Assessing the motivation of employees at Coca-Cola Amatil

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ACCG301 Organizational Planning and Control

Assessment Task 2 – Case Study/Report

Coca-Cola Amatil

Table of Contents

1 Coca-Cola’s rewards and compensation programs…………………………………………2

2 Four motivation theories

2.1 Expectancy Theory ……………………………4

2.2 Equity Theory ………………………………………………….5

2.3 Two Factors Theory …………………………………………….6

2.4 Maslow Theory ……………………………………………….7

3 Conclusion (Recommended improvements)………………………………………………..8


1 Coca-Cola Amatil’s reward and compensation systems

Coca-Cola Amatil aims to reward employees in fair and competitive terms, the company achieved this by benchmarking their remuneration programs against other companies that perform well in the same industry; local market data is also considered to ensure the competitiveness (Coca-Cola Amatil 2013). Rewards are made based on achievement made demonstrated by Key Performance Indicators and behaviors displayed that coordinate with the company’s values.

Employees Share Plan (ESP)

Under the Employees Share Plan (ESP), employees has the opportunity to devote up to 3% of their base wage to obtain the company’s shares. There is a party (trustee) who attains and controls the share on behalf of the participants for their benefits. Over the vesting period, the employee contributions to the ESP are considered as an expense and are held by the trustee. After two years, those corresponding shares will be vested and conferred to the participant (Coca-Cola Amatil 2013, p. 82).

The following graphs show the number of employees that were entitled to participate in the ESP in the financial year of 2013 and 2014. It also demonstrates the number of shares (both vested and non-vested) that were issued to the participants in the financial year 2012 to 2014.

Figure 1: Number of employees that participated in Coca-Cola Amatil’s Employee Share Plan during the financial years 2012 to 2014. (Coca-Cola Amatil 2014, p. 86)

Figure 2: Number of shares issued to the participants under the Coca-Cola Amatil’s Employee Share Plan during the financial years 2012 to 2014. (Coca-Cola Amatil 2014, p. 86)

The Coca-Cola Amatil Limited also provides its employees with not only financial benefits, a range of benefits in different aspects.

Coca-Cola Amatil shows flexibility in work leave, up to 4 weeks of additional leave could be granted. Market salary review is done in regular basis, to evaluate if there is a need to change the current base salary. Moreover, employees will be enabled to purchase a variety of products using their before-tax salary (as known as salary packaging) and will be granted additional novated leases. Incentive programs are also constructed to award employees based on performance (Coca-Cola Amatil Career 2015).

Employees are encouraged to join the Individual Development Plan where they have the opportunities to expand the skills and abilities that will further support their current role. This includes Employee Assistance Program, External Study Assistance and Workplace Giving Program (Coca-Cola Amatil Career 2015).

2 Four motivation theories

2. 1 Expectancy Theory

Under the expectancy theory, it is believed that there is a strong relationship between motivation and an individual’s belief in achieving or gaining what one desires. Even though individuals’ goals differ from one and another, managers can motivate them by making them believe that:

  • Sufficient amount of effort would result in desirable performance (Expectancy)
  • An individual who achieved a favorable performance will be rewarded (Instrumentality)
  • The reward is highly valued (Valence) (Fred, L 2011, p. 2)

In other words, a person’s motivation is associated with contribution and performance in terms of the 3 elements that the expectancy theory is composed of:


The belief that increase in contribution would lead to a better outcome. There is an assumption where employees are provided with necessary resources and support in order to complete the tasks.


Individuals have to be aware of that they will receive something valued if certain performance is achieved. It is assumed that transparency and fairness take place in determining the quantity and the person who deserves the rewards.


This refers to the significance an individual places upon the expected reward in terms of its desirability. This includes organizational rewards that an individual values and finds appealing. (Institute for Manufacturing 2014)

Table 1: 3 variables of Expectancy Theory

Figure 3: Basic model of Expectancy Theory (Fred, L 2011, p. 4)

Motivation is then generated along with the combination of the above components that encourages individuals to make rational choices, with the belief that they will gain desirable outcomes.

Under the remuneration programs designed by Coca-Cola Amatil, employees are highly motivated as they are clear that their performance are tied closely to the compensations available. This fulfilled the first component of the Expectancy theory, “Expectancy”. Knowing that each individual differs on skills, knowledge, Coca-Cola Amatil provides its employees with training and education to ensure the employees have necessary resources and to further expand their capability in completing the tasks under the Individual Development Plans.

Secondly, the remunerations programs are designed to compensate the employees in fair terms, which is aligned with the concept of ‘instrumentality’ in the Expectancy Theory. Transparency and fairness are presented as employees are rewarded base on their level of performance under the measurement of Key Performance Indicator (Coca-Cola Amatil 2014). For instance, employee who has a higher achievement is entitled to devote more of their base salary to obtain the company’s shares, with the opportunity to earn the dividends.

The last component ‘valence’ has also been taken into considerations. Since the attractiveness each individual finds in the reward differs, Coca-Cola Amatil establishes various remuneration programs to satisfy different individuals’ needs and desires. Apart from monetary rewards, employees are entitled to apply for additional leave; and benchmarking are carried out to ensure competiveness and fairness of the treatment Coca-Cola Amatil’s employees received. This allows employees to be satisfied not only economically but also emotionally while working under Coca-Cola Amatil, because they get treated with respect and their effort are being appreciated.

2.2 Equity Theory

One of the theories for motivation is equity theory, which is a major formulation related to financial compensation, also known as Adams’ Equity Theory. In this theory, employees do not receive the compensation only for their efforts, and also what the others received with the relationship of the amount. According to Ramlall (2004, p. 55), this theory creates a tension, which can make the employees work hard and be aware of the imbalance in their outcome-input ratio compared to others so that they will be motivated to strive for what they want as equity and fairness. There are two components in this theory – input and outcome.



