Employee

Motivation

Definition of Moti vati on

According to Edwin B F lippo, Motivation is the process of attempting
to influence others to do their work through the possibility of gain or reward.
The definition of motivation is to give reason, incentive, enthusiasm, or interest that
causes a specific action or certain behavior. Motivation is present in every life function. S
imple acts such as eating are motivated by hunger. Education is motivated by desire for
knowledge. Motivators can be anything from reward to coercion. From the scientific
viewpoint, by most accounts, motivation is defined as an inner state of need or desire. That
state of desire creates a movement or activity towards satisfying that desire. In my neverending quest to spread the word about turning ideas into action, I view inspiration as the state
of mind that primes us to come up with great ideas, and motivation as the state of mind that
spurs us to action.

Co ncept of Motivation
In order to understand the concept of motivation, we have to examine three terms :
motive, motivating and motivation and their relationship

Motive
A motive is an inner state that energizes, activates, or moves and directs behavior
towards
Goals.

Moti vating
Motivating is a term which imp lies that one person includes another, to engage in action by
ensuring that a channel to satisfy the motive becomes available and accessible to the individ
ual.

Motivation
Dubin has defined motivation as;
Motivation is the complex force starting and keeping a person at work in an
organization. Motivation is something that moves the person to action, and continues
him in the course of action already initiated

According to McFarland;
Motivation refers to the way in which urges, drives, aspirations, strivings, or needs
direct, control, or explain the behavior of human being.
.NATUR E
1.

OF MOTIVATION

Based on Moti ves: Motivation is based on individuals motives which are internal to the
individual. These motives are in the form of feelings that the individual lacks something.
In order to overcome this feeling, he tries to behave in a manner which helps in
overcoming this feeling.

2. Affect ed by Moti vati ng: Motivation is affected by way the individual is motivated. It can
also activate the latent needs in the individual, that is, the needs that are the less strong
and

somewhat dormant, and harness them in a manner that would

be functional for the organization.

2.

Goaldirected Behavior: Motivation leads to goal-directed behavior. A goaldirected behavior is one which satisfies the cause for which behavior takes place.

4. Related to Satisfaction: satisfaction refers to the contentment experiences of an

individual which he derives out of need fulfillment. Thus satisfaction is a consequence
of rewards and punishments associated with past experiences.
5. Complex Process: Motivation is a complex process; complexity emerges because of
the nature of needs and the type of behavior that is attempted to satisfy those needs.
6. Person Motivated in Totality: A person is motivated in totality and not in part. Each
individual in the organization is a self-contained unit and his needs are interrelated.
These
affect his behavior in different ways.

Motivation
Motivation is a force that drives people to do things. Employees are normally
motivated to achieve their needs, whatever they may include. Motivation is inside another
person's head and heart. It may be intrinsic or extrinsic. This is what we call motivation.
Employees of a company will be motivated if they associate certain incentives with an
activity of work.
Motivation is an important function which every manager performs by assigning the
people to work for accomplishment of objectives of the organization .Issuance of well
conceived instructions and orders does not mean that they will be followed .A manager has to
make appropriate use of motivation to enthuse the employees to follow them. Effective
motivation succeeds not only in having an order accepted but also in gaining a determination
to see that it is executed efficiently and effectively.
In order to motivate workers to work for the organizational goals, the managers must
Determine the motives or needs of the workers and provide an environment in which
Appropriate incentives are available for their satisfaction .If the management is successful in
doing so; it will also be successful in increasing the willingness of the workers to work. This
will increase efficiency and effectiveness of the organization. There will be better utilization
of resources and workers abilities and capacities.

Concept of motivation
The word motivation has been derived from motive which means any idea, need or
emotion that prompts a man in to action. Whatever may be the behavior of man, there is
some stimulus behind it .Stimulus is dependent upon the motive of the person concerned.
Motive can be known by studying his needs and desires.
There is no universal theory that can explain the factors influencing motives which control
mans behaviour at any particular point of time. In general, the different motives operate at
different times among different people and influence their behaviours. The process of
motivation studies
the motives of individuals which cause different type of behavior.

Need of motivation
Managements basic job is the effective utilization of human resources for achie
vements of organizational objectives. The personnel management is concerned with
organizing human resources in such a way to get maximum output to the enterprise and to
develop the talent of people at work to the fullest satisfaction. Motivation implies that one
person, in organization context a manager, includes another, say an employee, to engage in
action by ensuring that a channel to satisfy those needs and aspirations becomes available to
the person. In addition to
this, the strong needs in a direction that is satisfying to the latent needs in employees and
Harness them in a manner that would be functional for the organization.
Employee motivation is one of the major issues faced by every organization. It is
the major task of every manager to motivate his subordinates or to create the will to work
among the subordinates. It should also be remembered that a worker may be immensely
capable of doing some work; nothing can be achieved if he is not willing to work. A
manager has to make appropriate use of motivation to enthuse the employees to follow
them.

