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Work motivation can be defined as 'a set of energetic forces that originates both within as well as beyond an individual's being, to initiate work-related behaviour and to determine its form, direction, intensity and duration' (Pinder, 1998). It is of paramount importance, having a direct impact on job performance and organizational commitment (Colquitt et al, 2011), as well as task performance. Lack of work motivation in employees of an organization can lead to counterproductive or withdrawal behaviour, both highly undesirable. This is why companies around the globe are always devising new methods to motivate workers.
2.0 MOTIVATION AND REWARDS
There are several motivational theories which explain how rewards affect the behaviour of people. These theories describe how organisations can encourage employees to utilise their capabilities and effort to satisfy their needs as well as attain the organisation's aims (Armstrong, 2002). It is believed that work motivation (independent variable) has a direct impact on an employee's performance at work (dependent variable). However, it must be considered that motivation comes in two forms: Intrinsic and Extrinsic. Intrinsic motivation is motivation which emanates from within the individual such as feelings of satisfaction and accomplishment (Buchanan and Huczynski, 2010). Extrinsic motivation is motivation provided by others or external factors such as pay raise and recognition. Below is a model which explains the link between motivation, reward and performance (Figure 1.0)
MOTIVATION THROUGH EXTRINSIC REWARDS
FINANCIAL REWARDS (Pay and Allowances)
The first employee reward to be considered is money. Research studies have shown that financial incentives have a strong influence on work motivation (Colquitt et al, 2011). This may be because money is the key to satisfying human needs and wants, and also because it symbolises power and success. It is in the nature of human beings to always want more. Monetary rewards can occur in various ways namely an increase in base salary and contingent pay such as commission, skill-based pay, service-related pay, performance-related pay and overtime allowance (Armstrong, 2002). It can therefore be assumed that money is indeed an excellent tool to increase work motivation.
FINANCIAL REWARDS (Profit-Sharing)
Profit-sharing schemes have been implemented under the belief that employees share risks and opportunities, and should therefore share reward as well. Profit-sharing refers to providing employees with money from a 'pool' on the basis of a particular formula such as the percentage of profit given may depend on work-performance so as to promote efficient work (Armstrong, 2002). For instance, Thomas Cook does not pay profit-sharing money to employees with low performance ratings (Armstrong, 2002).
NON-FINANCIAL REWARDS (Fringe benefits)
Fringe benefits are also reward schemes which contribute to extrinsic motivation. They may include health insurance, childcare and assistance reimbursement, employee discounts and personal use of a company-owned vehicle. Promotion prospects can also drive employees to work harder, as a promotion often implies a fatter pay or simply a higher status in society. All these can motivate employees to work harder when they are aware that reward awaits them. An example is the successful American company Enterprise Rent-A-Car, which offers excellent promotion prospects (Colquitt et al, 2011), and which is successful in motivating its employees to work harder.
NON-FINANCIAL REWARDS (Recognition)
Recognition is also believed to be a powerful motivator. It is important that employees are made aware of how far they have been successful in performing their tasks or achieving their aims, and also their good work must be acknowledged and appreciated. The need to be recognized arises from Maslow's self-esteem needs from his hierarchy of needs (Armstrong, 2002). According to positive reinforcement of the Reinforcement Theory, recognition for a well done job, either a simple pat on the back or a public 'applause' can motivate the employee to repeat his good performance. 'Desirable consequences are linked to a behaviour (eg praise after a good job done) -The effect of this is to increase the probability that the behaviour will be repeated.'(Hollyforde and Whiddett, 2002) However, it is recommended that for recognition schemes to be effective motivational tools, they must be reinforced with financial rewards (Armstrong, 2002). Praise must also be judiciously given.
NON-FINANCIAL REWARDS (Non-traditional employee incentives)
Non-traditional employee incentives are becoming very popular means of motivating employees. Examples are flexible working hours and work at home options. With the advent of globalisation and development in technology, there are useful tools such as video conference and teleconference which can help. These incentives will particularly help single parent employees or employees with young children and boost their performance. There are also other employee benefits such as paternity leaves, maternity leaves and elaborate pension schemes which may act as good motivational tools. The company W.L.Gore was ranked first for the third time in a row in a survey conducted by The Sunday Times where employees were asked to identify 'the best company to work for'. Amongst the many benefits it provides are flexible working and paid maternity leaves (Buchanan and Huczynski, 2010).
MOTIVATION THROUGH INTRINSIC REWARDS
JOB CHARACTERISTICS MODEL
Job characteristics model (JCM) was developed Hackman and Oldham in 1974, which proposed an array of concepts to reinforce internal work motivation, improve job performance and satisfaction. The key concepts are combining tasks, forming natural work units, establishing client relationships, vertical loading and opening feedback channels (Buchanan and Huczynski, 2010). The empirical relevance of JCM in modern organisational environment was evaluated and results supported the predictions of JCM, that is, the concepts mentioned above do improve motivation, performance and satisfaction (De Varo et al, 2007).