Education, intelligence, experience, training

Pay, intrinsic rewards, satisfying supervision

Skills, seniority, age, sex, ethnic background

Seniority benefits, fringe benefits, job status

Social status, job effort, personal appearance, health, spouse’s characteristics.

Status symbols, job perquisites, poor working conditions, monotony, fate, uncertainty.

Table 1: Inputs and outputs of Equity Theory

There are 3 main assumptions which equity theory depends on; first, people would expect to get a fair and equitable compensation for what they contributed to their jobs; second, people will want to compare what they are aware of to be the alternate they have with their employees; third, people will have motivation to do something when they are aware of their own remuneration is not equitable. In between an employee’s capability on the job and compensation an employee receives, there is a positive association that is most rendered in work organizations according to the concept of equity.

As Coca-Cola Amatil’s aim is to reward employees fairly, this is related to equity theory because equity theory is based on fairness as well. The employees in Coca-Cola Amatil are compensated based on the achievement they make, which totally fulfill the equity theory. The employees are highly motivated because Coca-Cola Amatil provides remuneration programs, which attract the employees and make them strive for what they perceive. There are different kinds of remunerations programs created by Coca-Cola Amatil for different employees, so that they can aim for compensation within their own categories. In the mean time, there are tensions created which can provide motivation in order for the employees to work harder to achieve what they perceive as equity and fairness.

2. 3 Two Factory Theory

The two factor theory, which are hygiene factors and motivators. These two kinds of factors affect motivation and they do it in different ways:

Hygiene factors are the factors whose absence motivates, but whose presence has no perceived effect. They are things that when you take them away, people become dissatisfied and act to get them back. (Pardee 1990) For example, supervision, salary and personal life.

Hygiene Factors

Motivational factors

Job security

Training new staffs


Personal development

Personal life

Challenging work

Insufficient safety in the workplace






Motivators are the factors whose presence motivates. They absence, does not cause any particular dissatisfaction, it just fails to motivate. (Pardee 1990) Table 3: Examples of Two-Factor Theory (Herzberg) Base on Coca-Cola Company’s employee share plan, the hygiene factor is the employee has the opportunity to devote no more than 3% of their base wage to obtain the company’s shares. Two years after the shares were issued, in normal situation, those corresponding shares will be conferred to the participant, along with the contributions previously made. (Coca-Cola Amatil 2014) Therefore, the employees’ can received their benefits from the shares. Not only the financial benefits for the employee, but also for the benefits of Coca-Cola Company’s drinks. Employees can enjoy exclusive employee discounts on alcoholic drinks and receive allowance for non-alcoholic beverages. They can also be enjoying complimentary on-site Coca-Cola drinks. (Coca-Cola Amatil 2014)

The motivators in Coca-Cola Company are they provide a program called incentive programs. This program is constructed to award employees based on performance. (Coca-Cola Amatil 2014) This program can increase employees work efficiency and engage everyone in a good work performance. Employee Assistance Program also encouraging employee to join the Individual Development Plan where employees have the opportunities to expand the skills and abilities that will further support their current role. (Coca-Cola Amatil 2014)

2.4 Maslow Theory

Figure 4: Maslow's Hierarchy of Needs (Alshallah 2003)

The core idea of Maslow theory is hierarchies exist in people's needs. For better development, the different levels of individual's needs should be satisfied in varying degrees. As the figure 2 shows this concept is visualized through diagram of pyramid. It can be divided into five parts. Human beings starts with the desire for physiological needs including food and water. Safety needs are the next one which should be met. It covers the sides about health, social stability and so on. They are both at the bottom of the pyramid. Based on these fundamental needs, people will quest for the feeling of belonging and the self-esteem. The last one is related to the self - actualization at the top of the pyramid. After satisfying the four lower needs, people will expect to better themselves. Thus, they will put forward high demand about the people and world around them (Alshallah 2003). In general, Maslow theory states that if people meet one level of the needs, they will seek the higher satisfaction. This will become the motivation to help them reach the self - actualization.

In relation to our case study company - Coca Cola, it does well in reasonably using Maslow theory to motive its employees. There are two main respects. Firstly, Coca Cola satisfy most of the basic individual's needs. For example, the most obvious motivation of Coca Cola is monetary compensation. It pays salaries to employees on time to satisfy the physiological needs, because people can get food or clothes through these money. In addition, it also provides the pensions benefits to ensure people meet the health needs. Another one is about the self actualization. To achieve this purpose is not very easy, but Coca Cola succeeds. As mentioned before, it sets the individual development plans to offer more opportunities to help employees improve themselves (Coca Cola Amatil 2014). This action greatly boost their self-worth.

Conclusion (Recommended improvements)

Employees have to be treated fairly, so that they will know that they are needed in the company and willing to work hard for the company. Company should talked to the employees to find out whether they are treated inequity and explain to them they are all been treated the same. Besides that, showing the employees how important they are can also help in motivating them to work. Not only that, company can also change the job requirement in order to help the employees succeed.

Owners can create and provide the employees’ need on technology part for them to reply on the system, so the industry attains an increase in profit and production. It provides employers and business owners to widen their understanding when it comes to managing their employees. It does now only mean the mere understanding of what they have to do for the company but it is more about providing them with the proper technology and helps them enhance skills and become more of an asset to the company than a liability.

Lastly, to better implement ESP, assessing employees' performances more effectively should be focused on. Before evaluating individual performance, the evaluation of the department is needed. The combination of this two will make employees have the feeling of equity to motivate them.


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