Why the operational level labour motivation is low in SkillsFootwear - Dissertation Example

?Literature Review 2 Introduction Skills Footwear & Co. was established in 1980 and has the core business of manufacturing men’s footwear productsfor the local market. The firm was very successful primarily due to its competitive edge of the exemplary quality, competitively priced products and sustainable volumes of the products produced. Moreover, according to Lloyd (2005, pp.929 – 943) the firm’s competitive advantage was its skilled labor and workmanship as the products were fully handmade. The organization had a total of 110 employees who reported to their middle level managers who reported to the entrepreneur thus having a comparatively flat organizational hierarchy. The operational level workers were on daily wages, which were the industry average rates. The management however received monthly wages. The Sri Lankan shoe industry has a total of 30 medium scaled and 3000 small-scaled manufacturers. The industry produces a wide range of shoes from canvas, sports and leather shoes and is also exporting finished products to EU and USA. As per a research done by the Development of Board Sri Lanka, the shoe industry witnessed a decline from 2007 onwards but the 2010 witnessed a surge in the export market due to the growth in the local tourist sector. However, the workforce in the industry is n issue. This is because the skill is making shoes completely by hand. But this is a difficult task and most firms have not incorporated technology into the process of production, which is not very lucrative for the workmen. According to Lloyd (2005, pp.929 – 943), this is because their production level is low and the firm cannot deliver larger orders and often cannot meet deadlines. Thus the craftsmen are not given enough bonuses and motivations. This in turn has caused the workers to drift away from the skill and the skill is not being handed over to their children. Moreover, the basic pay scale, recognition in society and the living standards of these workmen are not high which is yet again a de-motivating factor. The skill of these workers is safeguarded neither by the industry people nor by the government and this is a threat to the industry. Adding to this, there is not enough training and technology in the footwear industry especially in the SME sector. 2.2 Motivation The motivation level of the workers in the footwear industry of Sri Lanka is generally low. This is because the government and the industry have not given it enough importance, as they do not realize the power of labor. There is underproduction in the industry and it is primarily due to the fact that the labor are not working at full capacity nor are they receiving state of the art training in technological advancements. According to Lloyd (2005, pp.929 – 943), motivation is the essence and the core of management and is an effective tool to make the labor force perform more meaningfully. Motivation is important to produce the drive in a labor to give his 100% when he is working. Without motivation, a worker with the potential to produce 100% may not be able to do so as he doesn’t have the drive to do so. According to Hofstede (2005), it is the management’s responsibility to make the workers perform at their best, which can be done only with the correct sort of motivation so that the objectives of the firm may be accomplished. It is the motivation that the managers instill in the workers that enable them to work towards the vision and long-term strategies of the organization. Motivation is important because without it the employees lose focus and are not enthusiastic enough to work thereby they are not giving their maximum which in turn means wastage of resources for the firm as they are not producing to capacity. There is no connection of the employees with the firm and they will not go out of line for the benefit of their firm. But motivating the employees is a difficult thing to do. This is because every employee is motivated in a different manner. According to Hofstede (2005), some require monetary benefit while some need spiritual motivation and other need a bit of both. It is the management’s task to know their employees enough to be able to motivate them with the right motivational tools. According to Latham (2005, pp. 485-516), once the management understands what the employees need, they will be able to strike the willingness in the employees to work with utmost dedication. Such an enthusiasm will increase the productivity of every motivated employee and this in turn will increase the overall productivity of the firm. The employees increase their productivity and the firm could reach a competitive advantage due to this. Thus, according to Lloyd (2005, pp.929 – 943) motivation in employees is a very important element in improving the productivity of the firm as a whole, which is very essential in footwear firms in Sri Lanka who need to improve their productivity so that they could compete in the international market. 2.2.1 Importance of motivation “Motivation is a course of action taken to influence others to do their work through the possibility of gain or reward”. (Weiner, B 1992). Motivation is the key to making members of a group work in efficiently and with enthusiasm. It enables them to work wholeheartedly and with interest so that they become loyal to the firm they are working for and thus look out for the interest of the firm more than their own. 2.2.2 Motivation has many benefits. 