The paper "Behavioral Wage Theories" is a great example of a finance and accounting essay. Behavior refers to the natural reaction to oneself and/or the environment. On the other hand, motivation refers to the process of influencing other people to do work on behalf of a person or a business organization with a promise of reward or gain. Compensation or remuneration normally has a behavioral aspect that addresses the need for having goals fulfilled. The four main behavioral wage theories include the need fulfillment theory, the expectancy theory, the reinforcement theory and the justice theory.
This paper briefly explains the four main behavioral wage theories and suggests ways in which the theories influence compensation in organizations. The need-fulfillment theory The need-fulfillment theory was developed by Abraham Maslow. He came up with a hierarchy of needs that apply to any person, ordered from basic needs to self-actualization needs. According to Maslow, every individual has a hierarchy of needs that are satisfied in a given order with the most basic needs being satisfied first (McLeod, 2014). Maslow also believed that as every individual goes up in the needs hierarchy, the perceived value of the preceding needs decreases.
The hierarchy of needs, as developed by Maslow, starting from the lowest in the hierarchy to the highest in the hierarchy is as follows: “ basic need (food, shelter, clothing), safety need (emotional and physical safety - health insurance, pension), social need (affection and belongingness to society), Self-esteem need (power, achievement, status, etc. ), and self- actualization (personal growth, the realization of potential) (Essay, 2015, p. 1). ” Despite results from some studies showing that the fulfillment of needs does not necessarily result in well-being (Moss, 2011); needs fulfillment motivates employees and increases their output, which in turn results in better organizational performance.
To show how needs fulfillment results in motivation, the work of Maslow was extended by Hertzberg, who divided needs-fulfillment-based motivation into two categories including extrinsic and intrinsic factors.
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