Motivational Theories Applied to the Employee Base of Costly Cosmetics Ltd to Improve Internal Motivation Levels - Coursework Example

Individual Business Report Contents Section One: Introductory Context ……………………………………………….3 1.1 Terms of Reference ……………………………………………………………….3 1.2 Objectives …………………………………………………………………………4 1.3 Research Method ………………………………………………………...................4 1.4 Context …………………………………………………………………………….4 2. Section Two: Findings and Analysis ……………………………………………..5 2.1 Outline of main theories of motivation……………………………………………5 2.2 Analysis…………………………………………………………………………..7 3. Section Three: Conclusions & Recommendations ……………………………..9 3.1 Recommendations………………………………………………………………….9 3.2 Conclusion…………………………………………………………………………10 4. Section Four: Bibliography ……………………………………………………….11 1. Section One: Introductory Context Introduction 1.1. Terms of Reference The aim of this research paper is to determine what motivational theories can be applied to the employee base of Costlie Cosmetics Ltd in order to successfully improve their internal motivation levels. The problem at Costlie Cosmetics Ltd originated when some employees were laid off and the rest had to accommodate the extra work load while maintaining the same efficiency levels and without receiving additional compensation for that work load. The Chief Executive operated a centralized, autocratic organization where employee interaction was discouraged and they were afraid to even speak up about their grievances. Without additional compensation, resentment began to grow in the employees and their motivation levels fell. This adversely affected their service and product quality. As has been documented by previous research this had an overall dampening effect on the company and its performance and image in the market due to which it lost some business from some customers and attracted negative reaction and dissatisfaction from other customers. This paper thus looks at how the Human Resource function needs to be managed within an organization and how critical it is to the organization’s final performance. It also looks at several theories of motivation and uses them to explain how the situation at Costlie Cosmetics Ltd can be rectified. This also encompasses a discussion of the current organizational structure and how it was posing a hindrance to the development of the employees and the organization as a whole. Further, it looks at how an organization should be structured to function more efficiently and eliminate many of the problems that Costlie Cosmetics Ltd was facing. Building upon previous secondary research on the topic, this paper looks at the possible ways that motivation levels among the employees of Costlie Cosmetics Ltd can be boosted so the company can get back on track. 1.2. Objectives The objectives of this research paper are to outline a plan of action that can be adopted to improve employee motivation at Costlie Cosmetics Ltd so that the performance of the company can be improved to match past splendor. 1.3. Research Method This paper uses secondary research previously published about motivational theories, organizational structure and Human Resource Management (HRM) to come up with a strategy to be implemented by Costlie Cosmetics Ltd in order to rectify its perilous condition. 1.4. Context The context for this research paper is provided by the pre-existing conditions of the business environment that Costlie Cosmetics Ltd was functioning in. A new competitor had deflated their market share dangerously and as a result they had lain off a lot of employees to remain cost efficient. But instead of benefitting them, this move had cost them dearly. Stress and resentment levels were high among the employees because they had to deal with additional work load without additional compensation and were expected to retain their earlier efficiency levels. Motivation levels were low and service and product quality was deteriorating. 2. Section Two: Findings and Analysis 2.1. Outline of main theories of Motivation Of the leading theories of human motivation that can be applied equally to motivation among employees is Abraham Maslow’s ‘Hierarchy of Needs’ theory. According to this theory, humans are motivated by a set of needs. These needs start from the base of the hierarchy with physiological needs, then lead up to safety needs, then belonging needs, then esteem needs and finally self actualization needs. The theory builds on the fact that the higher tier needs can only be satisfied if all the lower tier needs below it have been fulfilled. In this way, a person is first concerned about food and water and only when that need is satisfied will he be able to move on to needs of home and shelter. If the basic need of food and water is not satisfied, the individual will not be concerned about higher tier needs like love and shelter at all. (Maslow, 1943). According to Latham and Pinder (2004), there are many factors that influence motivation. Among these are needs, traits, values and context. Under context, there are issues of cultural influences where the social or business culture that a person is working in effect his/her performance and attitude on the job. Further, under context, there are job design characteristics which suggest that jobs that required employees to make more emotional connections showed higher job satisfaction and motivation levels as compared to jobs that were mechanical