Motivation: Performance Enhancement and Profit - Assignment Example

Motivation Task 1 The Relationship between Money and Performance In today’s dynamic business environment, organizations are trying desperately to come up with ways to attract and retain skilled employees. Importance of human capital has now been understood all over the world and human resource practices are being enhanced in order to increase the performance of employees. The economic environment of today is also not good as downsizing and corporate restructuring is becoming increasingly common in the business world. In a situation such as this money is not the only thing that can motivate employees. Firms will have to find other ways to motivate employees because firstly, firms are incurring high costs and therefore monetary rewards may not be appropriate and secondly, employees are also looking for other things like training, personal growth, and job security. In the first part of the paper we will discuss to what extent money can motivate employees in today’s economic environment. The second part of the paper will be comprised of personal reflections on rewards and motivation. It is widely assumed that employees are motivated to work hard when they are given financial incentives. Financial incentives do have a positive effect on the performance of employees (Jenkins et, al. 777). It is also natural to think that financial rewards can increase the performance of employees because human beings are motivated by money in general. In certain industries relationship between performance and rewards are strong like sales oriented industries where employees often earn commission on sales. In such industries rewards are constantly used to motivate employees. Recent research has found that a certain part of brain is stimulated when people earn financial rewards (Elliot et.al 303). Organizations are therefore doing the right thing by motivating employees by giving bonuses and other types of monetary rewards. Employees tend to have their personal material needs and by giving them opportunity to fulfill those needs, firms can make them work harder for them. People also want to move into the upper social class and for that they need money. Organizations can promise money and make employees perform better for the company. Experience of employees is also an important determinant when it comes to the efficacy of financial rewards. Inexperienced employees are more likely to identify opportunities when offered financial rewards than experienced employees (Shepherd & DeTienne, 91). This means that money can be used to motivate inexperience employees work hard and identify new opportunities. Inexperience employees usually take time to settle within an organization so firms can use financial incentives to motivate them. The relationship between reward and performance exists, and we have proven this in the above discussion. Money motivates employees and firms are right in using monetary rewards as motivators for employees. But monetary rewards are not enough and there efficacy is not unchallenged. Many argue that monetary rewards do not work as well as they are expected to work. This is why we will discuss another category of rewards below called non monetary rewards. Importance of Non Monetary Rewards Non monetary rewards include recognition, personal growth, training and development, and independence. They can also motivate an employee and obviously they do not cost as much as monetary rewards. It is an interesting option for organizations in today’s tough economic times. Employees can’t be given monetary rewards for a long period of time so it is not a sustainable way of motivating employees. Therefore organizations should be focusing on this category of rewards. It is true that employees want money but they also desire other things like recognition and encouragement. Some suggest that non monetary rewards can have the same impact as monetary rewards (Luthans & Stajkovic, 49). If this is accepted then it is feasible for managers to rely heavily on them. The problem is that people have become obsessed with the idea of monetary rewards. Firms rely so heavily on monetary rewards that they ignore the importance of non monetary rewards. An employee can be motivated significantly by encouragement and recognition because such rewards enhances the self esteem and repute of a person. We, human beings, have a tendency to appreciate praise. Social acceptance is important for all of us. A simple positive remark about one’s hair style or jacket can do wonders to one’s mood. This is how important monetary rewards can be for a person. It also shows how motivating non monetary rewards can be for employees. Employees generally need support and encouragement and this is why it is not always important to provide employees with monetary rewards. If employees are given independence then it can also serve as a motivation for them. Empowerment changes the attitude of employees towards their jobs and they start to come up with new ideas. This is why innovative companies like Google give importance to empowerment. Google encourage employees to spend some time on their personal project (Gargiulo, 1). This is an excellent example of non monetary reward. It is also important for firms to give employees social awards like employee of the month awards. Such awards cost nothing but it can serve as a great motivation for employees. Everyone wants to be recognized and employee of the month awards can provide social recognition. Also employees want to be famous among their peers and such rewards can give rise to healthy competition which in turn can increase performance further. This is another dimension of non monetary rewards. Job security is another important form of reward. In today’s business environment people can be motivated by a secure job. Downsizing is a constant fear in the heart of employees today and it hinders the performance of employees. Firms today are constantly letting go employees and this has made everyone worried about their future. In such a situation no employee can work freely and productivity is affected adversely. If firms provide job security at such a time then it can also serve as a reward for employees. It can also motivate them to work hard because they will know that there organizations