Sherman, 2001). Stone (1982) indicated that people are
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motivated by money for many different reasons. The need to fulfill the basic necessities of life motivates most
people. Some people think of money as instrumental motivational factor, to satisfying non economic needs such
as power, status and affiliations with desired groups. Money is often viewed as a symbol of personal success and
achievement.
3.4. Fringe Benefits
Fringe benefits are additional to wages of workplace compensation. The fringe benefits for the workers in hotel
organizations help the operation by having a positive, motivating work climate, increases in productivity, sales,
profitability, excellent quality and cost control.
Money is an important factor to motivate employees but today, fringe benefits become equal to money as an
important role to motivate employees. Following are the different fringe benefits given in hotel organization to
its employees:
1. Health insurance: Health insurance is the most common benefit in the hotel industry.
2. Leave Travel Allowances: Mostly Hotel organization provide LTA (Leave Travel Allowances) to its
employees, in which they are given vacations with pay and some extra amount in the form of travel allowance.
It is generally agreed that vacations are essential to the well being of an employee. This benefit also favors
employees who need extra time to care for their aging parents or those simply wishing to spend their time with
their family.
3. Meals: In many hospitality operations, employees receive one free meal per daily shift and an unlimited
amount of coffee and soft drinks. At Subway, for example, employees can eat for free in the company’s
cafeteria; most hotels also serve meals in the employees’ cafeteria and do not permit employees to use food and
beverage outlets at their place of employment (Jerris, 1999).
4. Uniform: Every hotel organization provides two set of uniform, which are laundered in hotel itself and
provide to employees on rotation basis, i.e. washed against soiled uniform.
3.5. Good Working Environment
Wheelhouse (1989) noted that the working environment can often be a cause of low productivity. Employees
need adequate equipment, space, heating, lighting and ventilation. Color also has a significant impact on the
work environment. Restrooms and lockers need to be clean, secure, and well maintained. The food provided
should be the same for line employees as for the managers. Managers, including top executives, should be
expected to eat at the cafeteria except when entertaining. If it’s not good enough for managers, it should be
consider not good enough for line employees. Therefore, Cheng (1995) noted that a good working environment
means employees want the same conditions in their work as similar to the management. They need challenge,
support from superiors, a quality workplace, friendly co-workers and respect. To have a good working
environment, management has to trust and value to its employees.
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4. MONEY AND MOTIVATION
Money is the most obvious extrinsic reward. Money acquires significant motivating power because it comes to
symbolize so many intangible goals. It acts as a symbol in different ways for different people and for the same
persons at different times. Money can provide positive motivation in the right circumstance, not only because
people need and want money but also because it serves as a highly tangible means of recognition. Money can be
considered as "scorecard" through which employees can evaluate how much an organization values them.
Kochan (2002) argued that money works as a short-term motivation factor and it does not transform employee
attitude and behavior in the long term. He pointed out that money only motivates employees to seek further
rewards.
Another researcher in this area was Jaques (1961), who emphasized the need for reward systems to be fair and
equitable. As per him, the reward should be clearly related to effort or level of responsibility and people should
not receive less money than they deserve compared with their fellow workers. Jaques called this the ‘Felt-Fair’
principle. It is necessary to examine the motivational power of money in order to be able to assess the value and
importance of other motivators. Money is the means by which employees are directly rewarded for their
contributions towards the achievements of organizational goals.
As per the Maslow's hierarchy of needs theory, money is associated with the lower level needs, such as physical
and security needs. Maslow (1954) stated that once the lower-order needs are met, higher-order needs will
become most important. Thus, additional salary increases do not motivate employees any further. To improve
job satisfaction and performance level of employees, management must work on motivational factors by
providing opportunities for career advancement and development, as employees value motivators more than
hygiene factors (Ramlall, 2004).
According to Chester Barnard, money is the weakest motivator an organization could offer its members.
Herzberg totally rejects money as a motivator. Money however can be measured while other motivational
factors cannot.
“Money does not motivate employees”, this is often a very controversial statement with employees. Employees
want to believe that they are motivated by money, and want their boss and employer to believe that they are
indeed motivated by money (for fear that salaries and / or bonuses will be reduced). Most employees, of course
would never openly admit that money does not motivate them. But when asked few hotel employees that if any
organization offers them the higher position but at the same salary, most of the hotel employees accept to join it
for the sake of their social status. It shows that money does not work as a motivator always.
Some people, in select industries such as commission-based sales, might be highly motivated by money. And in
some tip dependent occupations (wait staff, door men, etc.), where the connection to behavior and reward is
almost immediate, pay can also be a motivator. However, these are the exceptions and not the norm.
Opsah and Dunnettee (1966) list five theories of explanations of the role of money in employee motivation and
performance.
� It is generally believed that money acts a generalized conditioned reinforcer since it is repeatedly paired
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with primary reinforces.
� Some suggest that money is conditioned incentive, that is, the repeated pairing of money with primary
incentives helps to establish a new learned drive for money.
