Stock is usually reserved to motivate high- level managers or key people within most corporations, and a couple of reasons exist for this trend. First, if managers are motivated by a profit-sharing program, they will make decisions that will benefit the company long term. Second, most mid-to-lower level employees prefer an immediate reward or incentive like a bonus system previously discussed to reward outstanding effort.
2.3. Incentive travel
Who would say no to an all-expenses paid luxury holiday? Another effective way to financially motivate employees is with incentive travel. Many times when employees are rewarded with cash bonuses or pay raises, the money is used to pay off debt or everyday types of financial expenses. While money for everyday expenses is good, the added appeal of incentive travel, as a bonus or reward, is that employees would probably never buy something like it for themselves.
“Incentive travel is a management tool used to motivate and recognize participants for increased levels of performance in support of company objectives. In short, it is almost a way of bribing employees to work harder. And there is evidence it works exceedingly well” (Buttner, 2002).
If the company experienced a slow economy where people had to immediately cut some of there discretionary expenses, in their personal budgets such as holidays and personal travel. Again according to Clare Buttner (2002);
“Another benefit of incentive travel, according to incentive travel specialists, is that even in times when economies are suffering, incentive travel works”
Therefore, even in a slow economy, companies can effectively motivate their employees through incentive travel rewards.
2.4. Paid time-off
Paid time away from work is one of the most common types of financial rewards used to motivate employees. The amount of paid time-off can vary from an extended lunch to multiple days off at the same time. Bob Nelson (1997) suggests how this can be done effectively.
“If the job permits it, simply give people a task and a deadline and specify the quality you expect. If they finish before the deadline, the extra time is their reward.”
Companies have many variations of rewarding employees by giving time-off. Some companies even offer rewards for those who do not use their annual leave. According to Sarah Fister Gale (2002);
“The paid time-off incentive program offers employees gift certificates for every personal day they don’t take.”
This can be a valuable way of motivating employees to be more productive if done correctly.
Financial rewards are varied according to the situation and money available to a company and as the four financial rewards—salary increases, profit-sharing, incentive travel, and paid time-off—suggest, creativity is a major part of employing effective financial motivation.
3. Non-Financial Motivation
This report speaks of emotive forces as internal emotional drives for performing a task.
Effective motivation of employees goes beyond the financial compensation for work, and some of the most well-known companies in the world have realized the benefits of appealing to their employees’ drive to work intelligently and to be recognized. Most motivators lead directly to the empowerment and enabling of people to perform well. Productivity can be improved when a company focuses on the following: goal setting, communication, autonomy, responsibility, and flexibility.
3.1. Increase Skill Variety
Skill variety will be low if the whole service has been split up into a series of simpler tasks. The best-practice manuals tend to encourage this. The manuals are describing everything that should be done and we tend to assume that we are more likely to perform well across the board if someone is made personally responsible (accountable) for each task. We therefore divide tasks up on functional lines. This will be the best solution if:
- The service is too complex for one person to do all tasks well.
- The chain of people who act on any request is not too long.
Long chains have more communication links so they increase the risk of delay or misunderstanding. Long chains also make feedback more difficult and more expensive. We should arrange the necessary tasks so we strike a balance between:
Simple jobs which are demotivating
V
Complex jobs which are impossible for one person to do well.
And between:
A long chain of people with too many links
V
Relying on one individual to provide the whole service
If a job lacks skill variety it is often because our organisation does not fully appreciate the types and ranges of skills needed to perform it effectively. The first step is to review the job and revise the skill requirements, and then progress from there, possibly to training for staff.
A good example is general testing, where a common perception is that anyone can do it (ignoring the question of who can do it well). Low skill variety can arise from a ‘pigeon hole’ job. A person is given a job the organisation deems them to be good at, but which only uses a small part of their skills sets. Ideally the job should be revised to allow the individual to make best use of their skills. If this is not possible, then it may be advisable to rotate staff in the job so that no one individual feels pigeon-holed.
3.2. Goal-setting
A prime motivator for people is the achievement of objectives and the recognition of peers. Achievement is the successful execution of a task to reach a desired end. Whether employees are working to fasten a bolt on a machine or developing a competition study, the successful accomplishment of that task represents a piece of the company’s mission
“Worker’s that have a clear idea of how their task fits into the larger scheme and profit of a company will feel a sense of belonging and importance because they understand the ultimate end and importance of performing that task “(Weinstein, 2002).
“Setting goals is a good way to define an employee’s purpose in a company and helps to set a standard for them to gauge their success. Managers can then focus on the success of the individual by illustrating his or her performance in comparison to the goal, either with public or private recognition. In this way, the organization develops an atmosphere of attainment against measurable objectives and becomes energized with each win” (Nelson, 1997).
The process of defining the roles and objectives of the staff brings an invaluable opportunity for sharing communication between the employee and management.
