The Meaning of Money, The Money Ethic Scale, and Money
Profiles
Thomas Li-Ping Tang, Ph.D.
Middle Tennessee State University
Presented at
Hong Kong Baptist University
The Meaning of Money, The Money Ethic Scale, and Money
Profiles
Thomas Li-Ping Tang, Ph.D.
Middle Tennessee State University
Presented at
National Taiwan University
The Meaning of Money, The Money Ethic Scale, and Money
Profiles
Thomas Li-Ping Tang, Ph.D.
Middle Tennessee State University
Presented at
University of Valencia
The Meaning of Money, The Money Ethic Scale (MES), and Research Using the MES
Thomas Li-Ping Tang, Ph.D.
Middle Tennessee State University
Presented at
University of Nantes
Outline
The Meaning of Money
Measures of Money Attitudes
The Money Ethic Scale
The Use of the Money Ethic Scale in Research
Conclusions
The Color of Money
Color
Size
Shape
Cross-Cultural Differences:
History, Culture, People, National Pride, World View
The Meaning of Money
The meaning of money is “in the eye of the beholder” (McClelland, 1967, p. 10).
Money is a motivator (Gupta & Shaw, 1998; Lawler, 1981).
Money is a hygiene factor (Herzberg, Mausner & Snyderman, 1959; Kohn, 1998; Pfeffer, 1998).
The Meaning of Money
Attract, Retain, and Motivate employees (Chiu, Luk, & Tang, 1998; Milkovich & Newman, 2002; Tang, Luk, & Chiu, 2000).
The Meaning of Money
Money is the instrument of commerce and the measure of value (Smith, 1776/1937).
Money is an important factor in almost everyone’s life (Shaw, 1905; Wernimont & Fitzpatrick, 1972).
The paucity of research on money is caused by a taboo associated with money (Furnham, 1984).
The Meaning of MoneyMoney always represents or signifies
something other than itself (Crump, 1981).One is not interested in money, but in what
money will buy (Crump, 1981).In America, money is how we keep score
(Rubenstein, 1981).Money makes one happy (will reduce pain).
People want to be rich and in control (Tang & Luna-Arocas, 1999).
The Meaning of Money
Money can be investigated from many perspectives (economics, anthropology, sociology, psychology, and political science) (Doyle, 1992). American Behavioral Scientist.
People’s attitudes toward money can be perceived as their “frame of reference” in which they examine their everyday lives (Tang, 1992).
OB/HRM
The Meaning of Money-Motivator
Financial incentives do improve performance quantity and do not erode intrinsic motivation.
However, the jury is till out regarding the impact of financial incentives on performance quality. (Gupta & Shaw, 1998).
The Meaning of Money-Motivator
Clark (1999, November 1). Why it pays to quit. U.S. News & World Report.
Money TALKS.
Money is behind many of the common nonfinancial explanations for changing jobs (74).
Money talks, and OJ…
The Meaning of Money-Hygiene
Money is a Hygiene factor (Herzberg, Mausner & Snyderman, 1959).
Salary has more potency as a job dissatisfier than as a job satisfier (82).
In the lows salary is found almost three times as often in the long-range as in the short-range sequences (82).
The Meaning of Money-Hygiene
Others agree with Herzberg:
Cameron & Pierce (1994). Review of Educational Research.
Kohn (1993, September/October). Harvard Business Review.
Kohn (1998, March/April). Compensation and Benefits Review.
The Meaning of Money-Hygiene
Pearce (1987). New perspectives on compensation.
Pfeffer (1998, May/June). Six dangerous myths about pay. Harvard Business Review.
Pfeffer (1998): Six Dangerous Myths About Pay
1. Labor rates and labor costs are the same thing
2. You can lower your labor costs by cutting labor rates
3. Labor costs constitute a significant proportion of total costs
Pfeffer (1998)
4. Low labor costs are a potent and sustainable competitive weapon
5. Individual incentive pay improves performance
6. People work for money.
Pfeffer (1998)
Labor costs are only the most immediately malleable expense.
Higher “labor rates” (pay level) may lead to lower “labor costs” due to employees’ high productivity.
The Meaning of Money-Hygiene
People do not work “primarily for money” (Pfeffer, 1998: 111).
Individual incentive pay undermines performance—of both the individual and the organization.
