Implementing Motivational Theories to Amazon - Essay Example

DEMONSTRATE HOW MANAGEMENT STRUCTURES ARE INFLUENCED BY THE SIZE OF A COMPANY AND THE TECHNOLOGY IT EMPLOYS, AND HOW CONTROL PROCEDURES ARE AN IMPORTANT COROLLARY OF MANAGEMENT DELEGATION: CASE OF AMAZON Table of Contents Table of Contents 2 Introduction 3 Motivational theorists 3 Implementing motivational theories to Amazon 7 Effectiveness of implementation of motivational theories in Amazon 10 Achievement of set objectives with the implementation of motivational theories 10 Improvement in business performance: 10 The increase of employee satisfaction and reduced employee turnover: 11 Conclusion and Recommendations: 12 Reference List 14 Introduction Changes taking place in the business segment are a regular affair in the contemporary scenario. Dana (2008) noted that business organisations are trying to design a flexible approach for managing the influence of the internal and external factors that are related to the business environment. The primary feature of the 21st century business operations has been the growth and inclusion of technological factors (Fred, Kenneth and Shaoming, 2007). Julie and Arthur (2008) noted that as organisational structure and work processes are being altered rapidly, the performance criteria for the employee base of the firms have also become more complicated. Amidst these changes and alterations, the managers of the firms have to ensure that the employees are committed towards their roles and responsibilities. Considering these notions, this report will further analyse the aspects of motivation, performance, satisfaction and behaviour of the employees will be further analysed in context of American e-retailer Amazon.com, Inc. Motivational theorists Maslow’s Hierarchy of Needs was among the few earliest motivational concepts to be incorporated in the business management processes (Adam et al. 2010). The Hierarchy of Needs focuses on the basic factors that forms the needs and expectations of the employees and also segregates them in accordance to the level of achievement of the employees. Initially developed as a psychological reflection of human needs and wants, the Hierarchy of Needs was included in the corporate practices. The five aspects highlighted in Maslow’s theory reflect both materialistic and psychological needs of the employees. Most of the criticisms associated with this model are the extensive focus on the aspect of self-actualisation and psychological influence on the performance of the employees (Harris, Janes and Boonthanom, 2005). Figure 1: Maslow’s Hierarchy of Needs (Source: Boxall, Ang and Bartram, 2011, p.1522) The two factor theory was developed by Fredrick Herzberg and has high resemblance with the motivational theory of Maslow (Salaman et.al. 2009). The theory of Herzberg is based on two factors that contribute towards employee motivation, behaviour, loyalty and performance. These factors are hygiene and motivators. Farndale et al. (2011) noted that unhygienic work places affect the commitment of the employees towards their work, whereas the motivation for the employees is based on the facilities that can be provided by the employers for enhancing the productivity and performance of the employee base. Theory of Herzberg also categorises the employees in three divisions namely, dissatisfied and demoralised, neither motivated nor dissatisfied and satisfied and motivated. The theory of Herzberg is used for conversion of demoralised employees into motivated performers. Figure 2: Herzberg’s Two Factor Theory (Source: Thomas, 2009, p.35) Douglas McGregor developed Theory X and Theory Y considering the aspects of human resource and influence of organisational variables such as culture, communication and behaviour. Salaman et.al. (2009) mentioned that Theory X and Theory Y model of McGregor are mainly focused on evaluating the decisions of the managers in two contrasting perceptions. Theory X considers employees to be disloyal towards their responsibilities and should be managed with authority, whereas, Theory Y considers employees to be loyal and committed towards their roles and responsibilities and should be managed with a democratic style. Figure 3: McGregor’s Theory X and Theory Y (Source: Boxall, Ang and Bartram, 2011, p - 1524) Elton Mayo considered that the motivating factors for employees are mainly external and are influenced by three factors namely, working conditions, financial incentives and employee skills. The primary concern of the theory was that employee performance tends to change with the changes in their environmental factors and compensation design (Salaman et.al. 2009). However, a five year experiment conducted on Hawthorne Electric Factory of Chicago showed that employee performance was marginally influenced by changes in compensation or financial incentives and working conditions (Boxall, Ang and Bartram, 2011). Nevertheless, the process of communication with the colleagues and co-workers had a major influence on the performance level of the employees. It was concluded that teamwork and decision making processes helped in enhancing employee motivation. Figure 4: Mayo’s Theory of Motivation (Source: Harris, Janes and Boonthanom, 2005, p.36) Implementing motivational theories to Amazon Amazon.com, Inc. is