Motivation and Pay into Gap Inc. and How to Change Low Morale - Case Study Example

Running Head: IS PAY A MOTIVATING FACTOR IN A WORKING ORGANISATION Is Pay A Motivating Factor In A Working Organisation of Institution] Is Pay A Motivating Factor In A Working Organisation Introduction Gap Inc.: Low Morale and Absenteeism Low morale and absenteeism of are serious problems of Gap Inc. that cuts across industry. On a distinctive day between 2 and 4% of employees at Gap Inc. fail to show up for work, which does not sound like a high rate of absence, but more time is lost for the reason that of low morale and absenteeism than through strikes and lockouts. The yearly costs of low morale and absenteeism in the United States are estimated to be $29 billion and a change of 4.99% in the national absence rate changes the gross national product by $10 billion. (London, 2003) A great number of studies are done to identify the determinants of low morale and absenteeism. Many variables are found to be considerably related to indices of absence, the results appear to be unstable across situations and time. The Way Incentives Work Every incentive program is based on a formula for enhancing motivation that engages four fundamental variables: effort, performance, outcomes, and satisfaction. The logic behind these programs goes something like this: employees at Gap Inc. will put in the accurate quantity of effort to meet performance hopes if these part time employees at Gap Inc. obtain the types of outcomes that include pay raises and promotions which will provide part time employees satisfaction. In simpler words, Gap Inc. should provide its employees what they want, and employees will work hard to get it. Effort => Performance => Outcomes=> Satisfaction Conversely, the problem with most incentive programs like of Gap Inc. is that they center exclusively on the submission of outcomes and overlook the three beliefs that are the key to making the motivation solution work: Can one do it Will outcomes be tied to one's performance Will outcomes be satisfying to one The first conviction compacts with the relationship between employee effort and performance. The second compacts with the relationship between performance and outcomes. And the third compacts with the relationship between outcomes and satisfaction. These three beliefs form the basis of the belief system of motivation and performance. Accepting that these beliefs are decisive preconditions for motivation helps to explain why incentive programs generally yield such lackluster results like in case of Gap Inc. Since employees do not always hold these beliefs to be true, attempts to improve motivation by using incentives cannot make the grade, even when the incentives are highly desirable ones. Types of Motivation Problems One cannot do it Motivation problem: Lack of confidence Associated feelings: Self-doubt Anxiety Frustration Outcomes are not tied to one's performance Motivation problem: Lack of trust Associated feelings: Skepticism Disbelief Mistrust Outcomes will not be satisfying to one Motivation problem: Lack of satisfaction Associated feelings: Anger Rebelliousness Low Morale and Absenteeism At Gap Inc. a major transformation attempt only makes difficult the situation. If any of three beliefs are shaky to begin with, organisational change at Gap Inc. can weaken them even further. The result is often serious motivation and performance problems, at a time when organisations can least afford them, and a resultant surge in the negative emotions associated with change. When an employee believes 'one cannot do it' for example, one may develop a lack of self-confidence and begin to experience many of the unpleasant feelings that go along with it: self-doubt, anxiety, and frustration. About a year into the change effort, one manager portrayed the inner turmoil one went through by comparing the restructuring to building a ship at the same time one is trying to sail it. (Mele, 2003) Worker beliefs that 'outcomes are not tied to one's performance' can also escort to noteworthy motivation problems, especially lack of trust. This is normally accompanied by feelings of skepticism or disbelief; precisely the emotions that another manager felt when one was told early on change effort that power would be allocated differently. Employee beliefs that 'outcomes will not be satisfying to one' often escort to a third major problem, chronic dissatisfaction, and to feelings of anger, rebelliousness, low morale and absenteeism. (Miner, 2002) Like as the negative emotions allied with change can often go undetected, the motivation and performance problems that cause them frequently remain hidden and unresolved. Due to this, managers who lead change are sometimes frustrated in their efforts. They fail to realize that it is not enough to appeal to the intellect of their workers. So managers must also win employees' hearts in order to implement change successfully. The reason behind why are motivation problems so difficult to uncover is that employees are afraid to speak about them or even admit that they exist like at Gap Inc. Though most employees know when they have a motivation problem, many feel that acknowledging it is tantamount to admitting failure, and, naturally, they do not want to appear weak or incompetent to their manager. The belief system approach is practical method that can help manager at Gap Inc. resolve these problems effectively. It takes the guesswork out of the search for motivation problems and alerts managers to the three principal types: Motivation problems caused by a lack of confidence. Motivation problems caused by a lack of trust. Motivation problems caused by a lack of satisfaction. The approach is based on the expectancy theory of motivation and on the research of Yale University professor Victor H. Vroom. In conducting Vroom's analyses of why motivation improvement so often fails, Vroom came to the conclusion that motivation at work depends on certain employee expectations or beliefs: that effort will lead to performance, that performance will lead to outcomes, and that these outcomes, when received, will be satisfying. (Thomas, 2004) Like other expectancy theorists, Vroom maintained that the tendency of people to act in certain ways depends on the strength of the expectation that their actions will be followed by certain outcomes and on the perceived value -- or "valence" -- of those outcomes. This combination of expectation and valence is what determines people's behavior, Vroom and colleagues argued, and unless both expectation and valence are present to some