The success of any organization depends on the ability of managers to provide a motivating environment for its employees. Motivated employees are more productive, happier, and stay with the organization longer. One of the primary tasks a manager faces is to find out what motivates their staff. By understanding employee needs, managers can understand what rewards to use to motivate them.
Advanced economies are constantly evolving. There is a general sense that the pace of change has accelerated in recent years, and that we are moving in new directions. Central to these notions is the role of technology, particularly information technology. The implementation of these technologies is thought to have substantial impact on both firms and their workers. Globalization and increasing international competition also contribute to the sense of change. In this environment, greater attention is being paid to the management and development of human resources within firms. Education and training are increasingly seen as an important investment for improved prosperity— both for firms and individual workers.
This paper studies what motivates employees and designing a motivation program based on those needs, drives, and expectations.
NEW TRENDS IN HUMAN RESOURCE MANAGEMENT
With today’s workforce, becoming increasingly diverse, and organizations are doing more to maximize the benefits of the differences in employees, Human Resource managers are evolving from the “old school” sideline player to the front-line fighters. Organizations are relying on managers to get the people who get the job done, and of course, make the company money. People have always been central to organizations, but their strategic importance is growing in today’s knowledge-based business world like never before. An organization’s success increasingly depends on the knowledge, skills, and abilities of its employees, particularly as they help establish a set of core competencies, which distinguish one organization from its competitors. When employees’ talents are valuable, rare, difficult to imitate and organize, an organization can achieve a sustained competitive advantage. In order to “compete through people”, an organization has to be able to do a good job of managing their human capital: the knowledge, skills, and capabilities that add value to the organizations. Managers must develop strategies for identifying, recruiting, and hiring the best talent available. Develop these individuals in ways that are specific to the needs of their individual firms, encourage them to generate new ideas while familiarizing them with the company strategies, invite information sharing, and rewarding collaboration and team work. The basis on which compensation payments are determined, and the way they are administered, can significantly affect employee productivity and the achievement of organizational goals.
It is generally recognized that firms that innovate are more profitable, grow more rapidly and create a larger number of jobs. Within a firm, the process leading to innovation requires a high level of human capital among workers. In order to participate fully in this process, workers must not only acquire strong basic knowledge through the education system but also need to have opportunities to acquire training in the labour market. Training taken within the firm could extend the knowledge acquisition process and help workers to renew or adapt previously accumulated skills and enable them to fully contribute to the improvement of productivity or to innovation (see Figure 1).
Human Resource Management’s front-line fight is to get the organization in order. Evidence points to a more active interest in and careful implementation of human resource management. Management is, by definition, getting things done through people. If managers are to increase productivity, reduce costs, and improve their organization’s competitive advantage, they must focus on how properly manage personnel. Creating effective motivation and leadership, recruiting and retaining the right personnel, rewarding and treating employees fairly, establishing an environment that supports the people and benefits the organization, the Resource Manager looks towards a future with exciting challenges and opportunities for managing an organization’s most valuable resource – its people.
UNDERSTANDING EMPLOYEE DRIVES AND MOTIVATIONS
Definition of Employee Motivation
The heart of motivation is to give people what they really want most from work. The more you are able to provide what they want, the more you should expect what you really want, namely: productivity, quality, and service.
When you think about it, the success of any facet of your business can usually be traced back to motivated employees. From productivity and profitability to recruiting and retention, hardworking and happy employees lead to triumph.
Unfortunately, motivating people is far from an exact science. There is no secret formula, no set calculation, and no work sheet to fill out. In fact, motivation can be as individual as the employees who work for you. One employee may be motivated only by money. Another may appreciate personal recognition for a job well done. Still another may work harder if she has equity in the business.
The way I believe you motivate people is to make it clear not only what goals the company is trying to achieve but also why the goals are important to society.
It is important that employees feel a sense of passion and deep interest in doing a good job, no matter how big or little the job may be. Matching the right job with the right person will further help to motivate employees. An employee who feels mismatched with their job will feel frustrated and motivation will decrease.
Many individuals express frustration in performing the same responsibilities repeatedly . The ability of a company to structure career planning programs, including job rotations, skills training, and project management assignments are of interest to many employees.
Providing immediate recognition for a job well done is most rewarding. This will likely ensure work to continue to be good throughout the day, week, or month. If recognition is only given at specific times, employees will only be motivated closer to the time the recognition or reward is expected.
