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Nowadays, employee motivation is the focal point of all business ventures. It is essential to any successful business. Author not only has read about the cases where lack of motivation has called for brain drain or high attrition rate, but also has experienced personally where lack of motivation has caused not only operations employees leaving the job, but also management level employees leaving job and joining somewhere else.
Motivating employees is getting harder and harder nowadays as a lot of organisations have come up with extreme measures to "take care" of their employees, because of which organisations that are falling behind are losing precious employees and knowledge.
To make people do what as an employer organisations want them to do, is only possible if organisations understand the need and necessity of motivating employees and not only reward them with benefits, but also take further leaps to know the problems of each individual and help them solve or overcome the obstacles in personal and professional life.
Further on the topic author has highlighted different aspects of motivation and how it is seen today as a challenge among the organisations, and what organisations are doing - beyond expectations - to motivate their employees.
The policies adopted by an organisation are strongly influenced by the economic and institutional environment. An organisation should design human resource policies that suit its strategy and technology (Baron and Kreps, 1999, 70-72). Management should always promote motivating policies, especially concerning salary and working conditions, to reduce dissatisfactions among employees at the work place.
What is human resource management: Human Resource Management is the function or a body within an organization whose areas of focus are on recruitment of, management of, and providing direction for the people who work in the organization.
Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. (www.humanresources.about.com)
What is Motivation: Allen Buchanan (1985) defines motivation as "a decision-making process, through which the individual chooses the desired outcomes and sets in motion the behaviour appropriate to them".
Motivation is the desire within a person causing that person to act. People usually act for one reason: to reach a goal. Thus, motivation is a goal directed drive.
Old belief was - the salary what organisations pay to the employees is enough to keep them motivated, however the new fact is well known, if organisations want to motivate employees they have to come up with different benefits.
Needs Hierarchy Theory of Motivation by Abraham Maslow - Abraham Maslow's theory is based on the idea that individuals work to satisfy basic human needs - food and complex psychological needs like self esteem. He used a term called "Hierarchy of Needs" to mention about human motivation.
According to Abraham Maslow, a fulfilled need cannot motivate an employee. For example, a pupil who has enough to eat will not get motivated by food; similarly, a person who has an unfulfilled need can be persuaded to work to satisfy that particular need. Thus, a hungry person might work hard for food.
Five Levels of hierarchy needs:
There are five different levels in Maslow's hierarchy of needs:
These are the very basic and vital needs for survival, the need for water, air, food and shelter. According to Maslow these are the most basic needs in the hierarchy because all needs are secondary until these physiological needs are fulfilled.
These include needs for safety and security. Security needs are important but are not much demanding as the physiological needs, for e.g. a desire for a steady employment, a health insurance - again a basic need nowadays, safer neighbourhoods and again - shelter from the environment.
These include needs for personal belonging, love and affection. According to Maslow these needs are less basic than physiological and security needs. Relationships such as friendships, romantic attachments and families help fulfil this need for companionship and acceptance, involvement in social, community or religious groups.
Once the first three needs have been satisfied, esteem becomes highly important. These include the need for things that reflect on self-esteem, personal worth and growth, social recognition and accomplishment.
This is the highest level of Maslow's hierarchy of needs. Self actualisation in self means - people are self-aware, concerned with personal growth, less or not concerned with the opinions of others around them and interested fulfilling their own potential.
(Hierarchy of needs, psychology.about.com)
(Hierarchy of needs - socialmediatoday.com)
Motivation through employee reward systems:
Employees nowadays don't only work for money, in today's age they not only need payment to cover the basic costs of living (Maslow) but also they need some sort of recognition from organisations.
Author has come across two types of rewards systems, one is direct and another one is indirect.
Direct: Direct rewards are usually cash/account transfers, they are salaries, paid leaves, wages, over time work payments, punctuality allowances etc. For example 1, "Dee DiPietro, founder and CEO of Advanced-HR Inc., described money as "a baseline": too little of it can make workers feel unappreciated and resentful. "You don't want compensation working against you as a motivator," she said. "People just don't want to feel like their employer is taking advantage of them." However, motivation to work hard rarely comes solely from money. If your employees are being paid fair salaries and still seem unwilling to go the extra mile, throwing more money at them is unlikely to be the answer." (www.hrworld.com)
Indirect: They are often termed as benefits as well. These are health insurances, company paid cell phones, home insurances, family travel tickets/discounts etc.
example 2, If Plan X pays Rikishi a sum of £20,000 for bookkeeping and consulting, and Rikishi pays Yokozuna £15000 to do the bookkeeping. The £20,000 payment to Rikishi is direct compensation. The £15000 payment to Yokozuna is indirect compensation.