in nature or discouraged interpersonal interaction or the forming of emotional ties with fellow employees. Finally there is the person-organization fit, according to which the level of job satisfaction or motivation depends upon factors which connect the employees and their organization, like the “job, organization or culture”. Important determinants for motivation in this situation are particular characteristics of the job or the organization in question. The “Goal Setting Theory” is useful for improving performance levels among employees. Therein, management sets a specified number of goals for the employees to attain within a specific time frame. However, this is only successful in cases where commitment to the organization is high. Similarly, in the “Social Cognitive” theory, it is stated that an employee who is positive in the workplace will transfer this feeling of positivity to other employees too, thus, a person who is self motivated will subsequently induce motivation in his/her fellow employees. According to Gagne and Deci (2005), “Self Determination Theory” is also an influencing factor wherein it says that controlling environments induce pressure in employees, in such situations motivation comes from “extrinsic” sources. In contrast, in work environments where the employees are interested in their work and are engaged in, committed to and satisfied by their jobs there exists “intrinsic” motivation that is autonomous in nature. The “Two Factor Theory” by Herzberg says that the determinants of motivation in employees are inherent factors of the job, like room for “personal growth, recognition, advancement and achievement” etc. Dissatisfaction and demotivation is caused by external factors, like work environment, salary, work practices, organizational culture, attitude of top management, etc. (Hackman and Oldham, 1976). The Expectancy theory, developed by V. H. Vroom says that peoples’ choice of actions has an inherent motive; to achieve pleasure and avoid pain. It explains that workplace attitude is largely influenced by external factors. The theory illustrates that if an individual employee deems a particular goal possible and wants it to happen; he/she is capable of making that happen. This motivation is driven by three elements; expectancy, instrumentality and valance. This theory was worked upon further by Porter and Lawler who drew the conclusion that there is a positive relation between the effort that the employee puts in, his/her consequent performance and level of satisfaction with the job. Managers should thus harness the potential this can unleash in their employees by setting goals, training, developing and supporting them (Isaac, et al., 2001). Furthermore, Caulton (2012) in her research talks about Alderfer’s Existence, Relatedness, Growth (ERG) theory, according to which sometimes when the employees feel pressurized and frustrated by senior managements’ actions and the organizational policies, their motivation to fulfill needs shifts to lower tier basic needs. In effect, since higher tier needs like achievement, recognition and pursuing talent no longer remains a priority the organization as a whole is dealt a blow as employee productivity and efficiency plummet simultaneously with their motivation levels. 2.2. Analysis According to the information provided about Costlie Cosmetics Ltd, there are several problems that exist with the organizational culture of the company. The company is short of staff and the current staff is over worked, resentful and demotivated. The senior management has not shown much empathy for the lower management levels, especially the Chief Executive of the company who likes to keep her employees under stress and pressure all the time and is not open to a more communicative and interactive environment. She is autocratic and has maintained a strict vertical hierarchy in the organization and kept it largely centralized, so instead of delegating she heads all important matters herself. The organizational culture is such that the employees are not encouraged to interact with one another much, not just this, they are even afraid to communicate any grievances they might have with the senior management. This shows a company which has not evolved with time into a more interactive, devolved, flexible culture and instead has remained largely inflexible and un-interactive. In light of the theories presented above, the situation at Costlie Cosmetics Ltd can be analyzed to identify problem areas and possible solutions to rectify those problems. To change the organizational culture, a more devolved and decentralized approach needs to be adopted under which the organization will have a flatter hierarchy, this approach favors interaction and adopts a more flexible agenda while granting employees higher levels of individual autonomy so as to enhance commitment levels to the job and increase job satisfaction. The end result will be that their motivation levels will rise, restoring or maybe even improving the quality of their service and products so they can increase competitiveness and win back their customers and market share from the competitor. There are a number of theories that can be applied to Costlie Cosmetics Ltd that will improve its motivation levels. Context effects motivation levels; for example, currently the person-organization fit in Costlie Cosmetics Ltd is below optimal level as the employees