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Table of Contents

1.0 Introduction ................................ ................................ ................................ ........................... 2

1.1 Background................................ ................................ ................................ .............................. 2 1.2 The Case ................................ ................................ ................................ ................................ .. 4 1.3 Significance of the Issue ................................ ................................ ................................ ........... 6 2.0 Review of Literature ................................ ................................ ................................ ............... 7

2.1 Theories/Concepts/Models ................................ ................................ ................................ ...... 7 3.0 Analysis and Discussion ................................ ................................ ................................ ........ 10

3.1 Case Analysis and Discussion ................................ ................................ ................................ .. 10 3.2 Theoretical Analysis and Discussion................................ ................................ ........................ 11 4.0 Conclusions and Implications ................................ ................................ ............................... 13

4.1 Conclusions................................ ................................ ................................ ............................ 13 4.2 Implications for Managers/Practitioners ................................ ................................ ................ 14 5.0 List of References ................................ ................................ ................................ ................. 15

Analysis of an Organizational Issue

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1.0 Introduction
1.1 Background
This paper is based on an issue related to a group of four employees of an organization. This issue is related to the motivation of the group concerned and its impact on the group concerned. It will first present the case and second review the related literature. It will analyze and discuss the case in light of the presented theories/concepts and models. Finally it will be concluded with conclusions/implications for the organizational practitioners. The primary area of concern of this issue is the Motivation. However the incident is tightly linked with Personality, Attitude and the Job Satisfaction. This paper describes and analyses a real incident still happening in one of the technology based organizations in Sri Lanka. Due to the fact that being an ex-employee of the organization, I have the first hand information about the scenario and its current status. With the advancements of ICT and globalization during the last couple of decades, a new set of organizations emerged where technology as the basis. The majority of the people worked on these types of organizations were knowledge based employees. These organizations usually provided their employees with better salaries, healthcare facilities and opportunities for social networking. The employee concerns over their wage and other facilities were lesser in these organizations compared to other industries. Still these organizations severely suffer from employee turnover problems. Especially for knowledge based organizations, as in the case of the company I have discussed in the paper, this turnover problem has been very critical since those organizations were very much dependent on these technology experts in respective domains. This report is based on the incident of four pioneering members of the technology division of the given organization leaving the company due to this aggravating problem. This particular organization suffered badly due to this sudden loss of human capital. The main reason for this problem is the lack of motivation and job satisfaction of this group of employees due to underutilization.
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It was observed that these technology experts getting de-motivated during their last period with the organization, when they were not given enough challenges and opportunities to work on and improve themselves. This particular organization managed their resource pool well when it was a small team in early days but had no proper plans to do the same once it decided to expand the team size rapidly during last couple of years. If the organization continues without properly addressing this issue, they will lose majority of their experienced employees in the near future who are the domain experts of the business. The report is concluded with a set of suggestions for the company to retain this knowledge base. The issue falls under the Secondary Motives of the motivation theory. The group of people discussed in the paper can be identified as having the Achievement Motive. They are highly satisfied with their Accomplishments. Given the choice between a simple task with a good payoff for accomplishment and a more difficult task with a lesser payoff, other things being equal, this group of people may choose the latter. This type of behavior can be analyzed using the Content Theory of Motivation in particular. However, these theories basically focuses on the de-motivation of people due the unrealistic and exceeding workloads rather than describing this type of situations where the employees complaining about less, unchallenging and routine type workload.

Analysis of an Organizational Issue

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1.2 The Case


The organization discussed in this paper started ten years back with four employees. The formation of the organization was based on the mutual understanding with a foreign based company which was the market leader in financial services in the region. The organization, XYZ basically provided information technology related services to its mother company which was operating in multiple countries in the region. The small team of employees in the XYZ Company managed to gather the domain specific knowledge gradually by working in global operations. After about five years of operation, the XYZ Company was in a stable position both financially and technically. During this period they managed to make strong relationships with their mother company and its regional centers. By this time, the management of the company decided to increase the number of employees working in the organization up to thirty and had relocated their company premises in Colombo. During the next couple of years, the senior management team of the company focused on the other potential markets outside the region and embarked on a growth plan. During this second phase of expansion, the company implemented a rapid growth plan. This was done after about two years of evaluation about the potential markets or the emerging markets as they technically define them. During the next two years, the company XYZ managed to expand its team of employees from fifty to two hundred and fifty employees. Though the senior management of the XYZ Company had paid couple of years of scrutiny into the business domain and the potential markets, they had paid very little attention on the behavior of the existing employees and the possible repercussions of such huge expansion on them. The issue that is being discussed in this paper is one of such major outcomes that resulted in by that expansion drive. The four employees who play the main roles in this discussion made such an impact on the organization since its inception. These four employees played key roles within the company and possessed the domain specific business knowledge that was so crucial to the competitive advantage of the XYZ Company over its rivals. When the company was with a team of around thirty employees, this group of four managed their teams, provided them with domain, technical and business guidance. The management always provided these four capable employees with many challenging tasks. They engaged in