Firestone Tires
NHTSA has filed more than 2,000 complaints about Firestone tires linked to 103 traffic deaths.
Firestone has recalled 6.5 million 15-inch radial tires, sold as P235/70R15 Wilderness, ATX and ATXII models and widely used on the mid-size Ford Explorer since it appeared in 1990.
Firestone Tires
If a consumer prefers to replace consumer advisory tires with competitor’s tires, Bridgestone/ Firestone will reimburse the consumer up to $140.00 per tire.
Firestone Tires
Recall of Firestone Tires cut Ford profits by 7 percent (Knight-Ridder/Tribune Business News, Oct. 18, 2000)
The controversial recall of Firestone tires on millions of Ford Explorer sport-utility vehicles has cost the automaker $500 million so far.
Consequences
Ford’s quarterly sales in Britain dropped 15 percent while sales in Germany were down 8 percent.
Ford also lost $77 million in its Canadian-Mexican operations and $64 million in South America.
Consequences
Saudi Arabia bans all Firestone Tires. (Investment News, 10/2/2000)
Ford recalled Firestone Tires in Asia starting in May (The Asian Wall Street Journal Weekly, 9/18/2000)
Consequences
For Ford CEO Nasser, damage control is the new ‘job one’, tire crisis is likely to be either maker or breaker of his corporate career (The Wall Street Journal, 9/11/2000)
Consequences
It will also mean less money for the 156,000 plus hourly and salaried employees at Ford who have grown accustomed to ever-growing profit-sharing and bonus checks.
Potential damages and settlements for the 100-plus personal injury and class-action suits filed against the automaker
*Union on strike, replacement workers
The Meaning of Money
If you double your employees’ pay, do they produce twice as much?
Paid by the Hour vs.
Paid by Salary
The Meaning of Money-Hygiene
Extrinsic reward may undermine intrinsic motivation (Deci, 1971; Deci & Ryan, 1985).
The Meaning of Money
Intrinsic, self-determination, freedom from control, Play, Origins, Masters of Money
Extrinsic, performance standards, external feedback, Work, Pawns, Slaves of Money (Amabile, DeJong, & Lepper, 1976; DeCharms, 1976; Lepper & Greene, 1975)
The Meaning of Money
Amabile (1998, September-October). How to kill creativity. Harvard Business Review.
Technical Abilities
Problem-Solving Skills
Motivation
Labor of Love
The Meaning of Money
Brandstatter & Brandstatter (1996). Journal of Economic Psychology.
ATS Austrian Shillings, US$1 = ATS 13.96
Double Joy vs. Double Anger
At 50 ATS 6.3 4.4
At 500 ATS 5.7 2.8
At 5,000 ATS 3.2 2.2
The Meaning of Money
People are more sensitive for losses than for gains.
It takes a significantly higher amount of money to make people happy than to make them unhappy.
The Meaning of Money
Negative path between monthly income and subjective value of money.
Higher incomes are related to lower marginal utility of money.
The Meaning of Money
Higher incomes are related to lower marginal utility of money.
The Value of US$1,000,000 to a person
Who is making US$1,000,000 vs.Who is making US$100,000
The Meaning of Money-Materialism
Belk (1985). Materialism. Journal of Consumer Research.
Materialism is a devotion to material needs, desires, and the importance a consumer attaches to worldly possessions (265).
The Meaning of Money-Materialism
For materialistic individuals, possessions are believed to provide the greatest sources of satisfaction and dissatisfaction (265).
The Meaning of Money-Materialism
Low and high materialists are likely to differ in the meaning of money holds for them and in money-related attitudes (Richins & Rudmin, 1994, Journal of Economic Psychology, 15: 222)
Time is Money
My account is worth every penny he charges because of the time he saves me.
This year, for example, he probably saved me five to ten years in prison.
Measures of Money Attitudes-1
Burgoyne (1990): Money in marriage.Doyle (1992): American Behavioral Scientist.Fank (1994): Money handling inventory,
PAID.Furnham (1984): Many sides of the coin:
PAID.Furnham & Argyle (1998): The psychology of
money.
Measures of Money Attitudes-2
Goldberg & Lewis (1979): Money madness: The psychology of saving, spending, loving, and hating money.
Haraoka (1990): Money & value orientation, PJSSP.
Luna-Arocas, Quintanilla, & Diaz (1995), EAD-6, IAREP.