Nowadays organisations are coming up with many plans to compensate the employees; some of them are discussed below.
ESOP: Employee Stock Ownership Plan; A plan in which employee can accumulate stocks. In this plan employees are given stock options after a certain period of time and then employees are given dividends on these and after maturity are also allowed to sell. For example 3, Starbucks Coffee Company provides ESOP for its employees who have completed 1 year or more at the organisation. It is one of those motivational factors where employees see the worth of time in the company as money in terms of stock. Author has received $300 worth of stocks in USA after completing 2 years at Starbucks UK.
Profit sharing: Profit sharing is one of the highly appreciated reward system in which organisations share profit with employees based on hierarchy. For example 4, "During a business coaching engagement, I found employee morale to be way down," said Terri Levine, president of The Coaching Institute. "We created a weekly event to boost morale. One week we asked everyone to bring in a baby picture, post it on a wall, then pick which person matched each picture. Everyone was having fun and socializing while productivity went from 58 percent to 72 percent - all in the same week." (http://www.hrworld.com)
Annual Bonus: Annual bonus, also known as onetime payments which are not a part of employees' basic pay and are paid for innovation, new qualifications, development of new skills. For example 5, "Give a little latitude in determining work schedules and to take time for family or personal issues (such as doctor's appointment and banking errands)," advised Richard Martin, president of Alcera Consulting Inc. "As long as the employee is deserving and doesn't abuse the privilege, this can go a long way to building trusting and mature relationships with key workers." (http://www.hrworld.com)
Gain sharing: It is measured against performance targets where teams work together to meet a certain goal and perform. For example 6, "let's assume a company producing parts for tractors. In records, the company mentions that every £1,000,000 of good product output required 10,000 worker hours, so under gain sharing, the next £1,000,000 of output and shipment was produced with only 9,000 hours. If the average wage rate is £10 per hour, the 1,000 hours saved are worth £10,000, and that is a gain to be shared equally between the workforce and company." (www.tms.org)
Apart from above mentioned reward systems there are a lot more for organisations to explore.
Some of them are niche, for example 7 Lunch vouchers, gym memberships, subsidised travel tickets, subsidised meal plans etc.
Award: Example 8 "At Walt Disney World in Orlando, Florida, one of the company's 180 recognition programs is called the Spirit of Fred Award, named for an employee called Fred. When Fred first went from an hourly to a salaried position, five people taught him the values necessary for success at Disney. This helped to inspire the award, in which the name Fred became an acronym for friendly, resourceful, enthusiastic and dependable. First given as a lark, the award has come to be highly coveted in the organization. Fred makes each award-a certificate mounted on a plaque-as well as The Lifetime Fred Award, a bronze statuette of Mickey Mouse given to multiple recipients of the Spirit of Fred Award." (www.qualitydigest.com)
Incentives: Example 9 "AT&T Universal Card Services in Jacksonville, Florida, uses the World of Thanks award as one of more than 40 recognition and reward programs. It's a pad of colored papers shaped like a globe with "Thank You" written all over it in different languages. Anyone in the company can write a message of thanks to someone else and send it to that person. The program has been extremely popular-in four years they have used more than 130,000 such notes." (www.qualitydigest.com)
Individual Incentives: Example 10"Advanced MD CEO Jim Pack handwrites his thank-you notes to employees on a $2 bill. "In three years of doing this, only one employee has asked if he could spend it," said company spokesman John Pilmer." (http://www.hrworld.com)
Group Incentives Example 11 "At Intel, rewards are clearly linked to performance. About half of pay is tied to company and/or divisional performance, and more than 70% of employees have rights to purchase stock options. The way Intel management sums this up is, "The reward system reinforces the company's high expectations of its employees to grow, learn, and lead." (www.1000ventures.com)
Ownership: Example 12 "Cisco Systems Inc.'s CEO John Chambers hosts a monthly hour-long birthday breakfast for any employee with a birthday that month, says Harrison." "Employees are invited to ask him anything. They feel recognized, and he gains loyal employees who share their ideas." (http://www.hrworld.com)
Skill based pay: Skill-based pay is an alternative to job-based pay. Rather than having an individual's job title define his or her pay category, skill-based pay (or also sometimes called competency-based pay) sets pay levels on the basis of how many skills employees have or how many jobs they can do. (www.ezinearticles.com)
Is it a good idea on the part of any management to award employees with merit issues?