An engineer called Taylor (1911) proposed scientific management as a means to motivate workers, which mainly focused on task fragmentation. This process of breaking down a task into several simpler steps and training workers to do this proved to be monotonous, insignificant and boring (Buchanan and Huczynski, 2010). Job enrichment, a technique for broadening the experience of work to enhance employee satisfaction and to improve work motivation and performance (Buchanan and Huczynski, 2010), was proposed as solution. Job enrichment may be related to job rotation and job enlargement. Nokia is a company which implements job rotation, for instance, lawyers are often assigned to act as managers (Bauer and Erdogan, 2009). This variation increases work motivation. As Kohn (1999) quotes: 'If you want people motivated to do a good job, give them a good job to do.'
4.3 PSYCHOLOGICAL EMPOWERMENT AND CDP
Career development plans (CDP) are effective in building up the intrinsic motivation of employees and helping them progress. These are in fact internal programmes set up by an organisation to develop the skills and attitudes of employees which include learning activities, learning events and courses (Hollyforde and Whiddett, 2002). Career development plans may even include the support required by an employee within an organisation (Hollyforde and Whiddett, 2002). Psychological empowerment is a form of intrinsic motivation (Colquitt et al, 2011), but organisations often give a helping hand to their employees in order to build it up. Workers are closely monitored, are given personal attention, and are often given the chance to participate in decision making. Examples where psychological empowerment is applied are MindTree and Infosys, both being IT consulting firms in India and there a participant even qualifies the experience as being 'very empowering'(Colquitt et al, 2011).
4.4 GOAL SETTING
Another factor to be analysed is goal setting as a means to increase employee motivation. According to the goal theory developed by Locke and Latham, specific and difficult goals lead to higher levels of performance than vague and simple goals, as well as participation in setting goals and feedback on past performance (Armstrong, 2002). Besides, goal setting within an organisation helps to enhance an employee's own self-set goals (Colquitt et al, 2011), and increase his motivation. It is also important to mention that '90 percent of the goal setting studies support the beneficial effects of specific and difficult goals on task performance.' (Colquitt et al, 2011)
As seen from Figure 1.0, work motivation influences employee performance, specifically task performance. An employee who lacks motivation may fail his tasks and may indulge in counterproductive or withdrawal behaviour. For example, his absences might become frequent and he might prefer to chat with colleagues than do his job. To avoid these, it becomes important to generate motivation whether through rewards or any other means!
The points made above indicate that employee incentives and reward schemes do increase work motivation. Even contextual performance or organisational citizenship behaviour is encouraged by reward. It has been proved that 'there is no inherent negative property of reward' (Cameron and Pierce, 2006) However, many argue that reward is not effective at all; in fact it can even be harmful to the employee. According to Kohn, rewards, like punishments, do not have a lasting effect on a person's attitude and cannot motivate; they can only temporarily change a person's actions (Kohn,1993). He further quotes: 'Rewards and punishments are not opposites at all; they are two sides of the same coin. And it is a coin that does not buy very much.' (Kohn,1999)
Another key point is that reward schemes should be fair to all those who form part of the system or organisation and the rewards must be realistically achievable by all. If inequity is perceived, the reward system could backfire and trigger demotivation instead of motivation (Hollyforde and Whiddett, 2002).
Financial incentives and monetary rewards have also been criticised. Pfeffer (1998) claims : 'People do work for money, but they work even more for meaning in their lives(…)Companies that ignore this fact are essentially bribing their employees and will pay the price in lack of loyalty and commitment.'(Armstrong, 2002) It has also been argued that money is seen as a motivator only by people who have short-term financial needs, and therefore only commits them to their job instead of increasing their motivation (Hollyforde and Whiddett, 2002).
A different argument states that reactions to reward policies vary from employee to employee as they depend on the individual's values, needs and employment conditions (Armstrong, 2002). Culture is another important aspect which must be considered. It is believed that people of different cultures have different motivators (Colquitt et al, 2011). An employee in France would appreciate wine as a motivator, while in Middle East an employee would view this action as an insult.
Even goal setting has been proved to be a double edged sword; it may have side effects (Ordonez et al, 2009). Indeed, if goals are too narrow, too large in number, or too challenging, they can have adverse consequences instead of increasing motivation. A suitable example is the mishap encountered by Sears, Roebuck and Co.'s in the early 1990's, where goals had prompted employees to mislead customers (Ordonez et al, 2009).
Considering all the points for and against using reward and incentives to increase the work motivation of employees, it can be deduced that they definitely are effective motivational tools. However to claim that they represent the 'best' way to do so would be an overstatement, mainly due to the different proofs which support the fact that rewards can have backfiring effects. In fact, incentives and reward schemes, in any form, must be judiciously provided. Moreover, considering only financial incentives as motivational tools, they would be more effective if reinforced with other types of rewards; money alone cannot have a lasting motivating effect.