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There is an old saying “you can take a horse to the water but you cannot force it to drink, it will drink if it’s thirsty—so with people. They will do what they want to do or otherwise motivated to do”. Whether it is to excel on the workshop floor they must be motivated or driven to it, either by them or through external stimulus. Motivation is a basic psychological process. Few would deny that it is the most important focus in the micro approach to organizational behavior.
Along with perception, personality, attitudes, and learning, motivation is presented here as a very important process in understanding behavior. Many people incorrectly view motivation as a personal trait-that is, some have it and others don’t. Our knowledge of motivation tells us that this just isn’t true. What we know is that motivation is the result of the interaction of the individual and the situation. Certainly individuals differ in their basis motivational drive. The 1950s wee a fruitful period in the development of motivational theories.
The theoretical development of work motivation are shown in the following figure: 1900 A quick look on early theories of motivation |Motivational Theories |Definitions | | |X- The assumption that employees dislike work, are lazy, dislike | | |responsibility, and must be coerced to perform. |Theory X & Theory Y |Y- the assumption that employees like work, are creative, seek, | | |responsibility, and can exercise self-direction. | | |There is a hierarchy of five needs-psychological, safety, social,| |Hierarchy of needs theory |esteem, and self-actualization. |ERG Theory |There are three groups of core needs: existence, relatedness, and| | |growth. | |McClelland’s theory of needs |Achievement, power, and affiliation are three important needs | | |that help explain motivation. | |Intrinsic factors are related to job satisfaction, while | |Two-factor theory |extrinsic factors are associated with dissatisfaction. | | |Individuals compare their job inputs and outcomes with those of | |Equity theory |others and then respond to eliminate any inequities. | |The strength of a tendency to act in a certain way depends on the| | |strength of an expectation that the act will be followed by a | |Expectancy theory |given outcome and on the attractiveness of that outcome to the | | |individual. |Reinforcement theory |Behavior is a function of its consequences. | |Goal-setting theory |The theory that specific and difficult goals, with feedback, lead| | |to higher performance. | [pic] Employee Motivation: Theory and Practice The job of a manager in the workplace is to get things done through employees. To do this the manager should be able to motivate employees.
But that’s easier said than done! Motivation practice and theory are subjects, touching on several disciplines. In spite of enormous research, basic as well as applied, the subject of motivation is not clearly understood and more often than not poorly practiced. To understand motivation one must understand human nature itself. Human nature can be very simple, yet very complex too. An understanding and appreciation of this is a prerequisite to effective employees motivation in the workplace and therefore effective management and leadership.
Quite apart from the benefit and moral value of an altruistic approach to treating colleagues as human being and respecting human dignity in all its forms, research and observations show that well motivated employees are more productive and creative. The inverse also holds true. Now we will emphasize on six applications of motivational theories that relate motivational theories, which are applied practically in the organization. To know this we have to know the application of motivational theories and then we will able to make link between theories and application.
These are: 1) Management by Objectives 2) Employee Recognition Programs 3) Employee Involvement Programs 4) Variable Pay Programs 5) Skill-Based Pay Plans & 6) Flexible Benefits Management by Objectives (MBO) Peter Drucker first outlined management by Objectives (MBO) in 1954 in his book ‘The Practice of Management’. In the 90s, Peter Drucker himself decreased the significance of this organization management method, when he said: “It’s just another tool. It is not the great cure for management inefficiency…
Management by Objectives works if you know the objectives, 90% of the time you doesn’t. ” What is MBO? Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc.
MBO includes ongoing tracking and feedback in the process to reach objectives. MBO is often achieved using set targets. MBO introduced the SMART criteria: Objectives for MBO must be SMART (Specific, Measurable, Achievable, Realistic, and Time-Specific). However, it has been reported in recent years that this style of management receives criticism in that it triggers employees’ unethical behaviour of distorting the system or financial figures to achieve the targets set by their short-term, narrow bottom-line, and completely self-centered thinking.
