Money isn’t everything … or is it?
A preliminary
research study into money as a motivator in the
licensed house sector
The aims of this paper are to
consider the role of money as
a motivator for managers and
staff in the licensed house
sector of the hospitality
industry and to consider the
implications of the findings
from both an academic and
an industry viewpoint. As part
of a one-day training event, a
pilot study was undertaken
with 57 managers and
employees of an independent
public house operator in an
attempt to establish what
makes people work and what
makes them work harder. The
research was then transposed
into an academic context and
related to underlying theories
and research studies. Initial
findings indicate that the
traditional approaches to
motivation do not necessarily
apply to this particular indus-
try sector. There are marked
differences between man-
agers and staff and these
differences appear to be
influenced by demographics
and level in the organisation.
International Journal of
Contemporary Hospitality
Management
10/4 [1998] 128–132
© MCB University Press
[ISSN 0959-6119]
[ 128 ]
Karen Meudell
Department of Business and Management, University of Portsmouth, Southsea,
UK
Karen Rodham
School of Management Studies for the Service Sector, University of Surrey,
Guildford, UK
Theoretical background
“One more time: How do you motivate
employees?” is, as Herzberg delighted in
telling us, the most reprinted article in the
history of the Harvard Business Review
(Herzberg, 1976, p. 49). Although there have
been criticisms of Herzberg’s theory (see, for
example, King, 1970), whatever the answer,
Herzberg, like so many behavioural scientists
tends to lessen the comparative importance of
money as a major motivator, preferring to
concentrate on issues such as challenging
jobs, the provision of feedback, a contribution
to decision-making and the like. Kohn (1993a;
1993b; 1993c), echoing a point made previ-
ously by Lee and Lawrence (1985), argues that
incentive pay schemes produce only tempo-
rary compliance and are ineffective at pro-
ducing long-term attitudinal and behavioural
changes; rewards merely motivate individu-
als to seek more rewards and can undermine
intrinsic interest in the job which is then
perceived as being merely a means to an end –
an expensive and short-term motivator. Both
employers and academics in the service
industries have tended to concur with this
idea: the notion that people enter the indus-
try because they “like dealing with people”
rather than to attain high salaries is one
which is long-standing and firmly
entrenched.
However, there have been some dissenting
voices: the basis of expectancy theory
(Lawler, 1973; Porter and Lawler 1968; Vroom,
1964) suggests that money will motivate to the
extent that it is seen as being able to satisfy
an individual’s personal goals and is per-
ceived as being dependent on performance
criteria. Indeed, Lawler is one of the
strongest advocates of the desirability of
linking reward to performance because pay
has certain optimal characteristics: it is
valued by its recipient, the size of the reward
can be flexible (unlike, for example, a promo-
tion, its value remains relatively constant
and the relationship of money to performance
is a very visible one.) Locke (1980) reviewed
four methods of motivating employees
towards improved performance – money, goal
setting, participation in decision making and
job redesign – and found that money was
overwhelmingly the most important. Robbins
(1996) suggests that money can be considered
to act as both a “scorecard” which enables
employees to assess the value the organiza-
tion places on them in comparison to others,
and as a medium of exchange in that individ-
uals can purchase whatever “need satisfying”
things they desire. Vecchio (1995) specifically
argues against Kohn’s proposition by suggest-
ing that rewards do not necessarily control
or manipulate behaviour, but can provide a
focus and reinforce good performance; the
detractors of the money/motivation/
performance school fail to offer any legiti-
mate alternatives; “At a time when organiza-
tions are demanding more work out of fewer
people, and flexibility and teamwork are
becoming prerequisites to staying in busi-
ness, properly crafted incentive plans provide
one means for joining employers and workers
in the risks and successes of the organiza-
tion” (Vecchio, 1995, p. 220).
Thus far the money/motivation/perfor-
mance argument can be considered to be bi-
polar: money does or does not motivate. How-
ever, there is a case to be made for a contin-
gency view, individual motivation is depen-
dent on a wide variety of variables which
could include age, gender, career stage, socio-
economic circumstances and even national
culture: Furnham et al. (1994) reported that
acquisitiveness for money was ranked higher
by young people in the Far and Middle East
while work ethic and mastery were ranked
higher in North and South America. “The
search for a generalized theory of motivation
at work appears a vain quest. A major deter-
minant of behaviour is the particular situa-
tion in which individual workers find them-
selves … motivation varies over time and
according to circumstances” (Mullins, 1993,
p. 449). Kovach (1987) also challenged the
notion that everyone considers pay and pro-
motion important; his research study looked
at 1,000 employees and asked them to rank
order ten work-related factors. Although
there was considerable similarity in prefer-
ences between men and women, there were
distinct differences in terms of age, income
level and level in the organization: younger
workers with low incomes in non-supervi-
sory positions were most concerned with
Karen Meudell and
Karen Rodham
Money isn’t everything … or
is it? A preliminary research
study into money as a motiva-
tor in the licensed house
sector
International Journal of
Contemporary Hospitality
Management
10/4 [1998] 128–132
money while older workers with higher
incomes and higher organizational positions
were motivated more by work which was
interesting, job security and being appreci-
ated for their efforts.