Luna-Arocas (1998). Dinero, Trabajo y Consumo. PROMOLIBRO
Measures of Money Attitudes-3
Lynn (1991): The secret of the miracle economy.
McClure (1984): Money attitudes and overall pathology, PAQJHB.
Mitchell & Mickel (1999). The meaning of money: Money Importance Scale, AMR.
Opsahl & Dunnette (1966): The role of financial compensation in industrial motivation, PB
Measures of Money Attitudes-4
Quintanilla (1997). Psicologia Economica. McGraw Hill.
Richins & Rudmin (1994). Materialism, JEP.Rubenstein (1981): Money & self-esteem,
relationships, secrecy, envy, satisfaction, PT.Thierry, the meaning of pay, in Erez & Thierry
(Eds.) Work motivation.
Measures of Money Attitudes-5
Wernimont & Fitzpatrick (1972): The meaning of money, JAP.
Yamauchi & Templer (1982): Money attitude scale, JPA.
Zelizer (1989): The social meaning of money: Special monies, AJS.
Zuckerman (1983): Sensation seeking.
The Money Ethic Scale
1. Tang (1992): Journal of Organizational Behavior.
2. Tang (1993): Journal of Organizational Behavior.
3. Tang & Gilbert (1995): Personality and Individual Differences
4. Tang (1995): Personality and Individual Differences,
5. Tang (1996): Psicologia E Lavoro (Italian)
The Money Ethic Scale
6. Tang (1996): Journal of Economic Psychology
7. Luna-Arocas & Tang (1998). Revista de Psicologia del Trabajo y de las Organizaciones (Journal of Work and Organizational Psychology)(Spainish).
The Money Ethic Scale
8. Tang & Kim (1999). Public Personnel Management
9. Tang, Kim, & Tang (2000). Human Relations.
10. Tang, Furnham, & Davis (2000). Personality and Individual Differences
The Money Ethic Scale
11. Tang, Singer, & Roberts (2000). Journal of Managerial Psychology.
12. Tang & Smith-Brandon (2001). Public Personnel Management.
13. Tang, Furnham, & Davis (in press). International Journal of Organization Theory and Behavior.
Money and Related Research
15 Tang, Tang, Tang, & Dozier (1998). Journal of Compensation and Benefits.
16. Tang & Talpade (1999). Public Personnel Management.
17. Tang & Frost (1999). Journal of Compensation and Benefits.
18. Tang, Luk, & Chiu (2000). Compensation and Benefits Review.
Money and Related Research
19. Tang, Tang, & Tang (2000). Higher Education.
20. Tang & Tang (in press). International Journal of Organization Theory and Behavior.
MES Papers (Submitted)
Tang & Kim: MES--Full-Time, Part-Time, Students
Tang & Luna-Arocas: Money as a Motivator (Scale Development): 10 Factors: Budget, Evil, Equity, Success, Self-Expression, Social Influence, Power of Control, Happiness, Richness, & Motivator
MES Papers (Submitted)
Luna-Arocas & Tang: Money Profiles-US-Spain Faculty
Tang, Tang, & Luna-Arocas: Money Profiles -US Students
Tang, Tillery, Lazarevski, & Luna-Arocas: Money Profiles-Macedonia
Tang, Luna-Arocas, & Whiteside: Income & Life Satisfaction
MES Papers (Submitted)
Tang, Luna-Arocas,Tang, & Sutarso: Does MES Moderate and Mediate. Regression
Tang, Sutarso, Tang, & Luna-Arocas: A model of Pay Satisfaction (SEM)
Tang, Sutarso, Tang, & Luna-Arocas: A model of Pay Satisfaction with Demographic Variables
Tang, Luna-Arocas ,Tang, & Sutarso: A model of Pay Satisfaction: The US vs. Spain, Male vs. Female
MES Papers
Tang, Davis, Dolinski, Ibrahim, Sutarso, & Wagner (2000): Money Attitude, motives of helping behavior, organization-bases self-esteem, and organizational citizenship behavior.
Tang, Luna-Arocas, & Quintanilla (2000) Materialism and Money Ethic endorsement
Cited in Many LanguagesChinese. Chen (1987). Ours.English. Furnham & Argyle (1998). The
psychology of money. Mitchell & Mickel (1999) Academy of Management Review.