Advantages of Employee Motivation
A positive motivation philosophy and practice should improve productivity, quality, and service. Motivation helps people:
• achieve goals;
• gain a positive perspective;
• create the power to change;
• build self-esteem and capability;
• manage their own development and help others with theirs.
Disadvantages of Motivating Staff
There are no real disadvantages to successfully motivating employees, but there are many barriers to overcome.
Barriers may include unaware or absent managers, inadequate buildings, outdated equipment, and entrenched attitudes, for example:
• “We don’t get paid extra to work harder.”
• “We’ve always done it this way.”
• “Our bosses don’t have a clue about what we do.”
• “It doesn’t say that in my job description.”
• “I’m going to do as little as possible without getting fired.”
Such views will take persuasion, perseverance, and the proof of experience to break down.
Basic Principles to Remember
1. Motivating employees starts with motivating yourself.
A great place to start learning about motivation is to start understanding your own motivations. The key to helping to motivate your employees is to understand what motivates them. So what motivates you? Consider, for example, time with family, recognition, a job well done, service, learning, etc. How is your job configured to support your own motivations? What can you do to better motivate yourself?
2. Key to supporting the motivation of your employees is understanding what motivates each of them.
Different things motivate each person. Whatever steps you take to support the motivation of your employees, they should first include finding out what it is that really motivates each of your employees. You can find this out by asking them, listening to them and observing them.
3. Recognize that supporting employee motivation is a process, not a task.
Organizations change all the time, as do people. It is an ongoing process to sustain an environment where employees can motivate themselves. If you look at sustaining employee motivation as an ongoing process, then you will be much more fulfilled and motivated yourself.
4. Support employee motivation by using organizational systems (for example, policies and procedures) – do not just count on good intentions.
Do not just count on cultivating strong interpersonal relationships with employees to help motivate them. The nature of these relationships can change greatly, for example, during times of stress. Instead, use reliable and comprehensive systems in the workplace to help motivate employees. For example, establish compensation systems, employee performance systems, organizational policies and procedures, etc., to support employee motivation. In addition, establishing various systems and structures helps ensure clear understanding and equitable treatment of employees .
THEORIES OF HUMAN MOTIVATION
Hierarchy of needs theory
Abraham Maslow proposed the theory called hierarchy of needs theory . Maslow believed that within every individual, there exists a hierarchy of five needs and that each level of need must be satisfied prior to an individual pursues the next higher level of need. As the individual progresses through the levels of needs, the preceding needs lose their motivational value. The five levels of needs, according to Maslow are
1. Physiological Needs
These needs include food, water, and sex, which are essential for us to survive. If these needs are not met, then all other needs will not be a source of motivation.
2. Safety Needs
This refers to the need to feel safe from physical and emotional harm.
3. Social Needs
These needs are concerned with social interactions with others. The individual needs to feel a sense of belonging, affection, acceptance, and friendship.
4. Esteem Needs
Esteem is concerned with the feelings of self-confidence derived from achieving something, and the recognition and prestige that comes with that achievement.
5. Self-Actualization Needs
This level of needs is concerned with achieving one’s full potential and dreams.
It is only when these needs are met that workers are morally, emotionally, and even physically ready to satisfy the needs of the employer and the customers.
Fredrick Herzburg developed another popular theory of motivation called the two-factor theory . Herzburg’s findings suggest there are two factors that contribute to employee satisfaction and dissatisfaction. The first is referred to as motivators, which includes responsibility, advancement, and recognition. The other is known as hygiene factors. These factors include the work environment, management, salaries, and company policies. Unsatisfactory hygiene factors can act as de-motivators, but if satisfactory, their motivational affect is limited without motivators. Thus, Herzberg has put emphasis on the psychological needs of the employees in designing jobs.
Another theory, developed by B.F. Skinner, is the reinforcement theory . This theory is a behavioral approach. The main point is consequences influence behavior. According to the reinforcement theory, there are four ways to modify behavior. The first and most affective way is positive reinforcement, which refers to rewarding a desirable behavior to strengthen the likelihood that it will be repeated. The second way a manager can modify behavior is negative reinforcement, which is defined as removing a negative stimulus in the environment after the behavior occurs. Another way to modify behavior is punishment, which decreases the chances of the behavior to occur. The last method of behavior modification is lack of reinforcement. The idea behind this method is that if a behavior is not reinforced in any way that it will decrease in frequency, and be eliminated.