It is all too easy for managers to fail to outline, and agree with their employees, what it is that everyone is trying to achieve. MBO substitutes for good intentions a process that requires rather precise written description of objectives (for the period ahead) and timelines for their monitoring and achievement. The process requires that the manager and the employee agree to what the employee will attempt to achieve in the period ahead, and (very important) that the employee accept and agree to the objectives (otherwise commitment will be lacking).
For example, whatever else a manager and employee may discuss and agree in their regular discussions, let us suppose that they feel that it will be sensible to introduce a key performance indicator to show the development of sales revenue in a part of the firm. Then the manager and the employee need to discuss what is being planned, what the time-schedule is and what the indicator might or might not be. Thereafter the two of them should liaise to ensure that the objective is being attended to and will be delivered Management by Objectives (MBO) Principles |Six MBO Stages | |Cascading of organizational goals and objectives |Define corporate objectives at board level | |Specific objectives for each member |Analyze management tasks and devise formal job specifications, | |Participative decision making |which allocate responsibilities and decisions to individual | |Explicit time period |managers | |Performance evaluation and feedback |Set performance standards | | |Agree and set specific objectives | | |Align individual targets with corporate objectives | | |Establish a management information system to monitor | | |achievements against objectives | Types of Objectives | |Routine objectives |The objectives must be: | |Innovation objectives |focused on a result, not an activity | |Improvement objectives |consistent | | |specific | | |measurable | | |related to time | | |attainable | |MBO Strategy: Three Basic Parts | |All individuals within an organization are assigned a special set of objectives that they try to reach during a normal | |operating period. These objectives are mutually set and agreed upon by individuals and their managers. | |Performance reviews are conducted periodically to determine how close individuals are to attaining their objectives. | |Rewards are given to individuals on the basis of how close they come to reaching their goals. | |The Two Questions Need to Answer To Get The Whole Process Rolling | |Where do I want to go? (What is the objective? | |How will I pace myself to see if I am getting there? (What are my milestones, or key results? ) | |Make sure that the answers are precise! | Linking between MBO and motivational theory Linking MBO with motivational theory A logical extension of goal setting is the traditionally used management by objectives or MBO approach to planning, control, personnel appraisal and overall system performance. The approach has been around for many years and thus preceded much of theory and research on goal setting per se. Today the term MBO may no longer be used.
Instead, MBO can be has evolved into an overall system performance approach using goal setting and appraisal by results. For example, Locke and Latham recently noted that MBO could be viewed as goal setting applied to the macro or organizational level. The application of goal setting and appraisal by results of overall organizational systems generally follows the series of systematic steps. Once the overall objectives have been set and the organization is developed to the point of accommodating the performance system, individual objectives are set. Each manager subordinate pair, starting at the top and going down as far as the system is to be implemented, determines these individual objectives. Figure: The application of goal setting theory
In line with the goal-setting research, these objectives should be specific, difficult, and accepted. Like the overall objectives, this set of individual objectives, should also be accompanied by action plans developed to spell out how the objectives are to be accomplished. [pic] Although the goal-setting dimension is most closely associated with this approach to system performance, feedback and will be appraised on the basis of how they perform in accordance with the objectives that are set. This feedback and appraisal process takes place on both a periodic and an annual basis. The appraisal sessions attempt to be diagnostic rather than purely evaluative.
This means simply that the subordinate’s manager assesses the reasons why objectives were either attained or not attained, rather than giving punishments or rewards for failure or success in meeting objectives. Goal-setting theory demonstrates that hard goals result in a higher level of individual performance than do easy goals, that specific hard goals result in higher levels of performance. MBO directly advocates specific goals and feedback. MBO implies, rather than explicitly states, that goals must be perceived as feasible. Consistent with goal setting, MBO would be most effective when the goals are difficult enough to require the person to do some stretching.