Significance of Motivation
Motivation involves getting the members of the group to pull weight effectively, to
give their loyalty to the group, to carry out properly the purpose of the organization. The
following results may be expected if the employees are properly motivated.
1. The workforce will be better satisfied if the management provides them with
Opportunities to fulfil their physiological and psychological needs. The workers will
Cooperate voluntarily with the management and will contribute their maximum towards
the goals of the enterprise.
2. Workers will tend to be as efficient as possible by improving upon their skills and
Knowledge so that they are able to contribute to the progress of the organization. This will
also result in increased productivity.
3. The rates of labors turnover and absenteeism among the workers will be low.
4. There will be good human relations in the organization as friction among the
workers themselves and between the workers and the management will decrease.
5. The number of complaints and grievances will come down. Accident will also be low.

6. There will be increase in the quantity and quality of products. Wastage and scrap will be
less. Better quality of products will also increase the public image of the business.

Motivation is t he activation or e nergization of goal -oriented behavi

or;

Intrinsic
Extrinsic
From a practical standpoint, we can dig into our motives in order to get better results,

and move ourselves from point A to point B. For example, if you know what motivates you,
you can use those motives to get yourself to do things that you wouldn't do otherwise. These
same principles can be applied to motivating others as well.
Motivational techniques, therefore, are useful to teachers, leaders, parents, employers,
and really, almost anyone. The key is in understanding that you are not motivating someone
else. Instead, you are simply providing a circumstance that triggers that person to be
motivation.

Intrinsic and Extrinsic Motivation

Intrinsic Motivation
Intrinsic motivation comes from rewards inherent to a task or activity itself - the
enjoyment of a puzzle or the love of playing. This form of motivation has been studied by
social and educational psychologists since the early 1970s. Research has found that it is
usually associated with high educational achievement and enjoyment by students. Intrinsic
motivation has been explained by Fritz Heider' attributional theory, Bandura's work on self
effeciency,and Ryan and Deci's cognitive evaluation theory. S tudents are likely to be
intrinsically motivated if
they:
Attribute their educational results to internal factors that they can control (e.g. the
amount of effort they put in),
Believe they can be effective agents in reaching desired goals (i.e. the results are not

determined by luck),
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Are interested in mastering a topic, rather than just rote- learning to achieve good grades.

Extrinsic motivation
Extrinsic motivation comes from outside of the performer. Money is the most
obvious example, but coercion and threat of punishment are also common extrinsic
motivations.
While competing, the crowd may cheer on the performer, which may motivate him or
her to do well. Trophies are also extrinsic incentives. Competition is in general extrinsic
because it encourages the performer to win and beat others, not to enjoy the intrinsic rewards
of the
activity. Social psychological research has indicated that extrinsic rewards can lead to over
justification and a subsequent reduction in intrinsic motivation. In one study demonstrating
this effect, children who expected to be (and were) rewarded with a ribbon and a gold star
for drawing pictures spent less time playing with the drawing materials in subsequent
observations than children who were assigned to an unexpected reward condition and to
children who received no extrinsic reward.
Motivation starts with you! As you aspire to be more successful in life, your
attitude towards yourself and others will play a huge role. Positive people learn how to
handle life's challenges differently and use these opportunities to grow. So can you!

Self Motivation
The self-control of motivation is increasingly understood as a subset of emotional
intelligence; a person may be highly intelligent according to a more conservative definition
(as measured by many intelligence test), yet unmotivated to dedicate this intelligence to
certain tasks. Yale School of Management Professor Victor Vroom's "expectancy theory"
provides an account of when people will decide whether to exert self control to pursue a
particular goal.
Drives and desires can be described as a deficiency or need that activates behavior
that is aimed at a goal or an incentive. These are thought to originate within the individual
and may not require external stimuli to encourage the behavior. Basic drives could be sparked
by deficiencies
such as hunger, which motivates a person to seek food; whereas more subtle drives might be the

desire for praise and approval, which motivates a person to behave in a manner
pleasing to others.

Motivation Process
1. Identification of need
2. Tension
3. Course of action
4. Result Positive/Negative
5. Feed back

TYPES OF NEEDS
There are many needs which an individual may have and there are various ways in
which these may be classified. The basic objective behind classification of needs into
different categories is to find out similarity and dissimilarity in various needs so that
incentives are grouped to satisfy the needs falling under one category or the other. Thus needs
may be grouped into three categories.
1. Primary Needs: Primary needs are also known as psychological , biological , basic
or unlearned needs . These needs are common to all human beings , though their
intensity
may differ . Some of the needs are food , sleep , air to breathe etc. These needs arise
out of the basic physiology of life and are important for survival and preservation of
species These needs are conditioned by social practice .
2. Secondary Needs: As contrast to the primary needs, secondary needs are not natural
but are learned by the individual through his experience and interaction .Therefore,
these
are also called learned or derived needs. Emergence of these needs depends on
learning . There may be different types of secondary needs like need of power,
achievement,
status,
etc.

affiliation,

3. General Needs: There are a number of needs which lie in the grey area between
the primary and secondary classifications. In fact, there are certain such needs
for
competence, curiosity, manipulation, affection etc.