degree, there will be little or no motivation to act. For example, if a person wants a certain outcome but doesn't feel it can be achieved through one's efforts, then that person won't be motivated. Similarly, that person will also lack motivation if one believes that a certain outcome can be achieved but is undesirable. The application model relies on structured, facilitated meetings between managers and their direct reports to find the answers to the three basic questions that uncover motivation problems: Does the employee believe that one's effort will lead to the expected performance Does the employee believe that outcomes will be tied to one's performance Does the employee believe the outcomes will be satisfying Preconditions for Employee Motivation AT Gap Inc. managers have to note that an employee is motivated to perform when The employee believes that effort will lead to performance. The employee believes that performance will lead to outcomes. The employee believes that outcomes will lead to satisfaction. AT Gap Inc. once a manager has recognized a specific motivation problem, one can then work with the employee to find its cause and develop an appropriate solution. There are several reasons that this model performs far better than managers expect such as: This model prepares managers and employees for solving motivation problems by getting them to think about these issues before they meet. This model promotes effective change by clarifying expectations, uncovering hidden agendas, and managing emotions before they escalate. This model relies on the cooperation and involvement of the one person who knows most about the problem and what may be causing it: the employee. (Caruth, 2001) By gently forcing an accurate diagnosis of problems and their causes, the belief system model increases the prospects of finding good solutions to performance shortfalls. After all, it takes information to solve problems, and the goal of the belief system model is to uncover critical information about performance and motivation and to guide managers and employees in applying it productively. The model works to generate an environment in which managers and employees divide the responsibility for solving performance problems, and it fosters the kind of communication that helps managers maintain the critical preconditions for employee motivation: confidence in their ability to meet performance expectations, trust in others to tie outcomes to performance, and satisfaction with their job and the outcomes that they receive. Fredrick Taylor's Approach Fredrick Taylor led to a radical way of organizing the low-cost production of thousands of indistinguishable and relatively reliable products named as Taylorism. The innovative techniques involved learning how to organise a stable work force and complex machinery in order to produce thousands of copies of identical parts that could be assembled into a wide range of consumer products. It required learning how to take advantage of economies of scale, how to generate sufficient demand to make the investment required to make economies of scale profitable, and how to distribute the resulting products to a wide range of consumers. In terms of industrial organisation, the answer lay in large corporations organised to develop and manufacture new products more efficiently than the competition, source the necessary raw materials, establish distribution networks and develop and satisfy the necessary high, sustained demand. (Gorman, 2003) With Taylorism, an incorporated job such as a turn of-the-century clerk, who might have been a skilled worker involved in all aspects of office work--writing correspondence, arranging meetings, screening visitors, making decisions, supervising staff, taking dictation, and computing accounts--is broken into relatively autonomous components, with different laborers performing the different components. This leads to an overall reduction in labor costs, because typists and receptionists need less training and skill than office managers or accountants and are thus paid less. Clearly, cutting labor costs by fragmenting jobs has implications for the quality of the jobs; this is an issue we examine in the section on job quality. Taylor's approach cannot be implemented to Gap Inc. situation, as it will increase the problems by further declining the pays of the employees. It will lead towards further decline of employees' morale that will result in further absenteeism. Abraham Maslow's Theory Abraham Maslow appears from the humanist perception within psychology of motivation. He gives an apparently individualistic approach to the subject of motivation. In spite of looking at internal factors as the driving system for behaviour, Maslow was interested in the cognitive factors that force people towards certain forms of behaviour. Maslow identified the needs that forced people into behaviour beyond the most fundamental fulfillment of survival needs. Maslow anticipated a hierarchy of needs with fundamental survival needs at the lower level and other psychological needs towards the top. According to Maslow, humans have developed beyond the requirements of simple survival and are now driven towards greater achievements; the highest of these is self-actualisation and satisfaction. This is the desire to achieve all that it is possible for an individual to achieve, which is present in all humans. Maslow qualifies the argument with four imperative points: 1. The needs at the bottom of the hierarchy must be fulfilled before the needs higher up can be considered; i.e. one must take care of one's physical needs before one can begin to explore one's cognitive/achievement or aesthetic needs. A lack of food may make it difficult to concentrate on one's work. 2. Although all of these needs are present in all humans, all of the time, they are linked to development, such that one need may predominate over another at certain stages of development. For example, babies will be more concerned with the satisfaction of basic needs (food), than with the need for achievement. 