� It is suggested that people learn to become anxious in the presence of a variety of cues that signify an
absence of money. Such cues include being told, “That costs too much money” or “We can’t afford that”
Such cues lead to feeling of anxiety (and perhaps feeling of insecurity) which money can satisfy.
� Money is seen as “hygiene” factor as in Herzberg’s two-factor theory. In this model, it is suggested that the
absence of money causes dissatisfaction, although the presence of money does not satisfy. It merely
eliminates the source of dissatisfaction and brings someone to a neutral state of satisfaction.
� Money can serve, as an instrument for gaining other desired outcomes such as building or buying a new
house, car or vacation. These accords with the expectancy/valence theory. Here money acquires value for
an individual to the extent that it can help to fulfill these other desires and needs.
Money, for example, could therefore be an instrumental reward for someone wanting a new car but may not be
either an instrumental reward or a motivator for someone seeking escape from the pressures of a routine, dead-
end job. For such a person only job enrichment can motivate.
Money could be a motivating factor but within some limited situation. However, we argue that employees take
money for granted as a reward for their labour and it is not seen as a motivator as such. Its absence breed’s
dissatisfaction, its presence however does not add to performance over and above the normal.
Research suggests that, as employee’s income increases, money becomes less of a motivator (Kovach, 1987).
Also, as employees get older, interesting work becomes more of a motivator.
5. SURVEY FINDINGS
When a telephonic and online survey done of hotel employees, employees reported that the three things which
motivate them the most:
(1) Good wages, (2) Job security, and (3) Opportunities for advancement and development.
There were differences among the hotel workers, however, based on their age and the area in which they
worked. While mostly employees ranked good wages as the most important job factor, few employees reported
opportunities for development and interesting work as the second and third most-wanted job factors. In contrast,
employees over 30 reported job security and working conditions as the second and third most-important job
factors.
This survey found that the best motivation factor for employees was “Salary”. According to a literature review,
Daschler and Ninemeier (1989) discussed in the strategies to employees’ motivation that “Each person is the
center of his own concern; however, the primary interest is to satisfy needs, ambitions, desires, and goals” and
“An employee wants to satisfy basic needs”. So the reviews of strategies of employees’ motivation that Daschler
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and Ninemeier said are true because salary is the basic need for the employees as per the survey.
When we surveyed in Delhi- NCR region hotels more than 40 % employees said that they need good salary
package and for that they always keep an eyes on good hotel’s vacancies. It means they are not happy with their
current pay package and that is the reason they are not satisfied with their job. Thus, it can be said money is
related to job satisfaction.
Few employees said that they have to work for long hours in hotel organizations, so they are looking a job in
another service sectors, where they will have to work for 9-10 hours, e.g. BPO’s, event management companies
etc. Few of them said if the hotel organizations increase their pay structures, the employees turn over rate will
decrease and the level of job satisfaction will increase up to a certain level.
Thus, the human resource director should be concerned about higher pay as his first consideration.
Wheelhouse (1989) said that the basic objectives of the wage and salary program are to help the company
attract and keep qualified people, provide equal pay for equal work, reward good performance, control labor
costs, and maintain cost equality with direct competitors.
The second motivational factor was “Job security”. So, Maslow’s theory can illustrate the motivational factors
of the Hotel employee because the first factor the employee chose was money, and job security was the second
factor. Furthermore, the investigation of Daschler and Ninemeier (1989) about strategies for employees’
motivation found that most employees want appropriate job security assurance. Thus, the most important factor
for them is job security.
And the third one was “Interesting Job”. Interesting job is one of the motivation factors that can reduce turnover
rate and absenteeism rate in every organization. Moreover, the investigation of Daschler and Ninemeier (1989)
of strategies to improve employees’ motivation found that other factors that can fulfill and motivate employees
are challenging work, work that yields a sense of personal accomplishment, increased responsibility and the
chance to grow in the job. And some more factors that employees need are job rotation, job enlargement and job
enrichment. Jerald and Robert (1997) reviewed Frederick W. Taylor’s book treating people like machines often
meant having them engage in repetitive movements which they found highly routine and monotonous. Then
people became bored with such jobs and frequently quit.
From these results, the motivation factors of employees in the Hotel are the same as the study of Charles and
Marshall (1992) in a Las Vegas: that good pay and job security are the first motivation factors of concern to
employees. Similarly with the study of Simons and Enz (1995), the study of 278 hotel employees from 12
different hotels located through United States and Canada found that those hospitality employees preferred (1)
good wages, and (2) job security. Additionally, the results of the study of Dr. Kovach found that good wages
always ranked about the first through the fifth on the list of ten items. Siu, Tsang and Wong (1997) found that
1,245 employees in Hong Kong’s hotel considered opportunities for advancement and development to be the
first important factor and loyalty to employees to be the second factor.
Therefore, hotel organizations should improve motivational factors as their employees require different
factors because they come from different backgrounds. As Daschler and Ninemeier mentioned in the
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strategies to employees’ motivation, employees are individuals. Everybody comes from a different
background, experience, education and family so they need different things. Human resources can adjust to
the appropriate way. Motivational factors can vary in each hotel and each period. Human resources
department should evaluate the employees’ needs every year.
