Humans - an important factor to growth organisations.

University Degree Business and Administrative studies

CONTENTS

Maslow’s Hierarchy of Needs Theory

Herzberg’s Two-Factor Theory

Theory X and Theory Y

Expectancy Theory

UNDERSTAND WHAT INFLUENCE MOTIVATION

PERFORMANCE MANAGEMENT THEORIES

COMPENSATION SYSTEMS

EFFICIENCY AS MOTIVATOR

PRACTICAL APPROACH

Analysis of an article “Performance indicators”

THE PURPOSE OF MOTIVATING EMPLOYEES

Ways of Motivating Employees

Introduction

Human is an important factor to growth organisations. No any company can be operated its business without people. Success and achieving goal are the main task for all employees. Therefore, managers have to consider how those people can be encouraged to work efficiency and effectiveness for their companies. In this sense, motivation factor has been considered to encourage people to achieve their works. It is also related to psychological extent to motivate people from inside, which link to individual behaviour and human’s mind.

In term of Human Resource Management thinking, individual motivation is more important, and has been mentioned by many theorists such as Maslow, Alderfer and Herzberg that is concerned with “need”, which reflect to people’s performance and behaviours. Moreover, Thompson and McHugh (1995) mentioned that motivation can be indicated into two main factors: internal and external. These focus on the process of motivation theory which content of theory will be used, for instance, external use payment level and internal use a creation of work satisfaction. Discussion in details deeply will be revealed later. Although money seems to be seen as the main factor of encouraging people to work, but it cannot motivate them working in long-period. In fact, people always expect more and more payment, and they will not willing to work in fully power if they have inadequate expected money (Thompson and McHugh, 1995). Consequently, in this report will examine that besides the money, there are other factors, which can drive people to make a complete effort in their competency for achieving an organisation goal.

Money is not the only motivator

“If you are financially incented at your job that will most likely prevent you from hating your job. It is not going to motivate you to achieve”

(Livingston)

An organisation offers both intrinsic and extrinsic rewards to its employees, therefore, it must be realised that the financial rewards is considered as an extrinsic reward. On the other hand, employee derives intrinsic rewards from the job itself. They depend on how deeply the employee integrates himself with the work, as well as, how the job fits the employee’s ambition and could be practiced by giving the employees such a degree of authority and responsibility at their the workplace, that could generate a sense of personal achievement by completing the tasks, which in most cases, leds to high performance in the direction of the organisation strategy, and sense of satisfaction flanked by the employees.

Now the question arises which one of these rewards is more operatively motivating employee? Is it the extrinsic reward as a money motivator factor, or is it intrinsic, which expresses the rest of intangible factors?

Supportive theories

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Supportive theories

Maslow’s Hierarchy of Needs Theory consists of five hierarchal levels; each level represents a need that must be satisfied. By this he meant that at any given moment an individual will be aiming to satisfy one particular category of need, but once this has been done that person will be interested in satisfying the next higher level.(Waiting for Appendix ref.) Furthermore, in Herzberg’s Two-Factor Theory, the author indicated that some motivators are recognition, promotion, responsibility and the work itself. However, no matter how significant these factors are, people will never be motivated without having enjoyable work to do. He also describes the “hygiene factors” as being things that can contribute to job dissatisfaction and demotivate workers. These include low salary, unsatisfactory supervisors and poor working conditions. Although a low salary can demotivate workers, a high salary will not motivate them to do more. (Waiting for Appen. Ref.).

After considering these motivation theories, it will be easier to understand why pay is an ineffective motivator. As evidenced by the motivation theories, motivation is an internal force. Motivation causes an individual to act because he/she wants to. Pay is an external factor; it is a motivator only in the short term. It can last for little depending on the amount before it becomes just another factor. According to Herzberg, pay can keep a person from being demotivated, but it will not make a person motivated to do more and work harder. As the result of a survey conducted in the year 1999 by the American Management Association employers ranked external conferences and seminars, tuition reimbursement, managerial training and company support for an academic degree higher than pay for performance as ways to retain their best and brightest workers2. Also money, when used as a motivator, tends to distract employees. Employees focus on this external ineffective motivator rather than concentrating on internal motivators, which are superior to anything external.

