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Employee

Motivation

Presented To; GROUP OF EAGLES

Pr. Kashif Ammar NASIR KHAN

University of Sargodha AAMIR RAZA

SADIA GULL

MADEEHA ZUBAIR

AAMIR SAIF-ULLAH

M.B.A (Regular) Sec A

University of Sargodha

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Definition of Motivation

According to Edwin B Flippo, ―Motivation is the process of attempting to influence

others to do their work through the possibility of gain or reward.

The definition of motivation is to give reason, incentive, enthusiasm, or interest that

causes a specific action or certain behavior. Motivation is present in every life function. Simple

acts such as eating are motivated by hunger. Education is motivated by desire for knowledge.

Motivators can be anything from reward to coercion. From the scientific viewpoint, by most

accounts, motivation is defined as an inner state of need or desire. That state of desire creates a

movement or activity towards satisfying that desire. In my never-ending quest to spread the word

about turning ideas into action, I view inspiration as the state of mind that primes us to come up

with great ideas, and motivation as the state of mind that spurs us to action.

Concept of Motivation

In order to understand the concept of motivation, we have to examine three terms :

motive, motivating and motivation and their relationship

Motive

―A motive is an inner state that energizes, activates, or moves and directs behavior towards

goals.‖

Motivating

―Motivating is a term which implies that one person includes another, to engage in action by

ensuring that a channel to satisfy the motive becomes available and accessible to the individ ual.‖

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Motivation

Dubin has defined motivation as;

―Motivation is the complex force starting and keeping a person at work in an organization.

Motivation is something that moves the person to action, and continues him in the course of

action already initiated‖

According to McFarland;

―Motivation refers to the way in which urges, drives, aspirations, strivings, or needs direct,

control, or explain the behavior of human being.

.NATURE OF MOTIVATION

1. Based on Motives: Motivation is based on individual‘s motives which are internal to the

individual. These motives are in the form of feelings that the individual lacks something. In

order to overcome this feeling, he tries to behave in a manner which helps in overcoming this

feeling.s

2. Affected by Motivating: Motivation is affected by way the individual is motivated. It can

also activate the latent needs in the individual, that is, the needs that are the less strong and

somewhat dormant, and harness them in a manner that would be functional for the

organization.

3. Goal–directed Behavior: Motivation leads to goal-directed behavior. A goal-directed

behavior is one which satisfies the cause for which behavior takes place.

4. Related to Satisfaction: satisfaction refers to the contentment experiences of an individual

which he derives out of need fulfillment. Thus satisfaction is a consequence of rewards and

punishments associated with past experiences.

5. Complex Process: Motivation is a complex process; complexity emerges because of the

nature of needs and the type of behavior that is attempted to satisfy those needs.

6. Person Motivated in Totality: A person is motivated in totality and not in part. Each

individual in the organization is a self-contained unit and his needs are interrelated. These

affect his behavior in different ways.

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Motivation

Motivation is a force that drives people to do things. Employees are normally motivated

to achieve their needs, whatever they may include. Motivation is inside another person's head

and heart. It may be intrinsic or extrinsic. This is what we call motivation. Employees of a

company will be motivated if they associate certain incentives with an activity of work.

Motivation is an important function which every manager performs by assigning the

people to work for accomplishment of objectives of the organization .Issuance of well conceived

instructions and orders does not mean that they will be followed .A manager has to make

appropriate use of motivation to enthuse the employees to follow them. Effective motivation

succeeds not only in having an order accepted but also in gaining a determination to see that it is

executed efficiently and effectively.

In order to motivate workers to work for the organizational goals, the managers must

Determine the motives or needs of the workers and provide an environment in which

Appropriate incentives are available for their satisfaction .If the management is successful in

doing so; it will also be successful in increasing the willingness of the workers to work. This will

increase efficiency and effectiveness of the organization. There will be better utilization of

resources and workers abilities and capacities.

Concept of motivation

The word motivation has been derived from motive which means any idea, need or

emotion that prompts a man in to action. Whatever may be the behavior of man, there is some

stimulus behind it .Stimulus is dependent upon the motive of the person concerned. Motive can

be known by studying his needs and desires.

There is no universal theory that can explain the factors influencing motives which control mans

behaviour at any particular point of time. In general, the different motives operate at different

times among different people and influence their behaviours. The process of motivation studies

the motives of individuals which cause different type of behavior.