The last theory of motivation this paper will cover is the expectancy theory , proposed by Victor Vroom. Unlike the reinforcement theory, this theory is concerned with internal processes that an individual undergoes in order to decide whether they want to put forth the effort to strive towards a specific goal. According to Vroom, there are three important elements to consider when determining motivation. The first element is “valence,” this refers to the desire an individual has to achieve a goal or fulfill a need. The second element is “instrumentality,” this is the belief that if an individual gives a certain level of performance, then a desirable outcome is expected. The third element is “expectancy,” this is the belief an individual has about the relationship between effort and performance, if one exerts a high level of effort, then one can expect good performance. What motivates people depends on their perception of the attractiveness of the goal and its attainability.
Regardless of which theory is followed, interesting work and employee pay are important links to higher motivation. Options such as job enlargement, job enrichment, promotions, monetary and non-monetary compensation should be considered.
ESTABLISHING COMPENSATION PACKAGES
Work is about the money and earning a living. Work becomes not about the money only when employees have “enough” money to meet their basic living expenses. Establishing compensation programs require both large and small organizations to consider specific goals. Employee retention, compensation distribution and adherence to the budget must be carefully weighted against the overall organizational goals and expectations. Compensation must reward employees for past performance while serving as a motivation tool for future performances. Internal and external equity of the pay program will affect employees’ concepts of fairness. Organizations must balance each of the concerns while remaining competitive.
For internal equity, an organization can use one of the basic job evaluation techniques to determine relative worth of job. The most common are the ranking and classification methods.
The job ranking system arranges jobs in numerical order based on the importance of the job’s duties and responsibilities to the organization. Job classification slots jobs into reestablished grades with higher rated grades requiring more responsibilities, working conditions, and job duties.
External equity can be determined by a wage survey. Data obtained from the surveys will facilitate establishing the organization’s wage policy while ensuring that the employer does not pay more, or less, than needed for jobs in the relevant labor market. Base salary is only one aspect of a retention plan for important employees.
By offering enticing compensation packages, equitable pay, flexible benefits and known incentives, an organization allows itself the luxury of identifying and selecting those, which meet the needs of the organization. In filling job openings above the entry level an employer usually finds it advantageous to use transferring and internal promotions. By recruiting from within, an organization rewards employees for past performances and sends a signal to other employees that their future efforts will payoff, while capitalizing on previous investments made in recruiting, selecting, developing, and training its current employees.
The budget for salary, compensation, and benefits is not unlimited in most organizations. Thus, in addition to traditional increases to base pay, and variable rewards, such bonuses, profit sharing and gain sharing, I recommend attention to quality of work life rewards. These can include the following:
• Payment of a one-time, lump sum payment for a result or outcome that deserves recognition.
• Payment of smaller rewards with “thank you” notes for above the call of duty contributions These are not necessarily tied to an achieved result, but they are contributions, that when emphasized, increase the probability of results.
• Increased emphasis on additional benefits such as pre-paid legal assistance, educational assistance, and vision insurance.
• Increased opportunity for flexible work arrangements and job-sharing.
• An organizational emphasis on the training and development of employees.
• Clear career paths so employees see opportunities within your organization.
In summary, organizations are moving toward salary and compensation systems that emphasize flexibility, goal achievement, and variable pay based on performance, and less emphasis on increases to base pay. They are using bonuses based on profit and accomplishment to add to employee compensation. The rising cost of benefits is causing rethinking of their place in the compensation system. Forward thinking organizations are emphasizing “quality of work life” rewards and recognition to add to the value of the total compensation package.
Benefits and incentive plans are valuable rewards in recruiting and retaining essential employees. Benefits are an established and integral part of the total compensation package. In order to have a sound benefits package there are certain basic considerations. It is essential that a program be based on specific objectives that are compatible with the organizational philosophy and policies as well as affordable to the company. By utilizing a flexible benefits package, employees are able to choose those benefits that are best suited to their individual needs.
On average, organizations spend 41 cents for benefits for every dollar of payroll. That is 29 percent of the total employee compensation package. Research reported in the journal, Personnel Psychology, suggests that employees only understand and appreciate between 31 and 68 percent of the cost or market value of the benefits they receive . Employees undervalue their benefits for many reasons including: employers communicate the value of the benefits poorly, the employees have little or no choice in benefits packages or options, and the employees misunderstand the market value of benefits. Firms that wish to maximize the value of their benefits expenditures need to survey their employees to ask them what they value and how much. Benefits surveys or focus groups are important first steps in understanding employee preferences. Relevant questions might include the following.
• What benefits are most important to you?
• If you could choose one new benefit, what would it be?