2.2.2.1 Efficiency There is an enhancement in the efficiency of the workers. The employees will be motivated to produce more and be more enthusiastic in learning more and adding to their knowledge base. According to Lloyd (2005, pp.929 – 943), this is turn will be beneficial for the firm as the increase in the knowledge base and thus the skill of the worker will in turn cause an increase in the overall productivity of the individuals and thus the firm as a whole. 2.2.2.2 Voluntary cooperation According to Hofstede (2005), when the employees have been motivated effectively they feel that there is a bond with their firm and they will be more connected with it. Moreover they will put their heart and soul into their work and thus be able to take care of their firm like the firm takes care of them. This means that they will put in extra effort so that their firm does better and are not money-centered. This means that they will work with more dedication, which in turn will give results in the form of better productivity (Decenzo, 2001). 2.2.2.3 Labor turnover When employees are de-motivated they lose the interest to work effectively and thus lose interest I their work that they do. According to Lloyd (2005, pp.929 – 943) when an employee has been given the right type of motivation he gets more into his work and does not think of changing his job. He works with more dedication and is less likely to quit and take leaves of absences. Thus motivation makes sure that the employees remain in the firm for a longer time and that firms can make additional expenses on the training of their employees when the rate of turnover and absenteeism is low (Decenzo, 2001). 2.2.2.4 Employee relationship According to Hofstede (2005), the relationship between the management and the employees greatly improves because it is the management that actually assesses the problems that the employees are facing and gives them the motivation as per their needs. Thus when the employees are being rightly motivated it means that the management understands the employees correctly and this will improve the relationship between the employees and the management. 2.2.2.5 Employees and organization When the firm gives its employees good motivation, the employees are happy. When they are happy, they perform better and there is a general feeling of being happy with the firm. There will be less complaints against the organization as the employees feel that the organization is taking care of them. This is important to establish in Sri Lanka’s footwear industry, as there is a general feeling of de-motivation among the workers as their productivity is low. When the firm motivates the appropriately, they will of course contribute by increasing their productivity which the Sri Lankan industry actually needs. 2.2.2.6 Rate of accidents According to Steyn (2002, pp. 82-101), the rate of accidents in firms will decrease when there is the right amount of motivation among the employees. This is because the employees will work with full dedication and there is less chance that they will get involved in accidents, as they will be more focused at work. 2.2.2.7 Increase in quality and quantity With the employees more focused and happy at their workplace, they will work more efficiently which will in turn cause their productivity to increase. According to Hofstede (2005), once their productivity increases, they will be able to produce more products and the quality of their work will also improve, as they will more dedicated to their work. Thus the motivation of employees especially in the footwear industry is important as the job requires focus and quality is very important in the production of shoes. If the quality falls, the demand for the products will also decrease and the industry will not be able to compete in the global market. 2.2.3 The process of motivation Motivating the employees is a technical procedure and one cannot just replicate some other firm’s successful motivational plan. Every firm has to have their own structure, which varies as per the needs of their respective employees. Motivations can be in many forms. Firstly there can be monetary which include annual bonuses, monetary awards for good performance and gifts etc. the firm could also give a raise, profit sharing in the firm (Decenzo, 2001). The firm could also motivate its employees with non monetary benefits like paid leaves, maternity leave, flexible working hours, work from home facilities, foreign trips, training and development etc. employee empowerment, a healthy work environment, better communication between the management and the employees etc. which could in turn motivate the employees enough to make them work with more dedication. 