French. Charles-Pauvers & Urbain (1998). Laboratoire de recherche en sciences de gestion. Urbain (2000). Recherche et Applications en Marketing
Cited in Many Languages
Spanish. Luna-Arocas (1998). Dinero, trabajo y consumo. Quintanilla (1997). Psicologia economica.
Italian. Tang (1996). Psicologia e Lavoro.
Russian. Fenko (2000). Psikhologicheskii Zhurnal.
Arabic, Polish
Mitchell & Mickel (1999)
The well-developed measures are those that have been developed more carefully and used more systematically. There are three of these: (1) the money ethics scale (Tang, 1992, 1993, 1995), (2) the money belief and behavior scale (Furnham, 1984; Furnham, Kirkcaldy, & Lynn, 1994), and (3) the money importance scale (Mitchell, Dakin, Mickel, & Gray, 1998) (p. 571).
A Cross-Cultural Study
Australia, Austria, Belgium*, Brazil, Bulgaria*, Canada, Chile, China (?), Congo (Zaire), Cuba, Czech Republic, Egypt, France, Germany, Hong Kong*, Hungary*, India, Italy*, Japan, Macao, Macedonia*, Malta*, Malaysia, Mexico, Nigeria, Saudi Arabia, Oman*, Panama, Peru, Philippines*, Poland, Portugal, Romania, Russia, Singapore*, Slovenia*, South Africa*, South Korea, Spain*, Taiwan*, Thailand*, Turkey, Ukraine, the UK, the USA*, Venezuela, and other countries (Ireland and Ecuador).
The 30-Item Money Ethic Scale
Good AffectiveEvil AffectiveBudget BehavioralAchievement CognitiveRespect CognitivePower Cognitive Tang (1992) Journal of Organizational
Behavior
The 30-Item Money Ethic Scale
Age, Sex (female)--Budget
High Income--Achievement, not Evil
Young People--Evil
Protestant Work Ethic--Budget, Evil, Power
Leisure Ethic--Good, not Evil, Achievement, Power
Study of Values (Allport, Vernon, & Lindzey,1970)
Economic, Political--Achievement, Respect, Power
Social, Religious--(-) Achievement, Power
Religious--(-) Good, Respect
Theoretical--Achievement
Aesthetic--(-) Good
Money Ethic-Satisfaction
Achievement--Low satisfaction with Work, Promotions, Supervision, Co-workers, and Overall Life Satisfaction.
Power--Low satisfaction with Work, Pay, Co-Workers, Overall Life Satisfaction.
Not Evil--Work Satisfaction
Budget--Life Satisfaction, Supervision
University Students in Taiwan NTU
Good--IrritationEvil--Work Ethic, AnxietyAchievement--Irritation, LOC-E, Sex (M), Work
EthicRespect--Irritation, Sex, Work Ethic, I-EBudget--Type A, Age (young) Power--I-E Tang (1993) Journal of Organizational Behavior
The 12-Item Money Ethic Scale
Evil Affective Budget BehavioralSuccess Cognitive
Achievement, Respect, Power, Good
Tang (1995) Personality and Individual Differences.
The 12-Item Money Ethic Scale
High Income: Money is not Evil.High MES: Male, Older, Type A
Personality, Low--Pay Satisfaction, Self-Esteem, n
Achievement, Social Value; High--Theoretical, Economic, Political
Values, Stress, External LOC
The 6-Item Money Ethic Scale
Budget Behavioral
Evil Affective
Success Cognitive
Tang & Kim (1999) Public Personnel Management
Exploratory Factor Analysis
Promax Rotation Budget Evil Success
1. Budget .92 .06 -.00
2. Use .91 -.07 .01
3. Root -.01 .88 .02
4. Evil .01 .88 -.02
5. Success -.16 .00 .87
6. Achievement .17 -.00 .85
Confirmatory Factor Analysis
Budget Evil Success1. Budget .73 2. Use .933. Root .984. Evil .565. Success .646. Achievement .76
The 3 Factor, 6-Item Money Ethic Scale
Independent,
Low cross-loadings,
Low inter-factor correlations
Predictor of the linear combination of Altruism, Conscientiousness, Intrinsic job Satisfaction, Extrinsic Job Satisfaction, and Commitment.