It indeed is a fantastic idea to award employees with merit issues, these options not only boosts employee work involvement, but also generates higher results for organisations.
It has always been difficult to find good help, and if found, then organisations should always take extra measures to keep them happy. Employees are good help (paid ones of course) they get recruited after understanding the requirement of the position and after thorough process of selection. Which is time consuming and costly, so why not some extra effort to keep them in the organisation by compensating them for their work?
Example 13: Author has worked at a contact centre in Asia where author was given free medical insurance, travel insurance and monthly bonus on the basis of performance.
Example 14: The Pension and taxation office at Gwalior City in India, provides free crèche facility for its employees, which is crucial for people with young child, employees can visit their children time to time at the crèche.
Author observed that above mentioned compensations were highly motivating and increased productivity among employees.
Factors management should consider
Line or department manager(s) should be able to make compensation recommendation about his/her direct employees based on the individual/team performance according to the procedure. Manager(s) should have access to compensation information of his/her subordinates. There should be a system for higher level manager(s) to accept or reject the recommendation details of lower level manager and should have critical reports for lower level managers as well.
Again, Type X employees should put into training where performance - improvement at work - based compensation can get them motivated to become Type Y employee.
Author believes that organisations should give everyone raises based on their seniority and should always ready to reward performers with high rewards and train the less performers to motivate them by setting real life examples. Author also believes that consistent poor performance can demoralise the entire workforce in contact, and hence would like to suggest removing that factor (person) if consistent training is not working.
Money is not the only option to motivate employees; management should come up with more personal and emotional ways to motivate them. Organisations can come up with their own services to help employees, for example 15 free personal counselling, subsidised groceries, etc.
Author also believes that regular incentives are fantastic ways to motivate employees, each quarter a small bonus or house party based on performance can help motivate employees.
If organisations wish to implement merit based pay, they should do thorough performance review and should make sure to mark the progress towards the development or opportunity areas set in performance reviews and thus to allow fair process of merit pay.
It is understood that some organisations do thorough job analysis while restructuring before Human Resource planning.
Job analysis in one line is the nature of a specific job, while Human Resource Planning is to determine the number of jobs to be filled. If the nature of the job is not specified, then how the staffing will be planned is again a question.
Further research on this section understands the necessity of Job analysis and Human Resource Planning and also on the performance improvement steps.
JOB ANALYSIS: The aim of Job Analysis is to place right number of candidates with right aptitude and skills at right positions People may mistake it sometimes as an analysis of the person doing the job, however the fact is opposite - it is the analysis of the job, not the person who is doing the job. The data on the job is collected through different means like interviews, questionnaires etc and the description comes out is of the job.
Job analysis can also be used for training or developing training contents, assessment tests and in measuring efficiency of training. It can be used in compensation to identify or determine: skill levels, compensable job factors, work environment, responsibilities and required level of education. (www.ariclebase.com)
Duties and Tasks: Any job requires performance and that is the prime task. This segment should include frequency, duration, effort, skill, complexity, equipment, standards, etc.
Environment: Environment looks at the working environment of a particular job. This may have also have good impact on the physical requirements to be able to perform a job.
Tools and Equipment: Some jobs and tasks require special tools and equipment to perform them. These items need to be specified while the time of Job Analysis.
Relationships: The hierarchy of the organisation must be clear. The employees should know who and how many are under them and who they are reporting to.
Requirements: Employees should be aware of the skills required to perform the job. (www.articlebase.com)
How to conduct Job Analysis: There are ways to conduct job analysis, a few are discussed below.
1. Direct observation
In this method, the behaviour, activities, tasks are recorded for observation.
2. Work methods analysis
This method observes repetitive work at production units and factories it includes time and motion study.
3. Critical incident technique (CIT model).
Critical Incident Technique is used to identify work behaviour in terms of good and bad behaviour at work.
4. INTERVIEW METHOD
Interview method is use tool to ask questions to both incumbents and supervisors in either an individual or collectively. Interview includes structured Interviews, unstructured interview, open-ended questions.