2.2.3.1 Understand the need of employees Before a firm structures the motivation program for its employees, it is essential for the management to know and understand the needs of its employees. Some may need recognition for the work performed while other may need a monetary benefit. It is the management’s job to know which employee needs what sort of a motivation and give him exactly that so that he is motivated enough to bring a positive change in the way he works (Decenzo, 2001). This can only happen when the relationship between the employees and the management. There has to be proper communication and the appropriate employee empowerment so that the management can understand what the employee’s want but more importantly the management should have enough power to give the employees what they need so that they can be motivated effectively. 2.2.3.2 Build employee and management relation Employees can be de-motivated if they do not get along with their management. Even if they get the right monetary benefits, when their relationship with their employees is not healthy, they do not enjoy their work. Employees need to have a healthy work environment where their management values their work input and encourages their hard work. Moreover employees need a certain amount of empowerment so that they have a sense of belonging with the firm and that their promotions are not hindered. They need a fair treatment and equal opportunity so that they have the motivation to get ahead and perform at their best, which can be achieved only when there is a healthy relationship between the employees and the management. 2.2.3.3 Achieve the target of satisfying the employees According to Hofstede (2005), the management should not only work towards understanding the motivating factors of the employees but also understand the needs of the employees at a personal level. Such an understanding will help the employees adjust better in the firm and be satisfied in their job. Once their personal needs are understood and satisfied, the employees will be much more at ease and will be focused when their needs have been satisfied. To be able to do that the management has to take it up seriously and have a planned course of action so that the satisfaction of the employees is aligned with the strategic goals of the firm. 2.2.3.4 Ensure employee satisfaction Once the management understands the needs of the employees, it is the management’s job to design a strategy that would make the employee satisfied. However, according to Deresky (2007) just implementing the strategy is not enough, the management has to ensure that the strategies implemented are actually working and has positive effect on the employees. In case if the strategy implemented has a negative effect on the employees, then the management should alter the strategy so that the employees don’t suffer. Thus tracking the strategies is essential so that the actual effect of the strategy on the employees is assessed and acted upon. 2.2.3.5 Consult stakeholders The management should also consult the stakeholders and discuss the issues of the employees with them. This is because the management will have new ideas for handling the situation and the brainstorming may give a better solution and perspective for the problems that the employees are facing. 2.3 Motivational theories 2.3.1 Maslow’s need Hierarchy According to Deresky (2007) the theory is a very famous theory for motivation. Maslow’s theory has been used widely in industries by the administration and management to satisfy resolve the employee issues by understanding their problem situations and to understand there needs and wants. According to him, the needs of humans can be categorized into five stages. With such a theory the Sri Lankan footwear industry can understand the needs of the employees of the industry so that their production level is increased once their needs and wants are understood by the management. Firstly as per the hierarchy, human need start at the bottom of the hierarchy with the physiological needs. As per Hirshman & Bjork (1988, pp. 484-494), this need includes the need to eat and have shelter for himself and his family. This means that the firm should ensure that the employee is being paid enough that at least these needs of his are satisfied so that he has the basic motivation to work in the firm. The per capita income of Sri Lanka is decreasing especially in the industry as the employees are not technologically advanced and their production level is low and since they are paid on per day basis, their income depends upon how much they produce. If they are not paid enough per day, then even this need of theirs may not be satisfied and could be a reason for their de-motivation. 2.3.1.1Safety needs Once the physiological needs are fulfilled, they will not be a motivation for him to work. The next need of an employee is that he has to know that he is physically safe. These include the physical safety needs against any harm to his body and that of his family. Moreover, there is the safety need to protect his family against bodily harm. 2.3.1.2 Social needs Since man is a social animal and the society he lives in is a big influence on him, it is important that he is positively accepted and respected by the social environment he is in. for him the work environment is very important and he has to have a healthy workplace environment so that he is able to work with full dedication. As per Hirshman & Bjork (1988, pp. 484-494), a friendly work environment is essential for them so that they can increase their productivity. 