Motivation and Behavior

Motivation causes goal-directed behavior. Feeling of a need by an individual
generates a feeling that he lacks something. This lack of something creates tension in the
mind of individual. To overcome this state he engages himself in a behaviour to satisfy his
needs. This is goaldirected behaviour.

NEED
TENTION

GOALDIRECTED
BEHAVIOUR

GOAL-FULFILMENT/
NEED SATISFACTION

FAVOURABLE
ENVIRONMENT

Goal-directed behavior leads to goal- fulfillment and the individual succeeds in

fulfilling his needs and thereby overcoming his tension in the favorable environment.
Behavior ends the moment tension is released. However, satisfaction of one need leads to
feeling of another need.
Thus goal-directed behavior is a continuous process.

FACTORS AFFECTING INDIVIDUAL PERFORMANCE

MOTIVATION
EXTRINSIC

ABILITY
RESOURCES
PERFORMANCE
SENSE OF
COMPETEN
CE

ROLE
PERCEPTION

REWARD
INTRINSIC

1. Motivation: Level of motivation derives an individual for work Motivation is based

on motive which is a feeling that an individual lacks something. This feeling creates some
sort of tension in his mind. In order to overcome this tension, he engages in goal-directed
behavior. Thus motivation becomes a prime mover for efforts and better work performance.
2. Sense of Competence : Sense of competence denotes the extent to which an
individual consistently regards himself as capable of doing a job. Sense of competence of
an individual depends to a very great extent on his locus of control. Locus of control
means whether people believe that they are in control of events or events control them.
3. Ability: Ability is expressed in the form of the following equation:
Ability = knowledge x skill
Knowledge refers to the possession of information and ideas in a particular field which may
be helpful in developing relationships among different variables related to that field . Skill
refers to expertness, practical ability or facility in action or doing something.
4. Role Perception: A role is the pattern of actions expected of a person in activities involving
others . Role reflects a persons position in the social system with its accompanying rights and
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obligations. Role perception is how he thinks he is supposed to act in his own role and
how others act in their role. There are two types of problems which emerge in role
specification:
Role ambiguity and role conflict. Role ambiguity denotes the state in which the individual
is not clear what is expected from him in the job situation. Role conflicts are the situation in
which the individual engages in two or more roles simultaneously and these roles are
mutually incompatible.
5.

Organizational Resource: Organizational Resources denote

various

types of

facilities physical and psychological which are available at the work place P hysical
facilities include la physical and psychological which are available at the work place. P
hysical facilities include layout of the work place and physical environment.

Role of Motivation
Motivation is one among the various factors affecting individual performance. All
organizational facilities will go waste in the lack of motivated people to utilize the
facilities effectively. The importance of motivation in an organization may be summed
up as follows:
1. High Performance Level: Motivated employees put higher performance as compared to
other employees. In a study it was found that motivated people employees worked close to
80-90 percent of their capability. High performance is a must for an organization being
successful and this performance comes by motivation.
2. Low Employee Turnove r: Motivated employees stay in the organization and
their absenteeism is quite low. High turnover and absenteeism creates many
problems in the organization.
3. Acceptance of Organisational Changes: Organisations are created in the society.
Because of changes in society, organisation have to incorporate those changes to cope up
with the recruitment of the time. When thesechanges are introduced in the organisation, there
is a tendency to resist these changes by the employees. However if they are properly

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motivated, they accept, introduce, and implement these changes ke eping the organisation on
the right track of progress.

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THEORIES OF MOTIVATION
1. Herzberg's theory of motivators and hygiene factors:
Herzberg (1959) constructed a two-dimensional paradigm of factors affecting
people's attitudes about work. He concluded that such factors as company policy,
supervision, interpersonal relations, working conditions, and salary are hygiene factors
rather tha n
motivators. According to the theory, the absence of hygiene factors can create job dissatisfaction,
but their presence does not motivate or create satisfaction.
In contrast, he determined from the data that the motivators were elements that
enriched a person's job; he found five factors in particular that were strong determiners of job
satisfaction: achievement, recognition, the work itself, responsibility, and advancement. These
motivators (satisfiers) were associated with long -term positive effects in job performance
while the hygiene factors (dissatisfiers) consistently produced only short-term changes in job
attitudes and performance, which quickly fell back to its previous level.

