Question on employee motivation and reward


Do you think it is a good idea on the part of any management to award employees with merit issues? Why or why not? Discuss and debate. What factors should management consider in your opinion? Substantiate with many relevant organisational examples.

The traditional practice of considering the employees merely as just another ingredient to the successful formula of product and services has been long foregone. The Hawthorn studies gave an entirely new perspective to the management of human capital. (Dickson 1973).This contemporary view gave a humanistic approach to management taking into account the needs, wants and motivation of the entire workforce. The Hawthorn studies brought forward the employees to be the centre of focus for the managers. (Bedeian, 1993)

The hawthorn studies have been rightly termed as the "Somebody Upstairs cares" syndrome. It is human nature to seek care and attention and to ask for return in favour of your duties and sacrifices. Employees a whole great chunk of their day messing through office files making reports presentations and so forth. In return what they aspire for is a sheer sense of belonging, appraisal for their work and recognition. I think just a mere act of showing that you care won't harm the company and its reputation. In fact, it can result in greater productivity, increased job performance and consequently increased success for the business.

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Motivation of employs helps to develop a bridge between the corporate assignments and the knowledge and skill of the employees (Wright, 2001). Many theorists talk about the two basic aspects of motivation i.e. the extrinsic motivation that can be driven by the surrounding environment and the intrinsic motivation that focuses on the people dimension or from the task within (Ryan and Deci, 2000a). The drive that causes the employees to work and to get motivated can also been seen from the perspective of Maslow's theory of hierarchy (Ryan and Deci, 2000b). In order to fulfil his needs such as the need for security or self esteem, he is motivated to work under pressure and shows the commitment to perform well.

Motivation thus acts as a force that helps the employees to make their best contribution to the organization. The contribution will ultimately lead to commitment if properly rewarded (Meyer, Becker, and Vandenberghe, 2004). A strong workforce also increases the resistance of the organization towards challenges (Kreisman, 2002).

Starbucks case is an exemplary proof of the need of employee motivation for creating an outstanding business model. The Starbucks attained the status of the fastest growing retail corporation by effectively managing its labour and facilitating them with financial and emotional rewards. They successfully placed the right strategy of deviating from the classical management approaches.

The Starbucks adopted the approach of treating their employees equally and calling them as their partners. The managers also work with the frontline staff in order to mingle with the employees and create a fraternity management system.

There is a good communication network between the employees and the management. At Starbucks a bi-annual survey called 'Partner View Survey' is taken to take into account the employee's suggestions and recommendations.

Starbucks consider employees as their greatest asset and provide them with best welfare facilities like employee discounts, medical insurance (including health, vision and dental) and vocational benefits.

Team work is their essence.  Another strategy that they use is that the limit the numbers of employees from three to six at their retail shops. The reason being is that the small size of a retail shop makes the working staff well acquainted with each other and the employees are more likely to develop a stronger bond of association and belongingness among them.

Starbucks attempt to promote welfare and harmoniousness in the society. They strive to take special measures to contribute to the betterment of the society. This goal in turn helps to motivate the employs making them realize that their contribution is not only for themselves but for the society at large. The decentralized approach and employ empowerment help develop a culture of enthusiasm at Starbucks.

According to Robbins S.P (2002), motivation is based upon intensity, direction and persistency. Intensity refers to the hard work and effort put into the work. This effort must be channeled in the right direction. It is pertinent to mention that the most important aspect for the organization is to make the effort maintain this effort. This aspect is, thus, the most challenging for the managers today.

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Most people consider money as the greatest motivator but it is certainly not the greatest motivating factor. A good paying job and a nice office can prevent employs from being less motivated but it seldom push people to becoming more motivated. Through a survey, Kohn (1993) showed that physical rewards only can put the productivity towards decline, especially in the creative industry sector. He puts working environment and manager-employee relationships above the physical rewards

Nicholson (1998) recognized the social needs of the employees that they seek to fulfil through interaction among formal and informal groups at work place. The impotent influence of employee-employee relationships and the office culture and norms tend to put a stronger influence on employee motivation and performance (Macky & Johnson, 2003).

In today's competitive environment many of the companies are under extreme pressure more because of the global costs issue. They have to deal with increased work load pressures, cut offs, downsizing, and wage freezing to name a few. In these circumstances keeping your employs happy and motivated is a very challenging task. There are certain measures that the managers can take to effectively manage their human capital.

Employee Recognition Programs

Employee recognition programs range from a simple thank you note, appreciating the employee for good performance or even a specially organized formal affair in which behaviour is encouraged and the recognition packet is conferred upon.

Example: Like the most common employee recognition program done in companies such as KFC is that they recognize the best service employee by choosing the employer of the month. This recognition motivates other employees to attain the slot next time.

Employee recognition programs are particularly successful because of their low cost and high performance. They provide a low cost measure of motivating and increasing employee performance.