As regards the findings of a research conducted by research scientist George Dudley of Behavioural Sciences Research Press, 32% of the U.S. sales people studied say they work for making money. The figure drops to 19% for sales people from Singapore and 18% for those from Sweden. Only 12% of Australian sales people and 9% from New Zealand say money is their primary motivator3. Thus, motivators like recognition, a strong culture and stable work environment, a sense of commitment and desire to do the job, a pleasant workplace with good people to work with, and a shared goal or vision can keep people motivated for a long time than money.

Money as the only motivator

People necessitate money, and as a result they demand money. Money is seen as a possible motivator but there are other interesting options to study. People give different value to money so if the organizations want to use it as a reinforcement factor, it should be something that the employees want to have. If the organizations use money as an incentive to respond, it will depend on the value that people give to this incentive.

To find the role that money plays apart from covering the basic needs (survival and security) that referred to the Maslow’s Hierarchy. When the earnings are regular, it helps to satisfy the need for self-esteem. As money is usually connected with the achievement of the needs, therefore, it can be defined as motivates.

The importance of money relies on the fact that it can be exchanged for many different things. Money is likely not to have and essential meaning in itself, but obtains indicative motivating power due to the fact that through money, there are able to symbolise so many intangible objectives.

In conclusion, money is a symbol that can change its value even for the same person at different periods of time.

On the report of Gupta and Shaw (1998) accentuate the influential and representative significance of money as below.

The influential power is interesting of the purpose of the money to buy intangible goals.

The representative significance regards how the money is perceived by the subject and its society as the money is seen as a symbol of status. According to this theory, employees will do things for which they are rewarded for. It is a simplistic point of view.

In line with this argument, Pfeffer (1999) pointed out six dangerous myths about pay, the more distinguished of which are the following two.

Individual incentive pay improve performance: If managers give incentive to individuals, they might not promoting the teamwork and people are working to move on the hierarchy.

People work for money: This is relatively not truth since they have other reasons to work. For instance, the meaning to lives. As maintained by Pfeffer (1999) that pay cannot substitute for a working environment “high on trust, fun, and meaningful work”.

New forms of money motivator

As money helps to compare the wage with the anterior jobs this could be the reason explain why people associate the money compensation as their success. As Ed Lawier (Bayett and Bayett, 1999) stated that, “the best incentive pay system for most companies probably would involve some combination of corporate wide profit sharing and stock ownership, couple with gain sharing plans in major operating units that award groups for cost saving”. Profit sharing and stock ownership are considered as new forms of money motivator. However, compared with simply money rewarding, these two seems more powerful and more indictable to employees through providing a sense of belonging.

Outcomes of the comparison

In harmony with Herzberg et al (1957) maintained that the lack of motivation may cause dissatisfaction, at worst, those employees become powerful negative influences in the workplace, spreading rumour, gossip and discontent amongst otherwise happy staff members. These are just some of the reasons why motivation should be important in an organization. It was thought that money helps to avoid dissatisfaction at work; however, money did not result in lasting satisfaction.

One of the studies by Kohn (1998) suggests t the financial incentives do not motivate people. “It becomes disturbingly clear that the more you use rewards to motivate people, the more they tend to lose interest in whatever they had to do to get the rewards.” In fact, money is not the key of success. Sometimes, it does not motivate all the employees and its influence over people can vary. In the like manner Pfeffer (1999) stated that the major problem with money is that life is not long. Therefore the influence of money is quite “overestimated”.

While many of these principles have been absorbed into modern day, Motivation of employees becomes a real challenge for organization as this crucial function of the HRM department depends on several factors that are interdependent. The money issue is likely to be important as it possible to work on some cases, but it may not achieve success for others employees in the same circumstances.

Also it is very remarkable for the HRM department to keep in relation between organization results and the workers contribution. A good option is to base the incentives on appropriate and elementary measurements so that the employees could make the correct connections and understand the relations and to be informed by the result of their value added to the organisation. All the incentives would be well-linked to the workers future demand. If not, that would mean that any such encouragement form HRM department could not be effective on the employee performance in the future.