12

In summary, satisfiers describe a person's relationship with what she or he does,

many related to the tasks being performed. Dissatisfies, on the other hand, have to do with
a person's

13

relationship to the context or environment in which she or he performs the job. The satisfiers
relate to what a person does while the dissatisfies relate to the situation in which the person
does what he or she does.

2. Maslow's hierarchy of needs (Deficient theory of Motivation)

In 1954, Maslow first published Motivation and Personality, which introduced his
theory about how people satisfy various personal needs in the context of their work. He
postulated, based on his observations as a humanistic psychologist, that there is a general
pattern of needs recognition and satisfaction that people follow in generally the same
sequence. He also theorized that a person could not recognize or pursue the next higher need
in the hierarchy until her or his currently recognized need was substantially or completely
satisfied, a concept called prepotency. Maslow's hierarchy of needs is shown in Table 1. It is
often illustrated as a pyramid with the survival need at the broad-based bottom and the selfactualization need at the narrow top.
Table 1

Maslow 's hierarchy of needs

Level Type of Need

Examples

Physiological

Thirst, sex, hunger

Safety

Security, stability, protection

Love and

To escape loneliness, love and be loved, and gain

Belongingness

a sense of belonging

Esteem

Self-respect, the respect others

Self-actualization

To fulfill one's potentialities

(i) Physiological needs:

These are important needs for sustaining the human life. Food, water, warmth,
shelter, sleep, medicine and education are the basic physiological needs which fall in the
primary list of need satisfaction. Maslow was of an opinion that until these needs were
satisfied to a degree to maintain life, no other motivating factors can work.

(ii) Security or Safety needs:

These are the needs to be free of physical danger and of the fear of losing a job,
property, food or shelter. It also includes protection against any emotional harm.

(iii) Social needs:

Since people are social beings, they need to belong and be accepted by others. People
try to satisfy their need for affection, acceptance and friendship.

(iv) Esteem needs:

According to Maslow, once people begin to satisfy their need to belong, they tend to
want to be held in esteem both by themselves and by others. This kind of need produces such
satisfaction as power, prestige status and self-confidence. It includes both internal esteem
factors like self- respect, autonomy and achievements and external esteem factors such as
states, recognition and attention.

(v) Need for self-actualization:

Maslow regards this as the highest need in his hierarchy. It is the drive to become
what one is capable of becoming; it includes growth, achieving ones potential and selffulfillment. It is to maximize ones potential and to accomplish something.

3. ERG theory
Cla yto n Alder fer, expanding on Maslow's hierarchy of needs, created the ERG theory
(exis te nce, re lated ness a nd gro wt h).
Physiological and safety , the lower order needs, are placed in the existence
category, while love and self esteem needs are placed in the relatedness category. The
growth category contains our self-actualization and self- esteem needs. In addition to the
differences in categorizing human needs, ERG theory adds a regre ssion hypothesis to go
along with the progression hypothesis originally proposed by Maslow.
Alderfers regression hypothesis helped explain peoples behavior when frustrated at meting
needs at the next higher level in the hierarchy.

4. McClellands Theory of Needs :

David McC lelland has developed a theory on three types of motivating needs :

1. Need for Power

2. Need for Affiliation
3. Need for Achievement
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Need for Achievem ent

This need is the strongest and lasting motivating factor. Particularly in case of persons
who satisfy the other needs. They are constantly pre occupied with a desire for improvement
and lack for situation in which successful outcomes are directly correlated with their efforts.
They set more difficult but achievable goals for themselves because success with easily
achievable goals hardly provides a sense of achievement.

Need for Pow er

It is the desire to control the behaviour of the other people and to manipulate the
Surroundings. Power motivations positive applications results in domestic leadership style,
while it negative application tends autocratic style.

Need for affiliation

It is the related to social needs and creates friendship. This results in formation
of informal groups or social circle.
Basically people for high need for power are inclined towards influence and control.
They like to be at the center and are good orators. They are demanding in nature, forceful in
manners and ambitious in life. They can be motivated to perform if they are given key
positions or power positions.
In the second category are the people who are social in nature. They try to affiliate
themselves with individuals and groups. They are driven by love and faith. They like to
build a friendly environment around themselves. Social recognition and affiliation with o
thers provides them motivation.
McClelland observed that with the advancement in hierarchy the need for power and
achievement increased rather than Affiliation. He also observed that people who were at the
top,
later ceased to be motivated by this drives.

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5. Theory X and Theory Y of Douglas McGregor:

McGregor, in his book The Human side of Enterprise states that people inside the
organization can be managed in two ways. The first is basically negative, which falls under
the category X and the other is basically positive, which falls under the category Y. After
viewing
the way in which the manager dealt with employees, McGregor concluded that a managers view
of the nature of human beings is based on a certain grouping of assumptions and that he or
she tends to mold his or her behavior towards subordinates according to these assumptions.

Assumptions of theory X:
Employees inherently do not like work and whenever possible, will attempt to avoid
it.