3. Whilst needs at the bottom of the hierarchy are physiological, the higher up the hierarchy one goes the less they are related to biology and the more they are related to life experience, which will inevitably be different for each individual. This partially explains why it is that some individuals will achieve more than others will. 4. There are significant personality differences that will help to explain why some individuals are more capable of achieving more than others. Maslow identifies a list of self-actualisers as well as a list of characteristics that such people possess. Maslow gave several examples of the sort of behaviour or approach to life that would lead to self-actualisation: Taking responsibility Being honest Being prepared to try new experiences Listening to one's own feelings Being prepared to be unpopular (White, 2000) So Gap Inc. according to Maslow should provide the grounds to their employees where the employees can fulfill at least initial levels of needs. In this way they will feel satisfied and motivated. Fredrick Herzberg's Theory of Motivation Fredrick Herzberg posited that the single technique to motivate employees in long-term is to provide them demanding work where employees can believe responsibility. Herzberg get to this conclusion after questioning employees and asking them two sets of questions: (a) consider of a time when one felt particularly good about one's job; and (b) consider of a time when one felt particularly bad about one's job. In each case why did one feel that way Herzberg found that there are "two dimensions to job satisfaction: motivation and hygiene." In the case of Gap Inc. hygiene refers to variables that relate to an employee's working atmosphere at Gap Inc.: Gap Inc. policies, supervision, pay and working conditions. Fredrick professed the hygiene factors not as motivators, but as spot of possible dissatisfaction. (Hanlan, 2004) Fredrick asserted that if managers satisfactorily address hygiene issues, there is greater employee satisfaction. If, in addition to providing the indispensable hygiene, employers also put in place a variety of tools for motivating their employees, the employees will be even more content and more productive. Although one often thinks of pay as a motivator, Fredrick did not classify it as such. Rather, Herzberg distinguished pay as a pusher that either legitimate behavior or rewarded behavior, but did not generate any internal motivation among the employees. The factors that motivated employees included mainly of internal, non-tangible rewards, as contrasting to external rewards, or hygiene factors. Both impressions are significant to the debate of the psychology of motivation and can be clarified in terms of intrinsic and extrinsic motivation. (Butkus, 1999) Intrinsic motivation relates to the degree to which an employee desires to work well in one's job in order to achieve internal satisfaction, where as external motivation refers to external, material rewards that affect to the working atmosphere. So according to Herzberg the only way to really motivate employees is to present them challenging work. This is the notion of employee empowerment and should be used by the mangers of Gap Inc. as one strategy for long-term success. Is Pay A Motivating Factor In A Working Organisation The pay and motivation controversy worries the dispute over the use of pay and reinforcement to motivate people's performance and interest. In business, managers repeatedly offer enticement to employees for exceptional performance. Over the past 30 years, a number of psychologists have questioned the wisdom of these practices. The concern is that pay undermines employee's motivation and performance. If employees are paid more for doing an interesting task, the claim is that employees will come to like the task less and engage in it less once the pay are no longer forthcoming. The contention that pay undermines motivation rests on a body of experimental research from social psychology. The negative effects of high pay occur under a circumscribed set of conditions and that, when appropriately arranged, pay can be used to enhance motivation and performance. The research on the topic indicates that pay can be used to increase motivation and performance on tasks that are of low initial interest. On high-interest tasks, positive effects are obtained when participants are verbally praised for their work and tangible pay are offered and explicitly tied to performance standards and success. The only negative effect occurs when tangible pay signifies failure or is only loosely tied to behavior. Negative effects of high pay can be easily prohibited and that managers can use pay effectively to motivate performance and interest. Although the negative effects of high pay are highly circumscribed, many researchers have fought against the use of pay. To understand this reluctance to use positive incentive systems, one points to the socio-historical context of the pay and motivation debate. Studies on negative effects of high pay were instigated at a time when many employees were apprehensive of science and technology, particularly as they applied to human behavior. A prominent view in the 1970s concerned employees as willful and self-determined; a major goal was to seek self-actualization. Any external influences including the use of pay were seen as harmful to an employee's psychological development. It is within this context that experiments on pay and motivation were conducted, and although the findings were weak, the research was interpreted as evidence for the harmful effects of pay and reinforcement. This view led to inertia in management. (Cameron, 2002) The design programs that used positive reinforcement to instill habits and values, individuals involved in performance management were being told that doing nothing was better than using an incentive system. Pay and reinforcement can be used to promote desired behavior and, at the same time, maintain employees' interest. In simpler words, there is no need to prohibit the use of pay in the organisation including Gap Inc. References Butkus T. Raymond, Thad B. Green, (1999), Motivation, Beliefs and Organisational Transformation. Quorum Books. Westport, CT. Cameron Judy, Pierce W. David, (2002), Pay and Motivation: Resolving the Controversy. Bergin & Garvey. Westport, CT. Caruth L. Donald, Handlogten D. Gail, (2001), Managing Compensation (And Understanding It Too): A Handbook for the Perplexed, Quorum Books. Gorman Phil, (2003), Motivation and Emotion. Routledge. New York. Hanlan Marc, (2004), High Performance Teams: How to Make Them Work, Praeger. London Manuel, (2003), Job Feedback: Giving, Seeking, and Using Feedback for Performance Improvement, Lawrence Erlbaum Associates. Mele R. Alfred, (2003), Motivation and Agency, Oxford University Press. Miner B. John, (2002), Organizational Behaviour: Foundations, Theories, and Analyses, Oxford University Press. Thomas Neil, (2004), The Concise Adair on Teambuilding and Motivation, Thorogood. White Geoff, Druker Janet, (2000), Reward Management: A Critical Text, Routledge. New York. Read More