are resentful of their workload, superiors, organizational culture etc. They are also demotivated because of these factors. Furthermore, according to “social cognitive” theory, there is no positivity in the workplace. On the contrary, there is much negativity; from the Chief Executive for the Senior Management, from the Senior Management to Lower Management and then upwards, from Lower Management to Senior Management and so on. According to theory, all this negativity will breed more negativity and bring motivation levels further down still. Moreover, according to the “Self Determination” theory, since employees are not intrinsically motivated to work, in order to increase their motivation levels, the motivators must be intrinsic, e.g. salary increase, work load decrease, extra payment for over time, formal recognition of efforts etc. According to Porter and Lawler, the senior management can correct the situation by setting goals, training, developing and supporting the disgruntled employees. Additionally, the ERG theory explains how if the employees are frustrated by senior management, they lose interest in fulfilling their higher tier needs; motivation plummets and takes the organization’s productivity and efficiency with it. This is the case in Costlie cosmetics Ltd where the Chief Executive has kept all employees under her pressurized and thus they have lost their motivation to perform well and this has cause the quality of their services and products to decline as well. 3. Section Three: Conclusion and Recommendations 3.1. Conclusion Findings of this research paper show that Costlie Cosmetic faces several issues that require change in organizational culture and structure. The motivation, commitment and satisfaction levels among the employee base are dangerously low, and in the face of daunting competition this has made things worse by further decreasing the company’s performance which has made it lose market share and potential and existing business clients. The main problem area which will subsequently heal all of Costlie Cosmetic’s wounds is the motivation level among the employees. Once restored, it will affect all the other areas as a domino effect and help the company’s performance get back on its feet. But until this concern is diagnosed and tackled, the company won’t be able to set its other deficit areas straight. 3.2. Recommendations Based on previous research, it is suggested that the company undertake a few measures as part of a scheme to rectify the current situation in the company. First and foremost, the company needs to be restructured into a more devolved workplace that fosters communication and flexibility and minimizes hierarchal levels. Secondly, the company needs to introduce and/or increase extrinsic motivators like salary, over time and recognition for achievement. This will on its own boost the motivation levels incrementally. However to sustain a healthy level of motivation, the company bust keep setting goals for the employees to follow according to the “goal setting theory” that will keep them motivated to keep performing with commitment. Management can also introduce new options for their employees like training programs or counseling programs so that they can learn to cope better with organizational change instead of feeling like they can’t cope. Apart from this they also need to foster a supportive environment for the employees so they feel like they’re really a part of the organization and not an alienated employee. This will promote a sense of ownership among them and keep the levels of motivation at healthy levels. (Word Count: 2115 words) 4. Section Four: Bibliography Caulton, J. (2012) The Development and Use of the theory of ERG: A Literature Review. Emerging Leaderhsip Journeys, 5 (1), p.2-8. Available at: http://www.regent.edu/acad/global/publications/elj/vol5iss1/ELJ_Vol5No1_Caulton_pp2-8.pdf [Accessed: 19th Nov 2012]. Gagne, M. and Deci, E. (2005) Self Determination Theory and Work Motivation. Journal of Organizational Behaviour, 36 p.331-362. Available at: http://alain.battandier.free.fr/IMG/pdf/2005_GagneDeci_JOB_SDTtheory.pdf [Accessed: 19th Nov 2012]. Hackman, R. and Oldham, G. (1976) Motivation through the Design of Work: Test of a Theory.Organizational Behavior and Human Performance, 16 p.250-279. Available at: http://groupbrain.wjh.harvard.edu/jrh/pub/JRH1976_3.pdf [Accessed: 19th Nov 2012]. Isaac, R. et al. (2001) Leadership and Motivation: The Effective Application of Expectancy Theory.Journal of Managerial Issues, 13 (2), p.212-226. Available at: http://www.cs.unca.edu/~manns/MotivationExpectancyTheory.pdf [Accessed: 19th Nov 2012]. Latham, G. and Pinder, C. (2004) Work Motivation Theory and Research at the Dawn of the 21st Century. Annual Review of Psychology, 56 p.485-516. Available at: http://home.ubalt.edu/tmitch/642/Articles%20syllabus/Latham%20%26%20Pinder%20wk%20mot%20theory%20an%20rev%2005.pdf [Accessed: 19th Nov 2012]. Maslow, A. (1943) A Theory of Human Motivation. Psychological Review, 50 p.370-396. Available at: http://downloads.joomlacode.org/trackeritem/5/8/7/58799/AbrahamH.Maslow-ATheoryOfHumanMotivation.pdf [Accessed: 19th Nov 2012]. Osterloh, M. et al. (2002) The Dynamics of Motivation in New Organizational Forms. International Journal of the Economics of Business, 9 (1), p.61-77. Available at: http://www.bsfrey.ch/articles/366_02.pdf [Accessed: 19th Nov 2012]. Read More