Because employees dislike work, they have to be forced, coerced or threatened

with
punishment to achieve goals.
Employees avoid responsibilities and do not work fill formal directions are issued.
Most workers place a greater importance on security over all other factors and
display
little ambition.

Assumptions of theory Y:
Physical and mental effort at work is as natural as rest or play.
People do exercise self- control and self-direction and if they are committed to
those goals.
Average human beings are willing to take responsibility and exercise
imagination, ingenuity and creativity in solving the problems of the
organization.
That the way the things are organized, the average human beings brainpower is only
partly used.
On analysis of the assumptions it can be detected that theory X assumes that lower-order
needs dominate individuals and theory Y assumes that higher-order needs dominate

individuals. An organization that is run on Theory X lines tends to be authoritarian in nature,

the word
authoritarian suggests such ideas as the power to enforce obedience and the right to
17

command. In contrast Theory Y organizations can be described as participative, where

the aims of the organization and of the individuals in it are integrated; individuals can
achieve their own goals best by directing their efforts towards the success of the
organization.
However, this theory has been criticized widely for generalization of work and human behavior.

6. Equity Theory
As per the equity theory of J. S tacey Adams, people are motivated by their beliefs about
the reward structure as being fair or unfair, relative to the inputs. People have a tendency to
use subjective judgment to balance the outcomes and inputs in the relat ionship for
comparisons between different individuals. Accordingly:
If people feel that they are not equally rewarded they either reduce the quantity or
quality of work or migrate to some other organization. However, if people perceive that they
are reward ed
higher, they may be motivated to work harder.

18

Two Factor Theories

Douglas mcgregor introduced the theory with the help of two views; X assumptions
are conservative in style Assumptions are modern in style.

X The ory (pessimistic)

Individuals inherently dislike work.
People must be coerced or controlled to do work to achieve the objectives.
People prefer to be directed

Y The ory ( optimistic)

People view work as being as natural as play and rest
People will exercise self direction and control towards achieving objectives they are
Committed to
People learn to accept and seek responsibility.

Types of Motivation
Intrinsic motivation occurs when people are internally motivated to do something
because it either brings them pleasure, they think it is important, or they feel that what they
are learning is morally significant.
Extrinsic motivation comes into play when a student is compelled to do something or act
a certain way because of factors external to him or her (like money or good grades)

Incentives
An incentive is something which stimulates a person towards some goal. It
activates human needs and creates the desire to work. Thus, an incentive is a means of
motivation. In
organizations, increase in incentive leads to better performance and vice versa.

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Need for Incentives

Man is a wanting animal. He continues to want something or other. He is never fully
Satisfied. If one need is satisfied, the other need arises. In order to motivate the Employees,
the management should try to satisfy their needs. For this purpose, both financial and non
financial incentives may be used by the management to motivate the workers. F inancial
incentives or motivators are those which are associated with money. They include wages and
salaries, fringe benefits, bonus, retirement benefits etc. Non financial motivators are those
which are not associated with monetary rewards. They include intangible incentives like ego
-satisfaction, self- actualization and responsibility.

Types of Incentives
Financial Incentives
Wages and Salaries
Bonus
Medical reimbursement
Insurance
Housing facility
Retirement benefits

Non-financial
incentives
Competition
Group recognition
Job security
Praise
Knowledge of result
Workers participation
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 Suggestion system
Opportunities for growth

Motivation is the key to performance improvement

There is an old saying you can take a horse to the water but you cannot force it to
drink; it will drink only if it's thirsty - so with people. They will do what they want to do or
otherwise motivated to do. Whether it is to excel on the workshop floor or in the ' ivory tower'
they must be motivated or driven to it, either by themselves or through external stimulus. Are
they born with the self- motivation or drive? Yes and no. If no, they can be motivated, for
motivation is a skill which can and must be learnt. This is essential for any business to
survive and succeed. Performance is considered to be a function of ability and motivation,
thus:

Job performance =f (ability) (motivation)

Ability in turn depends on education, experience and training and its improvement is
a slow and long process. On the other hand motivation can be improved quickly. There are
many options and an uninitiated manager may not even know where to start. As a guideline,
there are broadly seven strategies for motivation.

There are broadly seven strategies for m otivation;

Positive reinforcement / high expectations
Effective discipline and punishment
Treating people fairly
Satisfying employees needs
Setting work related goals
Restructuring jobs
Base rewards on job performance

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Essentially, there is a gap between an individuals actual state and some desired state and
the manager tries to reduce this gap. Motivation is, in effect, a means to reduce and
manipulate this gap.

