Motivating and Rewarding Employees

Motivation and Individual Needs

• Motivation, result of interaction between the individual and the situation they face.

• An individual’s motivation varies from situation to situation.

• Motivation: Willingness to exert high levels of effort to reach organizational goals, conditioned by the effort’s ability to satisfy some individual need

• Three key elements of Motivation: Effort, Organizational Goals, Needs.

• Effort: When someone is motivated, they try hard.

• Organizational Goals: Effort is channeled in a direction that benefits the organization.

• Need: An internal state that makes certain outcomes appear attractive.

Theories of Motivation

1. Maslow’s Hierarchy of Needs

• Physiological Needs: Food, Drink and Shelter.

• Safety Needs: Security and Protection from Physical and Emotional harm.

• Social Needs: Affection, Acceptance and Friendship.

• Esteem Needs: Internal Esteem factors; Self-respect and Achievement and External Esteem factors; Status and Attention.

• Self-Actualization Needs: Growth, achieving one’s potential and Self-fulfillment.

2. McGregor’s Theory X and Theory Y

Theory X Theory Y

A Negative View A Positive View

Dislike Work Creative

Lazy Seek Responsibility

Avoid Responsibility Exercise Self-Direction

Coerced to Perform

3. Herzberg’s Motivation-Hygiene Theory

• An individual’s attitude towards their work determines Success or Failure.

• Intrinsic factors: Achievement, Recognition and Responsibility; related to Job Satisfaction.

• Extrinsic factors: Company policy, Supervision and Working conditions; related to Job Dissatisfaction.

• Removing Dissatisfying characteristics from a job does not make job Satisfying.

• Hygiene Factors: Factors that eliminate job dissatisfaction but doesn’t increase job satisfaction. For example; working conditions and Salary.

• Motivators: Factors that increase job satisfaction. For example; Recognition and Growth.

Contemporary Theories of Motivation

1. McClelland’s Three-Needs Theory

I. Need for Achievement: Drive to excel, to achieve in relation to a set of standards, to strive to succeed.

II. Need for Power: Need to make others behave in a way that they would not have behaved otherwise.

III. Need for Affiliation: Desire for friendly and close interpersonal relationships.

2. Input and Outcomes Influence Motivation

• Employees make comparisons of their job inputs and outcomes relative to others.

• Inequities influence the degree of effort that employees exert.

• Equity Theory: Employees perceive what they get from a job situation (outcomes) in relation to what they put into it (inputs) and then compare their input-outcome ration with input-outcome ratios of relevant others.

3. Job Design

Job Characteristics Model (JCM): Hackman and Oldham’s job description model.

I. Skill Variety: Job requires a variety of activities; worker can use a number of different skills and talents.

II. Task Identity: Job requires completion of a whole and identifiable piece of work.

III. Task Significance: Job affects the lives or work of other people.

IV. Autonomy: Job provides freedom and independence in scheduling the work and in determining the procedures to be used.

V. Feedback: Carrying out the work activities required by the job results in the individual’s obtaining direct and clear information about the effectiveness of their performance.

Job Enrichment: Vertically expanding a job by adding planning and evaluation responsibilities.

4. Expectancy Theory

An individual tends to act in a certain way on the basis of the expectation that the act will be followed by a given outcome and the attractiveness of that outcome to the individual.

I. Effort-Performance Linkage: Probability perceived by the individual exerting a given amount of effort leading to performance.

II. Performance-Reward Linkage: Individual believes that performing at a particular level lead to the attainment of a desired outcome.

III. Attractiveness: Importance that the individual places on the potential outcome or reward that can achieve on the job.

Contemporary Issues in Motivation

Motivating a Diverse Workforce:

• Management needs to think in terms of Flexibility.

• Employees have different personal needs and goals that they’re hoping to satisfy through their job.

• Diverse array of rewards.

• Managers must be flexible enough to accommodate cultural differences.

Paid for Performance or Time on the Job:

Pay-for-performance Programs: Pay employees on the basis of some performance measure. For example: Piece-rate plans, profit sharing and lump-sum bonuses.

• Employees perceive a strong relationship between their performance and rewards they receive if motivation is to be maximized.

Competency-based Compensation: Pays and rewards employees on the basis of the skills, knowledge or behavior employees possess. For example: Leadership, Problem solving and Decision making.

Broad-banding: Preset pay levels, established on the basis of the degree to which these competencies exist.

Stock Options: A program that allows employees to purchase company stock at a fixed price.

Motivate Minimum-Wage Employees:

• Money is important as a Motivator but not the only reward.

• Employee Recognition programs (employee of the month)

• Empowerment and Career Development Assistance.

• They need guidance, assistance in self-assessment and training.

Motivating Professional and Technical Employees:

• Professional and Technical employees value support.

• Managers must provide them with new assignments and challenging projects.

• Reward them with Educational Opportunities – Training, Workshops and Conferences.

Improve Work/Life Balance:

• Managers’ attempts to increase their organizations’ flexibility and to support a balance between work and family, a number of scheduling options.

• Increased use of temporary and contingent workers.

 Flextime: A scheduling option that allows employees, within specific parameters, to decide when to go to work.

 Job Sharing: A special type of part-time job that allows two or more individuals to split a traditional 40-hour-a-week job.

 Telecommuting: A system of working at home on a computer that is linked to the office.

Entrepreneurs in Motivating Employees:

• Employee empowerment.

• Participative decision making and delegation.

• Employees work effectively and efficiently using their creativity, imagination, knowledge and skills.

• Businesses are more flexible and achieve productivity gains, quality improvements, more satisfied customers, increased employee motivation and improved morale.