• If you were given X dollars for benefits, how would you spend them?
Follow-up research about the cost of the benefits employees desire, can help you determine which programs will provide the most “bang for the buck.” Based on the data developed, you can adapt your benefit offerings or provide choices consistent with organizational objectives such as employee retention or performance.
The success of an incentive pay plan depends on the organizational climate in which it must operate, employee confidence in it, and its suitability to employee and organizational needs. Importantly, employees must view the incentive plan to be equitable and related to their performance.
Tuition assistance is an employer-provided employee benefit that is a win-win for your workplace. In a tuition assistance program, an employer pays all or part of an employee’s cost to attend college or university classes. Most employers, who offer a tuition assistance program, pay the full cost of the employee’s tuition, lab fees, and books.
In most cases, employers cap the amount of tuition assistance available for employees. Either employers set a limit in terms of dollars available per employee per year or they establish the number of classes they will pay for per year per employee.
When tuition assistance is available, the most common method for administering the program is to require employees to pay for their own tuition and books when they register for classes. The employee is then reimbursed when he or she submits the receipts and evidence of earning a “C” or above grade upon completion of the class.
In some cases, where extensive funds are spent on tuition assistance, the employer requires that the employee sign an agreement to pay back the tuition assistance if he or she leaves the organization within a certain period. In these cases, the employer forgives a percentage of the tuition assistance for every year the employee stays with your organization .
Tuition assistance makes sense for employers because you enable your employees to continue to grow and develop their knowledge. Your employees stay in the practice of learning and university attendance fosters an environment at work that supports employee learning.
Performance measures should be quantifiable, easily understood, and bear a demonstrated relationship to organizational performance. Performance appraisal programs serve many purposes, but in general, those purposes can be clustered into two categories: administrative and developmental. The administrative purposes include decisions about who will be promoted, transferred, or laid-off. Developmental decisions include those related to improving and enhancing an individual’s capabilities. These include identifying a person’s strength and weaknesses, eliminating external performance obstacles, and establishing training needs.
In every enterprise, every form of employee compensation or reward is either contingent or non-contingent on accomplishment of desired performance.
Contingent Reward is that which can only be had through doing desired performance. In other words, if the performance is not accomplished, the reward is not realized.
Non-contingent Reward is that which can be had without doing desired performance. In other words, employees get it regardless of whether or not they accomplish desired performance.
A key to building employee motivation for desired performance is to increase the amount of contingent reward and decrease the amount of non-contingent. The difference between the amounts of contingent and non-contingent reward we call the contingency differential.
The greater the differential between contingent reward and non-contingent reward, the more frequently employees will choose desired performance over undesired performance .
We should consider installing a differential pay program — a program that enables each employee to get a larger paycheck when s/he accomplishes a particular “bonus” performance criteria during the pay period. By doing that, we increase the net payoff that employees derive from pursuing desired performance, which builds their motivation for continuing to pursue it.
Carefully designed performance standards that are reliable, strategically relevant, and free from either criterion deficiencies or contamination are essential foundations for evaluation.
Providing opportunities to learn new technologies, methods and accomplish new achievements are significant in capturing prolonged interest from high potential staff. Giving people the opportunity to gain exposure and implement new programs while building self-esteem and credibility is valuable for both the company and the employee. Opportunity and recognition of accomplishments can prove to be a much more lucrative incentive than any financial considerations a company may offer.
Today organizational operations cover broad areas and require continuous training for effective job performance, evolutions in product areas, and corporate growth. In order to have effective training programs organizations can utilize a systems approach. Key areas of this approach include needs assessment, program design, and evaluation. Needs assessment begins with organizational analysis. Managers must establish a context for training by deciding where training is needed, how it connects with strategic goals, and how organizational resources can best be used. In designing a training program, managers must utilize principles of learning in order to create an environment that is conducive to learning. The evaluation of a training program should focus on several criteria: participant reactions, learning, behavior changes on the job, and bottom line results.
There are two types of training, classroom training supported by the employer and on-the-job training supported by the employer.
Classroom training (sometimes called formal training) is defined as training activities with a predetermined format, pre-defined objectives, specific content and progress that can be monitored or evaluated.
Occupation appears to have a significant impact on the probability of taking classroom training, but not much on the probability of taking on-the-job training. The various categories of workers (except managers) are less likely than professionals to take classroom training. Thus, professionals not only have better access to training but they are also more inclined to take it, if available.