cares for them. The fact that non monetary rewards can increase productivity of employees is often ignored and organizations need to focus on it, especially in today’s environment. Money is not important for everyone rather job security, recognition, and encouragement matters. If these things are given to employees then there is no reason why they would not work harder for their respective organizations. Thinking only in terms of monetary rewards is myopic and managers need to avoid focusing too much on money. Below we will discuss why financial incentives and monetary rewards are not enough for employees. Why Monetary Rewards are not sufficient? Monetary rewards are not sufficient for employees because employees are not always looking for money. It is only beneficial for low level employees like janitors or construction workers. Mainly monetary rewards work for unskilled labor. Employees who perform jobs that require a high level of skill may not be motivated by money. An example would be of a man who works for 50 hours a week and makes a considerable amount of money. This man will not be motivated by money because he has enough of it. He may instead want to enjoy time with his family. There are people who think they need not to earn more and for them monetary rewards are useless. Monetary rewards are also named as ‘bribes’ that do nothing but breed temporary compliance (Kohn, 55). Financial incentives cannot internally motivate employees as they are only temporary in nature. Once the reward is spent, motivation is gone. This is why it is said that rewards only make employees temporarily motivated. Monetary rewards cannot be given for a long time and this why employees will eventually need something else other than money to keep them motivated. In an environment where employees need to innovate, monetary rewards become useless. Money cannot make a person smart or innovative rather it makes people greedy for more. And once employees get reward they expect to get rewards on a regular basis and if this is not the case then all their motivation is lost. This is why it is important for managers to think beyond monetary rewards because employees do not need desperately need monetary rewards rather they need encouragement and recognition. It was found that removal of rewards can make employees work harder (Rothe). When employees can be motivated even without monetary incentives then what is the need for monetary rewards at all. Rewards only make employees work harder for a short period of time after which they expect more reward. This is not a sustainable system and managers need to find alternatives of monetary rewards. When there are no rewards given to employees, they work without any greed and there focus is on performance and nothing else. Financial rewards just make them seek money and performance may suffer as a result. Also quantity of work increases when employees are offered rewards and not the quality of work (Jenkins Jr.). This shows how monetary rewards can hurt a company instead of helping it. Employees, when lured with financial rewards, may attempt to increase the quantity of their work at the expense of quality. It is seen in the investment banking industry that brokers in hope of high commission make deals that are not suitable for the company as well as for the customer in the long run. This is how rewards can act in negative manner for a company. It motivates employees to cheat and defraud customers in order to highlight performance and gain financial benefits. On the other hand a person might not do so in hope of non monetary rewards because they are not as tempting as money. Alternatives to Monetary Rewards Research suggests that there is no correlation between performance and incentive plan of executives of US corporations (Rich & Larson). This shows how ineffective rewards can be when it comes to increasing performance of employees. It is therefore important for employees to focus on other types of rewards that can motivate employees but at the same time be cost effective for the organization. Training and personal development are some of the things that can increase the performance of employees. Training is important for employees as it makes them perform in better in future. Employees are valuable assets of the company and they play a big role in the success of any company. It is therefore important for organizations to spend money on training of employees. It gives employees a sense of belonging as they feel that an organization is spending money on them and this motivates them to work harder for the organization. It is also important for firms to educate and train employees so that in future they can better perform their job. Personal growth is another important kind of reward that can motivate employees. Every person has a need to grow and an organization should fulfill those needs. An employee should feel that an organization has helped him grow as a person and his skill level has increased. Then employees will be motivated to work hard for the organization because he will want to develop more. Personal growth is important for people who are contended with their social and financial status. For such people money or recognition do not matter rather they want to grow as a person, and for such people personal growth can serve as an important motivator. Employees are also motivated if they are integrated in the organizational network (Moch, 15). This makes them responsible for their actions and knowledge is also transferred within the organization. When employees interact and they share knowledge they are in a better position to work. This motivates them to work hard and they also grow as a person. The form of organization also plays a role in motivating employees (Osterloh & Frey, 2000). An organization that celebrates knowledge and learning behavior is more likely to have employees that are satisfied and motivated. All the above mentioned rewards can play a vital role in motivating employees. In today’s tough economic times money is not the only motivator rather non monetary rewards and training and integration of employees can serve as better motivators. Money can only motivate employee to a small level but internal motivation can only happen through other types of rewards. Task 2 From personal experience I can