HUMAN RESOURCE PLANNING: Human Resource Planning is a process by which management ensures that it has right expertises that are competent enough to complete those tasks that help the organization reach its objectives, this process anticipates and figures out business strategy consequences on an organization's human resources, this process is reflected in planning of skill and expertise needs as well as total headcounts for the organisation. (www.hrmguide.co.uk & www.crfonline.org )
Benefits of Human Resource Planning:
a)Â Â Â Â Â It is mandate for all organisations to plan well for Human Resources. Organisation's goals and objectivesÂ regarding expansion, diversification, technological change, should be backed up by the availability of human resources. (www.hubpages.com)Â
b)Â Â Â Â Â It an element compensates at the times of uncertainty and change. There are the times when organisations have land$ and technology, but no labour to work. It compensates at such times to the maximum possible way and thus helps the society to have right men at right time and in the right place. (www.hubpages.com)Â
Â c)Â Â Â Â Â It provides opportunities to employees for development through training, etc. (www.hubpages.com)Â
d)Â Â Â Â Â It also helps individuals to satisfy their needs for the promotions transfers, salary enhancement, better benefits etc. (www.hubpages.com)Â
e)Â Â Â Â Â It helps in calculating all the cost of human resources including budgeting etc. (www.hubpages.com)Â
Â f)Â Â Â Â Â Â Â It helps to forecast the requirement for redundancy and plans to check of human resources and to change the techniques of management. (www.hubpages.com)Â
Â g)Â Â Â Â Â It helps in planning for physical facilities, like canteen, schools, hospitals, conveyance, crèche, employee quarters, company stores etc. (www.hubpages.com)Â
h)Â Â Â Â Â Â Â It helps to take steps to improve human resource contributions in the form of increased productivity, sales, turnover etc. (www.hubpages.com)
RESTRUCTURING PROCESS: Nowadays organisation restructuring them to fit in today's cut throat competition, organisations are more and more in to cost reductions and revenue generations, organisations are taking all the means to be a market leader and Restructuring is the key.
Why Organisations restructure them: The continuous innovations in technology, global market expansion, new product development, organizational culture and structure, global competitors etc, are a few examples that call for restructuring.
For example, Apple came up with i-Phone to beat Sony's walkman series phones.
Organisations go for downsizing it's employees at the times of turmoil is again a restructuring process. For example, Nomura, a Japanese firm - after taking over Lehman Brothers in UK - restructured it and laid off a lot of people, one of author's acquaintances was business analyst at Lehman, who was asked to leave as because Nomura had its own analysts, and others were surplus resources.
Another example is General Motors' restructuring plan which was presented to US treasury to gain bailout at the time of crisis. Where it mentioned all the processes were literally at change, including launch of new car models.
What makes more sense- Job Analysis first or Human Resource Planning?
As mentioned above about the role of job analysis and human resource planning, and the examples studied so far, author believes that Job Analysis is one of the basic foundations of Human Resource Management, as because it is known that it provides the basics required for Human Resource Planning, recruitment, selection, induction, job description, job specification, performance appraisal, compensation, etc.
Human Resource planning is done only when the jobs are designed, because if organisation doesn't know what is required, how can they plan for the human resource?
For Example an IT company can only plan to hire developers when they know the use of developers and can put them according to the requirements in processes.
For example, an IT company that looks at Transaction Processing System of a Bank, can hire specialists to maintain the System only when they know who they are recruiting and why?
Author believes it is always beneficial to conduct a thorough job analysis first before planning the Human Resource for Organisation.
If actual performance of the Human Resources Plan differs from desired performance, what remedial steps might be taken?
If the actual plan laid by Human Resource Department for employees to perform in the organisation, then HR department should provide the resources with the necessary training or can also do a research to find out the problem either in the plan or in resources.
If fi is understood that what factors are affecting the performance, then a contingency plan can be evoked.
Let's assume employees are resisting towards a change in the organisation- considering current market trends- company is going to merge with another organisation, and employees are resisting because of insecurity of losing job. Then HR department should already have plans to discuss this issue with employees, and how organisation sees this merger are a huge opportunity to grow, not as an organisation, but also cares for individual growth of employees in the organisation. Organisation should have right information and tools ready to train and/or update the employees and should also have plan to lay off employees who are not able to cope up with the change even after training and development exercises.
Another case is of ANZ & Grindlays, where after merger, employees could not cope up with the culture and started leaving the organisation. In such scenarios, HR department should have had first understood the complications of cultures and have had contingency plans in order to retain employees and maintain the attrition rate.
Baron, James N. with D. M. Kreps, Strategic Human Resources: Frameworks for General Managers. John Wiley & Sons, 1999
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