There are different approaches for motivation:

Expentancy theory People make choices on their sense of obtaining positive values; their level of effort brings to a certain level of performance and therefore leads to an expectation to get a reward. This is what we have known as expectancy theory. The rewards achievement need affects people’s behaviour, attitudes and feelings at the workplace. Using adequate rewards to what is expected can lead to motivation and retaining employees. If on of the above mentioned passages should be missing there would be no motivation. If the performance is not high enough compared to the efforts given, the effort is interrupted. Only the result who give rewards leads to a motivate behaviour.
Mc Clellands Theory of needs. When applying motivation concepts we have to take care about environment and culture. Something which could be motivating for a German could not be similar for an Italian: their needs of achievements and expectations are different, but, more than all, their cultural views are different: some people could just do a job to get money, do not care about what they are doing; other people look for self esteem and work towards a goal, combining knowledge, ability and opportunity. They perform towards a goal, trying to achieve their needs.
Maslow’s hierarchy of needs How could people become motivated to look behind their physiological needs and go forward to other needs? In chapter six of Robbin’s Organizational Behaviour the case incident describes a punishment method, the penalty box: the programmers who are burned out are assigned fro a certain period to the sales office, being obliged to call customers, to file orders etc., i.e. doing things they are not used to, This way, for example, they can get ,as Maslow says, ” A person who is lacking of food, safety, love and esteem would probably hunger for food more strongly that anything else”.To come back to the motivation in practice- and the performance related in pay.
As Maslow states that only if we are interested in what actually motivates us and not what as or will motivate us, then a satisfied need will become a motivator.
How cold we interrelate then personal motivation to performance which leads to rewards considered as money?
If we are talking about performance related pay we are considering a tangible reward, a financial reward give to an employee whose job is being considered or to be at a required standard or to be above average. If the pay is performance related we can find, even if there is a difference from business area to business area there are some common step/features which can be found: the performance appraisal which leads to a reward and the method of reward.
Goal setting theory If the rewards are performance related how should the performance be analysed? A performance related pay could create problems with equity theory: there may be discussion about the way to reward the employee. If we would in this case try to apply the expectancy theory with the equity theory we could get the result that the rewarded employees are selfish and do not promote team work or there could raise rivalry between managers

By having to choose which method would best suit to be embrced in an organization we would rather got for a combination of the different theories.

If we consider that most people are working for money, even if they are not putting money on ther highest goals.

By combining the expectancy theory and the equity theory, we could apply pay programs which are based on skills and competencies. If we notice, for example, that many colleagues do not manage to speak even a basic English and are in no way motivated to do it, we could put this knowledge as a basic need. Human resources had tried many possibilities in order to make them get these skills; by introducing a pay per competence and skill, with the prospective of a pay raise per competence adquired, that motivation would grow and with morivation also performance on the job and related productivity factor. This program could be generally aplied to all employees. Sales people could be motivated to have a better performance if there would be introduced a gain sharing program.

In order to reflect the young attitude of the owners and the desire to be a progressive and healthy company, we would suggest to apply variable reward systhems which can be choosen from the employee basing on their needs: a mother, for example, would rather prefer to get a flexible time schedule, a sales person would go for a gainsharing program, a young married accountant for a flexible benefit plan to be adjusted basing on the upcoming needs.

With the kind permission of RKU