the average manager is really helpless to use money as a reward.

this problem, unfortunately, most merit pay systems have failed. Significantly, employees are unable to perceive a direct relationship between pay and perfol1TIance.
Besides, the average manager is really helpless to use money as a reward. Assume that a company uses a merit system contingent upon an annual performance review. Employees find it extremely difficult to relate a specific performance that took place 11 months prior to a merit increase of may be 5 per cent. Of course, not only is a manager severely limited in the amount of merit pay that may be granted, but the merit pay will have little impact on take-home payor earning power in times of high inflation. In face, many managers may feel compelled to administer merit increases near the allowable maximum to even mediocre perfOlmers just to allow employees to keep pace with the high rate of inflation.
Because of the nature of merit systems in an era of inflation, money is really a negative rather than a positive motivational device. Employees may operate more from a fear of not receiving a customary increase rather than for extra incentive. Fear may develop because the salary is
important just -to meet the physical needs of having food, shelter, and clothing. This is not to say that money is not important when considering motivation; rather, it is to say that monetary rewards are not viable alternatives for the average manager considering ways to motivate employees to exert greater eff0l1 on the job.
A manager will succeed more by using effective
communication to emphasize the social and egotistical needs, Also, when managers emphasize the probability of
obtaining a reward. they meet with greater success in their
efforts to improve employee perfOlmance.