Money, is the basic motivator when people do not have not enough articles of prime necessity for a survival, but it hardly falls into to people in the rich countries, which have often money more than enough to satisfy the basic needs in food and a shelter. It is especially correct concerning general directors and the high-ranking chiefs who are subject to a money power and in many cases, have not one house, and two or three in different parts of globe.
There is a number of the reasons in which money does not act in a motivator role. First, it is a bait in short-term prospect. Bonuses and pay increase in the beginning can lift labour efficiency, but their force fast disappears. There are psychological phenomena named by "accustoming". People start to accept a subsistence level or awards for something self-evident. Thus, for money to be an effective motivator, the sum should increase constantly.
Secondly, there is a danger connected with use of money as the basic motivator. People who get under a money power , most likely, put own interests, above than long-term interests of the company.
Thirdly, there are no bases to believe that bonuses will involve talents and to keep staff. Always there is someone who is ready to offer more money for work.
Fourthly, using money to entice talented people from other companies, often there are unpleasant consequences. People become superstars of the company, in particular, because they have created a network of relations in the company and know how to achieve the objective in this company, but this organizational knowledge is not passed other companies. When stars start to work in the new organisation, they work often badly because they should rearrange organizational knowledge and the social capital which fed their successes in their previous company.
Fifthly, as well as teams, the companies acquire a fortune, at the expense of the people working together. Allocation of people on bonuses following the results of work destroys command work and cooperation. It also creates a resentment because all consider that they are worthy a more bonus.
Sixthly, alignment of monetary incentives is difficult for making for high level posts in which the majority of people are so far from production that it is impossible to measure the individual investment in successful results.
It is necessary for Companies to revise the belief in force and a money power. If they have decided to use money as the basic motivation this decision should be based on the solid data testifying to close interrelation between monetary incentives and labour efficiency.