3.3. Communication
The flow of information in a company can be a powerful tool in motivating its workforce. Communication of clearly stated goals and paths to achievement is the best way to begin developing employee talent.
Registering and acting on the communication of employees also gives a powerful message about their value to the company and management. Employees want their company and team to succeed; and when management uses the input to help them be productive, a sense of empowerment and ownership of the process develops. The open communication also gives a measure of control over their work environment and allows for the improvement of each individual working situation.
The reward employees receive for communicating is not always what managers might view as an award. As Matejka (1991) says,
“Giving an employee something pleasant is not the only way to reward. You are also rewarding (making life more pleasant) when you take something away that the employee dislikes.”
Enhancing the work life, thereby compensating the employee for the communication, is a way to build rapport and loyalty. When the work environment is pleasant, the employee’s satisfaction and motivation increase. Communication also gives rise to trust between the supervisors and their staff. Trust enables management to give autonomy and to encourage independence, and that trust builds a strong sense of community for the employee.
3.4. Autonomy
As the workplace has evolved, the thoughts on worker autonomy have changed as well.
“When Charles P. McCormick took over the spice-maker McCormick and Company in 1932, the company was not profitable and failing. He promptly destroyed the time clocks and began allowing the employees a place in the decision- making process. Within one year the company was profitable and has remained that way. “(Nelson, 1997)
Autonomy is giving the employee the impetus to do what needs to be done at that moment in the larger context of business. It is a break from the fundamental ‘job definition’ structure. It allows employees to act independently to fix problems, improve procedures, or enhance interaction.
Independence, when coup led with good communication, motivates the worker to think about the best interests of the company and further motivates by giving the freedom to act in any given situation. Good managers will define the outcomes but avoid narrowing the task into steps for the employee. Managers, trusting the employee to perform the job that he or she has been given to do, allow them to use talent and ingenuity to accomplish that task.
“An employee that is engaged in the decision- making process feels motivated to ensure the project is done according to business objectives.” (Bartlett, 2002).
Autonomy is also a major driving factor in the effectiveness of an organization. An organization that is concerned with everyone’s role in achieving overall objectives is more adaptable and flexible. Employees will take responsibility for achieving goals in a broader context and will have less rigidity in the interpretation of job roles. The lack of rigidity will enable problems to be dealt with more efficiently and will give greater satisfaction and empowerment to each employee. An effective and productive organization is the major insurer of employee retention, satisfaction, and motivation.
People feel better if they are trusted to organise their own work. Line managers who worry about performance may inadvertently make matters worse by assuming that they are the only person who can or will make changes for the better. If this moderate mistake persists over time a vicious circle may be established. To escape this vicious circle we need to give the line manager the confidence to sit back and let group members make decisions themselves, even if these are quite different from what the line manager would have done. The line manager should also be provided with some way of saving face, because the change of management style is a clear admission that the previous style was wrong.
Face-saving opportunities include:
- Training a responsible group member to deputise,
- Slipping this change in quietly alongside another change.
This is one of several situations when it may not be helpful to highlight problems with supervisory satisfaction.
Experienced, able, confident staff can be given a great deal of autonomy but this should not be confused with denying them the reward of appreciation or the stimulation of an occasional criticism. People feel bad if they are left alone to cope with a job which no-one else seems to understand. They may also become concerned about pay and job security if they suspect that the organisation has no way of appreciating their contribution to the whole.
Autonomy without feedback is a significant problem with many jobs. Apart from improving feedback so individuals build an experience base to make good decisions, it is advisable to review who should be involved in the decision making process. This is particularly important for people who act as agents of change. Their decisions can affect many people, and key groups affected should be consulted about important decisions. This approach not only reduces what may be a too high level of autonomy with the decision-maker’s job, but helps increase the commitment of those affected to implementing the decisions.
3.5. Responsibility
Employees place a ‘worthwhile job’ above every other employment concern, including money.
“Responsibility for the success or failure of a project is a large part of creating job worth” (Nelson, 1997).
When employees are given the tools and autonomy to do a certain project, or work in a particular role, they are motivated to perform brilliantly because they are accountable for that particular function. Responsibility for a project will also give a good employee the opportunity to display talent and creativity in solving a problem or completing a task.
When tasks are clearly outlined to stress individual and group accountability, employees feel that management is putting trust and faith in their abilities to perform.
3.6. Flexibility
One of the aims of the company is to be flexible with employees. During the 1990's, companies realized tremendous productivity gains by demonstrating flexibility in the work environment.
“Schedule and organizational flexibility allow employees to balance home and work more effectively and cause productivity and morale gains as well.” (Nelson, 1997)
Just as previously illustrated with McCormick and Company, more hours worked and time clock punching do not necessarily make a company profitable or effective.