one of the largest e-retailers of the world and is headquartered at Seattle, United States. The company initiated as an online book retailer but with growth and development of their business, they have diversified into multiple genres of products and services in the online industry (Aryee and Chay, 2001). With the increase in their business scope, Amazon has transformed itself into a multinational organisation providing service in over 32 countries around the world with the help of 154100 employees (Amazon.Com, Inc., 2015). Farndale et al. (2011) observed that although Amazon is one of the leading brands in the international business segment, their work culture is mainly governed with the principles of authoritative management. However, Harris, Janes and Boonthanom (2005) stated that in order to develop uniform standards of work structure along several workplaces, a multinational organisation often engages in strict management styles such as authoritarian styles. Furthermore, as the organisations are venturing into new market places, the diversity in their workforces has also increased which can make it difficult for the managers to implement effective motivational policies. Boxall, Ang and Bartram (2011) highlighted the significance of the technological factors in the business process which have reduced the direct communication among the employees but enhanced the monitoring abilities of the managers. If the suggested motivational concepts were to be employed by Amazon.com, Inc. the subsequent effects have been further analysed in the following sections. Considering the implications of implementing Hierarchy of Needs in Amazon, the basic changes will be in the formation of the reward structure of the company. The existing reward structure of Amazon is based on a standard benchmarking process and has limited considerations regarding the emotional needs of the employees (Aryee and Chay, 2001). However, in the Hierarchy of Needs the materialistic and psychological needs of the employees have been designed. Aspects such as safety and belongingness should be practiced with the employees to boost their potential abilities and also enhance their productivity. This will also instigate changes in the managerial approach, and thus employee participation in the decision making process can be managed with the Hierarchy of Needs. Moving on to the two factor theory of Herzberg, the primary focus of Amazon will have to be segmented between hygiene and motivators. The operational functions of Amazon employees in their warehouses often tend to get chaotic based on the fluctuations in the rate of orders received and to be dispatched. With constant management and tracking of the products, the employees have to stay agile and thus need a healthy atmosphere for working. The safety processes of the Amazon warehouses will need to be upgraded with the implementation of the Two Factor theory. Meanwhile, considering the motivators designing a participative work culture supported with fair wages and compensatory benefits will help in gaining employee commitment and also enhance in their job satisfaction. The application of the McGregor’s Theory can be considered as a more practical approach for Amazon in comparison to the other motivational concepts. Farndale et al. (2011) stated that nature of a workforce for a multinational organisation includes both committed and uncommitted employees and hence a management has to be flexible in its approach for enhancing their productivity and performance. The concept of McGregor will allow the managerial team to identify the behaviour of the employees and also allow them to segregate their approach based on the individual nature of the employees. On the other hand, it can also cause huge changes in the structural set up of the company (Aryee and Chay, 2001). It has been noted above that Amazon tries to create a uniform standard for managing their diverse workforce. By implementing the McGregor’s theory, the notion of decentralisation will increase which can also increase the cost of operations of the firm. Finally coming to the theory of Mayo, it can be gathered that the initial aspects of Mayo’s theory are related to the existing practices of Amazon. The working culture of the Amazon focuses on the monetary incentives of the employees and restricts changes in their operational structure which builds consistency in the performance of the employees (Fred, Kenneth and Shaoming, 2007). However, communication and teamwork are two primary features of the work structure of Amazon. This was evaluated by Mayo after the Hawthorne experiment. Amazon has excellent communication systems in place for integrating their logistics with other supply chain functions. Thus, implementation of Mayo’s concept will not initiate huge changes in the practices of Amazon but again the influence of the concept will also be low. Based on these criteria, McGregor’s Theory X and Theory Y will be more suitable as it will address both employee and employer needs. Effectiveness of implementation of motivational theories in Amazon Achievement of set objectives with the implementation of motivational theories The organisational objectives of Amazon.com, Inc. are to establish itself as the most customer-centric organisation of the world. This