Important Relationship Between Motivation and Economics - Free Essay

Published: 2019-11-18
Important Relationship Between Motivation and Economics - Free Essay
Categories:  Human resources Economics Motivation
Pages: 5
Wordcount: 1223 words
11 min read

Every company operates so that it can generate profits and create value for the shareholders. This depends on the efforts that the employees make in their daily activities to ensure that work is done. The efficiency of the employees is very important because it determines the costs that a company incurs in the revenue generation. The better productivity of the employees means greater output to the companies that leads to greater benefits than costs. To increase the productivity of the employees, motivation is an important factor. This paper evaluates the relationship between economics and motivation, linking the same to the case of a special program that Google Inc. uses to motivate its employees.

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Google spends a lot of money in motivating its employees in the form of various benefits. The salaries that the employees receive are huge, and the company has a unique design of the offices that the employees work in. The other benefits include free medical benefits, insurance cover, free meals in the workplace, and the free servicing and washing of the employee vehicles. The employees are also given a lot of freedom to do whatever they want and choose the projects that they are to handle. The employees are given maternity and paternity leave which is paid, and in addition to the salary, they are also given some money to spend during their leave days (Jost, & Edward, 2016).

Looking at the program, it is evident that it is very costly for Google Inc., but it is obvious that it is affordable for a large company like Google. Regardless of this, one would argue that it is not economical for the company to offer such huge benefits for the employees. It is possible that the company eliminates such benefits and still generates revenues (Jost, & Edward, 2016). However, it is obvious that the fact that the CEO accepted the special program means that it is beneficial for the company. The CEO could not approve such a program if they were aware that it did not lead to net benefits for the company.

The CEO of the company must have carefully evaluated the costs and benefits of the program, and confirmed that it is of greater benefit to adopting the program. The program serves various purposes that make it economical for the company to incur the huge amounts of costs. Studies show that the attitude of employees in the workplace is a major factor that influence the costs that the company incur. With the freedom that the employees in the company have, they are likely to develop positive attitude towards work considering that they can choose projects that they can do best. Their freedom to be creative and come up with best ways of implementing projects and dealing with problems at the workplace means that the employees are motivated to give their best for the company they work for (Martin, 2014).

By having the program in place, the company avoids high employee turnover and encouraged employee retention. The company can also easily hire highly skilled individuals since many people would be interested in working at the company. Employee turnover is costly for a company because losing a talented individual to a competitor in the same industry would mean the loss of trade secrets which would adversely affect the profits for the company. It takes a lot of resources in terms of costs to hire and maintain an employee in the workplace (Norsworthy, & Zabala, 1990). When such an employee leaves the workplace, it means huge financial loss for the company which cannot be immediately be compensated for. Whenever an employee leaves a company, it means some additional costs which were not planned for because there would be a need to advertise for the position, and then conduct interviews before a qualified person is hired (Martin, 2014). This requires expenditure and interruption of daily work especially if the top management is involved in the hiring process. It is thus not economical to have employees leaving a company because of lack of economic incentives.

When employees are not satisfied with their work, their productivity decreases, and this costs the company a lot. The employees at the workplace may end up spend a lot of time online applying for jobs in other companies and some other cases, they take sick leave even when they are not sick. The man hours that are lost in these circumstances are expensive to the company. According to Maslow Hierarchy of needs, companies have a duty to help the employees meet their needs. The hierarchy explains that as long as the employees are able to meet their needs, they dedicate more of their time and efforts to company activities and this leads to greater benefits to the company. In the example of Google Inc. program, the good pay for the employees help them meet their basic needs and the fact that there are various programs that intend to make the employees happy, they are able to meet their social needs of affiliation (Martin, 2014). Such an environment is likely to make the employees very productive in their daily activities.

The environment that aims at making the employees happy by ensuring that they are empowered to achieve their dreams in the organization they work for eliminates the negative attitude that some employees may have about the companies that they work for. Some companies treat the employees as assets that can be used to achieve certain goals, which means that they dictate what the employees should do. On the other hand, companies like Google that view employees as assets that are important and valuable change the attitude of the employees (Bilgin, & Danis, 2016). This motivates the employees to give their best in terms of their efforts and skills to ensure that the company performance improves because the growth of their company means an improvement in their lives.

In conclusion, there is a positive relationship between economics and motivation in the workplace. Employees are motivated if they are able to meet their basic needs easily through the support of the organization that they work for. If this is achieved, their attitude changes towards their organization and this influences their productivity as they are more dedicated in terms of efforts and time towards serving their company. When the output of the employees is greater than the cost that is used in meeting their wages, then this leads to greater performance of the company (Norsworthy, & Zabala, 1990). When employees are not motivated, they leave the organization, or their productivity is very low such that the economic performance of the company is very low. In the case of Google, the high level of motivation in the workplace is a cost to the company, but the benefits from the same is greater than the costs of motivating them. It is obvious that the economic benefits of the program are far much higher than the costs.


Martin. (2014). The Google Way of Motivating Employees. Retrieved from

Norsworthy, J. R., & Zabala, C. A. (1990). WORKER ATTITUDES AND THE COST OF PRODUCTION: HYPOTHESIS TESTS IN AN EQUILIBRIUM MODEL. Economic Inquiry, 28(1), 57-78. doi:10.1111/j.1465-7295.1990.tb00803.x

Bilgin, M. H., & Danis, H. (2016). Entrepreneurship, business and economics. S.l.: Springer.

Jost, P.-J., & Edward E. (2014). The economics of motivation and organization: An introduction. Cheltenham: Edward Elgar Pub. Ltd.

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