Transcript Motivation - Unit 2.4

Unit 2 – Leadership &
Motivation
Motivation
Motivation
Refers to the desire, effort and passion to
achieve something
It is often referred to as the willingness to
complete a task or job with enthusiasm
“getting someone to do something you
want or, on an individual basis, wanting to
do something for yourself for a particular
reason.”
Benefits of Increased Employee
Motivation
 Higher morale and job satisfaction (leading to
improved productivity)
 Improves corporate image (helps attract both
customers and potential employees)
 Better industrial relations (in a unionized
environment)
 Lower staff turnover
 Lower staff absenteeism
 Higher profits
Warning Signs of Poorly Motivated
Employees
High absenteeism rates
High labour turnover rates
High wastage level
Low quality output
Increasing number of customer complaints
Poor punctuality
Increasing number of discipline problems
Intrinsic Motivation
People engage in an activity out of their
own desire, such as enjoyment of pursuing
a hobby or interest
Activities are undertaken because the
person finds them challenging, stimulating
or satisfying
Employees can see that their success is a
result of something they have done
Extrinsic Motivation
Occurs when people participate in an
activity because of the benefits and
rewards associated with the activity
Rewards can be tangible (wages or
bonuses) or intangible (recognition or
praise)
Can also come about from threats and
pressure imposed by senior management
Satisfying Individual Need
Revise
Identify the
Need
Incentive
Satisfaction
Result
 Employee is involved in the decision making process
 Employee discuss with management about the goals and
working practices
 Employee feels as if their contribution is valuable
 Employee works longer hours or takes on more responsibility
Motivation in Practice
Financial Motivation
Payment methods that are used by businesses
to motivate their workforce
Non-financial motivation
All other forms, such as praise, recognition and
team work
Financial Motivation
Wages
Piece Rate
Salary
Commission
Profit-related Pay
Performance-related Pay
Employee Share Programs
Fringe benefits
Wages, Piece Rate & Salary
Wages are usually expressed as an hourly
rate
Some countries have minimum wage limits
Amount is usually based on several factors
Method is straight forward
Piece rate rewards workers that are more
productive (taxi drivers etc)
Wages, Piece Rate & Salary (continued)
Salaries are a fixed annual rate
Used when output and productivity cannot
easily be measured
Overtime is not usually paid
Little incentive to work hard
Commissions
 An output based payment system
 Usually based on a percentage of output
 Often found in lower salary paying jobs or when
the incentive to sell is a key component
 Creates added pressure in the workplace
 Tasks can be repetitive and monotonous
Profit Related Pay
Linked to profit (success) of the firm
Paid as an annual bonus
Strengthens employee loyalty and foster a
team effort
Managers and employees are working
together
Share can be quite small and individual
effort is not recognized
Performance Related Pay
 Rewards employees who meet certain goals
Sales targets, job competence, contract completion
Awarded during a performance appraisal
 Problems may arise of performance levels are
unattainable
 PRP ignores non-financial motivators
Exercise - Hong Kong Football Association
Employee Share Programs & Fringe
Benefits
Usually shares of a company sold at a
discounted or company matched price
Used primarily for senior management
Fringe benefits (perks) are payments to an
employee over and above their salary
Potentially a huge cost to the company
Problems with Incentive Schemes
 Operating problems
 Fluctuating earnings
 Quality
 Changes in payment
 Quality of working life
 Jealousy
 Measured
performance
Are Incentives Effective?
According to research…
 Performance and merit pay had only a modest
effect on employee commitment
 Use of bonuses for managers had a positive
effect on the rate of return on capital employed
in the business
 Profit sharing had a positive effect on
productivity and company performance
Mini Case Study
Case: Incentives for Value Added Resellers
Source: Jones, Hall, Raffo, Business Studies,3rd
Edition, Unit 60, page 434
Motivation in Practice – NonFinancial Rewards
Used to improve productivity
However, increasingly businesses have
realized that:
The chance to earn more money may not be an
effective motivator
Financial incentive schemes are difficult to
operate
Individual rewards may be not be effective as
work is done in groups
Other factors that employer does not know
about
Job Enlargement
Giving an employee more work to do of a
similar nature
This variety prevents boredom
Problem of “horizontal loading”
More efficient if the workers are organized
into groups
Leads to job rotation
Job Rotation
Changing jobs or tasks from time to time
May increase motivation, but a new learning
curve for all jobs involved might decrease
productivity
Motivation is not guaranteed if worker moves from
one boring job to another
Should only be used if rotation involves a similar
skill set
Workers do not want to move into a hazardous
job possibility
Team Work
Higher productivity due to pooling of talent
People can specialize
Shared responsibility
Flexible working
Problems include:
Too much emphasis on “harmony”
Poor preparation
Individualism
Seeing teams as the solution for all problems
Job Enrichment
“vertical extension” of an employers job
responsibilities
Planning a task
Quality control
Work supervision
Ordering
Maintenance
Gives employees a challenge; develop
“unused” skills
Multi-tasking
Process of enhancing the skills of
employees
Giving an employee more skills and
responsibilities can improve work
performance
Criticisms include an expectation that the
employee will work harder for the same
pay
Training may also be an issue
Problems with Job Re-design
Employee’s reaction
Views and costs
Technology
Effects on output
Employee involvement schemes have
been used widely in recent years
Success varies from company to company
Management by Objectives
Coined by Peter Drucker (1954)
Business objectives should be defined for a
specific individual and revised after assessment
of the performance of the individual
Satisfaction comes from achieving certain goals
The harder the goals, the greater the satisfaction
Businesses should set specific goals (that are
attainable)
Saying “do your best” is not sufficient
Organization Behaviour Modification
OBMod
Assumes behaviour is a consequence of action
Thorndike and Skinner studies
Managers should observe behaviour not
attitude, and how this behaviour relates to
consequences
Employee receives something he likes
Something the employee dislikes is taken away
Something the employee likes is taken away
Something the employee dislikes is given
Employee Assistance Programs
EAP’s have been around for 50 years
Designed to help employees cope with
difficulties
Usually bereavement issues or job loss
Now it can be anything from budget balancing
to raising children
Mini Case Study
Case: BET
Source: Management
7th Ed., Schermerhorn