2.3.1.3 Esteem needs According to Deresky (2007), this is when the employee needs the recognition to do well and be recognized for what he has done at work. Especially when his actions have resulted in benefit and profitability of the firm, then the employee would like to be appreciated for his hard work. This may be achieved by giving the employee promotions and rewards for his work. Such a motivation may cause him to work with more dedication. If the employee is not recognized for his work, this may act as a de-motivator and then he may not be so interested in working with dedication. The footwear industry requires such incentives for the employees so that they are motivated enough to work and give their best to increase their productivity. 2.3.1.4 Self-actualization According to Deresky (2007), this is a point where the employees are not influenced by external influencers that come from outside the firm. Rather, they are self-motivated by all the motivation provided to them and they are charged enough and work with full dedication. They are the ones that are motivators for other employees. Such an employee should be left to his means. As per Hirshman & Bjork (1988, pp. 484-494), he has reached a point of self-actualization where he will work hard and work towards his full potential. The footwear industry needs to bring all their employees to this level so that they reach a self actualization point and are able to self motivate themselves and work at full capacity. The footwear industry has to begin at the base of this hierarchy if they intend to motivate their employees. First they have to satisfy the needs of their employees that are at the base and then slowly climb up the hierarchy to reach the point of self-actualization for their employees. 2.3.2 Adam’s Equity Theory According to this theory, the employee makes an assessment of his inputs to the firm and weighs it with the output that he gets from his firm. The ratio of his input and output is important and contributes to the motivational level of the employee. As per the theory, employees compare their rewards, increments and bonuses etc with their co-workers and the level of comparative satisfaction they get. According to Deresky (2007), this theory also explains why other employees feel de-motivated when one of their colleagues is promoted. This theory may be applicable in the footwear industry of Sri Lanka where the workers are de-motivated because they are technologically less advanced. Even though they give in more effort and time because they are producing shoes that are completely handmade. But their remuneration is not giving them the same satisfaction as compared to the ratio of input and output of workers that have the technological facilities incorporated in their production processes. Additionally, as per Hirshman & Bjork (1988, pp. 484-494) the local workers may also be comparing their own input and output with global employees where less effort is compensated with more ratio-wise. 2.3.3 Vroom’s Expectation Theory According to Steyn (2002, pp. 82-101) in this theory, the performance of an individual depends upon the skills, knowledge and experience he has. It’s his expectations from the organization that the theory talks about. The emotional attachment and expectation the employee has from his own performance that is his desires and his needs and what he thinks he deserves from his input. The theory is in coordination with Maslow’s theory where he mentions that in order to know how to motivate the employee, it is essential to understand his desires, wants and needs so that the firm may be able to motivate him in the right manner and wit all that he is expecting from his firm. In the footwear industry this is essential because the employees are perhaps expecting more than they are getting that is why they are de-motivated and that is also why more workers are not coming into the same profession as it is not giving them the same level of satisfaction as the firms fail to understand the needs of their employees. 2.3.4 Two Factor Theories-McGregor According to Deresky (2007), the theory introduced by McGregor, states that three are some reasons at work that cause the employees to be satisfied at work while there are a set of other factors that cause dissatisfaction at work. He also states that these two sets of factors are independent of one another and increase in one will not cause a decrease in the other. If an employee’s satisfaction is increased, his dissatisfaction may not decrease with the same proportion. The theory has two aspects. The first is a set of motivators that is a challenging job, being recognized and responsibility, which helps the employee, be motivated so that he can perform better. Hygiene factors include those factors that are essential for the employee like security of the job, salary and other benefits etc. these are not factors that cause satisfaction but if they are not there, and then they cause dissatisfaction. The theory has been criticized and many researchers believe that satisfaction and dissatisfaction are not independent but in fact very much depend on one another. Moreover, as per Hirshman & Bjork (1988, pp. 484-494), the theory overlooks the differences of the employees like individual abilities or traits that uniquely influence the motivation and hygiene factors. Lastly the theory is based on the assumption that happy and satisfied employees perform better which may not be true at all times. 