The Meaning of Money, The Money Ethic Scale, and Money Profiles

1
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

2
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

3
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

4
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

5
Outline

• The Meaning of Money
• Measures of Money Attitudes
• The Money Ethic Scale
• The Use of the Money Ethic Scale in Research
• Conclusions

6
The Color of Money

• Color
• Size
• Shape
• Cross-Cultural Differences
• History, Culture, People, National Pride,
  World View

7
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).

8
The Meaning of Money

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

9
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 everyones
  life (Shaw, 1905 Wernimont Fitzpatrick, 1972).
  
• The paucity of research on money is caused by a
  taboo associated with money (Furnham, 1984).

10
The Meaning of Money

• Money 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).

11
The Meaning of Money

• Money can be investigated from many perspectives
  (economics, anthropology, sociology, psychology,
  and political science) (Doyle, 1992). American
  Behavioral Scientist.
• Peoples attitudes toward money can be perceived
  as their frame of reference in which they
  examine their everyday lives (Tang, 1992).
• OB/HRM

12
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).

13
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

14
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).

15
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.

16
The Meaning of Money-Hygiene

• Pearce (1987). New perspectives on compensation.
• Pfeffer (1998, May/June). Six dangerous myths
  about pay. Harvard Business Review.

17
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

18
Pfeffer (1998)

• 4. Low labor costs are a potent and sustainable
  competitive weapon
• 5. Individual incentive pay improves performance
• 6. People work for money.

19
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.

20
The Meaning of Money-Hygiene

• People do not work primarily for money
  (Pfeffer, 1998 111).
• Individual incentive pay undermines
  performanceof both the individual and the
  organization.

21
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.

22
Firestone Tires

• If a consumer prefers to replace consumer
  advisory tires with competitors tires,
  Bridgestone/ Firestone will reimburse the
  consumer up to 140.00 per tire.

23
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.

24
Consequences

• Fords 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.

25
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)

26
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)

27
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

28
The Meaning of Money

• If you double your employees pay, do they
  produce twice as much?
• Paid by the Hour vs.
• Paid by Salary

29
The Meaning of Money-Hygiene

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

30
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)

31
The Meaning of Money

• Amabile (1998, September-October). How to kill
  creativity. Harvard Business Review.
• Technical Abilities
• Problem-Solving Skills
• Motivation
• Labor of Love

32
The Meaning of Money

• Brandstatter Brandstatter (1996). Journal of
  Economic Psychology.
• ATS Austrian Shillings, US1 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

33
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.

34
The Meaning of Money

• Negative path between monthly income and
  subjective value of money.
• Higher incomes are related to lower marginal
  utility of money.

35
The Meaning of Money

• Higher incomes are related to lower marginal
  utility of money.
• The Value of US1,000,000 to a person
• Who is making US1,000,000 vs.
• Who is making US100,000

36
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).

37
The Meaning of Money-Materialism

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

38
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)

39
Time is Money

Time
40
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.

41
The ABCs of Attitudes

• Three Components of Attitudes
• Affective
• Behavioral
• Cognitive

42
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.

43
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

44
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

45
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.

46
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.

47
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).
• 6. Tang (1996) Journal of Economic Psychology.
• 7. Luna-Arocas Tang (1998). Revista de
  Psicologia del Trabajo y de las Organizaciones
  (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. Luna-Arocas Tang, (2001). Revista de
  Estudios empresariales (Spanish).
• 14. Tang, Kim, Tang, (2002). Journal of
  Managerial Psychology.
• 15. Tang, Furnham, Davis (2002).
  International Journal of Organization Theory and
  Behavior.

48
The Love of Money Scale

• Tang Chiu (2003). Journal of Business Ethics.
• Tang, Furnham, Davis (2003). International
  Journal of Organization theory and Behavior.
• Du Tang (2003). Psychological Science
  (Chinese).
• Tang, Luna-Arocas, Whiteside (2003). Personnel
  Review.
• Tang, Luna-Arocas, Sutarso, Tang (2004).
  Journal of Managerial Psychology.
• Luna-Arocas Tang (2004). Journal of Business
  Ethics.
• Tang, Tillery, Lazarevski, Luna-Arocas (2004).
  Journal of Managerial Psychology.
• Du, Xu, and Tang (2004). Journal of Hohai
  University (Chinese).
• Tang, Luna-Arocas, Sutarso (2005). Management
  Research The Journal of the Iberoamerican
  Academy of Management.
• Du Tang (2005). Journal of Business Ethics.
• Tang, Tang, Luna-Arocas (2005). Personnel
  Review.

49
Money and Related Research

• 27. Tang, Tang, Tang, Dozier (1998). Journal
  of Compensation and Benefits.
• 28. Tang Talpade (1999). Public Personnel
  Management.
• 29. Tang Frost (1999). Journal of Compensation
  and Benefits.
• 30. Tang, Luk, Chiu (2000). Compensation and
  Benefits Review.
• 31. Tang, Tang, Tang (2000). Higher
  Education.
• 32. Tang Tang (2003). International Journal
  of Organization Theory and Behavior.
• 33. Tang Weatherford (2004). Psihologia
  Resurselor Umane (Romanian).
• 34. Tang, Tang, Tang (2004). International
  Journal of Educational Management.

