Pros and Cons of Employment of University Workers on Contract - Essay Example

Pros and Cons of Employment of Workers on Contract According to Kube, Maréchal, & Puppe p. 1646), organizations are concerned about the nature of employees’ motivation plan that may produce desirable results in their organizations. This is due to the facts that employee’s motivation can increase the organizations performance and result to better employees’ satisfaction if well implemented. There is a great challenge in balancing individual input in the organization and the reward or incentives given to the employees because unfairness in motivating the employees can result to poor performance of the organization (Nalbantian & Schotter, 1997, p. 3117). The study focuses on how the universities design motivation plan for their employees and the consequences of such motivation plans. Although employee’s motivation is meant to increase performance of the organization, poorly designed compensation plan may discourage some workers and result to decline in the overall performance of the workers. London (1995, p.37), uses tournament theory to elaborate how the size of the prize, players’ chances of winning the prizes and the cost of players’ effort to implement the undertaking influences the achievement of the players’ objectives and performance of the game. In the first incentive the prize for the players was independent of the outcome of performance, the second incentive involved single large prize for the first winner only while in the third category, there were different prizes for different winners and this depended on individual performance. The result of this game depicted that the workers’ output was maximum when there are various prizes for different winners (Dohmen & Falk, 2010. P.152). A few people had an incentive to pursue the prize when a single large prize is offered while the performance was lowest when the performance had no effect on the individual earning. The tournament theory has two main challenges which include competition among the participants or sabotage of the effort. From the game theory, the productivity of the workers is greater if the incentive scheme gives all employees equal chance of sharing revenue of the organization (Nalbantian & Schotter, 1997, p. 3119). The players’ effort is dependent on the expected prizes, the effort involved in scooping the reward and the probability of winning the game. The effort of the participants is at maximum where the probability of winning or losing the game is balanced. Therefore, in a university set-up where the employees are hired on contract with hope of getting a promotion in the future, this is an incentive similar to a game tournament where the players expect to win different prizes depending on individual performance (Fehr, Kirchsteiger & Riedl, 1993, p. 441). The main reason for renewable contracts of employment at the university is to encourage employees to work hard with the hope of getting a promotion in the future. This scheme is beneficial to the organization because it increases performance of the organization. In the university employment, the employees are uncertain of who is going to be promoted even though they are aware that someone will get promotion after a set period. The motivation for work is the expected promotion, and since the university management is likely to consider several factors before implement the promotion, the employees will pursue effort that will lead to promotion. According to Nalbantian & Schotter (1997, p.3116), setting performance goal for the employees should not be based on their previous performance because the workers have the tendency of becoming discouraged. The university management has to set higher goals for employees in order to encourage them to step-up their effort. However, because of the competitive nature of the work at the university the employees compete with one another instead of working for specific target. Individual worker has to double their effort in order to outperform others and get promotion (Neezy & List, 2006, p. 1376). The approach used by the university management results to increased output and quality of work that makes those organizations competitive in terms of performance. The university employees are motivated by the fact that all employees have equal chances of getting a promotion. According to the tournament theory, the game is likely to result to sabotage or collusion. Collusion of the employees is health if the workers at the university work together to achieve a common goal (Harbring & Irlenbusch, 2005, p.17). However, if the workers collude at the expense of the organization this move will be detrimental to the organization and may result to a decline in performance. This is likely to occur in an organization where the performance of the organization can be attributed to the effort of an individual employee. However, it is not easy to establish the individual performance of the employees in the university since this are a service organization and the collective effort of the employees’ results to the overall performance of the organization (Neezy & List, 2006, p. 1369). Therefore, the university employees devote their effort to achieve better performance of the organization in order to increase the chances of promotion after the specified period. This relates to the tournament theory which suggests that collusion of workers is beneficial where the prize is based on relative performance (Harbring & Irlenbusch, 2005, p. 27). The performance of the university workers is based on collective performance of the organization and individual effort may be insignificant to warrant any individual recognition for promotion. Another issue with tournament theory is the chance of the players to engage in sabotage. Basically, competition is health for better performance of the organization only if the player or participants focus on intensifying their efficiency and become more competitive (Freeman & Gelber, 2010, p. 162). The players tend to become more creative in order to outperform other participants and win the prize. However, engaging in unhealthy competition may be detrimental to the organization because if it occurs at the expense of the organization (Miguel, p.34). For example, the workers may decide to misuse organization’s resources in order to curtail other participants from achieving their objectives. This scenario is likely to arise in an organization where the prizes are based on individual performance (Muller & Schotter, 2003, p. 11). In the university, the promotion of workers is dependent on the individual performance thus employees may misuse resources or curtail other employees from being promoted. According to Freeman and Gelber (2010, p. 17), the work skills and awareness about the reward affect the output hence performance of the employees significantly. Although in some situations, it is not easy to associate performance to a particular individual, the employers should establish a means of recognizing individual inputs in the organization and reward them adequately. Earning a fixed amount of wages does not result to significant increase in the output. Therefore, the university employees may fail to perform up to the expected standards if due to length of time it requires to wait for the promotion. When employees are aware of the reward they will get for their effort and the time they are likely to motivate the employees because they are not ready to let the opportunity slip away (Miguel, p.39). When the new employees are hired to work in the university they enter into a contract that shows the period when promotion will take place (Harbring & Irlenbusch, 2005, p. 6). Therefore, the employees are likely to work tirelessly until such as a time when the promotion is conducted in order to increase their chances of being promoted. However, the management should be careful because those who miss the opportunity of being promoted are likely to get discouraged and may even resign from their jobs or may perform below standard (Dohmen & Falk, 2011, p. 584). According to Bandiera, Barankay & Ras, 2006, p. 31), incentive Achievement motivation theory is “conceived as a capacity for taking pride of accomplishment when success at one or another activity is achieved.” The workers are motivated not only by the rewards they anticipate from the management, but they enjoy doing their work because it improves self-esteem. In an organization where employees are motivated by the pride of achieving their goals rather than incentives they are likely to get excellent performance, the individual contribution to the performance of the organization is quite significant (Miguel, 46). At the university, the motivation for the workers is the probability that a number of workers have a higher probability of being promoted. The workers find pride in the accomplishment of their tasks in the organization and personal achievement after which they hope for promotion. The university employees are assigned different tasks hence it is not likely for an individual to establish what other employees are doing in a different department or task (Freeman & Gelber, 2010, p. 155). The management conducts evaluation of the employees’ performance in order to determine what each individual has achieved in the assigned task. The performance record is kept by the university management for making decisions such as promotion, retrenchment of redundant workers, hiring of more workers, training of workers and so on (Dohmen & Falk, 2011, p 558). Therefore, hiring university workers on a contract basis that specifies the time when promotion of some employees is likely to be carried out is of great benefit to the organization because it is likely to result into increased efficiency of the employees, and better performance of the organization In conclusion, the management is responsible for conducting evaluation of the employees’ performance. This method is subjective and is dependent on tasks assigned to an individual. Employees’ performance is dependent on the set goal, size of reward and individual effort. The university workers perform unrelated tasks whose output cannot be attributed to a specific employee. The management should be careful in order to avoid discouraging employees who may have shown a lot of committed, but are rated poorly. Universities are able to achieve improved performance because the employee motivation creates equal chances for promotion of the employees. Furthermore, the performance of individual employee is relative to the performance of the organization thus no risk of sabotage or defective collusions. Bibliography Bandiera, O., Barankay, I. & Ras, I. (2006). An Incentives for Managers and Inequality among Workers: The Evidence from a Firm Level Experiment. Discussion Paper No. 5649. Centre for Economic Policy Research. Pp. 1-64 Dohmen, T. and Falk, A. (2011). 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