IS PAY ALONE THE DETERMINANT OF PERFORMANCE?

By

Chinwe Ebere Nwosu

INTRODUCTION

Incessancy in performance is the major objective of any organization because it is paramount to

their growth and sustainability. Managers are learning to go beyond the norm to extend their
market presence, relevance and competitive advantage.

The world of work is evolving and the old organizational culture of finance being the most
important focus can no longer exist in this recent world of globalization since different needs and
expectation drives people to join an organization and produce results - perform. “The psychology
of work is tremendously complex and what has been unravelled with any degree of assurance is
small” (Herzberg, 1986).

The question of knowing what self-possible way to improve performance can only be acquired
by taking cognizance of key determinant of performance – which is rooted to motivation;
Intrinsic, Extrinsic, Monetary or Non-monetary, only then would an organization be able to
channel properly to this discovery to attain and maintain a market lead.

PAY AS A DETERMINANT OF PERFORMANCE

Intuitively, one would think that higher pay should produce better results, but scientific evidence
indicates that the link between compensation, motivation and performance is much more
complex. In fact, research suggests that even if we let people decide how much they should earn,
they would probably not enjoy their job more. (Tomas Chamorro-premozic 2013)

People are more likely to underreport than to over-report the importance of pay as a motivational
factor in most situations. Put another way, research suggests that pay is much more important in
people’s actual choices and behaviours than it is in their self-report of what motivates them to
perform (Rynes, Gerhart & Minette 2004)
OTHER DETERMINANTS OF PERFORMANCE

Recognition is important; it builds positive self-esteem. By itself, its benefits are short lived.
Long-term benefits are achieved when the employee feels the job could not have been done
without them. This means they were faced with a challenge, which means, they had the
responsibility and authority to take action (Webb 2016)

Brown, Cress and Ballard (1984) defined recognition as another type of reward. Some
recognition programs could include; employee of the month and year awards, longevity and
attendance awards and newsletter sections. These programs are less expensive than monetary
reward systems but like monetary rewards, it also suffers the disadvantage of being a deferred
reward programs. No one would deny the importance of recognition/reward systems, but many
argue they are insufficient to solely provide motivation impetus. Constant reinforcement during
the job comes from other factors as well. Many of these supporting factors are located under the
title "job enrichment."

Nwachukwu (2012) in her study found that the structure of an organisation increases the
effectiveness of the employees, bringing about the increase in productivity of the organisation.
Simply put that the way an organisation is structured does not only have an immediate impact on
the employee performance but the overall organisational performance and efficiency of the
organisation.

Nwonu, C.O, Agbaeze, E. K., Obi-Anike, H.O., (2017) where of the opinion that the major
challenge for managers and scholars is finding the best organisational structure which
enhances optimal organisational performance because poor organisation structure is as good
poor performance irrespective of the ability of those concerned, and vice versa.

According to Mansoor et al., 2012 as cited in (Nwonu, C.O. et al), the ideal organisational
structure is a recipe for superior performance this includes the nature of layers of hierarchy,
centralization of authority, and horizontal integration. It is a multi-dimensional construct in
which concerns: work division especially roles or responsibility including specialisation,
differentiation or departmentalization, centralization or decentralisation, complexity; and
communication or co-ordination mechanisms including standardisation, formalisation and
flexibility.

Harminder Kaur Gujral (2013) in reviewing the determinants of performance noted that
Employee Engagement serves as a stronger predictor of positive organisational performance
showing a two way relationship between employers and employees. He was the opinion that
engaged employees become more committed to achieving due to emotional attachment that this
creates. According to Markos and Srideri (2010) as cited by (Harminder 2013), performance is
built on employee’s engagement which is built on the foundation of earlier concepts like job
satisfaction, employee commitment and Organisational citizenship behavior.

CONCLUSION

Organization has an important role in our daily lives and therefore successful organization
represents key ingredient for developing nation. (Carina et al 2011)

These many economists consider organizations suitable to an engine that is used in determining
the economic, sociable and political progress. The tangibility of this can be seen in performance
which is the measuring benchmark for any organization success and since the organization
constitutes the divergent people in a symbiotic relationship, it is difficult to categorically say that
one factor alone determines performance

The integration of these various determinants in the right proportion is paramount to

performance and organisational success.

Employee dissatisfaction unlike wine doesn’t get sweeter as it ages; it gets acerb instead-
breeding contempt and in turn dwindling performances and productivity till it fizzles out a
promising organisation. Being the most important resource of any organisation, the Human
Resources with its many complexity and divergence in attitude towards work is a functionality of
motivation; be it monetary-pay or not; there’s no actual work without a spur.

Rafique, Tayyab, and Kamran (2014) established from their research that management is capable
of manipulate different useful procedures and campaigns to encourage employees and provoke
their stimuli in workplace environment; different tactics, strategies and policies may have
unusual effects on different people in different situations. It is extremely necessary to take into
account the unique quality of condition and team of different people. As different people in
organisation display different cultures, it is therefore the job of the management to consider
different alternatives according to situation.

It is not with doubts that there is a slightly positive relationship between pay and performance
but sustainable performance is a result of several factors. If organization provides good pays,
bonuses and promotion to do things effectively then employees will be motivated toward
organization goal, similarly, intrinsic and non-financial factors like Job satisfaction,
Organizational structures, Recognition, Employee Engagement has significant positive effect on
performances as much as pay does.

REFERENCES

Brown, J., Cress, M. and Ballard, B. J. (1982). Employee motivation and productivity. Montana
State Library

Nwachukwu, L. (2012). “The Impact of Organisational Structure in Effective Management

of Nigerian Organization: A Study of Nigerian Brewery Plc, Enugu.” A Research Project
Submitted to the Department of Business Administration, Faculty of Management and
Social Sciences, Caritas University, Amorji-Nike, Enugu, Enugu State in Partial Fulfilment
of the Requirements for the Award of Bachelor of Science (B. Sc) Degree in Business
Administration.

Rafique, A., Tayyab, M. S., Kamran, M. (2014). A Study of the Factors Determining
Motivational Level of Employees Working in Public Sector of Bahawalpur (Punjab, Pakistan).
International Journal of Human Resource Studies, 4(3)

Webb, B. (2016). Motivation in the workplace. Ibis, Goose Greek: Captain Bob Webb

Tomas Chamorro-premozic (2013): Does money really affect motivation

https://hbr.org/2013/04/does-money-really-affect-motiv