The only area of possible disagreement between MBO and goal-setting theory relates to the issue of participation MBO strongly advocates it, while goal-setting theory demonstrates that assigning goals to subordinates frequently works just as well. The major benefit to using participation, however, is that it appears to induce individuals to establish more difficult goals. The early research results on MBO-type performance systems were mixed. However, more recent analyses conclude that overall goal-setting systems have slightly positive effect on employee satisfaction, but a much larger, but still modest effect on performance, and a meta-analysis on MBO found that 68 out of 70 studies showed productivity gains. Employee Involvement Programs
It is a participative process that uses the entire capacity of employees and is designed to encourage increased commitment to the organization’s success. It follows that participation is the mental and emotional involvement of people in-group situation that encourage them to contribute to group goals and share responsibility for them. Employee involvement can be best defined as giving each worker more control over his or her job. The logic is that by involving workers in the decision that affect them by increasing their autonomy and control over their work lives. Employees will become more motivated, more committed to the organization, more productive and more satisfied with their job.
Employee participates through participative management, representative participation, work councils, board representatives, quality circle; total quality management and employee ownership plans. ? Suggestion Program: Formal plans to invite individual employees to recommend work involvement. ? Participative Management: A process in which subordinated shares a significant degree of decision-making power with their immediate superiors. ? Representative Participation: Workers participate in organizational decision making through a small group of representative employees. ? Work Council: Group of nominated or elected employees who must be consulted when management makes decision-involving personnel. ? Board Representatives: A form of representative participation employees sits on a company’s board of the firm’s employees. Quality Circle: A work group of employees, who meet regularly to discuss their quality problems, investigate causes, recommend solution, and take corrective action. ? Total Quality Management: The TQM approach gets every employee involved in the process of searching for continuous improvement in his or her operations. ? Employee Ownership Plan: Company established benefit plans in which employees acquire stock as part of their benefits. Prerequisites for Participation The success of participation is directly related to how well certain prerequisite conditions are met. Some of these conditions occur in the participants, some exist in their environment. Major prerequisites are as follows: ? Adequate time to participate. Potential benefits greater than cost. ? Relevance to employee interest. ? Adequate employee abilities to deal with the subject ? Mutual ability to communicate. ? No feeling of threat to either party ? Restriction to the area of job freedom. The Participation Process It indicates that in many situation participative program result in mental and emotional involvement that produce generally favorable outcomes for both the employees and the organization. Participating employees are generally more satisfied with their work and their supervisor, and their self-efficacy rises as a result of their newfound empowerment. ? Forces affecting the greater use of participation
Linking Employee Involvement Program and Motivational Theory Employee involvement program is linking on a number of motivation theories. The job of a manager in the work place is to get things done through employees. To do this the manger should be able to motivate employees. Motivation practice and theory are difficult subjects, touching on several disciplines. In spite of enormous research, basis as well as applied, the subject of motivation is not clearly understood and more often than not poorly practiced. Human nature can be very simple, yet very complex too. An understanding and appreciation of this is a prerequisite to effective employee motivation in the workplace.
On the practical aspects of motivation in the workplace and the research that has been understand in this field notably by theory Y, two factor motivation hygiene theory, theory Z, hierarchy of needs, Hawthorne Experiments, achievement motivation. Theory Y is consistent with participative management, while theory X aligns with the more traditional autocratic style of managing people. It motivates people to contribute. They are empowered to release their own resources of initiative and creativity toward the objective of the organization, just as theory Y predicts. Participation specially improves motivation by helping path toward goals according to the goal setting theory.
In term of two factor theory, employee with intrinsic motivation by increasing opportunities for growth, responsibility and involvement in the work itself. Similarly, the opportunity to make and implement decisions and then seeing them workout can help satisfy an employee’s growth, and enhanced self-esteem. So employee involvement is competitively with ERG theory and effort to stimulate the achievement need. An extensive employee involvement program clearly has the potential to increase employee intrinsic motivation in work place. Flexible Benefits Flexible benefits refers to a system whereby employees are persented with a menu of benefits and asked to select, within monetary limits imposed, the employee benefit they desire. Today, almost all major corporations offer flexible benefits.