Weaver (1988) took the argument further by
suggesting that where jobs do not, and can-
not, offer intrinsic job satisfaction and where
they are broadly similar across an industry
the most effective motivation programme
(indeed, probably the only one) – which he
terms “Theory M” – will be one which is
based on direct cash rewards for above aver-
age productivity. Although suited particu-
larly to food and beverage operations, Weaver
suggests that the programme could be
extended to other hotel staff: night desk staff
for selling last-minute vacant rooms or house-
keeping for cleaning an above average num-
ber of rooms. This view is summarised by
Mullins: “The work of, for example, cooks,
dishwashers and waiting or housekeeping
staff does not change much among different
companies, so such staff feel little attachment
to a particular company. Where there is little
pleasure in the work itself or the job offers
little opportunity for career advancement,
personal challenge or growth, hourly workers
are working for their pay cheque” (Mullins,
1995, p. 258) although Herzberg would take
issue with this suggesting, somewhat dis-
paragingly, “There are a lot of Mickey Mouse
people. So put the Mickey Mouse people in
Mickey Mouse jobs … there are a lot of people
who will not be unhappy in Mickey Mouse
jobs, and who can be moved into them”
(Herzberg, 1976, p. 308). Given that there are
many jobs in the hospitality industry which
could be described using Mullins’ parame-
ters, it is arguable whether either employers
or employees would be happy to hear them-
selves or their jobs described in such terms –
it would certainly do nothing to improve the
quality of service provision.
Thus, approaches to the issue of money as a
motivator seem to have moved on from a bi-
polar approach to one which accepts that the
power of money as a motivator is contingent
upon various factors. In order to examine this
view further a pilot research study was
undertaken with a hospitality organization.
The organization
The organization studied is a large indepen-
dent licensed house operator which has
expanded rapidly over the last five years to
their current operating level of some 80
public houses and café bars throughout the
UK. The organization is structured on tradi-
tional hierarchical lines with individual
managers/management couples reporting
through an area manager to a main board
operations director. Although partially divi-
sionalised, there is a deliberate strategy not
to build up a specific brand identity; the com-
pany believes that each branch should be
considered as unique in its marketplace. This
individualism is also reflected in their atti-
tude to employees -– managers are encour-
aged to “own” their branch and to take
responsibility for decision making wherever
possible. There is no traditionally recognised
“management profile”, the company recruits
on merit and attitude rather than age and
experience and is one of the few organiza-
tions in this industry sector to consider
employment of younger management couples
who would be rejected on age grounds by the
larger brewery conglomerates.
Although the company’s head office is rela-
tively small there is a human resource man-
ager in post who is responsible for all long
and short-term human resource issues
including a well-developed programme of
basic skills training, and the organization
has exemption to manage and administer its
own British Institute of Innkeepers member-
ship programme. In addition to specific skills
training in areas such as cellar management,
promotion and marketing, trainer skills and
effective interviewing, there is an established
management development programme
although this is by no means prescriptive and
is tailored to match employee performance
and expectations with individuals being
encouraged to take responsibility for their
own learning.
As would be expected, non-managerial staff
tend to be largely part-time and/or casual bar
people, glass collectors or short-order cooks
with a high percentage of what the company
terms “travellers”, most usually Australians
and New Zealanders on working holidays and
whose length of employment averages
approximately three months. Labour
turnover, therefore, can be quite high and
there is an urgent need to bring new “travel-
ling” employees up to a competent standard
as soon as possible. A frequent complaint of
managers is that these staff are only moti-
vated to apply for the job in the first place
because, in the main, live-in accommodation
is offered and their main motivation to work
is to gain enough money to take them on to
the next stage of their travels.