2.3.5 Balanced scorecard This is a strategically aligned management process, which is used as a performance measurement framework for employees. The firm’s objectives and the performances of the employees are compared using the scorecard to monitor the employee’s performance against the strategic goals of the firm. As per Hirshman & Bjork (1988, pp. 484-494), the scorecard needs close monitoring and once the management spots that the employee is under performing, the right motivation is used to bring him back on track and his performance is measured against the firm’s goals. According to Deresky (2007), if the employee is performing well, then management gives him motivation to encourage him and appreciate his dedication to the firm. In this way the firm is able to measure the performance of the employee and compare the performances of all the employees. In the footwear industry such a balanced scorecard monitoring will help the industry in understanding the needs of the employees and they will be able to know which motivational tools should be used to help the employees achieve their performance goals. 2.4 Types of Motivation 2.4.1 Intrinsic motivation This is when there is internal motivation involved. The employee is motivated because he has internal pleasure and satisfaction is his job. There are moral values involved in such a motivation. For instance, an employee gets an award for his extra ordinary performance. As per Hirshman & Bjork (1988, pp. 484-494), though there may not be any monetary involvement in this but the satisfaction and a sense of achievement the employee gets in such a motivation may cause him to perform better. In the footwear industry, the employees can be motivated with such rewards especially in a small scale business, giving monetary rewards may not always be possible. Such rewards are easier for the firm to afford and at the same time it keeps the motivational level of the employees high. The appreciation that he gets for his performance works as a motivating factor and he performs better 2.4.2 Extrinsic Motivation According to Latham & Ernst (2008, pp.181-198), this is when the employee is forced to do a particular thing so that he may get the motivation in terms of financial or non-financial job. It is these motivations that compel him to perform better. 2.5. Incentives There are different kinds of incentives that are involved in motivating an employee. These may be categorized into two main heads, which are financial motivators and non-financial motivators. Both types of incentives are essential for the motivation of employees. According to Latham & Ernst (2008, pp.181-198), the essence is in the right combination of motivation that the firm uses from these two different categories. INCENTIVES Financial Incentives Non-financial Wages and Salaries. - Competition Bonus - Group recognition Medical reimbursement - Job security Insurance - Praise Housing facility - Knowledge of result Retirement benefits. - Workers participation. - Suggestion system. - Opportunities for growth 2.5.1 Financial Incentives These include the right amount of wages and salaries that an employee should get as per the on going industry rates. Anything below the industry rate may cause the employee to be de-motivated and he may not perform at his best. In the footwear industry there is not enough financial incentive, which has caused the employees to be de-motivated. As per Hofstede (2005), the remuneration is low and is also on daily wages, which makes the monthly income of the employees rather unsteady especially in an economically unhealthy environment, which in turn has caused de-motivation amongst the employees. 2.5.2 Non-financial incentives Sometimes the employees are paid very well but they are still de-motivated at work. According to Latham & Ernst (2008, pp.181-198), this may be because they desire to have non-financial incentives like praise, job security, training etc which makes he employee more satisfied at work and gives him the comfort that he needs more than his financial motivation. References Decenzo DA. (2001). Fundamentals of Management: Essentials Concepts and Application. Prentice Hall, New Jersey. Deresky, H (2007). International Management: Managing Across Borders and Cultures (6th Edition). New Jersey; Prentice Hall Hirshman, E. & Bjork, R. (1988). The generation effect: Support for a two-factor theory. Journal of Experimental Psychology: Learning, Memory, and Cognition, Vol 14(3), pp. 484-494. Hofstede G (2005). Culture's Consequences: International Differences in Work-Relate Values. Sage. Latham, G & Ernst, C. (2008). The New World of Work and Organizations. Human Resource Management Review.Vol. 16, no. 2, pp.181-198 Lloyd, G. (2005) "Does Herzberg's motivation theory have staying power?", Journal of Management Development, Vol. 24 Iss: 10, pp.929 – 943. Latham, G. ( 2005). Work Motivation Theory and Research at the Dawn of the Twenty-First Century. Annual Review of Psychology. Vol. 56: pp. 485-516. Steyn, G.M. (2002). 'A theoretical analysis of educator motivation and morale.' Educare 31(1&2), pp. 82-101. Read More