Role of m onetary and non m onetary incentives in the w orkplace

Managers are constantly searching for ways to create a motivational environment
where associates (employees) to work at their optimal levels to accomplish company
objectives. Workplace Motivators include both monetary and non-monetary incentives.
Monetary incentives can be diverse while having a similar effect on associates. One example
of monetary incentives
is mutual funds provided through company pension plans or insurance programs. Because it has
been suggested that
Associates, depending on their age, have different needs pertaining to incentives, traditional
incentive Packages are being replaced with alternatives to attract younger associates. This
paper will discuss how monetary and non- monetary incentives are influenced by career
stages and the problems associated with monetary and non- monetary incentives.

Monetary Incentives
The purpose of monetary incentives is to reward associates for excellent job
performance through Money. Monetary incentives include profit sharing, project bonuses,
stock options and warrants, Scheduled bonuses (e.g., C hristmas and performance- linked), and
additional paid vacation Time. Traditionally, these have helped maintain a positive
motivational environment for associates (Kepner, 2001).

Non-Monetary Incentives
The purpose of non- monetary incentives is to reward associates for excellent
job performance through opportunities. Non- monetary incentives include flexible work
hours, training, pleasant work Environment, and sabbaticals.

Incentives across Generations

Research suggests that desired monetary incentives differ for associates based on
career stage and generation. Surveys by the American Association of Retired Persons
(AARP) have
22

shown that most workers will work past retirement age if offered flexible schedules, parttime hours, and temporary employment (Nelson, 1999). The generations covered in the
AARP
surveys include Mature Workers (those born between 1930 and 1945), Baby Boomers (those
born between 1946 and 1963), Generation x'ers (those born between 1964 and 1981), and
Generation y'ers (those born after 1982). The information presented below shown nonmonetary incentives that are important to each generation covered in the surveys (Nelson,
1999).

Problem s with Monetary Incentives

Alfie Kohn (1993) argues that monetary incentives encourage compliance rather than
Risk-taking because most rewards are based only on performance. As a result, associates are
discouraged from being creative in the workp lace. Another argument Kohn presents is that
monetary incentives may be used to circumvent problems in the workplace. For example,
incentives to boost sales can be used to compensate for poor management. Employers also
may use monetary Incentives as an extrinsic rather than an intrinsic motivator. In other
words, associates are driven to do
Things just for the monetary reward versus doing something because it is the right thing to do.
This can disrupt or terminate good relationships between associates because they are
transformed from Co-workers to competitors, which can quickly disrupt the workplace
environment (Kohn,
1993).

Adoption of Non- Monetary Incenti ves

Generational non-monetary incentive differences shown below are affected by career
stage and proximity to retirement. The older the associate, the more the focus is placed on
retirement or supplementing Retirement income with part-time or temporary jobs. The
younger the associate, the more the focus is placed on job satisfaction and the work
environment. The bottom line is that incentives must be tailored to the needs of the workers
rather than using the
"one-size- fits-all approach, which is impersonal and sometimes ineffective.

23

Non-m onetary incentives desired by different generations of employees

Mature Workers (1920
-1945)
Flexible schedules
Part-time hours
Temporary hours
Baby Boomers (1946 -1963)
Retirement planning
Flexible retirement option
Job training
Sabbaticals
Generation xers (1964 - 1981)
Flexible work schedules
Professional development
Feed back
Tangible rewards
Work environment
Generation yers (post
1982)
Flexible work schedules
Professional development
Feedback
Tangible rewards
Work environment
Attentive employers

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Conclusion
Monetary and non- monetary incentives vary in their roles, effectiveness, and
appropriateness, Depending on the type of incentive. Alfie Kohn (1993) argues that incentives
actually hamper Associates and companies by decreasing associates' motivation, interest, and
job satisfaction. This is just the opposite of what incentives were created to do. Incentives
must take into account the workers for whom they were created. A balance between monetary
and non- monetary incentives should be
Used to satisfy the diverse needs and interests of associates. Creat ing a balance sheet
is a simple exercise that can be used for evaluating incentive programs. O n one side of the
balance sheet list all the incentive programs (both monetary and non-monetary) of your
organization. O n the other side list all the outcomes (whether desired or not) that can be
attributed to these incentives. Areas of improvement would be those outcomes identified as
undesirable.

Techniques of Motivation
Recognition of work
Job Security
Team Spirit
Competition
Status

Desire for recognition

When people receive recognition or affirmation for their efforts it has a
positive motivational effect on them.
Just a few words of encouragement are worth their weight in gold.

