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

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


Profiles



Presented at

National Taiwan University


Profiles



Presented at

University of Valencia

The Meaning of Money, The Money Ethic Scale (MES), and Research Using the MES



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 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).


Attract, Retain, and Motivate employees (Chiu, Luk, & Tang, 1998; Milkovich & Newman, 2002; Tang, Luk, & Chiu, 2000).


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).


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).


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.


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.


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


If you double your employees’ pay, do they produce twice as much?

Paid by the Hour vs.

Paid by Salary


Extrinsic reward may undermine intrinsic motivation (Deci, 1971; Deci & Ryan, 1985).


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)


Amabile (1998, September-October). How to kill creativity. Harvard Business Review.

Technical Abilities

Problem-Solving Skills

Motivation

Labor of Love


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


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.


Negative path between monthly income and subjective value of money.

Higher incomes are related to lower marginal utility 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).


For materialistic individuals, possessions are believed to provide the greatest sources of satisfaction and dissatisfaction (265).


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

Time

$

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.

The ABCs of Attitudes

Three Components of Attitudes :Affective

Behavioral

Cognitive

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.


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


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


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.


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.


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)


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).


8. Tang & Kim (1999). Public Personnel Management

9. Tang, Kim, & Tang (2000). Human Relations.

10. Tang, Furnham, & Davis (2000). Personality and Individual Differences


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.


14. Tang, Furnham, & Davis (in press). Journal of Managerial Psychology

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


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


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


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


Evil Affective Budget BehavioralSuccess Cognitive

Achievement, Respect, Power, Good

Tang (1995) Personality and Individual Differences.


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


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

Inter-Factor Correlations

Budget Evil Success

Budget -.10 .05

Evil .02

Success

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)


207 University FacultyLiberal ArtsOtherEducationBasic & Applied SciencesMass CommunicationsBusinessTang, Luna-Arocas, & Whiteside (1997); Tang &

Luna-Arocas (1999)


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.

Factor Success

Money is a symbol of success.

Money represents one’s achievement

Factor Motivator

Money is a motivator.

I am motivated to work hard for money.

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.

Three-Stage Procedure

1. Partitioning

2. Interpretation

3. Validation and Profiling

Partitioning:Order of Money Factors

ANOVAsSuccess F = 171.94***Budget F = 81.51***Motivator F = 77.34***Equity F = 15.45***Evil F = 12.49*** The

F tests should be used only for descriptive purposes.

Bond, 1988).

Documents

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