In order to motivate incentives, it should be easy to reach and the best alternative would choose them according to employee preferences.” suitable person in the suitable place” and to offer only what he or she can give back. There are other approaches like placing employees in jobs where their skills can shine and encourage the staff to be the best they can be; showing employees ways to contribute meaningfully to the organization, by providing “need to know” information, i.e. telling the truth; avoiding over involved with team work, and their specific domains.

((((((((( Herzberg, Kohn, Pfeffer))))))))) needed resources

Recommendations

Many corporate Employee Motivation Strategies assumed that people all respond to the same incentives. Most commonly money is used to improve motivation, staff retention. However, employee motivation is much more complicated than that. To identify what employees’ real needs is the essential of deciding which motivator is the most effective one. Simultaneously, formulating a criterion of performance measurement is necessary for rewarding system. Gofton (1998) believed that there are four major factors connected with the performance measurement. They understand the target audience, effective communications, the commitment of senior management, and the recognition of achievement.

It is recognised that some company use agency elaborate their employee motivation strategy and performance measurement programme. The first step in developing the programme is to know exactly how to measure what needs enhancing. The main new idea is that there are several ways to improve but if the organization wants to know what the employees think about the incentives or work, it needs to get feedback from them. During all the process the boss should be trusted.

This short summary shows some ideas as discussed before: Firstly, any program that is implemented must be in accordance with the employees and they should know that it exists and the way it works. The incentives should be something that the employees want to get, so the best way would be to talk with them to discover what they want. Secondly, about the idea of measuring the performance, everybody should understand it otherwise it will probable not work. Moreover, the employees should be able to see the possible connections between the performance and company’s results.

Organizations recently are concerned about the motivation of their employees, and how they solve this problem. It is known that a lot of companies that are in dependency with the sales team using trips as a possible choice because money means paying more taxes, so some workers might change their likes and dislikes. The choice for a trip as an incentive is becoming more popular in the last five years.

From Writer’s perspective, although money plays an important role in the incentives systems, the company should still examine whose own situation carefully to choose the best motivation for employees based on their expectation from their jobs.

Conclusion

In this dynamic and highly competitive business environment, human capital remains a valuable asset in every organization. In fact, highly self-motivated, committed, ambitious employees can build a high performance organization and sustain that competitive advantage. However, when staffs feel lacking motivation, the effects can be dramatic: they lose enthusiasm for their work, make mistakes, being lack of initiative and energy, and lack of loyalty for their company, which leads to a high staff turnover.

There is no ‘one-size-fits-all’ approach to motivate staff. Traditionally companies use financial bonuses or perks to encourage employees to give their best effort. However the key to an effective employee motivation strategy is to provide a range of incentives that will appeal to different personalities. While one individual may be highly money motivated another may find job satisfaction or creative opportunities are more powerful factors.

In theory, the simplest and most intuitive approach to motivation is to satisfy an employee’s needs. The employer can choose the ‘right’ employee rewards for doing job and especially for doing job well. Providing the ‘right’ rewards reinforces the employees’ actions thus causing the employees to repeat the actions to get the reward again. Realizing that each employee is motivated by different things, managers should always target their rewards carefully and individually. One employee may simply want a higher salary, another wants company pension, while a third person might prefer more non-essential training.

The above approaches seem too idealistic. In reality, the problem is how to find what really motivates the staff. It is always being wrongly assumed that all the people are motivated by the same things. And managers, on the other hand, like to use the ‘one-size-fits-all’ approach which is convenient to them. That is why in many large corporations, although billions of dollars have been spent each year on money motivation, there is still a high staff turnover.

In conclusion, employees are motivated by a whole range of factors: financial rewards, promotion, praise and acknowledgement, competition, job security, public recognition, and so on. Managers must take these separately and use them on their employees individually. Further, the fundament of motivation is to balance people’s attitudes about work and life. What managers need to do is to make employees understand work is part of their lives and they should bring that passion into their daily works.(((((((((((((((((( at the end ))))))))))))