Permanent workers are more likely than non-permanent workers to take classroom training (of around nine percentage points) and on-the-job training (five percentage points). Since firms are less likely to recover their investment in training for temporary workers, they will be less inclined to support training for these workers (especially the most costly training). Temporary workers may also be less interested in investing time in training if they see few benefits in it.
Further, participation in classroom training increases with level of education, these two forms of investment appearing to be complementary. However, this effect appears to be limited to post-secondary education since the effect of a high school diploma (compared with no high school diploma) is not significant. Having a university diploma increases the probability of taking classroom training by 12 percentage points. The probability of taking on-the-job training does not appear to be substantially affected by the level of education. One possible explanation of this phenomenon is that this type of training is more useful at the beginning of employment in order to assimilate the characteristics inherent to the work performed, and that this applies to all workers regardless of level of education.
By definition, on-the-job training is given during work hours and at the workplace (in a location that is not necessarily separate from the “production facilities”).
On-the-job training involves four steps :
1. DESCRIBE the performance to be learned.
2. DEMONSTRATE how to do it.
3. REVIEW the employee doing it.
4. REINFORCE the employee for what s/he did well.
If needed, Step 5 is REPEAT steps 2-4.
Step 1 – Describe
DESCRIBE what the learner will be learning.
In doing this, describe WHAT the task is, HOW it is done, and WHY it is done that way. Bear in mind, the ability to do something well usually depends on three components: Attitudes, Skills, and Knowledge. So be sure to describe the particular attitudes, or perspectives, that are vital to doing the task excellently. In addition, explain how excellent performance of the task is important to the company. Also, explain how it can contribute to an employee’s career development.
Step 2 – Demonstrate
DEMONSTRATE how it’s done.
If the task’s performance involves a particular speed, first demonstrate how it’s done at regular or full-speed, then demonstrate it at half-speed, or step-by-step. For the step-by-step demonstration, consider having the trainee/s read aloud the procedure for each step prior to you’re doing it, if applicable. Also, consider fortifying your demonstration with a follow-up visual aid (photo, video tape, computer CD).
Step 3 – Review
Have the trainee try it while you REVIEW his/her performance.
Before s/he starts, ease the tension by explaining, “No one expects perfection first time out. So just relax, enjoy it and give it your best effort — whatever happens will be fine.” If it is a complex multi-step process, suggest that the person refer to the manual between steps. Finally, if applicable, have the trainee explain what they are doing while they are doing it.
Step 4 – Reinforce
REINFORCE the trainee for good performance.
To do this, point out what the trainee did well and praise him or her for it. This is vital to creating a positive attitude and motivation to continue learning. Therefore, no matter how weak the person’s first performance might be, always pick out the strongest aspect of their demonstration and commend them on it.
General Benefits from Employee Training and Development
There are numerous sources of online information about training and development. Several of these sites suggest reasons for supervisors to conduct training among employees. These reasons include:
• Increased job satisfaction and morale among employees
• Increased employee motivation
• Increased efficiencies in processes, resulting in financial gain
• Increased capacity to adopt new technologies and methods
• Increased innovation in strategies and products
• Reduced employee turnover
• Risk management, e.g., training about sexual harassment, diversity training
Every employee has a need for self-expression, entertains plans for professional development and career advancement, wishes to be accepted as “family member”, feel respect towards management and pride in his/her work, receive acknowledgment and reward, be listened to and trusted. Through strategic communications, it is manager’s duty is to share with employees’ company goals, market, industry and business information and futures plans, and invite employees to give feedback. We must learn how to place people in a role where they can use their abilities and make progress towards the realization of personal goals. Misplacements can cause a company substantial financial loss due to turnover, accidents, lawsuits, rebates, refunds, loss of customers and sales.
Fair benefits and pay is the cornerstone of a successful company that recruits and retains committed workers. If you provide a living wage for your employees, you can then work on motivational issues. Without the fair living wage, however, you risk losing your best people to a better-paying employer.
It is important for employees to know that management is aware of their existence, recognizes them, remembers their names and greets them. Managers who fail to greet employees or respond to greetings lead to a high degree of de-motivation, lack of trust, and disloyalty.
We must learn how to create a corporate culture and a supportive work environment. This is done through leadership and management excellence, a human approach, effective human resources strategies, “positive discipline”, fair and just treatment to all, clearly defined policies, career and personal development training programs (including cross-training and job rotation), organizational communications, tools to facilitate communication, team assignments, reward programs, objective appraisals, adequate pay, benefits and company activities .