objective has been amalgamated with the work culture of the company and the employee management policies. The strategic move of Amazon thus shows that they are focused on the mission and also want equal amount of co-operation from their employees. The implementation of the motivational theories can be used by Amazon to improve their service structure and also boost the brand equity of the firm. However, Boxall, Ang and Bartram (2011) mentioned that motivational theories mainly focus on the employee needs which can also be contradictory to the primary nature of a consumer-centric firm. MacLeod and Clarke (2009) criticised that motivation of employees helps the organisations in improving the quality of their services and also gain a cost competitive advantage if the work structure is able to reduce employee turnover. Improvement in business performance: The business structure of Amazon highlights a strict policy for managing their employee base and also stabilising the performance of the employees. The annual report 2013 of Amazon reflects that their operational costs have increased from $60417 in 2012 to $ 73707 in 2013 (Amazon.Com, Inc. 2013). The cost was segregated into many heads of which Technology and content was the 2nd highest with $6565 preceded by the cost of sales at $54181 in the year 2013 (Amazon.Com, Inc. 2013). Developing a strategy that could reduce their training and development costs of the employees will also help Amazon is reducing their costs of technological implementations and content management of the employees. Motivational strategies can be used for enhancing the brand loyalty of the employees and reflect them as an organisation focused on their stakeholder interests. MacLeod and Clarke (2009) also explained that as employees perform for gaining their personal needs, the organisations can benefit from this through numerous contexts such as quality improvement generating better customer satisfaction; increase in shareholder value based on better financial performance and reduced expenses. The increase of employee satisfaction and reduced employee turnover: Comparing the operational scope of Amazon with their existing employee base, it can be highlighted that the workforce of the company is lower in comparison to other multinational e-retailers (Harris, Janes and Boonthanom, 2005). This can be because of the high standards of the recruitment and selection process and also on the influence of the work culture of the company urging employees to leave. Implementation of motivational theories will help the companies in numerous contexts related to the development of the management style and employee commitment towards their roles and responsibilities. Considering that Amazon employees Theory Y or any other motivational concepts focused on participative style, they will be able to enhance their communication with the employees and also help in solving the employee issues, apart from fulfilling the employee expectations. Boxall, Ang and Bartram (2011) highlighted that employee commitment can be enhanced when they believe in their organisational roles and respoonsbilities. Farndale et al. (2011) stated that motivational theories and processes helps in developing a shared platform for the employees and also help in changing the outlook of the employees and managers towards each other. The aspect of employee retrenchment however has to be managed with individual effort from the managers rather than relying solely on the capability of the motivational concepts. Employees may leave their existing work place because of better opportunities in the external market or also because of attraction towards higher compensation. MacLeod and Clarke (2009) noted that in order to reduce employee turnover, a company should generate loyalty among the employees which can be conducted by enhancing the participation of the employees. This includes the concepts of Hierarchy of Needs, Y Theory and the Two-Factor Theory in the operational structure of a firm. Conclusion and Recommendations: Based on the evaluations of Amazon.com, Inc. and the motivational concepts, it can be assessed that the organisational strategy of Amazon is mainly consumer-centric and has limited focus on the needs and requirements of the employees. In order to enhance the employee participation, productivity and performance, Amazon can focus on creating a shared platform which will align the interests of the employees with the organisational mission and hence consumer expectations. Technological indulgence can help Amazon to design their employee management processes with better communication and integration of the work structures. Implementing of direct channels of Information and Communication Technology for monitoring and communicating with other departments will accelerate their work structure and also reduce the pressure on the employees. Considering a direct approach for implementing the motivational approaches in Amazon, the employees need to understand the organisational strategies and their roles in it. Thus, employee participation in the decision making process will be a primary factor along with managerial guidance and support for solving their issues. Reference List Adam, M. G., Elizabeth, M. 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