Assistance at National Investment and Insurance - Essay Example

Executive Summary: The present report analyses the provided case study and identifies the lack of motivation among the Assistance Officers as the prime problematic. Reviewing recent literature regarding motivation reveals - i) employee motivation or vision as a factor that significantly contributes to improvements in the perceived service quality of any company through enhancing learning regarding service provision to a better extent; ii) performance bases pay has very strong motivational impacts on performances particularly for employees located low on the income ladder and iii) The myths about rewards’ de-motivating potential are dispelled and it is identified that such negative effects to be possible only under certain specific conditions of rewards being tangible and expected and most importantly for the present context (for reasons to be discussed later), loosely associated to performance levels. With rewards being significantly performance dependent, positive effects were found on intrinsic motivation measures. An evolution of the concept of motivation is briefly outlined along with the major theories to enhance the perspective regarding the present context as well as justify the identification of the lack of motivation as the fundamental problematic for the ITS of NII. Based on the theories of motivation, two features of the part-time employment policy – no dependence of pay on performance and the lack of information regarding intrinsic benefits of working part-time in terms of future full time employment possibility, are identified as the fundamental problems that create an environment that does not provide any incentives to perform better. The report suggests redesigning the employment scheme and making a part of the pay dependent upon performance, i.e., introducing financial rewards as incentives to perform better as the first step. Secondly, it is suggested to introduce the intrinsic reward of higher possibility of being offered full-time employment given higher performance. 1. Introduction The subject of the given case study entitled “Assistance at National Investment and insurance” is the sub-optimality of the service provided by the employees of the IT support (ITS) section identified to be Assistance Officers (AOs) and the resulting performance of the department in totality. The study reports that from a survey conducted on National Investment and insurance (NII) employees who utilized services of the IT support section regarding the performance of the AOs emerged to be less than satisfactory. Apart from delayed responses and resolutions, unfriendly or mechanical attitudes were reported though surprisingly, the considerable majority of the problems addressed were minor difficulties arising from poor user knowledge which thus required little effort to resolve. This reported attitude reflects a very significant lack of motivation among workers. The present report shall attempt to develop an understanding of the notion of employee motivation and factors influencing it by reviewing recent literature germane to the context and apply this to offer solutions to the identified problem. 1.1 Relevant literature In order to develop a suitable perspective on the issue, a review of the recent relevant literature was conducted that led to three recent journal articles being identified as being most germane to engendering a possibly redesigning of employment policies that could solve the problems. 1.1. A) Motivation and Performance Hays & Hill (2000), identify employee motivation or vision as a factor that significantly contributes to improvements in the perceived service quality of any company through enhancing learning regarding service provision to a better extent. Though the idea is not novel, the importance of this work lies in the fact that it actually develops a theoretical framework that is able to exhibit it as a fact that enhanced motivation spurs greater service learning among employees which in turn leads to greater perceived service quality. 1.1. B) Motivational capacity of pay Rynes, Gerhart & Minnette (2004) discuss the motivational capacity of payments or financial rewards. It is recognized that traditional literature based on employee surveys has underestimated the importance of pays as motivators particularly due to the fact that the respondents exhibit tendencies to undermine the importance they place on pays as motivators or due to the perception that employees are likely to overstress the importance of pays as motivators to facilitate hikes in salaries. The authors also reveal that the inspirational ability of financial rewards or pays vary differently given different environments and contexts thus making the extent of the motivational capacity contingent upon a host of factors. For the present context, it is important to note that the marginal utility of increments was found to be diminishing, implying that pays were stronger motivators for people hired at lower pays compared to the higher paid employees. Further, it was found that responses to performance oriented payment were strikingly high. 1.1. C) Effects of rewards on motivation Though the intuitive perception initially was that rewards would positively stimulate motivations, a possible negative effect of rewards on motivation was found by various behaviour researchers. Catherine, Banko & Pierce (2001), conducted a meta-analytic exploration of literature to evaluate the validity of the traditional view that provision of rewards (particularly extrinsic) to motivate may be potentially backfiring as they lead to negative effects on intrinsic motivation. The research finds such negative effects to be possible only under certain specific conditions of rewards being tangible and expected and most importantly for the present context (for reasons to be discussed later), loosely associated to performance levels. With rewards being significantly performance dependent, positive effects were found on intrinsic motivation measures. 