Analysis of an Organizational Issue

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Research and Innovation (R&I) activities, worked on customer sites with unfamiliar technologies and sometimes was not afraid to take considerable amount of risk. Every employee of the organization, knew the capabilities if these four and the mutual understanding was at a high level. Though there were so many challenges in the initial stages of operation with minimal level of domain specific understanding, this group could drive the entire workforce successfully with so much commitment and result orientation The nature . and the personality of those four employees were such that they got highly motivated with those challenges and the successful accomplishment of them. They had no complaints of working for more than sixty hours per week as long as the work they were assigned was challenging and they could expand their knowledge and expertise with that. With the sudden increase in team size, those employees who were used to that type of challenging assignments were gradually de-motivated due to the lack of opportunities. They could see very little potential within the organization to personal growth. The tasks were not challenging enough for them to exploit their fullest potential. The route type of assignments with less opportunity for adding value to both the company and to the individuals made them highly de-motivated. This group of four employees had informed the senior management of XYZ Company on the situation and their growing frustration over the direction that the company is moving and their expectations. However, the management was of the view that they should move into new markets with the existing solutions without working on new and innovative solutions. Though this approach was profitable on short term basis, it would create detrimental consequences of the continuation and even the survival of the organization in the long run. Finally these four employees decided that they would better leave the company since the company objectives and the vision were not going to align with the employee expectorations in the future operations. Ultimately, the company lost its most precious assets since its inception and they had to deal with a very difficult situation of filling a significant knowledge gap that they could hardly accomplish. Nobody could fill the gap of losing those four employees and the company made continuous failures even in maintaining and servicing existing customers.

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1.3 Significance of the Issue


Employees work for organizations. Based on the organization type, the employees are expected to provide their knowledge, skills or labor to the organization and in return they get the wages or salaries. Practically any organization experiences the employee turnover problem to certain degree. They usually have management level plans to deal with such situations like conducting major recruitment drives. By such initiatives, those organizations manage to maintain the required amount of workforce consistently. However, this management practice cannot be applied to all the types of organizations. Especially for Knowledge based organizations, like those engaged in Research and Development activities and those who are specializing in certain technologies, it is hard to simply replace an employee with another. The knowledge, the experience and the specific skills of the given employee can seldom be expected from the new employee. Certain employees are unique in their approach to work and can never be replicated. In knowledge based learning organizations, there is a key set of employees who are the backbone of the organization. They are instrumental in creating the core competency of the organi ation. z When this type of employee or a group of employees leave an organization, it is practically impossible to find suitable replacements with similar capacity. The XYZ Company which is being discussed in the paper had to deal with such difficult situation due to the scenario described in the previous case section. The situation got aggravated when the teams that directly worked with those individual employees also got demotivated due to the lack of technical guidance they used to get and the lack of opportunity to any growth in the employment. Ultimately the unplanned expansion initiative resulted in a higher number of new employees without any business domain specific knowledge or technical expertise. It is obvious for any technology based organization to compete in the tremendously completive market conditions; they need to possess a team of highly skilled and motivated team of employees. Due to the mistake they have done in the growth phase, now the company will have to fight for the survival rather than competing for a larger market portion. The managerial attention is needed promptly focusing on the retention of the remaining senior employees if they wish to be competitive as they used to be. They simply need to pay more attention on human behavior rather that concentrating only on the business expansions.
Analysis of an Organizational Issue Page

2.0 Review of Literature


2.1 Theories/Concepts/Models
The issue that is being discussed in the paper is directly related to the work motivation. A group of highly efficient and effective employees of high caliber leaves the company which is highly technology based and greatly dependent on individual proficiency and expertise. This group of four employees was instrumental in developing the organization from the grass root level to a stable and profitable business unit. When discussing about the work motivation, it is important to understand the levels of needs of employees within an organization. Motivation may be defined as a process that starts with a physiological or psychological deficiency or need that activates a behavior or a drive that is aimed at a goal or incentive. Various human motives can be broadly categorized into three sections as Primary, General and the Secondary motives. Primary motives must be unlearned and it must be physiologically based. On the other hand, the General motives must be unlearned but not physiologically based. According to psychologists, the Secondary motives are unquestionably the most important. Secondary motives are closely tied to the learning concepts. The learning principle of reinforcement is conceptually and practically related to motivation. Examples of key Secondary needs include, Need for Achievement, Need for Power, Need for Affiliation, Need for Security and Need for Status. The issue in the XYZ Company occurred due the failure of the management to address the aforementioned Secondary motive of Need for Achievement of its key employees while engaging in the expansion drive. The group of four employees of this organization had a higher value for this particular motive. Driven by their personality and attitudes, they always wanted to engage in activities as follows:

Doing better than competitors Attaining or surpassing a difficult goal Solving a complex problem Carrying out a challenging assignment successfully Developing a better way to do something
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Analysis of an Organizational Issue

They got highly motivated by engaging in these types of activities demonstrating their need for achievement. The Achievement Motive has not been recognized for as long as the other motives like the Power Motive. However, more is known about achievement than about any other motive because of the tremendous amount of research that has been devoted to it over the years. Achievement may be defined as the degree to which a person wishes to accomplish challenging goals, succeed in competitive situations, and exhibit the desire for unambiguous feedback regarding performance. The group of four employees always demonstrated high Satisfaction with Accomplishment. High achievers generally find accomplishing a task intrinsically satisfying. They do not expect or necessarily want the accompanying material rewards. A good illustration of this characteristic involves money, but not for the usual reasons of wanting money for its own sake or for the material benefit that it can buy. Rather, high achievement oriented people look at money as a form of feedback or measurement of how they are doing. In this scenario of the XYZ Company also, the management has attempted to negotiate with the group of four employees providing them with monetary benefits. However, as explained in the literature, they were not merely motivated by those types of fiscal benefits and were not ready to compromise their values and norms with such packages.

Maslows Hierarchy of Needs The situation that was arisen in the XYZ Company can be analyzed with the Maslows Hierarchy of Needs. Under this, the group of four employees had an issue in Need for SelfActualization. Maslow portrays this level as the culmination of all the lower, intermediate, and higher needs of humans. People who have become self-actualized are self-fulfilled and have realized all their potential. Self-actualization is closely related to the self-concepts. In effect, self-actualization is the persons motivation to transform perception of self into reality. These employees had understood their self-potential and proficiencies. They wanted to exploit those capabilities to the betterment of the organization while improving themselves at the same time. When they were deprived of such opportunities of growth they got highly demotivated and frustrated.

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Herzbergs Two-Factor Theory of Motivation Herzbergs theory can also be used to analyze the situation occurred in the XYZ Company. Herzberg outlines a set of hygiene factors like company policy and administration, supervision, salary, interpersonal relations and working conditions. These hygiene factors prevent dissatisfaction, but they do not lead to satisfaction. In other words, hygiene factors do not motivate. Herzberg also lists a set of motivators like Achievement, recognition, work itself, responsibility and advancement. According to Herzbergs theory these factors motivate employees on the job. The theory asserts an individual must have a job with a challenging content in order to be truly motivated. This is exactly the requirement of those four employees of the organization. They strived for achievements and advancement continuously with challenging job opportunities. Once they noticed that these types of opportunities are going to miss out in future due to the new business objectives of the organization, they got de-motivated and discouraged.

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3.0 Analysis and Discussion


3.1 Case Analysis and Discussion
Any organization undergoes different stages in its life cycle; inception, survival, growth, resource maturity etc. Up to the growth phase, the XYZ Company was progressing quite steadily benefiting both the employees and the organization. Those management level decisions taken at the growth stage of the organization without long term vision has resulted in losing group of highly experienced and skillful employees who were the pillars of the organization. Certain organizations can manage this type of critical situations when they are basically task oriented. The vacancies of the group of employee who left the company can be replaced with a group of newly recruited employees. But for technology oriented organizations like the XYZ Company who is highly dependent on the individual employee skills and their knowledge, it is almost impossible to survive from such a collapse. Actually the issue was not merely due to the expansion of the team size. No organization can compete in the ever changing market place with tremendous uncertainty without making timely changes within their organizational structure. The issue was actually with managing the growth and the strategies in place to cope with the rapid growth in the team size. Any organization is consists of groups of employees with different attitudes, personalities and motives. Certain employees are satisfied with route type of work assignment under technical guidance at each stage of operation whereas there are some other employees who are highly motivated with achievement and accomplishments. These types of employees can rarely be motivated with mere financial benefits but challenging work assignments. These employees can hardly be replaced with proper alternatives because they are unique in skill set and the experience. However the previous set of employees could easily satisfied with monetary benefits or some other facilities. This group of employees is the majority in any type of organization and can easily be replaced with newly recruited employees. The management could have understood the human behavior of this group of experienced employees who have being the main asset of the company beforehand and effectively phase out the expansion plan accordingly.