Employee Involvement program

"Uses the entire capacity of employees and is designed to encourage increased commitment to the organizations success."

This contemporary view involves a decentralized approach of decision making, where by the employs have a say in the decisions that govern their office life and can enjoy autonomy in the corporate culture and business practices.

Example: Tesco, a leading retail store, invite its staff members to take part in a survey called the "viewpoint". This survey provides a platform for the employees to record their viewpoint regarding the different aspects of the company and also about their jobs. This survey allows Tesco to analyze that they are putting in the right ingredients to keep their employees motivated or not. The benefits provided by Tesco to its employees include:

• Lifestyle break - this offers 4-12 weeks off work

• Career break - this allows staff between 6 months and 5 years away from work with right of return

• Pension scheme - this award-winning scheme provides clearly defined long term benefits.

Using this idea of employee involvement the managers can regulate the performance of the employees in the following manner:

Participative management: Carry out joint decision making providing the subordinates with a platform to have a say in decision making.

Representative participation: Forming "work councils" and "board representatives" that represent and speak on behalf of the employs.

Quality Circles:

Quality circles refers to a group of people who share common responsibilities who held meetings to share the problems make recommendations, and take corrective actions.

It is a type of the joint analysis technique that the workers carry out to minimize their problems.

Employee stock ownership plans:

"Company established benefit plans in which employees acquire stock as a part of their benefits"

Employee stock ownership plans help to increase job satisfaction and is a source of motivation for the employees as it gives the employees ownership or stake in the company's business..This ownership or participative style of management is one of the successful motivating techniques that have proven to be successful for the organizations.

Example: TESCO give its employs Free shares after one year's service

Save As You Earn shares available in a high interest account

Skill-Based pay:

In addition to the motivational tools of the variable play programs that involve bonuses, gain sharing o profit sharing, skill based pay plans are equally profitable in cultivating motivation among the employees.

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Skill based pay not only encourage the employees to better equip themselves but it also helps to decrease dysfunctionality among the departments or even among employees. It facilitates communication and work sharing among employees and hence increase job performance.

Flexible benefits:

Flexible benefit plan allow the employees to choose the packaged plan that best fit their needs. This freedom of choice may serve as a treat for the employees that are usually not satisfied with the traditional one benefit plan for all. Some of the popular benefits of the flexible plan are:

Modular plans, core plans, and flexible spending plans.

The royal bank of Scotland has designed a flexible reward package for its employs that gives them pension funding that is flexible, medical benefits, paid holidays, and a confidential advice service. Employees can choose for themselves a openhanded holiday allowance provided for about 25 - 30 days.

Employees can also enjoy luxurious benefits such as discounted shopping vouchers, childcare facilities. They can also avail RBS financial products, such as mortgages, currency exchange, personal loans and banking at special discounted rates specially designed for the staff workers.

b. Some organizations do a thorough job analysis first and then human resource planning as part of a restructuring process. What makes more sense to you? Why? If actual performance of the human resources plan differs from desired performance, what remedial steps might you use?

With the vigorous changes that are taking place in the field of technology, market situation and the overall economy, it has become almost inevitable to plan for your human resource and to equip it to operate in the competitive business world. Precisely human resource planning accounts for the number of vacancies to be filled. Job analysis defines the nature of the job and the recruitment criteria for each and every specific position. (Miller, Burack, &Albrecht, 1980)

It is pertinent to note that over the years, increased importance is being paid to the human aspect of the business, highlighting the motivational aspect of work force and stressing the need for self esteem, self actualization and group belongingness. The development of the work force, working to build up their competencies and polishing their skills have become the essential criteria for doing successful business (Pareek & Rao, 1992).

Keeping in view this perspective, it is wise for the business to do a thorough job analysis first and then plan for their human resource. Job analysis encompasses important business functions of Job analysis. Job analysis is primarily done for the purposes of performing the HR activities of recruitment, pay, administration, and supervision. It involves a systematic collection, evaluation, and organization of information regarding the tasks to be done. In order to gather data different methods are used such as the face to face interviews, mailed questionnaires, observation, field study, and other similar methods. The information thus collected is used for the preparations of job descriptions and specifications (Werther & Davis, 1982).

The job analysis provides the basics for:

1. Recruitment:

Helps in developing a criteria for hiring people

2. Selection

Helps to outline the skills required for selection

3. Induction or orientation programs

Helps to make the employees acquainted with their new workplace

4. Job description

Jots down the responsibilities that a job may ask for

5. Job specification

Defines the qualifications/skills required for the particular post

6. Job role

Indicates the KPI (Key performance indicators)

7. Performance Appraisal

Defines the criteria, standards, systems etc for giving the appraisals

8. Performance Management systems

Systems that are designed for career plans / development programs for employees

9. Compensation Package

Determines the wages / salaries / incentives to be given to the employees

10. Manpower planning

Determine the quality and quantity of employees to be hired annually

Job analysis is important to formulate as it decreases role ambiguity among the employees and also help to reduce the absence of job autonomy, lack of expertise or the fear of accountability (Vijayaragavan & Singh, 1989). Therefore, instead of first hiring up people and then making room for them, it is better to first assess your needs and then make attempt to fulfil them. The perfect blend for a business would be "'get the right number of people, with the right skills, in the right place, at the right time".