2. The significance of Motivation The case study provides a great example of reduced productivity due to the lack of motivation among employees. To perceive the extent of sub-optimality this implies, it is imperative to understand what motivation is. Prior to the groundbreaking research known as the Hawthorne Studies carried out by Elton Mayo during the period 1924 – 1932, employees were perceived to be little more than inputs in the process of production. The Hawthorne Studies marked the beginning of a new era by revealing that there was a lot more to employees who were inspired by a wide spectrum of factors and not exclusively by money alone as was the erstwhile belief. More importantly, this study derived that employee behavior was significantly related to their attitudes and psychological fulfillment played a crucial role in motivating them (Dickson, 1973). The Hawthorne Studies led to the inception of what is known as the ‘human relations approach to management’ which turned the focus of subsequent research onto the needs and the interrelated existence of these needs with the motivation to work and perform as the part of an organization (Bedeian, 1993). 2.1 Explaining the notion of Motivation Enhancements in perception regarding the importance of Motivation for employee performance led to researches to better understand it as a concept. This led to development of quite a few definitions. According to Kreitner (1995), it is that psychological process which provides purpose as well as direction to human behavior. Motivation has also been defined as the predilection to act purposively to facilitate the achievement of satisfying certain precise, unmet needs (Buford, Bedeian, & Lindner, 1995). For Higgins (1994) it is essentially an internal compulsion to assuage any yet-to-be satisfied need while for Bedeian (1993) it represents simply “the will to achieve”. For the present purpose, it shall be considered as the internal force that makes employees strive to attain personal as well as organizational objectives. 2.2 The importance of Motivation for an organization The importance of motivated employee bases lies in the fact that ultimately the fate of any organization is determined by the quality of services offered by its workers or alternatively the performance of employees (Smith, 1994). The present dynamism in the sphere of business characterized by rapidly integrating markets and thus increasing the significance of competitive outputs and services every day, necessitates performances that are able to ensure that the organization attains and sustains competitive advantage which can only be achieved with strongly motivated employee bases. This is fundamentally true since greater the motivation of any worker, greater will be her productivity. Thus, for the managers it is imperative to understand the motivations of the workers in relation to the context of the performed roles. It is essential that the manager understands how along with environmental and personal changes, the motivations of the workers also change (Bowen & Radhakrishna, 1991). A good instance of such an effect would be the falling marginal efficacy of money as a motivator with rising incomes (Kovach, 1987). 2.3 Major Theories of Motivation After the publication of the Hawthorne Experiments, perceiving how the process of motivation works became the focus of a bulk of the related research work that ensued and this evolution led to the development of five key approaches to motivation that primarily drove the understanding regarding the notion of motivation (Terpstra, 1979) - The need-hierarchy theory (Maslow, 1943), reinforcement theory by Skinner (1953), the two- factor theory (Herzberg et al, 1959), the expectancy theory (Vroom, 1964), and the equity theory by Adams (1965). Employees, according to the postulates of the need-hierarchy theory, have a hierarchy of needs that drive their motivations to perform which in order were identified as: physiological needs, safety needs, social needs, ego needs, and self- actualizing needs. It was argued that the needs lying at the lower tiers initially drove motivations and thus before needs of the next level could become effective as motivators, had to be contented (Maslow, 1943). The two factor theory classified factors related to employee satisfaction and inspiration into two groups. Factors that provided incentives to employees to perform such as achievement, recognition, etc. were identified as intrinsic factors or motivators. Factors which on the other hand prevent job dissatisfaction such a pays, tenure, etc were identified as extrinsic factors, or hygiene factors (Herzberg et al, 1959). In essence, Vroom's expectancy theory points out the fact that motivations to work are fundamentally based on the expectations that efforts on the part of the employees determine the quality