This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Extrinsic factors are not the only motivators but Intrinsic factors also have more importance towards motivating employees which means that employees are not only motivated by the monetary factors like money they also need non monetary factors to enhance their motivation level which than would lead to job satisfaction. As we know that money motivate employees but a stage comes when non monetary factors, simply just giving a tap on the back or saying thank you, would play a vital role to motivate employees. Now there are different tools and techniques which can be used to motivate employees under the non monetary factors like friendly work environment, organizing training and development programs, giving awards to employee of the year, promotions, employee's performance appraisal etc.
Lawler (1973) in the study says that money act as a motivator, but some other studies have shown that money may not be a motivator in some cases. So this is clear from these studies that money is not always the only factor to motivate employees, some other organizational factors also do provide motivation to the employees, and job satisfaction is one which is studied and found to influence employee's behavior and work outcomes.
As we previously know that the pay on performance, compensation was considered as motivation tool. From the organizational point of view, compensation was used to attract, motivate, and retain employees which encourage effective employees to stay longer in the organization.
Now a day's organization would provide benefit not only to employees who are effective but also to the employees who are committed and loyal. A good and effective compensation design has always attracted, motivated, and retained employees which has helped to increase their efforts and outputs for the achievement of organizational goals. Thus, designing a reward system is very beneficial for the organization, as it helps to motivate people and at the same time it also contributes to the organizational effectiveness.
Opsahl and Dunnet (1996) noted that, employees preferred some other kind of rewards such as recognition more than their pay, 'they behave as if they value money highly'.
It is been clear from the previous researches that intrinsic compensation affect intrinsic need satisfaction and recent studies have found that intrinsic rewards such as verbal words of interest, use of words like thanks, pleasures, you are welcome, appreciation of work and approval from supervisor. These appreciations positively affect motivation and intrinsic need satisfaction of the employees.
Maslow's theory also says that a person first of all go for the basic needs which are at the bottom, later these are followed by security needs, social needs, esteem needs and self actualization needs. Up to the level of esteem needs, employee motivation or satisfaction can be fulfilled by factors such as salary, benefits, job security, and company policy etc while on other hand to when the level of a person comes to the level of self actualization than the factors known as motivators would be needed. These motivators than would include employee achievement, employee recognition, and employee growth.
Armstrong says that there are number of tools to compensate people and compensation management leads to develop a positive employment relationship which means a healthy relation between employer and employee it also focus on psychological contract.
Intrinsic rewards focuses more on the process of learning and development of employees with regard to their work experience. There are number of examples of rewarding an employee in companies. One of which is known as Land's End, in which the rewarding system include whole of the employment relationship from financial rewards to pride, appreciation, challenging work and fun, leader relations and involvement.
Some other Intrinsic rewards such as job allocation are used, like one by the name of 'job and knock' - a common practice that allows the employee to leave early if their job is complete, flexibility is given around meal breaks and job security is provided. Another reward usually offered in the organizations is that employees are given the reward of time (which means that employees can work from home or have some time away from normal duties), access to training, and recognition, this would help develop a sense of job security. Some other small-scale rewards which are mainly symbolic in value but are also provided by the employer for the line managers to use, these include mini awards such as a team lunch or picnic with the group of employees, or a bottle of champagne or a gift box is given to them.
An organization's strategy can be discussed here as an example, the organization used a variety of incentives to encourage the attendance of their employees during the Football World Cup 2006, as many football fans miss their work to support their team. The incentives include spot prizes, raffles, money, and TV screens to watch the matches. After implementation of this practice it was noted that absence dropped to its lowest level. Managers can also show recognition to their staff just by listening to staff and praising their good work; they can do this by giving verbal praise such as 'well done' or 'thank you', or just a simple pat on the back. On the other hand, International compensation systems are becoming more and more challenging issues for HR managers as MNCs become increasingly global.
Intrinsic rewards come to the worker directly from the work they perform. People who are motivated intrinsically will never quit their job easily. People feel motivated when they find interest, satisfaction, and challenge of the work themselves and not because of external pressures or incentives.
Intrinsic rewards are internal to the individual and are in many ways less tangible. In fact they are highly subjective, in that they represent how the individual perceives and feels about work and its value. Five types of intrinsic rewards that have been summarized by Manion (2005) include: healthy relationship, meaningful work, competence, choice and progress.
Psychological states help employees to enhance high work motivation and work satisfaction, they depend upon job characteristics. Employees have a sense of achievement when performing a task that is recognized by others to be a contribution to the goals or mission of the organization. The perception of fairness has significant weight in this type of reward.
When people are motivated by monetary factors like their pay or any other bonuses offered by the organization they are said to be motivated by extrinsic factors. On the other hand intrinsic motivators include (autonomy, competence and relatedness) these positively affect work attitudes and motivation level of the employees.
According to job characteristic theory if there is lack of skill, task, autonomy, and feedback than they will not provide intrinsic compensation which in return, would harm the desired work behaviors such as attendance of employees and their desire to remain in the organization which means low turnover.
Pay-for-knowledge strategies can help organizations to design some motivating works like skill variety, task identity and task significance, autonomy, and feedback. To manage successful intrinsic reward plans the performance of employees is checked with performance appraisals which also lead to appropriate compensation. Job characteristic has an impact on individual's attitudes. So far the studies suggest that pay-for-knowledge program lead to increased affective organizational commitment and enhanced work motivation, these result are probably due to pay- for-knowledge plans which promote skill variety and autonomy.