50
Cited in Many Languages

• Chinese,
• English,
• French,
• Spanish,
• Italian,
• Romanian,
• Russian, etc.

51
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).

52
A Cross-Cultural Study

• Australia, Belgium, Brazil, Bulgaria, China
  (2), Egypt, France, Hong Kong, Hungary, Italy,
  Macedonia, Malaysia, Malta, Mexico, Nigeria,
  Saudi Arabia, Oman, Peru, Philippines, Portugal,
  Romania, Russia, Singapore (2), Slovenia, South
  Africa, South Korea, Spain, Taiwan, Thailand, the
  USA, and other countries (Chile, India).

53
The 30-Item Money Ethic Scale

• Good Affective
• Evil Affective
• Budget Behavioral
• Achievement Cognitive
• Respect Cognitive
• Power Cognitive
• Tang (1992) Journal of Organizational Behavior
  
  

54
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

55
Study of Values (Allport, Vernon, Lindzey,1970)

• Economic, Political--Achievement, Respect, Power
• Social, Religious--(-) Achievement, Power
• Religious--(-) Good, Respect
• Theoretical--Achievement
• Aesthetic--(-) Good

56
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

57
University Students in Taiwan NTU

• Good--Irritation
• Evil--Work Ethic, Anxiety
• Achievement--Irritation, LOC-E, Sex (M), Work
  Ethic
• Respect--Irritation, Sex, Work Ethic, I-E
• Budget--Type A, Age (young)
• Power--I-E
• Tang (1993) Journal of Organizational Behavior

58
The 12-Item Money Ethic Scale

• Evil Affective
• Budget Behavioral
• Success Cognitive Achievement,
  Respect,
  Power,
  
  Good
• Tang (1995) Personality and Individual
  Differences.
  

59
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

60
The 6-Item Money Ethic Scale

• Budget Behavioral
• Evil Affective
• Success Cognitive
• Tang Kim (1999) Public Personnel Management

61
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

62
Inter-Factor Correlations

• Budget Evil Success
• Budget -.10 .05
• Evil .02
• Success

63
Confirmatory Factor Analysis

• Budget
  Evil Success
• 1. Budget .73
• 2. Use .93
• 3. Root .98
• 4. Evil .56
• 5. Success .64
• 6. Achievement .76

64
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.

65
Taiwan, US, UK

• 6-item, 3-factor MES
• The Whole Sample Poor fit
• Taiwan Poor fit
• The USA Good fit
• The UK Poor fit
• CFA Fit between the Model and the Data (theory
  driven)
• EFA Data driven
• Tang, Furnham, Davis

66
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

67
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

68
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

69
Life Satisfaction
70
The 15-Item Money Ethic Scale

• 207 University Faculty
• Liberal Arts
• Other
• Education
• Basic Applied Sciences
• Mass Communications
• Business
• Tang, Luna-Arocas, Whiteside (1997) Tang
  Luna-Arocas (1999)

71
The 15-Item Money Ethic Scale

• Evil Affective
• Budget Behavioral
• Equity Cognitive
• Success Cognitive
• Motivator Cognitive

72
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.

73
Factor Evil

• Money undermines ones 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.

74
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.

75
Factor Success

• Money is a symbol of success.
• Money represents ones achievement

76
Factor Motivator

• Money is a motivator.
• I am motivated to work hard for money.

77
Faculty (The USA vs. Spain)

• 207 American and 102 Spanish Faculty
• Sex, age, education, marital status, race, length
  of service, income, the Money Ethic scale
• PWE (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.

78
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

79
Business Faculty (The USA)

• The Highest Income
• Factor Equity
• Factor Success
• Income gt Personnel Record

80
Faculty Income

• USA
• Age
• Equity
• Sex (M)
• Budget
• Education

• Spain
• Work Experience
• Education
• Evil (-)
• Sex (M).

81
Faculty Life Satisfaction

• USA
• Marital Status (M)
• Budget
• Success
• Sex (M)
• Education

• Spain
• Marital Status (M)
• Age.

82
Money Profiles

• Use the Money Ethic Scale to Classify People,
• Cluster Analysis
• Attitudes Toward Money
• Negative, Indifferent, Positive
• Low-------Median-------High
• Luna-Arocas Tang

83
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.

84
Hierarchical Cluster Analysis

• Single Linkage
• Complete Linkage
• Average Linkage
• The Wards Method
• (Aldenderfer Blashfield, 1984)

85
Hierarchical Cluster Analysis

• The nested tree structure of a dendrogram and the
  fusion coefficient are used to specify the
  concrete number of clusters.

86
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

87
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)

88
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89
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.

90
Three-Stage Procedure

• 1. Partitioning
• 2. Interpretation
• 3. Validation and Profiling

91
PartitioningOrder of Money Factors

• ANOVAs
• Success 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).