Analyze the role that culture as a component of compensation design plays in the creation of motivation theories.

The motivational theories that were brought up in the article don’t appear to work or fit for todays work society. The Human needs theory for example explains that the job needed to be enriched so that satisfaction of the human need and certain criteria had to be met in order for workers to perform well (Bowey, 2005). Unfortunately with today’s economic crisis it is hard to find a job and let alone trying to meet all criteria’s for an employee to perform well, so this theory would definitely fail in today’s society. Outdated motivation theories could effect the way a person would get compensated and rewarded, which in turn they will not work as efficiently or as driven as they should. In todays workforce a rewards system is crucial in order to retain their employees and motivate them to make the company a success.

The role that culture plays as a component of compensation design in the creation of motivation theories is that everyone wants to get rewarded in different ways. There is no set way of employees getting what they want and rewards cannot be tailored individually. The article states that, “The key to success may be extensive consultation, allowing employees to adapt their expectations to the rewards available, while having some influence on the features of those rewards” (Bowey, 2005). Since motivation varies between individuals, groups and cultures, it seems that one of the best ways to keep employees content is to motivate them and differentiate the way they get compensated. By keeping up with new culture trends to reward the employee, and getting input of what compensation or rewards the employees want, can help boost morale. Great ideas that don’t cost anything but can make a difference, can help keep the employee encouraged to work hard and efficiently.


Motivation being one of the forces that lead to performance, is defined as the desire to achieve a goal or a certain performance level leading to a goal directed behavior. When we refer to someone as being motivated, we mean that the person is trying hard to accomplish a certain task. Motivation is clearly important if someone is to perform well. Most of human resources professionals appear to believe that employees are likely to over-report the importance of pay in employee surveys. However, research suggests the opposite is true. We review evidence showing the discrepancies between what people say and do with respect to pay. We then discuss why pay is likely to be such an important general motivator, as well as a variety of reasons why managers might underestimate its importance. We note that pay is not equally important in all situations or to all individuals, and identify circumstances under which pay is likely to be more (or less) important to employees. In fact, most employees are motivated by money. Employee motivation through compensation can come in the form of raises, performance bonuses, commissions, profit sharing, or any number of “extra benefits” like, automobiles, vacations, or other tangible items purchased and used as rewards.

Task One

Evaluate how outdated motivation theories can lead to ineffective and antiquated rewards systems, as noted by Bowey (2005). Scientific management is still the underlying theory behind many payment systems being introduced today. The motivational theories brought up in the article don’t appear to fit our society today. Institutions always keep salaries secret as it reduces social comparison (Bowey 2005). Unfortunately, with today’s economic salaries are not secret, which means in today’s world such a theory will not work. Outdated motivation theories could affect the way employees would get compensated and rewarded. Employees will not work as efficiently or as ambitious as they should. In today’s workforce a reward system is very crucial to retain employees and motivate them to be able to keep competitive top talented employees in a company.

Task Two

Analyze the role that culture as a component of compensation design plays in the creation of motivation theories.

Culture plays a vital role as a component of compensation; a great culture is not easy to build that is why high performing cultures are such a powerful competitive advantage. Yet organizations that build great cultures can meet the demands of the fast-paced, customer-centric, digital world we live in today. More and more organizations are beginning to realize that culture can’t be left to chance. Managers should treat culture building as an engineering discipline, not a magical one. Bowey ,2005 states “the theories discussed in this paper, and the remuneration systems based on them relates to management in Europe, Australasia and the US. There is evidence that Japanese management operates with theories consistent with recent US and Uk thinking; but remuneration in other parts of the world should be based on motivation theories relevant to the cultures of those countries”.

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