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This report will investigate the link between motivational theory and reward in pursing successful implementation of such processes and the monitoring of these in terms of employee performance.
Assess the link between motivational theory and reward
"Motivation is the process by which the behaviour of an individual is influenced by others, through their power to offer or withhold satisfaction of the individual's needs and goals". (BPP Learning Media, 2010) Motivation theories are divided into two different viewpoints. See content and process theories of motivation in (Appendix 1). Content theories emphasis what motivations are, whereas process theories emphasise the real process of motivation. On the other hand reward is something that workers achieve during their job. It can be financial when the company pays for their performance and it can be non-financial which in this case means that the company rewards employees by promotion, achievement and praise.
"Maslow puts forward a theory that there are five levels of human needs which employees need to have fulfilled at work" (Mullins, 2005). See (Appendix 2).
Maslow mentions in his theory that managers following this theory deflect their attentiveness to offering complementary pleasing relationships, more attractive work, and more opportunities for self-fulfillment.
On the other hand, Herzberg in his theory suggests that there are two basic needs of individuals such as hygiene factors (environmental factors) and motivation factors. See (Appendix 3). Managers following Herzberg's theory reject money as a motivator and pay attention to supplying more job enhancements.
According to McGregor's theory, managers may follow two different theories which is theory X and theory Y. Pursuant to theory X, the average employee dislikes work and will avoid it whether he/she knows what to do or not, that is why employers suggest Theory Y which leads them to do excellent job and managers offer opportunities to have a job done. However, McClelland focuses interest on providing employees with the capability to persuade their needs for success, power, and relationship.
Companies use both positive amplification and negative amplification to motivate employees. Managers may use positive motivation techniques to persuade employees to create good quality job. Some managers may use negative motivation techniques to encourage employees and stop them from bad manners. However, companies reward their employees with both touchable products, as well as admire. Mangers may reward their employees by providing weekly or monthly bonus or free lunches, many managers reward their top employees by praising them.
For example: Tesco uses two motivation theories - Maslow's and Herzberg's, see both hierarchies in (Appendix 4). Tesco uses Maslow's theory because it suggests the company if they achieve one level then it motivates them to achieve the next one. Also Tesco aspire to motivate its staff both by paying interest to sanitation factors and by enabling satisfiers. For example, Tesco motivates its staff by good communication, by giving responsibility and involving employees in decision making. Tesco allows the staffs to be part of the talks on pay rises. This shows credit of the work that staff does and rewards them.
In Tesco, they reward staff for their works because it keeps motivating them at work and will carry on applying different motivation theories at work. Monetary reward uses by Tesco in a way of getting employees to welcome the complete value of their benefits package. Tesco also follows pension system and this usually includes pension assistance that the employer creates on the employee's behalf and being process in payroll department. They also reward employees by giving them extra benefits such as car insurance and private medical insurance, by special offers and discounts. See Tesco's reward system in (Appendix 5).
Evaluate the process of job evaluation and other factors determining pay
The Process of Job Evaluation:
"Job evaluation is a systematic process for defining the relative worth or size of jobs within an organisation in order to establish internal relativities. It provides the basis for designing an equitable grade and pay structure, grading jobs in the structure and managing job and pay relativities."(Armstrong, 2006)
Job evaluation is really an extensive process and it must follow in an orderly approach. At the start of this process management must make clear to its staff the reason of this job evaluation and importance of it. After that a team has been set where all the informed HR specialists and workers are included. In the next step organisation selects the job from each department that they are going to evaluate, then the chosen job is investigated in detail by the committee. Next, the HR selects a method for the job evaluation. There are two methods that can be followed to evaluate a job and these are: "Analytical - points rating, factor comparison, proprietary brands; and Non-analytical - job ranking, job classification, paired comparisons". (UK Essays, 2013)
The other factors determining pay:
The pay, which is an award for work, can be influenced by various factors and it creates some difference between the roles and the organisations. Those factors are:
Size of the organisation,
Skills and experience,
Profitability of the organisation,
Employee performance. See (Appendix 6) for more detail.
The effectiveness of reward systems in different contexts
Bratton and Gold (2003) define a reward system as "The mix of extrinsic and intrinsic rewards provided by the employer. It also consists of the integrated policies, processes, practices and administrative procedures for implementing the system within the framework of the human resources (HR) strategy and the total organisational system".
There are two types of rewards: Extrinsic rewards which are tangible rewards that employee receives for their good performance, such as bonuses, salary raise, gifts, promotion, compensation and commissions. Intrinsic rewards are inclined to give personal satisfaction to an employee, such as information, feedback, recognition, trust and relationship.
Employee bonus systems are positive strategies and they can provide actual motivation. Moreover to monetary thoughts; bonus systems take into account factors such as attendance, customer service, quality, group and individual performance. Also bonuses increase employees' motivation and output. It improves employees' morale and increases their self-esteem. However, a carefully planned bonus scheme can improve retention which helps to preserve the best employees.
Salary raise is the other types of reward system and it is one of the most significant motivators for the employee, also it is the key motivation behind an employee's performance.
Promotion is one of the most important types of reward system, where an organisation rewards an employee by moving them from their position to a higher position. Promotion improves employee's morale and job satisfaction.
However, improved performance is an effectiveness of reward system; it helps the employee to perform better at work in order to get extra reward from the organisation. At the same time employees also work hard and put their skills and understanding which assist them to gain knowledge and learn something new.
However, reward system also boosts profit, where a company has good chance to make return because member of staff works honestly and carefully. It also helps to bring positive psychological contract between employees and the organisation; it creates a better working environment and helps organisation to keep gifted, potential employees with them.
Examine the methods organisations use to monitor employee performance.
There are some methods that are used by Tesco to monitor their employees' performance. Tesco uses observation and feedback to monitor their employees' performance. In this system Tesco hires someone to monitor the performance of the employee, after that this person provides straightforward feedback. By observing and providing feedback Tesco can give the accurate shape to the employees of what is expected from them.
Tesco also uses performance standards and it is one of the worker performances monitoring method where performance has been compared with the criterion and where employee needs to accomplish this criterion. In this system performance must be realistic, measurable and expressed in terms of time, quality, cost, quantity, effect, or manner of performance.
Performance evaluation is another method that used by Tesco to determine the actual job performance of an employee against chosen performance standards. In Tesco employees' are interviewed to talk about their performance to identify strengths and weaknesses, and to create a plan how to improve weaknesses and increase strengths.
Tesco also uses a method known as "360-degree appraisal" (Business Case Studies, 2013). In this method all Tesco's stakeholders evaluate an employee's performance and give them feedback. For example, a manager of one department gets feedback from their manager from HR department and their team.
The conclusion of this report shows that employees' motivation and reward are very important. There are many types of theories of motivation such as Maslow's, Herzberg's, McClelland's and McGregor's theories. Each theory has a slightly different view of leader's and employee's motivation. Motivation is managers' action to influence employee's behaviour at work, so that perform as required in order to achieve organisational goals. Reward management can be view as a type of management practice where employees are rewarded for their performance. Rewards can be tangible and intangible benefits for the employee as part of employment relationship. Employees consider the reward as a return in exchange of their performance being appreciated by their employer.