Current issues in Motivation

Compressed Workweek
Flexible work hours
Job sharing
Telecommuting
Pay of Performance S ystem
Open-book management
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Rewards and Recognition

Like a child being given a chocolate cupcake and a big hug after cleaning her room, rewards and
recognition can be powerful tools for employee motivation and performance improvement.
Many types of rewards and recognition have direct costs associated with them, such as cash
bonuses and stock awards, and a wide variety of company-paid perks, like car allowances, paid
parking, and gift certificates. Other types of rewards and recognition may be less tangible, but
still very effective. These "non- monetary" rewards include formal and informal
acknowledgement, assignment of
more enjoyable job duties, opportunities for training, and an increased role in decision- making.
This paper focuses on non- monetary rewards, and as we will see, these types of rewards
can be very meaningful to employees and so, very motivating for performance
improvement.
But first, let's take a quick look at the primary goals of rewards and recognition. Jack Zigon
defines rewards as "something than increases the frequency of an employee action" (1998). This
definition points to an obvious desired outcome of rewards and recognition: to improve
performance. Non- monetary recognition can be very motivating, helping to build feelings of
confidence and satisfaction (Keller 1999). Another important goal is increased employee
retention. An AS TD
report on retention research identified consistent employee recognition as a key factor in
retainin g top-performing workers. (Jimenez 1999).
To achieve desired goals, reward systems should be closely aligned to organizational
strategies (Allen and Helms 2002). For example, a company focused on a product
differentiation strategy could design their reward practices to foster innovation to provide
unique products or services, while a company focused on a cost reduction strategy might
focus on rewards for ideas to minimize or eliminate costs and employee stock awards to
foster an on-going cost reduction
emp hasis.
Zigon offers a variety of ways to reward desired performance and increase the likelihood of it
happening again, and more frequently than it would have, without these types of interventions.

His web s ite lists ideas that give managers a lot of flexibility both to offer rewards at various
cost
levels and to find rewards that match what individual employees will find valuable. To be really

26

effective, this takes time and effort on managers' pa rts, to get to know different employees' likes

and dislikes.
How effective is non-cash recognition? Various anecdotal evidence reports non- monetary
recognition as an important factor in retaining excellent employees and for improving
performance. A quick search of a news service database points to articles extolling various
perks such as an in- house chiropractor, spa gift certificates, days off, fancy parties and the use
of personal trainers. The givers of such perks see these rewards as a way to keep high
performing employees in a shrinking job market; and certainly companies like Walt Disney
World have documented the success of employee recognition programs (Lynch 2003).
However I did not find any strong empirical evidence comparing the relative benefits o f
monetary versus non- monetary rewards.
In the absence of such evidence, we can still consider non- monetary rewards as
part of comprehensive performance improvement strategy.
So what types of non- monetary rewards are the most effective? Bob Ne lso n, recognition
consultant and self-proclaimed "Guru of Thank You" reports research indicating that the type of
recognition employees appreciate most is to be recognized by people they work direct ly for. In
fact, 78% of employees indicated that it was very or extremely important to be recognized by
their managers when they do good work (Nelson 2004). The number one choice for recognition
is sincere praise given in a timely manner with specific examples. Allen and Helms' (2002)
research confirmed the importance of regular expressions of appreciation by managers and
leaders to encourage behavior
of employees to reach strategic goals; and this was true for each of the strategies they examined.
Mike Rushby, HR Vice President at Weyerhaeuser Company, sees developmental
opportunities, such as assignments to special projects as a powerful form of non- monetary
recognition (personal communication, February 17, 2004). Rushby believes that being chosen
to work on a task team to accomplish a company initiative is motivating because it helps
employees gain new skills and experiences, demonstrates trust in their abilities, and adds
variety to an individual's work. Weyerhaeuser uses the Performance Management Process and
Individual Development P lans to
help identify strong candidates for developmental opportunities.

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People are motivated to higher levels of job performance by positive recognition from their
managers and peers (Keller). Creative use of personalized non-monetary rewards reinforces
positive behaviors and improves employee retention and performance. These types of
recognition can be inexpensive to give, but priceless to receive.

Employee Motivation using Team Rewards

Team rewards present a great opportunity to help team bonding. With the proper
application of a reward and recognition program, we can help build a high-performance
team. But team rewards are not to be treated carelessly: misapplication could lead to
unhealthy competition, lack of cooperation, and ultimately severe financial consequences
for the organization. Team motivation and rewards programs should make up part of our
overall employee recognition program. we need to consider a mix of team and individual
rewards, and balance the mix between awards that encourage both cooperative and
competitive behaviours.The desired outcome of recognition programs is to improve
performance and improve employee retention.

Organisations that are following t he non-monetary rewards and recognition sa y t hat:

Recognition is a basic requirement for creating a positive work culture in
the organisation.
Recognition encourages and enthuses employees to believe in themselves and
deliver
quality.
Recognition is a powerful motivator that puts the recipient in the limelight which
leads to better performance.
The practice by organisations of honouring the employees achievements, singling out top
performers, and offering benefits to the families, inspire the employees to give their best.
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Motivation - the need for meaningful self- fulfillment, the need to create personal challenges
isn't only about inspiring people to work harder, it is also an effective way to retain people
and build loyalty. It is an important factor in fostering career progression.