Taiwan, US, & UK
6-item, 3-factor MESThe Whole Sample: Poor fitTaiwan: Poor fitThe USA: Good fitThe UK: Poor fitCFA: Fit between the Model and the Data (theory
driven)EFA: Data drivenTang, Furnham, & Davis
Full-Time, Part-Time Employees,and Non-employed Students
The 6-Item Money Ethic Scales
265 Full-Time Employees
192 Part-Time Employees
270 Non-employed University Students
Tang & Kim
Full-Time, Part-Time, Students
Confirmatory Factor Analyses
The Whole Sample: Poor Fit
Full-Time Employees: Good Fit
Part-Time Employees: Poor Fit
Non-employed Students: Good Fit
Income
Full-Time Age Pay (JDI) Education Sex (M) Success (MES) Evil (MES) (-)
Part-Time Marital-Status (M) Sex (M) Pay (JDI) Promotion (JDI).
Tang & Kim
Life Satisfaction
Full-time Part-Time Students
Type A Type A Budget
Co-Workers Supervision Work Ethic
Budget Type A
Pay (JDI) Sex (F)
Marital (S)
The 15-Item Money Ethic Scale
207 University FacultyLiberal ArtsOtherEducationBasic & Applied SciencesMass CommunicationsBusinessTang, Luna-Arocas, & Whiteside (1997); Tang &
Luna-Arocas (1999)
The 15-Item Money Ethic Scale
Evil Affective
Budget Behavioral
Equity Cognitive
Success Cognitive
Motivator Cognitive
Factor Budget
I budget my money very well.
I use my money very carefully.
I pay my bills immediately to avoid interest or penalties.
I do financial planning for the future.
Factor Evil
Money undermines one’s ethical norms and standards of conduct.
People perform unethical acts to maximize their monetary gains.
Money is evil.
Money (the love of money) is the root of all evil.
Factor Equity
People on the same job should be paid equally (equality) Reverse Scored
People on the same job should be paid based on merit (equity).
Lower-level job with little responsibility should be paid less.
Faculty (The USA vs. Spain)207 American and 102 Spanish FacultySex, age, education, marital status, race, length
of service, income, the Money Ethic scalePWE (Blood, 1969), MSQ (Weiss et al., 1967),
Pay Satisfaction Questionnaire (Heneman & Schwab, 1985)
Life Satisfaction: Satisfaction of my personal/family life; Satisfaction of my life as a whole.
Faculty Income (The USA)
Liberal Arts 42,774
Other 44,287
Education 48,517
Basic & Applied Sciences 44,566
Mass Communication 48,861
Business 70,099
Business Faculty (The USA)
The Highest Income
Factor Equity
Factor Success
Income > Personnel Record
Faculty Income
USA Age Equity Sex (M)* Budget Education*
Spain Work Experience Education* Evil (-) Sex (M)*.
Faculty Life Satisfaction
USA Marital Status (M)* Budget Success Sex (M) Education
Spain Marital Status (M)* Age.
Money Profiles
Use the Money Ethic Scale to Classify People,
Cluster AnalysisAttitudes Toward MoneyNegative, Indifferent, Positive Low-------Median-------High
Luna-Arocas & Tang
The Cluster Analysis
Goal: Clusters of people with small within-cluster variation but large between-cluster variation.
Researchers begin with an undifferentiated group and divide the group into subgroups that differ in meaningful ways.
Hierarchical Cluster Analysis
Single Linkage
Complete Linkage
Average Linkage
The Ward’s Method
(Aldenderfer & Blashfield, 1984)
Hierarchical Cluster Analysis
The nested tree structure of a dendrogram and the fusion coefficient are used to specify the concrete number of clusters.
Dendrogram
1 _________I_________ 2 I ____I____ 3 ___ I____ I I 4* __I__ I I I 5 I I I I __I__
6_I_ _ I_ ___I____ ____I__ __I_ _I__ iiiii iiiiiiii iiiiiiiiiiiiii iiiiiiiiiiiii iiiiiii iiiiiii
Fusion Coefficient
Factor Analysis
Scree Curve: The percentage of total variance accounted for by each successfully extracted factors.
Fusion Coefficient: Similar Curve
USA vs. Spain (see the next slide)
Quick Cluster
K-means cluster analysis
The hierarchical methods are complemented by the ability of the nonhierarchical methods to fine-tune the results by allowing the switching of cluster membership.