say that reward systesm that is based on financial incentives work for an individual. I was working mainly to support myself therefore I was expecting money in return. This is why money will serve as a motivator for me but definitely it is not the only motivator. The problem with monetary rewards is that they are given for performance that is easily visible. There were many people in the same workplace I was working at, and they were more interested in posing that they were hard worker instead of working hard in real. These were the people who got financial rewards and many potentially able employees were ignored. This was a major demotivator for me as I was witnessing hard work going unrewarded. But still money is something that motivates me in the short run. I want to earn as much money as possible in a short time and that is why I will be working hard if rewards are offered. It works for other people as well. I personally met people on my job and they wanted to get a bonus just so that they can go on a family vacation. The theory suggests that monetary rewards yield temporary compliance, and my personal experience is similar as money motivates people in the short run but in the long run other things matter like job security and growth. According to Herzberg’s theory of motivation five factors that influence motivation are achievement, advancement, recognition, the work itself, and responsibility (Gawel, 1). These are motivators I believe that influence long term behavior. I will want achievement and recognition but in the short run money will serve as a motivation. This is also true for part time workers who do not care about the advancement just because there aim is to earn as much money as possible in a short time. People who want to pursue a career in a field; these are the people who are motivated by such factors. Motivators are different for different people so it is very difficult to generalize it over a large sample of population. Another major motivator in today’s business environment is ethical stance of organizations. I would really want to work for ethical organizations, one that really cares about people in general. In today’s business environment corporations are seen as ruthless predators that prey on innocent people’s interest. I personally would not want to work for a company which is not conscious about the society and which is doing more harm than good to the society. My aim is to help the community in whatever way possible and for this reason I will not to work for an organization that indulges in unethical practices. Many people whom I know have the same opinion so this is a new motivator that is affecting employees. Recognition and advancement are motivators that work well when a person is looking for a long term career. If a person wants to work in, say, financial industry for a long term then he or she will be motivated by non monetary rewards such as recognition and advancement. The idea of being socially accepted is great. In college if teachers encourage a person it feels good. The same is the case in the organizations when supervisors admire your work. Recognition also works because it makes me famous within the workplace. This is a kind of reward that can really motivate me to work hard. Responsibility is another thing that motivates me. If I am in a position of responsibility then I will pay more attention to my work. It is usually expected that people become responsible when they are given an important position. The position should have importance to be a motivator. This is why companies regularly promote employees to higher positions in order to make them more responsible. An important demotivator for employees in the workplace is homogenous reward system for high and low performers (Spitzer, 50). It is extremely an unhealthy practice that is carried out by many firms. I agree that it is a demotivator because it adversely affects the motivation of high performance. People who work hard think that their hard work is not rewarded. Employees feel that they were working for no reason what so ever because their extra work is not rewarded nor recognized. This is a major source of dissatisfaction for me. The inappropriate behavior of superiors is an important demotivator for me. Managers are usually disrespectful to their subordinates. They pay no attention and are too busy in giving orders which they think are important. They also do not appreciate any kind of innovation whatsoever. If employees come up with an idea then he or she is told to how little he or she knows. The ‘I know it all’ mentality is obvious in managers and this irritates me. Employees in general do not like such behavior and managers should avoid it. Sometimes it feels like we are some illiterate people who are no one. Organizational politics is generally bad for the company and it is a demotivator for me. Politics is just about blaming people and pulling each other’s leg. People cannot remain friendly if they know that there companion is playing a role in pulling their leg for a promotion. It is counterproductive and stressful. I prefer working and getting back to home without such dirty politics but it is sometimes impossible to avoid such things. People want to enjoy their lives and organizational politics just make them worried and troubled. This is something managers should attempt to avoid and employees that are involved in politics should be punished. Works Cited Page Elliot, Newman, Longe, & Deakin. Differential Response Patterns in the Striatum and Orbit frontal Cortex to Financial Reward in Humans: A Parametric Functional Magnetic Resonance Imaging Study. The Journal of Neuroscience, 23(1): 303-307, (2003) Gargiulo, Susanne. How employee freedom delivers better business. CNN (2011). Web November 14, 2011 http://edition.cnn.com/2011/09/19/business/gargiulo-google-workplace-empowerment/index.html Gawel, Joseph E. Herzberg's theory of motivation and Maslow’s hierarchy of needs. Practical Assessment, Research & Evaluation, 5(11), (1997). Web November 14, 2011 http://PAREonline.net/getvn.asp?v=5&n=11 Jenkins, Jr. Financial Incentives. In Generalizing from laboratory to Field Settings edited by Edwin A. Locke Lexington: Lexington Books, (1986). Print Jenkins, Jr., Mitra, Gupta, & Shaw. 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