Rewards:
Recognition for innovative ideas and entrepreneurial action from employees.
Honors for unique contribution to sustained high performance by an individual
or a team.
Membership to the exclusive club of top performers.
Recognition to not only super achievers but also employees with long service.
Eligibility for ``Real O ld Timers C lub.''

Genius Awards for employee children who fare well in studies .

Merits:
Motivates employees to perform better.
Costs the organization next to nothing.
Builds tremendous self-esteem among the employees.
Makes an employee and his family members proud of and loyal to the organisation.
Creates a positive atmosphere where change welcomed.

De-merits:
Remonstrates people if processes are not transparent.
Could result in unhealthy competition among employees.
May lead to shortsighted, hasty decision making.
Work intrudes on the home life of employees.
Will never work if monetary rewards are not substantial.
While recognition through non- monetary rewards facilitates participation, and
instills responsibility in the employees, it is important to ensure that the selection process
is fair and
29

transparent. It is also imperative that the practicing managers accept the fact that recognition
is a way of life and look for areas to award rewards.

The f ollowing are some of t he areas of non- monetary recognition practices that
an organization can take note of.
Treats: Free lunches, festival bonus, coffee breaks, picnics, dinner with the boss, dinner for
the family, b irthday treats etc.
Knick-k nacks: Disk accessories, company watches, tie-pins, broaches,
diaries/planners, calendars, wallets, T-shirts.
Awards: Trophies, plaques, citations, certificates, scrolls, letter of appreciation.
Social ack nowledgement: Informa l recognition, recognition of office get-togethers,
friendly greetings, smiles, e-mail, solicitation of advice, suggestions, use of company
facilities for personal projects.
Office environme nt: Redecoration, office with a window, piped music, flexible hours.
On the job: More responsibility, job rotation, special assignment, training, representing
the company at public for forums.
Tokens: Movie tickets, vacation trips, coupons redeemable at stores, early time off,
anniversary, dating and Birthday allowances / presents.
Practical examples:
1. Microsoft
Motivation comes from recognition
Compensation is a right, but recognition, however, is a gift which validates the importance
of their work.
Steve Ballmer (CEO)

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Employee Motivation
Why do we need motivated employees? The answer is survival (S mith, 1994).
Motivated employees are needed in our rapidly changing workplaces. Motivated employees
help organizations survive. Motivated employees are more productive. To be effective,
managers
need to understand what motivates employees within the context of the roles they perform. O f all
the functions a manager performs, motivating employees is arguably the most complex.
This is due, in part, to the fact that what motivates employees changes constantly (Bowen &
Radhakrishna, 1991). For example, research suggests that as employees' income increases,
money becomes less of a motivator (Kovach, 1987). Also, as employees get older,
interesting work becomes more of a motivator.
Most companies have it all wrong. They don' t have to motivate their employees.
They have to stop demotivating them.
The great majority of employees are quite enthusiastic when they start a new job. But
in about 85 percent of companies, our research finds, employees' morale sharply declines after
their first six monthsand continues to deteriorate for years afterward. That finding is based
on surveys of about 1.2 million employees at 52 primarily Fortune 1000 companies from 2001
through 2004, conducted by S irota S urve y Intelligence (P urchase, New York).
The fault lies squarely at the feet of managementboth the policies and
procedures companies employ in managing their workforces and in the relationships
that individual managers establish with their direct reports.

Three key goals of people at w ork

To maintain the enthusiasm employees bring to their jobs initially, management
must understand the three sets of goals that the great majority of workers seek from their
work and
then satisfy those goals:
Equity: To be respected and to be treated fairly in areas such as pay, benefits, and
job security.
Achievement: To be proud of one's job, accomplishments, and employer.

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Camaraderie: To have good, productive relationships with fellow employees.

According to various literature on motivation, individuals often have problems
consistently articulating what they want from a job. Therefore, employers have ignored
what individuals say that they want, instead telling employees what they want, based on
what managers be lieve most people want under the circumstances. F requently, these
decisions have been based on Maslow's needs hierarchy, including the factor of
prepotency. As a person advances through an organization, his employer supplies or
provides opportunities to satisfy needs higher on Maslow's pyramid.
Frederick has tried to modify Maslows need Hierarchy theory. His theory is also
known as two- factor theory or Hygiene theory. He stated that there are certain satisfiers and
dissatisfiers for employees at work. In- trinsic factors are related to job satisfaction, while
extrinsic factors
are associated with dissatisfaction. He devised his theory on the question : What do people
want from their jobs ? He asked people to describe in detail, such situations when they felt
exceptionally good or exceptionally bad. From the responses that he received, he concluded
that opposite of satisfaction is not dissatisfaction. Removing dissatisfying characteristics
from a job does not necessarily make the job satisfying. He states that presence of certain
factors in the organization is natural and the presence of the same does not lead to motivation.
However, their nonpresence leads to demotivation. In similar manner there are certain factors,
the absence of
which causes no dissatis faction, but their presence has motivational impact.

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