Essential Factors For Motivation Of Employees Commerce Essay

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For managers as well as supervisors motivating their employees is very essential to carry out work more efficiently. It is very important for every leader to recognize and appreciate the work done by employees. This can be done in various ways maybe by rewarding the employee in the form of cash vouchers, gifts, etc. This helps the employees to work more efficiently. This also helps to maintain a very healthy environment at work, which is indeed essential to be successful.

For any manager or supervisor it is very essential to learn the correct skills of management which includes motivation. More than it being possible for a leader to motivate the employee, it is very essential for the employee to motivate themselves. This is also applicable to the leader the leader needs to motivate himself and carry attitude which is full of positive vibes and enthusiasm.

It is very important for the leader to understand that by always yelling at the employees will not at all motivate them. It�s essential for the leader to maintain a good relations with its employees for the smooth sailing of the work, every time just by giving money to the employee the manager cannot motivate the employee, sometimes only a few words of appreciation can make wonders.

It is the job of the manager to set goals for its employees. The manager should be very careful and always set realistic goals which are beneficial for both the firm as well as the employees. Setting unrealistic goals may become a setback for the employees.

To motivate the employees the leader needs to understand the needs of each of its employees. Once the manager knows and understands the key to each and every employee, it becomes very easy for him to carry out his work smoothly.

Thus among the various ways of motivating employees, the new trend in the market is to provide Employees ESOP, Profit sharing, Scanlon plan, Annual Bonus, Gain sharing and Merit plans.s

The ability of each employee differs from person to person. Therefore the manager should recognize that ability and reward them for it. Every time cash bonus is not the only means for rewarding. They can reward the employees by gifting them or sponsoring a trip to a destination of their choice with their family. they can also provide them with shopping vouchers. They can also gift them with some electronics gadgets.

Performance Appraisal

In JP Morgan chase (India) company the leaders run a contest every month. Every month the employees have a meeting at the start of the month and then they are given goals to be achieved. On the basis of that the employees get rewarded. Sometimes on the basis of daily performance employees win raffles and then at the end of the month when all the raffles are collected there is a lucky draw and the person who wins get some kind of a gift/reward.

Example :- Disha Kripalani [ H.R. recruiter/Advisor, JP Morgan chase (India) ] won the lucky draw and she was rewarded with a voucher worth Rs.2000 which could be used at hyper city (Mall).

The new contest is winning some miles for the employees. The company has taken great efforts to get some really cool goodies for them eg. Pens, bags wallets. bottles, etc. they can purchase these goodies by earning the miles through their performances.

So in this way Disha Kripalani [ H.R. recruiter/Advisor, JP Morgan chase (India) ] can personally see the level of motivation in herself as well as her fellow colleagues.

There are various other ways of motivating an employee. Sometimes the employees are given a certain amount or percentage of the revenue collected by the employee for the firm, which indeed motivates the person to generate more revenue. In this way the employee makes sure that he/she carries out his work with full efficiency to earn more. He/she reduces his idle time i.e. the time taken by an employee to carry out his personal activities, but as every coin has 2 sides there are some demerits of this also as the employees also get into a rivalry to work more they may also end up spoiling their health.


Providing Bonus is also one way of motivating employees. There is an act providing for bonus which the PAYMENT OF BONUS ACT, 1965 (India). It is an incentive payment granted to a worker at the end of a particular year, in addition to one�s normal standard wage. It is a onetime lump sum (approximate) amount given to an employee for meeting or achieving their goals.

Example :- In JP Morgan Chase(India) company employees are paid bonus every quarter. Each one of them has a scorecard which determines their monthly performance depending on which they get their monthly incentive which is divided into 3 stages. The top 25% get a bonus of Rs.6000 while the next 25% get Rs.4250 and the remaining 25% get Rs.3000 and the bottom 25% do not get anything. This is for the part timers like Disha while the full timers get exactly double of the incentive mentioned above.

At the end of every quarter the employees sit with their respective manager and discuss a form which determines their bonus. The form does not only include the performance but also includes various other factors like one�s operating principles and their future development plan in the firm. Our operating principles play a very key role in determining our bonus.

This kind of reward definitely motivates the employees to work harder to achieve team goals.