The three most popular types of benefit plans are Flexible spending accounts, modular plans, and core-plus options. Flexible benefits programs Flexible spending accounts: Flexible spending accounts plans allow employees to set aside up to the dollar amount offered in the plan to pay for particular services. It’s a convenient way. For example, employees to pay for health-care and dental premiums. Flexible spending accounts can increase employee take-home pay because employees do not have to pay taxes on the dollars they spend out of these accounts. While tax benefits exist for employees, workers must understand that flexible spending accounts are heavily regulated. Each account established must operate independently.
Modular plans: Modular plans are per designed packages of benefits, with each module put together to meet the needs of a specific group of employees. So a module designed for single employees with no dependents might include only essential benefits. Another, designed for single parents, might have additional life insurance, disability insurance, and expanded health coverage. Core-Plus option plans: A core-plus options flexible benefits plan exhibits more of a menu selection than the two programs just mentioned. Under this arrangement, employees typically are provided with coverage of core areas-typically medical coverage, life insurance at one times annual earning, minimal disability insurance and standard time off from work with pay.
With these minimum benefits in place not only are employees provided basic coverage from which they can build more extensive packages, the core-plus option helps to keep benefit cost relatively stable. Under the core-plus plan, employees are given the opportunity to select other benefits. Employees are generally given credits to purchase their additional benefits. These credits are often calculated according to an employee’s tenure in the company, salary. And position held. Linking Flexible Benefits and Expectancy Theory: Consistent with expectancy theory’s thesis that organizational rewards should be linked to each individual employee’s goals, flexible benefits individualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs. Skill-Based Pay Plans
Pay level are based on how many skills employees have or how many jobs they can do. It is also called knowledge-based pay or multi-skill pay. Employees are paid for the range, depth and types of skills in which they demonstrate capabilities. They start working at a flat hourly rate and receive increases for either developing skills within their primary job or learning how to perform other jobs within their work unit. Some companies provide increases for each new job learned; most others require employees to acquire blocks of related new skills, which may take several years to learn. Advantages of Skill- Based Pay plans: Skilled-Based pay plan have several potential strengths.
They provide strong motivation for employees to develop their work-related skills. They reinforce an employee’s sense of self-esteem ? They provide the organization with a highly flexible workforce that can fill in when someone is absent. ? Pay satisfaction should be relatively high. Disadvantages of Skill- Based Pay plan: There are several disadvantages to skilled-based pay, and some firms have backed away from early experiments with it. Most employees will voluntarily learn higher-level jobs; the average hourly pay rate will be greater than normal. A substantial investment in employee training must be made, especially in the time spent coaching by supervisor and peers.
Not all employees like skill-based pay because it places pressure on them to move up the skill ladder. Some employees will qualify themselves for skill areas that they will be unlikely to use, causing the organization to pay them higher rates than they deserve from a performances standpoint. Linking Skill-based Pay Plans to Motivation Theories Skill-based pay plans are consistent with several motivation theories. Because they encourage employees to learn, expand their skill, and grow. Variable Pay Programs Any plan that ties pay to productivity or profitability usually as one-time payment. It is a portion of an employee’s pay is based on some individual and/or organizational measure of performance.
Four of the more widely used variable pay programs are – 1) Piece-rate pay plans 2) Incentives 3) Profit sharing 4) Gain sharing ? Piece-rate pay plans Piece rate is the oldest incentive plan and is still the most widely used, pay the workers a sum for each unit he or she produced. It is a system of pay based on the number of items processed by each individual worker in a unit of time, such as items per hour or items per day. Workers are paid a fixed sum for each unit of production completed. Piece rate generally implies straight piecework and standard hour plan. ? Straight piece work- that entails strick proportionality between results and rewards regardless of output.