The research study
The research arose out of a request to one of
the authors to develop a one-day workshop for
managers on the topic of “Motivating Staff
[ 129 ]
Karen Meudell and
Karen Rodham
Money isn’t everything … or
is it? A preliminary research
study into money as a motiva-
tor in the licensed house
sector
International Journal of
Contemporary Hospitality
Management
10/4 [1998] 128–132
Table I
Ranked questionnaire for managers and staff
Item
The chance to compete with others
Threat of losing the job
Prospects of promotion
Money
The way I am managed
The people I work with
Working conditions
Job satisfaction
Being allowed to make my own decisions
Fringe benefits
Job security
Bonus
[ 130 ]
and Building a Team”. The human resource
manager felt that this was an important
issue within the organization, particularly
in view of the fact that staff may only stay
with each branch for a short period of time.
Pre-course questionnaires were developed
from a previous exercise used with both
undergraduate and postgraduate manage-
ment students (Meudell and Callen, 1995).
Based loosely on the work of both Herzberg
and Kovach and including items which are
considered to be motivators and hygiene
factors, delegates, prior to attending the
training day, were asked to complete a ques-
tionnaire ranking the following items on a
scale of 1-7 where 1 was most important and 7
was least important. Table I shows the ques-
tionnaire.
A total of 57 questionnaires were returned,
16 from managers and 41 from employees.
The questionnaires were analysed and used
as a framework for the motivation section of
the workshop. In order to establish whether
the findings could form the basis of a valid
academic pilot study, additional analysis was
undertaken which is detailed below.
In total, 30 males and 26 females took part
with one respondent not specifying their
gender. Respondents’ ages ranged from 18
years to 53 years with a mean age of 28.37
years and a modal age of 23 years. Length of
service (los) also varied widely, ranging from
just one month to ten years with a mean of
14.67 months and a mode of one month. It
should be noted that while the sample is rep-
resentative of the employee profile of the
company, any assertions this study makes
regarding motivation will be influenced by
the bias of the sample towards young people
who have only worked for the company for a
short period of time.
What makes you What makes you
work? work harder?
Data analysis
The data were analysed using Spearman’s
Correlation Co-efficient for Ranked Data, a
one tailed test selected on the basis that all
the items contained in the list would affect an
individual’s motivation to work or work
harder.
General overview
Table II indicates the overall response and it
can be seen that money appeared to be very
significantly correlated with respondents’
motivation to work and work harder. In addi-
tion, included in the top five items were
money-related categories such as bonuses,
promotion prospects and fringe benefits.
Least significant was job satisfaction.
Having identified the overall trends of the
respondents as a whole, the responses were
further analysed in terms of length of service,
age, gender and job title.
Employees’ and managers’ motivation to
work and work harder
With the exception of “working conditions”
managers ranked many more of the
categories as significantly affecting their
motivation to work and work harder than did
employees who only ranked seven of the cate-
gories as being significant. The following can
be extracted as being of particular interest:
• For managers, the notion of job security
correlated with both working and working
harder. This was by far the most important
variable and was significant at the level p <
0.005.
• While managers emphasised job security,
threat of job loss, bonus, promotion, the
way they were managed, money, competi-
tion, colleagues and autonomy, in contrast
employees placed most importance on
bonus, money, promotion and fringe bene-
fits.
• For employees, the three most significant
categories were fringe benefits, money and
bonus (p < 0.005), while for managers eight
categories were ranked at this level of sig-
nificance – the top three being promotion
prospects, threat of job loss and job security.
Length of service and motivation
Those who had been working from up to six
months tended to place most emphasis on
money and bonuses, closely followed by
fringe benefits while those who had been
working for seven to 12 months placed most
emphasis on promotion prospects, competi-
tion, the people they worked with and job
satisfaction. It could be argued that these
people are beginning to know the job, the
Karen Meudell and
Karen Rodham
Money isn’t everything … or
is it? A preliminary research
study into money as a motiva-
tor in the licensed house
sector
International Journal of
Contemporary Hospitality
Management
10/4 [1998] 128–132
Table II
Total respondents’ motivation to work hard and
harder
Significance Category rs value
p < 0.05 Job satisfaction 0.3522
p < 0.025 Way I am managed 0.4143
p < 0.01 Job security 0.4426
p < 0.005 Autonomy 0.4775
Threat of job loss 0.4988
Fringe benefits 0.5005
Competition 0.5365
Promotion prospects 0.5477
Money 0.6115
Bonus 0.7004
organization and the opportunities that may
be offered to them.
However, those who had worked for the
organization for between 13 and 24 months
did not rank anything as being significant in
terms of making them work and work harder
and those who had worked for two to three
years placed most emphasis on bonus, per-
haps as the realities of organizational life
became apparent. Those respondents who
had worked for more than three years ranked
competition and promotion as being signifi-
cant in terms of making them both work and
work harder.