Merit pay

Merit Pay as an Incentive

Merit pay or merit raise is any salary increase the firm awards to an individual employee based on his performance. It is different from bonus and this usually becomes the part of the employees base salary.

Merit Pay Options

There are Two adaptations which are recent and popular.

1. One award raises in a lump sum once a year and does not make the raises part of the employee�s salary.

Example :- 5% lump sum merit payment to the employee whose salary is $30,000 is $1500 cash at the year end.

2. The other adaptationties merit awards to both individual and organizational performance.

( The book �Human Resource Management� by Gary Dessler, Page No. 476-477 )

The other way of motivation is an annual increment in the salary of an employee. The salary of an employee is increased at the end of every year. The hike in the amount depends upon the performance of an individual. This kind of a hike is known as Merit pay. The person who gets the highest increase in the salary indicates a gesture of appreciation from its employer. This also helps the employees to set their own benchmark to increase their performance.

When a specific work group goes ahead and exceeds their production standard they are provided with various variable incentives by the firm. This might be in various forms.


� Employers can differentiate pay given to the high performers.

� Employers can differentiate between the individual and company�s performance.


� Pay is subjective

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Example:- General Electric, Federal Express, Scott paper and Johnson and Johnson are among the more progressive companies in the merit pay rewards.

(,3816733 )

Profit-sharing plan

Profit-sharing plan are plans in which all or most of the employees receive a share of the firms annual profits. There are several types of profit sharing plans such as Cash Plans, Deferred profit-sharing plan and the bonus program as well. In this plan an individual gets cash shares of the firm at regular intervals. The profits made by the firm are distributed to the employees based on their individual merit ranking.

( The book �Human Resource Management� by Gary Dessler, Page No. 485-486 )

If the profit exceeds certain amount, it can make contributions accordingly.

Board of directors can review the financial position of the company and decide the contribution to be made.

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� Enforces employees to work in a team

� Achieve Team goals

� Work harder and Accurately


� Impact of the work and effort of the employees cannot be seen individually in the profitability of the company

� Rather than a motivation it becomes more of an entitlement for the employees

� Employees can get careless of their own work as the profit is team work oriented.

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ESOP (Employee stock ownership plan)

Another way of appreciating the hard work done by the employees is the ESOP (Employee stock ownership plan). A corporation annually contributes its own stock or cash only within the limit of 15% of compensation to be used to purchase the stock. This is a strong point of motivation which helps the employees to grow in the firm. The firm gives an opportunity to its employees to help the company grow by owning a part of its share. This helps to generate a feeling of belongingness among the employees towards the firm.

The right to purchase a specific number of shares of a company stock at a specific price during a specific period of time.

( The book �Human Resource Management� by Gary Dessler, Page No. 487 )


� Retain Control.

� Deferred taxes.

� Tax exempt earnings.

� Deductible dividends.


� Negative impact on Equity in Balance Sheet.

� Overvaluation may lead to Penalty Tax.

� Liquidity.

� Company value does not increase.

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Example:- Publix Super Markets, Inc, Procter and Gamble Co. and The Sherwin-Williams Company are ranked as the top three ESOP association member, ranked by the number of the employee participants.

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Example:- In Thermacore each year, the stockholders and the board of directors approve a dollar value of stock to offer employees. For example, the board may decide to make available $100,000 of company stock. No one employee may subscribe for more than $10,000 worth of stock. Thermacore is a private company, so the stock trade only within the company. The firm sells shares to the employees at a discount. The company has the right to first refusal should the employee wish to leave the company or sell stock. Employees can pay for the stock in cash or payroll deduction.

( The book �Human Resource Management� by Gary Dessler, Page No.487 )


Yes, it�s absolutely a wonderful idea for the management to provide their employees with these extra awards.

In today�s world everyone is need of opportunities to earn any kind of extra income, and if the management provides them with such opportunities we are sure that everyone would work towards achieving it.

This is not only beneficial for the employees but it is more beneficial for the company. Such kind of motivation is needed in all fields.

Giving a very small example about JP Morgan chase (India), As mentioned before all the employees have a scorecard on the basis of which they earn their incentives. This scorecard is updated every day on the basis of their daily performance.

Every day as soon as everybody enters the first thing they do is check their scorecard and if it is low due to any metrics they make sure that they work towards that metrics.

