The Psychology of Money

May 01, 2019

Executive Summary

People need a secure financial future, and, according to recent research, it may also be the core reason why people work for corporations. While people are incented to work for a number of reasons, the psychology of money has an effect on the decisions made by both leaders and teams. This is because, as detailed in this paper, research shows that money creates the foundation for hoarding, for protection against feelings of success, inadequacy or failure and for the rejection of others who do not make as much money.

What is the relationship, then, between our relationship with money and the creation of optimal pension plans that motivate employees to perform?

This paper explores four primary theories and their sub-theories, which includes the expectancy theory of motivation, motivation-hygiene theory, self-determination theory and downward social comparison theory. It examines how we use money and why pensions are such a touchstone for employees. It presents best practices for using (or not using) money as an incentive in planning pensions. In this paper, we will explore the connections and disconnections, between what our team members think and feel about money and the process of engaging them, and rewarding them, in the workplace. We’ll look at what leadership means when it comes to creating pension strategies that are based on what people actually think about with these rewards for a life of work.

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