It is an incentive plan in which a person is paid a sum for each item he or she makes or sells, with strick proportionality between results and rewards. ? Standard hour plan- it is like a piece rate plan, with one difference. Instead of getting a rate per piece, the worker gets a premium equal to the percent by which his or her performance exceeds the standard. The standard hour plan implies a plan by which a worker is paid a basic hourly rate but is paid an extra percentage of his or her base rate for production exceeding the standard per hour or per day. Similar to piecework payment but based on a percent premium. ? Team or Group Variable Pay Incentive Plans Pay incentives to the team based on the team’s performance.
It is a plan in which a production standard is set for a specific work group and its member are paid incentive if the group exceeds the production standards. Team or group variable pay incentive implies plant-wide incentives, Scanlon plan and improshare. ? Plant-wide incentives: an incentive system that rewards all member of the plan based on how well they entire group performed. ? Scanlon plan: an organization-wide incentive program focusing on cooperation between management and employees through sharing problems, goals and ideas. ? Improshare: a special type of incentive plan using a specific mathematical formula for determining employee bonuses. Incentives for managers and executives: Manager play a central role in influencing divisional and corporate profitability and most firms therefore put considerable thought into how to reward them. Most managers get short-term bonuses and long-term incentives in addition to salary. o Short-term incentives: Plans that are designed to motivate short-term performance of managers and are tied to company profitability. Most firms have annual bonus plans aimed at motivating the short-term performance of managers and executive. Short-term bonuses can easily result in plus or minus adjustments of 25% or more to total pay. There are three basic issues to consider when awarding short-term incentives. These are- eligibility, fund size and individual awards. Long-term incentives- Employers use long term incentives to inject a long term perspective into their executives decision with only short term criteria of shoot for a manager could boost profitability by reducing plant maintenance. Long-term incentives also encourage executives to stay with the company by letting them accumulate capital that can only be chased in after a certain number of years-“golden handcuffs” as some call them. Firms don’t just use stock options for this other popular long-term incentives include cash, stock appreciation rights and phantom stock. • Incentives for sales people: sales composition plans typically rely heavily on incentives. However, some sales people get straight salaries, and most receive combination of salary and commissions. Incentives measure |Example | |Amount of output |Piece rate, sales commission | | |Piece rate only for pieces standard, commission only for sales | |Quality of output |that are without bad debts. | |Success in reaching goals |Bonus for selling an established number of item during the | | |predetermined time span. | |Amount of profit |Profit sharing | |Employee skills |Skill based pay. | ? Profit sharing A plan whereby employees share in the company’s profit.
It is an organization-wide program that distributes compensation based on some established formula designed around a company’s profitability. Instead of plans may increase each worker’s sense of commitment, participation and partnership. They may also reduce turnover and encourage employee thrift. • Employee stock ownership plan- a corporation contributes shares of its own stock to a trust in which additional contributions are made annually. The trust distributes the stock to employees on retirement or separation from service. ? Gain sharing plans An incentive plans that engage employees in a common effort to achieve productivity objectives and share the gains. It improvements in-group productivity determine the total amount of money that is allocated.
The basic differences among these plans are the formula used determines employee bonuses. It establishes a historical base period of organizational performance, measures improvements, and shares the gain with employees on some formula basis. Example of the performance factors measured includes inventory levels, labor hours per unit of product, usage of materials and supplies a quality of finished goods. • Behavioral basis- gain sharing plans use several fundamental ideas from organizational behavior and are much more than pay system. They encourage employee, suggestions, provide an incentive for coordination and teamwork and promote improved communication. Contingency factors- the success of gain sharing is contingent upon a number of key factors, such as moderately small size of the unit, sufficient operating history allow creation of standards existence of controllable cost areas and relative stability of the business. Linking variable programs and expectancy theory Variable pay is probably most compatible with expectancy theory prediction. Specifically individuals should perceive a strong relationship between their performance and the rewards they receive at motivation is to be maximized. If rewards are allocated completely on performance factors such as seniority or job title then employees are likely to reduce their effort. Wrapping Up We have gathered a number of motivation theories and applications in this assignment.