Job roles at Specsavers"

Specsavers is a large name in the optical retailing business of Britain. They provide best optical solutions including spectacles, different eyewear and eye care products. In the year 2010 Specsavers was again selected as the most trusted optician in Britain for the consecutive eighth year.

Their success is attributed to their well crafted human capital management. Specsavers devise clear job descriptions that carefully outline each and every minute feature of the individual job roles at the firm. These are supported by person specifications that help recruit the right persons for the job. Moreover, they motivate their employees by providing them with attractive financial and non-financial rewards.

In order to have an effective work force the employees need to be aware of the different levels of responsibility that comes along with each task. Job analysis helps the recruited employees to clear up any ambiguity against their level of work as the job analysis helps to clearly indicate the task and duties key responsibilities and the standards expected.

A Specsavers store has employed a blend of people with different skills and competencies that is a great reason for their success. For example, within a Specsavers store:

• The Optometrist tests the patients' eye and recommends the glasses that best suit their needs

• A dispensing optician will have the responsibility of making sure that the right type of glasses are recommended by the optometric to the customer

• A store Supervisor is the head of the team of Optical Assistants

• Optical Assistants is responsible for responding to the customer queries and making recommendations related to the selection of frames.

Specsavers takes great pain in the process of recruitment and training in order to ensure that the best people are inducted in the Specsavers' team. In their process of recruitment process, Specsavers enlist the detail specifications of the job. This detail clearly outlines the skills required and the behavior expected of various post holders. It helps the company to filter out the best applicants that fit the requirements. Moreover, it also helps the Job applicants to become clearly aware of what is expected of them in a specific role.

For example an Optometrist job at Specsavers is clearly defined. He has to work with the whole Store team to deliver the highest standards of clinical and customer service. He is also expected to meet targets such as attaining the desired numbers of eye tests carried out and sales of glasses resulting from these tests. Further duties of an Optometrist include:

• conducting full eye examinations

• Communicating results to customers in clear, understandable language

• Providing dispensing advice and ensuring patients understand the recommendations made

• Maintaining customer records

• Maintaining cleanliness of test rooms and equipment.

The retail and support roles are equally appreciated. The store managers take the responsibility of ensuring that their stores are meeting the targeted business objectives and fulfilling the customer service effectively. Managers are also assigned the task of recruiting, motivating and developing the store team. They ensure that there are the right people, in the right place, at the right time to meet customer requirements. Training and development is an integral part of Specsavers human resource management. The management at Specsavers tries to make sure that the staff remain motivated and are on track through the provision of the personal development plans.

The management wants the best from their employees especially when they are well rewarded. They outline specific standards of achieving performance. But if a discrepancy occurs between the actual and the desired performance, it may lead towards a performance gap. A Gap analysis may help to analyze the differences between standards and the outline the measures to achieve the deficit in standards.

For the purpose of identifying the gap, a before-and-after analysis should be made. A step chart or a Value Stream Map can be used to graphically as well as deeply analyze the situation. Once the gap is identified, a game plan can be developed that will move the organization from it's the current deprived state of performance to the desired state of performance.

There may be three reasons for the gap to occur.

Limited resources

Lack of motivation

Lack of knowledge and skills (Branch, 2009)

The managers can take different remedial steps to eliminate the discrepancy between the actual and the desired performance.

The managers should devise a Strategy map. They should chalk out a plan to outline the desired company results that should get aligned with behaviors needed from employees across the company.

Technology Support -The management should make the entire performance and compensation with a strong technology underpinning.

The managers should make bold decisions to develop tactics and programs for improvements.

There should be a well developed measurement program that attempts to measure progress through consistent and frequent discussions between manager and employee about employee performance.

There should be a system of communication that can communicate the results of the year's progress and discuss it among the employees and the managers alike. The comparison of the employees against the business goals via total reward statements or other tools should be made periodically

For example Siemens, a global electrical business, is well known for its performance standards. It has a well developed program for managing the performance and development of its employees. Siemens development program attempts to make individual plans for each employee and establish its link with the organizational strategy. The individuals, at Siemens are assigned targets based on their roles and responsibility and skills. The discrepancy is removed or insured through:

Setting up of clear objectives

Constant monitoring of the work

Constant communication between the manager and its team

Promoting a straightforward and frank discussion environment

People Excellence at Siemens' global is achieved through the proper management of its human resource. Siemens flourish by:

Achieving a high performance culture

Increasing the global talent pool

Strengthening expert careers

Application of its Siemens' Leadership Excellence Programme (SLE).