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3.2 Theoretical Analysis and Discussion


Over the years behavioral scientists have observed that some people have an intense need to achieve whereas others perhaps the majority, do not seem to be as concerned about achievement. David C. McClelland and his associates at Harvard University studied this urge to achieve for over twenty years. His extensive research led him to believe that the need for achievement is a distinct human motive that can be distinguished from other needs. According to David C. McClellands research, achievement motivated people have certain characteristics in common: The capacity to set high (stretching) personal but obtainable goals The concern for personal achievement rather than the rewards of success The desire for job-relevant feedback rather than for attitudinal feedback

As outlined above, a significant characteristic of achievement-motivated people is that they seem to be more concerned with personal achievement than with the rewards of success. They do not reject rewards, but the rewards are not as essential as the accomplishment itself. They get a bigger kick out of winning or solving a difficult problem than they get from any money or praise they receive. To achievement-motivated people, money is valuable primarily as a measure of their performance. It provided them with a means of assessing their progress and comparing their achievements with those of other people. The characteristics of the group of four employees of XYZ Company are best described in the above analysis by David C. McClelland. The issues occurred due the failure of the management to understand these behavioral facts and address them accordingly. The management had tried to negotiate with the group of employees with higher fiscal and other benefits but according to their characteristics and motives, the monetary benefits were not going to motivate them to remain in the organization. As described in the literature review section, those content theories of work motivation can be used more effectively than process theories. Those employees were having needs at the Self-actualization stage of the Maslows Hierarchy of Needs. They had identified their potential and capabilities and wanted to exploit them for the betterment of the organization.

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Herzberg in his theory of motivation has listed a set of motivators like Achievement, Recognition, Work itself, Responsibility and Advancement. According to Herzbergs theory these factors motivate employees on the job. The theory asserts an individual must have a job with a challenging content in order to be truly motivated. This was exactly the requirement of those four employees of the organization. They strived for achievements and advancement continuously with challenging job opportunities. Once they noticed that these types of opportunities are going to miss out in future due to the new business objectives of the organization, they got de-motivated and discouraged.

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4.0 Conclusions and Implications


4.1 Conclusions
Based on the analysis, it is possible to derive some conclusion of the case. There is no question about the requirement of the organization to expand its workforce. Once the organization has achieved the required stability in the existing market place, it is obvious that the management need to look into the other potential markets out of the familiar region. However that expansion should have been introduced in the company only after evaluating the behavioral characteristics of its employees. The management needs to understand that the expansion of a knowledge based organization is different from a task-oriented company. For a knowledge-based organization, losing a single employee is crucial since it creates a gap in the overall operations. Especially those achievement-motivated employees are so important since they contribute immensely to the core competencies of an organization. Those employees usually have the capacity to set high personal but obtainable goals. They have the concern for personal achievement rather than the rewards of success. They desire for job-relevant feedback rather than for attitudinal feedback. It is vitally important for the management of any organization to identify this set of employees and treat them accordingly. It is hard to motivate them with usual benefits or facilities. Their requirements are continuous challenging work, successful task

accomplishment and achievement. Organizations need to make sure that they do not disturb the working conditions of these types of employees when the organizational management makes radical structural changes.

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4.2 Implications for Managers/Practitioners


Managers need to thoroughly understand the behavior of its employees and their personalities and attitudes before introducing radical changes in the organizational structure. In this particular case of organizational expansion, the management decision to increase the workforce is a required from the company point of view. The group of four employees discussed in this paper has no objection for the expansion drive as long as they get the challenging work assignment that they used to get. The management encountered the issue discussed here when they tried to implement that growth plan without considering the employee objectives. For a knowledge based company, the human factor is the most significant asset. Employees are motivated differently based on their personality and attitudinal traits. There is a group of employees within any organization who are achievement-motivated. These types of employees are usually highly effective, efficient, skillful with vast experience and resultoriented. They get highly motivated with continuous work assignments and successful task accomplishments. They rarely can be motivated only through fiscal benefits. These types of employees are so crucial for an organization due to their uniqueness and capabilities. It is so hard to replace this type of employee with an alternative new recruitment. Therefore, the management should make decisions without disturbing the way these types of employees are used to work. By doing so, they can avoid this type of adverse situations which might result in a total failure of any organization.

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5.0 List of References


David McClelland. Human Relations Contributors. Motivation Team Development. Retrieved January 22, 2011, from http://www.accelzeam.com/human_relations/hrels_06_mcclelland.html

Fred Luthans, (2002). Organizational Behavior. New York: McGraw-Hill International Edition.

Richard L. Daft, (2009). Principles of Management. Washington, DC: Cengage Learning.

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