Although its always risky to synthesize a large number of complex ideas into a few simple guidelines, the following suggestions summarize the essence of what we have come to know about motivating employees in organizations. Employees have different needs. So we must not treat them all alike. Moreover, spend the time necessary to understand what’s important to each employee. This will allow us to individualize goals, level of involvement and rewards to align with individual needs. Employees should have hard, specific goals, as well as feedback on how well they are faring in pursuit of those goals. Employees can contribute to a number of decisions that affect them: setting work goals, choosing their own benefits packages, solving productivity and quality problems, and the like.
This can increase employee productivity, commitment to work goals, motivation, and job satisfaction. Rewards should be contingent on performance. Importantly, employees must perceive a clear linkage. Regardless of how closely rewards are actually correlated to performance criteria, if individuals perceive this relationship to be low the results will be low performance, a decrease in job satisfaction, and an increase in turnover and absenteeism. At a simplistic level, this should mean that experience, skills, abilities, effort, and other obvious inputs should explain differences in performance and, hence, pay, job assignments and other obvious rewards. ———————–
Present Content Theories Process Theories Contemporary Theories Work Motivation Adams equity Festinger & Homans cognitive dissonance/exchange Lawler E—P & P—O expectancy Porter and Lawler performance-satisfaction Vroom valance/expectancy Lewin and Tolman expectancy concerns Herzberg Motivators and hygiene Human Relations economic security, working conditions Maslow hierarchy of needs Alderfer ERG needs Scientific management wage incentives Heider,de Charmes,&Bem cognitive evaluation/ self-perception Kelley&Rotter Attribution / locus of control MBO: Key Advantages • MBO programs continually emphasize what should be done in an organization to achieve organizational goals. MBO process secures employee commitment to attaining organizational goals. MBO: Key Disadvantages • The development of objectives can be time consuming, leaving both managers and employees less time in which to do their actual work. • The elaborate written goals, careful communication of goals, and detailed performance evaluation required in an MBO program increase the volume of paperwork in an organization. (1) Set overall objectives and action plans (5) Conduct final appraisal of results (2) Develop the organization (3) Set individual objectives and action plans (4) Conduct periodic appraisal and provide feedback on progress; make adjustments Board Representative
Representative Participation Employee Ownership Total Quality Management Work Council Quality Circle Participative Management Suggestion Program Participative Programs Outcomes: ? Organizational: ? Higher input ? Better quality ? Creativity ? Innovation ? Employees: ? Acceptance ? Self-efficiency ? Less stress ? Satisfaction Situation Involvement ? Mental ? Emotional Participative programs P A R T I C I P A T I O N Research results Productivity improvement pressure Utilization of work force diversity Employee desires for meaning Employee desires and expectations Ethical arrangements Core plus Flexible Spending Modular plans Menu
Flexible spending Modular plus Options Menu Choose Package A Package B Theories Link with Skill-based Pay Plan ERG theory Among employees whose lower-order need are substantially satisfied, the opportunity to experience growth can be a motivator. McClelland’s Paying people to expand their skill level is also theory of needs consistent with research on the achievement need. High achievers have a compelling drive to do things better or more efficiently.
By learning new skill or improving the skills they already hold, high achievers will find their jobs more challenging. Reinforcement Skill based pay encourages employees to develop their theory flexibility, to continue to learn, to cross-train, to be generalists rather than specialists, and to work cooperatively with others in the organization. Equity theory When employees make their input- outcome comparisons, skill may provide a fairer input criterion for determining pay than factors such as seniority or education.