Although some theorists like Herzberg believe that money is not a positive motivator (although lack of it can de-motivate), pay systems are designed to motivate employees.
The scientific / Theory X approach, in particular, argues that workers respond to financial rewards.
Getting employee pay right (often referred to as the "remuneration package") is a crucial task for a business.
Why is pay important?
There are many methods of financial reward:
Because pay is a complex issue, there are several ways in which businesses determine how much to pay:
However, it is important to remember that pay is only one element of motivation and will work best where management also give attention to: