Organisational Behavior and Analysis: The Importance of Motivation - Literature review Example

?Organisational Behaviour and Analysis Table of Contents Table of Contents 2 Introduction 3 Rewards 3 Intrinsic and Extrinsic Motivation 4 4 Financial Motivation 6 Argument against Financial Rewards for Increasing Work Motivation 7 Arguments for Financial Rewards for Increasing Work Motivation 8 Discussion 10 Conclusion 11 References 13 The One Best Way to Increase Work Motivation for an Organisation Is Through Financial Rewards Introduction Motivation is essential for organisations which encourage a particular person towards the direction of some specific activities or behaviours. Motivation is often recognised as the reason of specific behaviour among employees of any organisation. It is in this context that the feelings perceived by employees regarding their jobs tend to directly impact on the “bottom-line” revenue of any organisation. Through motivation, employees strive to perform at their best. Motivating employees is definitely a challenging task for any organisation. Hence, the financial rewards deliver an actual method to inspire and compensate the employees and tap them for better and exciting activities (Kohn, 1999). Rewards According to Janet Spence (1971), rewards tend to have a positive impact on motivation which involves the performance of employees to a large extent. Rewards serve as motivations for employees in an effort to inspire them in various methods such as altering job positions, reorganising job plans, developing working situations, and ranges of other activities (Kohn, 1999). The idea and prerequisite for motivation has been enticing much attention in the continuous change of business situation, altering technologies in the area of business and increasing difficulties. These aspects generate interference on the performance and on the level of proficiency of employees. Therefore, motivation helps to maintain the level of proficiency as well as improve and even develop the performance of the employees to a significant extent. Traditionally, it has been observed that in the context of motivation, the rewards play a significant part. However, the usefulness of rewards should be established as well. For any organisation, rewards can be of two types, i.e. intrinsic reward and extrinsic reward (Kohn, 1999). Intrinsic and Extrinsic Motivation Intrinsic motivation is demarcated as conducting an activity for intrinsic fulfilment rather than some distinguishable significance. When the employees are motivated intrinsically, they begin to act for excitement or challenge involved in their assigned tasks rather than due to external reasons, stresses or rewards. According to Hull (1943), a type of employees’ behaviour is the consequence of the motivation that was delivered by emotional forces, and the intrinsically motivated activities were specified to be those activities which offered satisfaction of the intrinsic emotional requirements. Employees have been witnessed to be motivated by satisfying their individual and inner requirements such as requirement for liberation, skill, positive relationship and better working environment in organisation (Ryan & Deci, 2000). Intrinsic motivation is a vital instrument for open-ended intellectual improvement as it is the driver of impulsive assessment and curiosity. Intrinsic form of rewards can be stated as internal procedure of rewards which is experienced by an employee while undertaking a particular task such as new challenges, modification of work or task on the positive achievement of objectives, positive gratitude and sympathetic attitude of the company. To some extent, the financial contemplation or pay benefits does not work well as a motivator after surpassing a certain level of survival. In those conditions, the intrinsic features or elements swap the extrinsic aspect and act as robust and efficient motivators for employees (Ryan & Deci, 2000). On the other hand, extrinsic rewards are denoted to those rewards that appear in the form of material and are recognised as external with respect to task accomplished or implemented. The fundamental description of extrinsic motivation can thus be stated to inspire a specific behaviour of employees for the aim of accomplishing certain objectives of the organisation. The existence of effective extrinsic structure of reward is highly essential for the reason of retaining superior performers or employees in an organisation. The system of extrinsic reward needs to be related with the level of output of employees in the organisation. Extrinsic motivation thus contrasts with intrinsic motivation which denotes conducting an activity basically for the enjoyment of completing tasks, rather than its contributory worth (Latham, 2007). Extrinsic rewards can come in the form of financial benefits such as pay benefits, bonuses, incentives and promotions among others. According to Neely (2007), the incidence of extrinsic motivation is perceived in occurrences when it becomes possible for employees to satisfy their necessities indirectly and most importantly with the help of financial compensation. Extrinsic motivation is accomplished by linking financial motivators of employees with the goals of organisation. There are great dissimilarities between the intrinsic and extrinsic form of motivation. Motivation is thought to be intrinsic when employees get involved in certain activities or actions due to their perceived satisfaction with regards to their instant requirements (Jones & Mawhinney, 1976). Desire and enthusiasm to perform well can also channelise an employee towards the accomplishment of external rewards. Intrinsic motivation helps in performing activities which are prompted by employees due to strong concern and the level of satisfaction involved to the achievement of the task. This instigation or ambition generates innovative activities which are perceived as highly beneficial for the organisations (Covington & Mueller, 2001). Financial Motivation For any organisation, financial consideration plays the role of a vital stimulus for motivating employees. Money is assumed to have the supreme role to make employees behave in the direction of superior and improved performance. According to Fredric Taylor’s “scientific management theory”, money is viewed as one of the principle aspects to motivate the employees for accomplishing increased productivity. He had depicted that employees are motivated and capable of carrying out challenging and effective work if they are compensated on the basis of quantity and quality of work delivered (Hollyforde & Whiddett, 2002). Financial rewards are considered to be the method of administration that expectantly donates towards the effectiveness of the organisation through influencing the activities of whole workforce as a team or individual employees. The application or execution of financial reward with respect to pay, promotion, bonus and other kinds of recompenses are made use by the organisation for the purpose of motivating the employees and increasing the level of productivity. Argument against Financial Rewards for Increasing Work Motivation Financial rewards and inducements are common in present commercial world, although several specialists are of the view that money is not the greatest motivator as the motivational influence of majority of the financial rewards does not last for longer time. The modern opinion of financial rewards and reinforcements are injurious on the basis of social psychology regarding intrinsic motivators. In this regards, a conspicuous interpretation denotes that the financial rewards can reduce the intrinsic motivation of employees to involve in organisational tasks. Basically, the major concern in this context is that, although money, pay, compensation motivate employees to perform any activity; however, the motivation tends to lose its value when the financial rewards break. For instance, if an employee enjoys additional performance, rewarded with money, the entitlement is that he/she will enjoy lesser while performing if the rewards are limited or restricted. In other words, financial rewards are believed to have a negative impact on the inherent motivation of employees (Cameron, 2006). The connection between financial rewards and intrinsic motivation is screened with complications. The word intrinsic motivation is demarcated by the non-appearance of understandable extrinsic rewards. If the motives of conducting good performance and enjoying tasks are consequence of previous outcomes or expected future paybacks or other factors which are unknown by the organisation, the specific behaviour of employees is considered as intrinsically motivated. Therefore, the motives for involving in productive activities get taken into the group of intrinsic motivation (Cameron, 2006). According to Kohn (1999), the financial rewards are effective for short term. In order to maintain long lasting productive behaviour of employees, there is need for maintaining the consistency of reward. According to the research on University of Kentucky in 1961, financial rewards were unable to improve the performance of employees. From the study it had been observed that people who strive to get financial rewards perform more mistakes in the tasks compared to those who were not attempted to take financial rewards. Kohn depicted that financial rewards can only improve the performance of employees only on those tasks which are simple and monotonous and financial rewards can only improve the quantitative performance rather than quality (Kohn, 1999). Arguments for Financial Rewards for Increasing Work Motivation Although there are certain disadvantages associated with financial rewards, it plays an active role up to a considerable extent. Once that level is reached, the financial reward stop to function or act as a good motivator. For this reason, the financial reward is required to be increased to maintain the effectiveness of employees. According to Donna Deeprose (1994), “while the presence of money may not be a very good motivator, the absence of money is a strong de-motivator” (Mossbarger & Eddington, 2003). Thus, financial rewards are the necessary bases as successful motivators of organisation’s employees. The absence of financial rewards such as pay benefits or bonus sometimes specifies that they are not appreciated within the organisation and therefore can be de-motivated easily. In present days, the economy is fluctuating constantly. As the economy continues to fluctuate, organisations will confront difficulties to provide the financial rewards. In this context, if the employees do not receive any financial rewards, their productivity is expected to deteriorate. Absence of financial rewards can also result in loss of valuable employees to search for alternative employment opportunities. Financial reward is termed as effective motivator due to additional benefits to the employees which cannot be satisfied by other forms of inducement. It is worth mentioning in this context that associating clever performance with reasonable reward system can strengthen the motivational procedure to a certain extent (Mossbarger & Eddington, 2003). According to the Meta analysis of Condly & et. al. (2003), it has been found that whether the objective of the organisation is to improve the performance of employees with respect to quality or quantity, the financial rewards had a positive impact. Financial incentives can help to decrease the hunt for new job and motivate employees to remain in the existing job and perform in a productive manner (Condly & et. al., 2003). Discussion According to Herzberg, employees cannot be motivated through the fulfilment of lower-level requirements. Obtaining the basic pay and being capable of performing in acceptable or usual working environment would not essentially make employees motivated with their job. He had described that employees extensively search for satisfying the high level requirements at their psychological level such as acknowledgement, higher obligation, progression of career, and characteristics of work. In this context, the hygienic factors are essential to ensure that employees are not dissatisfied. Furthermore, the perception of employees with respect to the financial reward environment can definitely influence their attitudes. According to the study of Probst & Brubaker (2001), the difference between job satisfaction and dissatisfaction grounds in the level of rewards provided to them and also, deserved by them. Generally, employees feel motivated when they recognise that they will be provided with reasonable pay with due respect to the degree of work they perform. However, any discernment in financial reward can obstruct the motivation and performance to a certain extent. Furthermore, employees are also determined to perform in the organisation for longer time if they are honestly rewarded. Although there is a significant relationship between financial rewards and motivation of employees to work effectively, it should be used prudently, because it cannot ensure positive behaviour for long term. Hereby, the foremost aspect for motivation is to recognise the factor which can help to inspire employees towards higher performance. It is in this context that Employees who can experience the recognition are able to perform better and get motivated to work for the organisation. In so far as, there have been subsequent evidences suggesting that money is a significant factor for motivation but it does not reveal that it is the only factor for motivation. Motivating the employees by making use of financial rewards effectively influences and improves the activities of the employees to a great extent. For the purpose of making financial rewards great motivators, management needs to configure the salary with respect to proportionate work, payment with respect to performance along with additional financial benefits such as fringe benefits, and retirement benefits among others (Rynes & et.al., 2004). Conclusion The presence of an efficient financial reward system is highly required for maintaining satisfaction of employees. In order to gain increased performance both the intrinsic as well as extrinsic motivation is required for organisations. Thus, it indicates that the organisations need to involve a well-balanced plan for financial reward system for the employees. The financial reward has average motivational impacts on the work performance of employees because there are other variables on which employees’ performance tends to depend largely. The impact of financial reward on the performance depends on whether the objective of organisation is attraction of employees, or retention of employees or improvement of job performance of employees. In addition, it can be stated that different dimensions of financial reward differently impact on the performance of employees. The reason is that financial rewards is one of the few job features that can be recognised with conviction at the time of job selection, where other intrinsic rewards cannot be recognised unless employees stay in the job for a considerable time. References Covington, M. V. & Mueller, K. J., 2001. Intrinsic Versus Extrinsic Motivation: An Approach/Avoidance Reformulation. Educational Psychology Review, Vol. 13, No. 2, pp. 157-176. Cameron, J., 2006. Rewards and Intrinsic Motivation: Resolving the Controversy. IAP. Condly, S. J. & et. al., 2003. The Effects of Incentives on Workplace Performance: A Meta-analytic Review of Research Studies. Performance Improvement Quarterly, Vol. 16, No. 3, pp. 46-63. Hull, C. L., 1943. Principles of Behavior. Appleton–Century–Crofts. Hollyforde, S. & Whiddett, S., 2002. Motivation Handbook. CIPD Publishing. Jones, W. D. & Mawhinney, T. C., 1976. The Interaction of Extrinsic Rewards and Intrinsic Motivation: A Review and Suggestions for Future Research. Indiana University, pp. 62-65. Kohn, A., 1999. Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes. Houghton Mifflin Harcourt. Latham, G. P., 2007. Work Motivation: History, Theory, Research and Practice. Sage Publications. Mossbarger, M. & Eddington, J., 2003. Methods for Motivating Employees. Weber State University. [Online] Available at: http://faculty.weber.edu/djgreen/TBE_3250/Assignment/Example%20Formal%20Report%20Methods%20For%20Motivating%20Employees.pdf [Accessed March 14, 2012]. Neely, A. D., 2007. Business Performance Measurement: Unifying Theories and Integrating Practice. Cambridge University Press. Probst, M.T and Brubaker, T.L, 2001. The Effects of Job Insecurity on Employee Outcome: Cross-Sectional and Longitudinal Exploration. Journal of Occupational Health Psychology, Vol. 6, No. 2, pp. 139-159. Ryan, R. M. & Deci, E. L., 2000. Intrinsic and Extrinsic Motivations: Classic De?nitions and New Directions. Contemporary Educational Psychology, Vol. 25, pp. 54-67. Rynes, S. L. & et.al., 2004. The Importance of Pay in Employee Motivation: Discrepancies between What People Say and What They Do. Human Resource Management, Vol. 43, No. 4, pp. 381-394. Read More