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There goes an axiom which says "one man's meat is another man's poison" which in this case means what motivates an individual to achieve a certain goal is different from what motivates another man to achieve his goals. Employee incentives and reward schemes are powerful motivator's of driving workers for better performance. Employee incentives and reward schemes can be explained under the two types of motivation which are financial and non-financial motivation which when combined is the best way for motivating an individual to achieve the aim of an organization. The types of motivation will be elaborated on later in this paper.
Motivation can be defined as the cognitive result creating method, during which objective directed behavior is commenced, energized, aimed at and upheld (Krumm 2001:2003).The two types of motivation that will be explained in this text are financial and non financial motivation.
Financial motivation takes place when the management uses monetary forms to encourage or press on employees to achieve the overall target of the business. Listed below are some types of financial motivation
Bonus pay: After a task has being executed and it overcomes the expected output, as a way to show appreciation extra money is given to the employee for his hard work or sometimes bonuses are given to people who are loyal to the organization. For example, an individual that has spent over twenty years working for an organization can be compensated by the organization through a bonus pay for his or her loyalty.
Performance related pay: This is the money paid to an employee relating on how well the individual performed this kind of pay is used in job like production line workers.
Piece rate: This happens when an employee is paid according to each unit produced or action taken this type of payment is used in jobs like construction workers who are semi-skilled workers who combine power and machinery to achieve their goal. It is also a type of performance related pay.
Time rate: This happens when an employee is paid for the number of hours a day the individual is available for. Students experience is an example of time rate because they work alongside school and are paid for the amount of time they put in.
Commission: This is a form of payment to an agent for services rendered. For example, the company Avon they pay their agents according to how many customers they bring in, this type of payment is also used for a cars sales man who is paid for the according to how many cars he or she sells.
Profit sharing: This method occurs when the employees receive a proportion of the company's profits especially when the company's profit for that period is higher than usual, this puts staff in the same position as shareholders.
Fringe benefits: These are items that employees receive in addition to their monthly income for example company car, free meals, health care and so on.
Share ownership: This incentive is usually used for senior managers who are given shares in company rather than bonuses this means that some staff are also shareholders.
Wages and salaries: Wages are paid every hour and summed up after the end of the week while salaries are annually but are given monthly. The increase in salaries and wages are the most common ways of motivating employees.
Non-financial motivation is the use of other forms apart from the usual monetary form to motivate employees. Examples of this form of motivation are holidays, company sponsored trips and promotions. Listed below are types of non-financial motivation.
Job enrichment: This is a technique for expanding the experience of work to improve employees need satisfaction and this aids to motivate workers and since the employees are motivated this will increase their performance. This is done through seminars and workshops that are relevant to the employee's field of work
Job enlargement: This is a work design method in which tasks are recombined to expand the scope of a job this is useful because it increases the employees confident in himself or herself and this is highly motivating.
Job rotation: This is a work design process in which employees design method in which employees are switched from task to task at regular intervals.
Team work: This is a technique which puts employees in groups to work together it helps them to accomplish more in a little time. This method increases the relationships between colleagues and makes the organization a home away from home so the employees saw their job in a fun way not a stressful way.
Delegation: This is the passing down of authority from the managers to their subordinates this helps to develop the staff it shows they can trusted with bigger jobs and will put in their best to impress the management.
Other benefits: This is the use of leisure activities to motivate workers. This includes amongst others Christmas hampers, Staff trips and recreational facilities in the work place.
According to a survey which was taken by Reade (2003) which showed that children rate the pleasures an individual gets from his job higher than money. Money came in after the friendly environment of the job which included friendly colleagues and job enjoyment. People may argue that what a child knows about a working organization but it should not be forgotten that school is also an organization that means the children put in their best in school due to the friendly environment. This means that workers prefer to derive pleasures from their jobs instead of earning more it also shows us that money is not the only major factor of motivation. Here is a reason why it was stated earlier that the two type of motivation work hand In hand. Buchanan and Preston (1992) quoted a supervisor in an engineering plant who stated that "you cannot say money is the only motivation because if you left the employees they would relax and not achieve the target of the organization". Money is not enough because most people work to earn a living most employees expect bonuses even though it is not indicated in their contract. Hence, factors that do not include financial forms are needed.
This leads to the next point which is based on content theories of motivation by Abraham Harold Maslow (1954). The theory was designed to solve the confusion between drives and motives. He argued that there are nine natural needs of man which are as followed;
Biological needs: Needs basic to our individual and collective survival.
Safety needs: These are the need that provides protection.
Affiliation needs: This is the need for attachment, love, relationship.
Esteem needs: The need for a stable and high self-evaluation based on capability and respect of others.
The need for wisdom (to know and understand).
Aesthetic needs: This is the need for order and beauty.
The need for transcendence: This is the need to be at one with the universe.
The need of freedom: This is the need of enquiry and expression.
Self-actualization: This is the need for the development of one's full potentials.
Maslow argued that self-actualized people are not easy to find and that producing the conditions for people's ability to grow to that level was a difficult task. Self actualization is the aspiration for personal completion to extend our potentials, to become everything we are able of becoming. Referring to the Maslow theory of motivation, different employees may fall into the different classification of needs. So it is likely that employees are motivated by the incentives that meet their needs.
McGregor (1960) stated that in every kind of organization there are different kinds of people, these are either those that enjoy working and being productive or those that have to be forced. Below is a table of the two different types of employees.
The average person inherently dislikes work
Work is a way of life
People must be directed to work
People have self discipline
People escape responsibility
People adore responsibility
People believe that achievement at work is irrelevant
Achievement is highly valued by people
people are not imaginative
People have imagination
Money is the only reason for working
Money is a benefit from work
They don't have the desire to improve their quality of life
People have needs to improve the quality of their life
Having an objective is a form of imprisonment
Having an objective is an aid to effectiveness
For work motivation to be high, productive work has to be seen as a road to valued goals. If an individual sees promotion as a target, there is a high percentage that the individual will work hard until his or her goal is reached. This is the expectancy theory which was first developed by American psychologist Victor H. Vroom who based his theory on three concepts which are valence, instrumentality and expectancy. The expectancy theory is simply defined as the setting of goals which an employee is willing to do anything to achieve their set goals. The key points of this theory are explained below;
Valence: The value of outcome associated with successful performance.
Instrumentality: The belief that successful performance will result in desired outcomes.
Expectancy: The belief that effort will result in successful performance of task.
It is not surprising that the two types of the motivation are the best, I witnessed a life experience where my uncle as a co-pilot to the former organization where he worked, where he was been paid a good salary but did not get promoted a captain but was left as a co-pilot. He left the organization because he was not deriving pleasure from his job (lack of job satisfaction) for another organization where he is now been paid more than the old job which aids him take care of his needs. Furthermore, he was also promoted him to a captain, which boosted his self confidents because the promotion showed him that the organization appreciated the effort he put into the success of the organization.
Alfie kohn (1999) does not believe in motivating individuals. He states the manipulation of people with incentives may seem to work in the short run but they often fail and they often do lasting harm in the long run. For one thing it could be argued that we are humans and we are all motivated by something either to meet our financial needs or our psychological needs or both. For example is an individual who cleans dirt off the street may not like his job because it is stressful and even if the individual is praised or given extra financial motivation, it would not change his/her dissatisfaction of the job. Secondly, an individual may actually like a job and there is a particular task which the individual does really well. This individual may not expect praises or bonuses if this is not given at a particular period, it would not affect the individual negatively in various ways like counter production.
If one considers motivation it becomes clear that employee incentives and reward schemes are good and but according to Maslow the employees need should be considered.