“HVS has also completed proprietary research on the effectiveness of pay-for-performance metrics in the hotel,
gaming and restaurant industries, and its results generally reinforce the findings of researchers like Gupta and
Perry. That is, “money ranks below other factors relative to job satisfaction, but high on the motivational matrix
when all other factors have been met.” But as per our survey we can say that money motivates every employee
somehow, whether it is alone in combination of other motivational factors.
As per Mr. Nitin Tyagi (Management Trainee in a Resort, Ooty), if he got a job in NCR region at the higher
salary he will love to join. He also mentioned that if in NCR region he got the lower designation with higher
salary, he will leave this resort job from this place, while one of his friend in the same resort Mr. Shiv Karan
said that he is happy with the resort environment and he feels safe in this company & satisfied with his job
specification, so he will spend more time in the organization to get promotion and increments. When we spoke
to one another management trainee he told that he is getting highest stipend in his group and he is very much
satisfied with his job, but if he will get offer from another hotel with the higher salary he may be move. It seems
if the employees will get good salary, they feel satisfied with their job.
6. CONCLUSION
Each person has his or her own likes and dislikes, passions, interests and desires. As indicated in most of the
literature, salary plays an important role in motivating hotel employees. However, the strength of the
relationship between salary and job satisfaction may be influenced by another factors. Someone who values
money highly will be satisfied with his salary and ultimately his job when he receives a desired raise.
According to Lawler (1973), employees' pay satisfaction usually influences their job satisfaction. Tang et al.
(2004) found that pay satisfaction is a part of job satisfaction, which could lead to higher worker productivity.
Workers are inspired to achieve more and to give full effort only if they are satisfied with their pay. It is no
surprise that money is an important factor, but there are many other reasons for an employee’s decision to leave.
Lawler (1973) reported that absenteeism can result when pay dissatisfaction is present. According to Mani
(2002), workers who were absent from their works frequently were not satisfied with their job, whereas 69%
who were absent once or more in six months were not satisfied with their pay.
In order to find and retain the right people for the job, hotel organizations in India need to redesign their reward
and recognition packages according to the local culture. Each organization has to build its own motivation
system based on compatibility between organizational and individual goals.
7. REFERENCES
7.1. Books, Journals and Articles
[1] Cheng, H., Assessing the Importance of Employee Motivation in the Hotel Industry in Taipei, Taiwan.
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Unpublished master’s thesis, University of Wisconsin-Stout, Menomonie, Wisconsin, United States (1995).
[2] Daan van Knippenberg, "Applied Psychology;'" Work Motivation and Performance: A Social Identity
Perspective; July 2000
[3] Heneman, R. L. Merit pay: linking pay increases to performance Ratings. New York: Addison-Wesley.
(1992).
[4] Industry. East Lansing, MI: Educational Institute American Hotel & Motel Association
[5] James L. Perry, Debra Mesch, and Laurie Paarlberg; "Public Administration Review;" Motivating
Employees in a New Governance Era: The Performance Paradigm Revisited; July 2006
[6] Jerald, G. and Robert, A. B., Behavior in Organizations: Understanding and Managing the Human Side of
Work, Upper Saddle River, NJ: Prentice-Hall, Inc. (1997).
[7] Jerris, A. L. Human Resource Management for Hospitality. Upper Saddle River, NJ: Prentice-Hall, Inc.
(1999).
[8] Milkovich, G. T., & Wigdor, A. K. (Eds), Pay for performance: evaluating performance appraisal and merit
pay. Washington, DC: National Academy Press. (1991).
[9] Perry, J. L., Mesch, D., & Paarlberg, L. (2006). Motivating employees in a new governance era: The
performance paradigm revisited. Public Administration Review, 66, 505-514.
[10] Pooja Garg and Renu Rastogi, "Journal of Management Development;" New Model of Job Design:
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[11] Simons, T. and Enz, C., Motivating Hotel Employees. Cornell Hotel and Restaurant administration
Quarterly, 36 (1), 20-27 (1995).
[12] Tony Simons (Cornell's School of Hotel Administration), Cathy A. Enz Motivating Hotel Employees
Beyond the Carrot and the Stick
[13] Wheelhouse, D. (1989). Managing Human Resources in the Hospitality
7.2. Websites
[14] http://www.2020skills.com/asts/Money%20and%20Employee%20Motivation.pdf
[15] http://www.aspanet.org/scriptcontent/custom/staticcontent/t2pdownloads/Perry Article.pdf)
[16] http://www.ehow.com, How Does Motivation Influence Employee Performance?
[17] http://www.ehow.com/info_8229456_motivational-factors-jobs. Motivational Factors in Our Jobs
[18] http://www.PeopleBuilders.com
[19] http://www.scribd.com/doc/21300913/Employee-Motivation-Project-Report
[20] http://www.utor2u.net/business/gcse/people_motivation_financial_rewards.htm
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