Flexibility in work scheduling allows work to be arranged according to the individual’s need. Many companies illustrate how the flexible schedule gives tremendous returns in employee loyalty, retention, and compensation.
“One company could not attract desirable applicants because it could not afford the massive benefit and financial compensation packages of the bigger firms. The company management decided to move towards flextime, eradicated time clocks, and invented ‘management by wandering around.’ The company is Hewlett-Packard. Scitor has no sick- leave days, preferring to let the employees use their best judgment. Scitor averages five sick days per employee per year, much less than the industry average.” (Nelson, 1997).
4. Findings
This report was based on ten male production staff of varied ages (shown in figure 1). Identification has been withheld and kept confidential from every one apart from myself to ensure data protection and confidentiality to encourage honest and truthful answers.
This section shows results from various questionnaires that the production staff where asked to fill in which was the building blocks for this report.
This next example came from the production staff being asked what they thought would motivate them to increase production and job enrichment. This was then narrowed down to the most popular methods.
Staff were asked that if the company came across a slow down in production would they prefer the absence of salary increase to enhance job security or would they prefer a salary increase a the cost of possible redundancy.
This shows the stats for labour turnover over the last ten years.
5. Summary of findings
The labor force has an average age of less than forty with quite a large skill variety and experience. It was found that there age had an effect on the preferred motivation methods as the younger members preferred financial methods but the older members tended to prefer none financial methods and job security.
In the early years labour turnover was higher than in recent years, this is thought to be because of a change in management style from an autocratic style to a more democratic style involving and encouraging group discussion and decision making.
Summary and Conclusions
Employee motivation is a complex sum of many factors. Managers have found many ways to motivate their employees to perform to the best of their abilities. The purpose of this report is to identify the most effective ways to motivate employees. The areas that are discussed include Financial Motivation and Non-financial Motivation.
Financial rewards are common. Most experts recognize that most financial rewards do not last very long but are essential in order to successfully motivate employees. The most common types of financial rewards are salary increases, profit sharing, incentive travel, and paid time-off. Salary increases involve bonuses and raises in base pay. Profit sharing provides opportunities for employees to share in the profits of the company. Incentive travel allows for employees to take vacation travel that would normally not be taken without the incentive. Paid time-off involves giving employees time off in a variety of ways.
Non-financial rewards are rewards that motivate employees for their creative and intellectual ability. These types of rewards lead to employee empowerment. Goal setting, communication, autonomy, responsibility, and flexibility are considered non- financial motivational rewards. Goal setting gives employees opportunities to be involved in the decision-making aspects of a company. Working autonomously with responsibility and flexibility also empower employees to perform at their highest level of expertise.
Financial and non-financial motivational techniques can be used effectively together to maximize employee performance and company profits. Motivated employees are the backbone of any profitable company, and sometimes motivation is the sole reason for profitability as illustrated by McCormick and Company. When coupled together as a complete compensation package, financial and non- financial rewards can be used to retain employees and enhance productivity.
The caution for managers is to be aware that although staff may appear to be well motivated, if they are running on coping strategies a larger problem is developing. Therefore managers should not be complacent, but should investigate whether this is happening with their staff and take remedial action now. We have every reason to believe that well motivated production staffs are willing to deliver high work outcomes. There is no need to live with a disappointing performance.
Glossary
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Skill Variety. The degree to which a job requires a variety of different activities in carrying out the work, which involve the use of a number of skills and talents of the employee.
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Autonomy. The degree to which the job provides substantial freedom, independence and discretion to the employee in scheduling his or her work and in determining the procedures to be used in carrying it out.
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Job Security. The degree to which the employee feels secure in the organisation.
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Productivity. Is the measurement of the efficiency with which a firm turns production inputs in to out puts?
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Motivation. The will to work due to the enjoyment of the work itself. If you do a good job it is because you want to do a god job.
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Peers. Some one whose views on work place behaviour and attitudes may be highly influential.
References
- www.co-dr.com/article_people_motivation.htm Bartlett, A. (2002).
- Coffman, C. and Gonzalez-Molina, G. (2002). How the world's greatest.
- organizations drive growth by unleashing human potential.
- Cummings, B. (2002). Money aside, rewards lose punch.
- Dar-El, E. (1991, November 22). The productivity option.
- Deeprose, D. (1994). How to recognize & reward employees.
- Gale, S. F. (2002). Small rewards can push productivity.
- Hoffman, R. (1999). It takes more than pay to keep good workers.
- Matejka, K. (1991). Why this horse won't drink: How to win and keep employee commitment.
- Nelson, B. (1997). 1001 ways to reward employees.
- Walters, J. and Fenson, S. (2000, March). Goals, roles, pay, and performance.
- Weinstein, B. (2002, May). Motivating employees.
- http://www.zdnet.com.au/itmanager/management
- http://www.inc.com/magazine
- http://www.inc.com/articles/hr
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