of performance which in turn determines the quality of the reward (as in positive rewards or negative rewards). It is thus the extent to which the environment of the organization can facilitate the strength and direction of these expectations which determines employee motivation. The more employees expect positive rewards for efforts, better will be the aggregative performance (Vroom, 1964). Equity theory focuses on the drive amongst employees to attain at par levels with one another in terms of performance. Adams (1965) identifies the attainment of same ratio of outcomes to inputs for individual employees as equity. According to this theory, employee motivations are driven by the objective of attaining equity among themselves. The most important point to note that according to this theory, the process of attempting to attain equity can lead to underperformance as well as over-performance depending upon the average performance of the employees. The importance of motivating at least a few workers with rewards thus emerges clearly from this theory, as that will through the equity attainment process among other workers will lead to improved performance overall. Reinforcement theory suggests that only the employee behaviors resulting in positive outcomes for employees are most likely to be repeated while those culminating to negative consequences are least likely to be repeated and thus, (Skinner, 1953) employee behaviors that lead to better performance for the organization should be reinforced (through rewards etc) while those resulting in sub-optimality should not be so. 3. Applying theory: Solving the problems of NII Having perceived the below satisfactory performance of the Assistance Officers as a reflection of lack of motivation and having understood the importance of motivation in improving performances, we now turn to applying the derived understanding to design a solution for the company. In essence we shall apply our derived understanding to suggest a redesigning of the reward system that may lead to significantly effective motivation. This suggested redesigning in essence is an application of the expectancy theory and the refined understanding of the notion of motivation and related aspects derived from the first three articles discussed. As the case points out, the ITS section of NII employs ninety AOs who cater to the computer related services requirements of the company’s. Of these AOs, eighty percent are employed on a casual basis earning per-hour wages while the remaining are full time employees. Full timers are generally posted as supervisors and managers and enjoy the advantages of higher pays and hikes as well as eligibility for up gradation through training and subsequent promotion. Notably, the full-time workers have earned their present positions after being initially employed as casual workers. However, the casual employees do not know what the exact process is through which a part time worker is evaluated and offered full-time status by the ITS. The causes for lack of motivation lie are structurally inherent in the employment schemes. Since, the eighty percent of the AOs are part time employees, if the performances of these types of workers can be improved, the overall performance of the department will improve considerably. Notably, the part time workers are paid on the basis of hourly rates and there is no additional incentive to perform better. In fact, rewards, positive or negative are absent from the pay scheme these employees are enrolled on. The case study also reports a lack of information among the casual workers regarding how they can become full-time employees. Two immediate possible motivators are evident from this. First, if the employees’ performances are evaluated and incentives are provided to better performers in the forms of additional payments, more involved participation is likely. This is a direct application of extrinsic rewards as motivators. Given the relatively smaller incomes of the part time employees, it is likely that they will be very responsive to performance based financial rewards. Secondly, the performance as casual workers should be associated with the possibility of gaining full-time employment later on. If it is announced that the best performers shall be considered for full-time status, not only will it motivate greater performance on the part of the workers, it will also create a transparency that shall align the motivational process with expectancy theory predictions. However, since the supply pool of employees is essentially made up of graduate students, it may be that they are satisfied with the present pays given the minimal work they have to put in and prefer to preserve the system as it is as that satisfies their needs. It is precisely due to such possibilities that the second step becomes even more relevant. If the students perform well as part-timers then the higher possibility of them shall be accepted as full-time employees once they complete their degrees and decide to enter the job market may motivate even those workers who are not immediately seeking monetary rewards and thus cannot be motivated by the first type of incentives. References: Adams, J S (1965) “Inequity in social exchange”, In L. Berkowitz (ed.), Advances in experimental social psychology, New York: Academic Press. Bedeian, A G (1993) “Management” (3rd ed.), New York: Dryden Press. 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