This helps them to motivate themselves without the need of a manager as they all want to earn incentives over and above the fixed income. Also the person with the best scorecard is recognized every month in front of the top management which gives them an opportunity to stand out of the crowd.

I�m sure everyone wants that.

While making the plan of providing these kinds of additional bonus the management needs to be careful about many factors.

As we all agree that all individuals have different capabilities, so each one should be rewarded for their own and also their weaknesses should not at all be left, some motivators should be there to help them overcome their weakness.

The management needs to be careful for the following-

? Establishment of goals- the management needs to establish goals for its employees so that everyone is aware about what they need to achieve.

? Realistic goals- the goals that are established should be real and which can be achieved.

? Performance plans- the management should make plans where in every day or week the employee is aware of its performance and can work on its opportunities.

? Observation- the management should observe very minutely on each individuals performance.

? Feedback-a proper feedback should be given to each employee about their performance and solutions should be provided so that they can work on them.

? Evaluating performance- an apple to apple comparison should be done while evaluating the performance of the employees.

? Rewards-after the evaluation a proper plan for rewarding the employees should be planed to make them feel special.


There are various kinds of leaves which are entitled to the employees-

Paternity leave

The firm [JP Morgan Chase (India)] truly understands the need for the employee to be with his child on his birth so the male is given a 2 day paid leave to be with his child. In the UK the law has allowed two weeks of this leave.

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Example :- Hironobu Narisawa, A district Mayor in the Japanese Capital, Tokyo , is going on paternity leave on Saturday, the first local government leader ever to do so.

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Example :- Dad of new born baby can take a two paid week off in IBM, NY.

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Maternity leave

So that you can experience the wonderful feeling of a mother JP Morgan Chase (India) provides a leave 12 weeks to a female employee in case of pregnancy.

Example:- In IBM, NY the birth moms are eligible for six paid weeks off, and also has a option of taking three years of unpaid job guaranteed leave.

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Every year since the employees work so hard it is the duty of the firm to understand that they need some time for their personal enjoyment. So JP Morgan chase (India), provide the employees with 20 days leave per year as vacation.

These leaves need to be planned at least 48 hours in advance. If all the leaves are not consumed in 1 year only 5 leaves can carry forwarded for the next year. these are all paid leaves. no compensation is given if these leaves are unused.

Example:- In Morgan Stanley (India), the employees are entitled 22 days leave in a year. This leave can be taken at the same time or in parts.

Sick leaves

When in case of emergency we provide our employees with 15 sick leaves. These leaves are not compulsory. Only in the case of emergency the employees can utilize these.

They need to inform their manager about the leave at least 2 hours before work.

It needs to be approved by the manager.

Example: - When I worked with Morgan Stanley, India, one of my colleagues had a Disk Slip in the back and had to undergo a surgery. He was back after the surgery and proper home rest after three months and later I came to know the entire three month leave permitted was sick leave and was paid for that particular leaves.

Floating leaves

In case the employees have taken the trouble to work extra on a bank holiday JP Morgan Chase (India) do provide them with the facility of taking that leave any other day they would prefer.

It is like a one day vacation leave.

Example :- I was a employee with Bank of America Continuum Pvt. Ltd. (India) and Morgan Stanley (India), there the employees have a Complementary Off i.e. whenever a employee used to work on a public holiday or any such event/instance he/she were given one and a half time the salary plus a day off on any other day preferred by the employee provided that the leave is taken within two months of that actual date the employee worked.


After learning these merit issues, no employee want to not have all these benefits. Of course, not all the benefits can be given to all the employees but as said above it should be based on their work performance, behavior, profile, etc. Also even if the employees are eligible for most of the benefits, management should make a point where the employee does not get such a combination of this merit issues / leaves. In the case of leave it should be well justifies and no leaves should be granted for a longer span of time together even if he is entitled for them i.e. the benefit of taking vacation leave with the accumulated many floating leaves if any. Setting targets and goals to be achieved within a period of time must be adopted in every process to better enhance the efficiency in within time limits. Performance can be better analyzed with this target oriented work. Almost every call centre has target oriented jobs. Trips and picnics should also be organized by the team leaders and the managers. Sports events is also a good activity for the employees for a fit and healthy living as well as fun and entertainment.


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