We can see, therefore, a trend beginning to
emerge with peaks at the beginning of
employment and as service becomes longer: it
could be suggested that length of service does
seem to have an influence on a person’s per-
ceptions concerning what makes them work
and work harder.
Age and motivation
The findings in this category would appear to
bear out the Kovach study in that the 18-24
year old age group (i.e. the “travellers”)
ranked fringe benefits, money and bonus as
influencing their motivation to work and
work harder. The 25-34 year old age group
ranked most of the categories as being signifi-
cant –- ten out of the possible 12 – while the
35-44 year old age group were much more
concerned with the threat of job loss and the
45-54 year olds more concerned with the cate-
gory of “bonus”.
Gender and motivation
Males, both managers and staff, ranked all
the categories as being extremely significant
(p < 0.005) while female staff ranked only
money and bonus at this level of significance;
promotion prospects and the threat of job loss
were also significant at the level p < 0.05. In
contrast, female managers only ranked bonus
and job security as being statistically signifi-
cant.
Conclusions
The survey was initially one of a pilot study in
one industry sector; although the findings
would suggest some validity, further research
would need to be undertaken to replicate the
survey in other organizations and industry
sectors in order to ascertain whether the find-
ings are specific to the licensed house sector or
the specific culture of the organization stud-
ied, and it is hoped that this may be under-
taken in the near future. There are, however,
preliminary indications that the currently
accepted perceived wisdom of the
“traditional” approaches to motivation may
have limited applicability and that the study
would appear to bear out the suggestions of
both Kovach and Weaver. While some of
Herzberg’s propositions are undoubtedly
worthy of note, his suggestion that hygiene
factors are a prerequisite necessary to allow
motivation to begin to occur are not replicated
in this study; hygiene and motivating factors
mean different things to different people at
different stages in their career – clearly money
is a major motivator for “travellers”.
Implications
Organizations and individual managers need
to recognise individual differences and to
accept that what motivates them may well not
motivate their staff, particularly if they are
peripatetic “travellers”. This may well call for
a renegotiation of individual psychological
contracts, a point raised by Taylor as long ago
as 1988: “Staff … have aspirations, desires,
ambitions and targets. It may be for promo-
tion, it may be for a pair of Levi 501s. It may
be to get home for Christmas or to pay the
electricity bill, or to finish up on the board.
You have to identify what people want out of
life and then offer them the bargain: if they’ll
help you to your ambition … you’ll help them
to achieve their objectives” (Taylor, 1988).
This is echoed by Boella: “Most organizations
will have to pay much closer attention to their
human resource policies as labour markets
become tighter and working people’s expecta-
tions and aspirations become heightened.
Which of … the models or variations on these
models will be the most suitable depends
upon a whole range of different influences”
(Boella, 1992, p. 38).
In addition, there are implications for ser-
vice industries which could impact not only
on remuneration policies but also on recruit-
ment and training. For example, should we be
employing people whose main motivation
appears to be money – or is the licensed house
sector sufficiently “different” that such
[ 131 ]
Karen Meudell and
Karen Rodham
Money isn’t everything … or
is it? A preliminary research
study into money as a motiva-
tor in the licensed house
sector
International Journal of
Contemporary Hospitality
Management
10/4 [1998] 128–132
[ 132 ]
allowances can be made? Alternatively, is it
time for service organizations to “bite the
bullet” and accept that where jobs are inca-
pable of being enriched, where there is little
intrinsic satisfaction in doing the job well,
where there is very little difference between
organizations in any one industry sector and
where competition for relatively low paid
hourly labour is low, the only alternative is to
accept that employees will work for a rela-
tively short term and only for money? If new
consideration is to be given to renegotiating
the psychological contract this should be
reflected in recruitment policies and proce-
dures: at interview stage potential employees
could be examined in greater depth than is
the current norm (i.e. interview at 5.45 p.m.
and start at 6.00 p.m.) in an attempt to ascer-
tain just what their needs and motivations
are and, although it is accepted that this is
perhaps a naïve hope which requires a total
industry culture change, candidates should
be encouraged to be honest. Employers
should also be encouraged to revisit the range
of reward options available to them and to
give consideration to the notion of a menu of
benefits which could be adapted to suit indi-
vidual employees: from subsidised accommo-
dation to bonuses based on sales, reduction in
wastage or the like. Indeed Herzberg, without
realising it, may have made the precise point
when he wrote “money is not a motivator; it’s
a good mover” (Herzberg, 1976, p. 304).
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