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Need of motivation

Management‘s basic job is the effective utilization of human resources for achievements

of organizational objectives. The personnel management is concerned with organizing human

resources in such a way to get maximum output to the enterprise and to develop the talent of

people at work to the fullest satisfaction. Motivation implies that one person, in organization

context a manager, includes another, say an employee, to engage in action by ensuring that a

channel to satisfy those needs and aspirations becomes available to the person. In addition to

this, the strong needs in a direction that is satisfying to the latent needs in employees and

Harness them in a manner that would be functional for the organization.

Employee motivation is one of the major issues faced by every organization. It is the

major task of every manager to motivate his subordinates or to create the ‗will to work‘ among

the subordinates. It should also be remembered that a worker may be immensely capable of

doing some work; nothing can be achieved if he is not willing to work. A manager has to make

appropriate use of motivation to enthuse the employees to follow them.

Significance of Motivation

Motivation involves getting the members of the group to pull weight effectively, to give

their loyalty to the group, to carry out properly the purpose of the organization. The following

results may be expected if the employees are properly motivated.

1. The workforce will be better satisfied if the management provides them with

Opportunities to fulfil their physiological and psychological needs. The workers will

Cooperate voluntarily with the management and will contribute their maximum towards the

goals of the enterprise.

2. Workers will tend to be as efficient as possible by improving upon their skills and

Knowledge so that they are able to contribute to the progress of the organization. This will also

result in increased productivity.

3. The rates of labor‘s turnover and absenteeism among the workers will be low.

4. There will be good human relations in the organization as friction among the workers

themselves and between the workers and the management will decrease.

5. The number of complaints and grievances will come down. Accident will also be low.

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6. There will be increase in the quantity and quality of products. Wastage and scrap will be less.

Better quality of products will also increase the public image of the business.

Motivation is the activation or energization of goal-oriented behavior;

Intrinsic

Extrinsic

From a practical standpoint, we can dig into our motives in order to get better results,

and move ourselves from point A to point B. For example, if you know what motivates you, you

can use those motives to get yourself to do things that you wouldn't do otherwise. These same

principles can be applied to motivating others as well.

Motivational techniques, therefore, are useful to teachers, leaders, parents, employers,

and really, almost anyone. The key is in understanding that you are not motivating someone else.

Instead, you are simply providing a circumstance that triggers that person to be motivation.

Intrinsic and Extrinsic Motivation

Intrinsic Motivation

Intrinsic motivation comes from rewards inherent to a task or activity itself - the

enjoyment of a puzzle or the love of playing. This form of motivation has been studied by social

and educational psychologists since the early 1970s. Research has found that it is usually

associated with high educational achievement and enjoyment by students. Intrinsic motivation

has been explained by Fritz Heider' attributional theory, Bandura's work on self effeciency,and

Ryan and Deci's cognitive evaluation theory. Students are likely to be intrinsically motivated if

they:

Attribute their educational results to internal factors that they can control (e.g. the amount

of effort they put in),

Believe they can be effective agents in reaching desired goals (i.e. the results are not

determined by luck),

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Are interested in mastering a topic, rather than just rote- learning to achieve good grades.

Extrinsic motivation

Extrinsic motivation comes from outside of the performer. Money is the most obvious

example, but coercion and threat of punishment are also common extrinsic motivations.

While competing, the crowd may cheer on the performer, which may motivate him or her

to do well. Trophies are also extrinsic incentives. Competition is in general extrinsic because it

encourages the performer to win and beat others, not to enjoy the intrinsic rewards of the

activity. Social psychological research has indicated that extrinsic rewards can lead to over

justification and a subsequent reduction in intrinsic motivation. In one study demonstrating this

effect, children who expected to be (and were) rewarded with a ribbon and a gold star for

drawing pictures spent less time playing with the drawing materials in subsequent observations

than children who were assigned to an unexpected reward condition and to children who

received no extrinsic reward.

Motivation starts with you! As you aspire to be more successful in life, your attitude

towards yourself and others will play a huge role. Positive people learn how to handle life's

challenges differently and use these opportunities to grow. So can you!

Self Motivation

The self-control of motivation is increasingly understood as a subset of emotional

intelligence; a person may be highly intelligent according to a more conservative definition (as

measured by many intelligence test), yet unmotivated to dedicate this intelligence to certain

tasks. Yale School of Management Professor Victor Vroom's "expectancy theory" provides an

account of when people will decide whether to exert self control to pursue a particular goal.

Drives and desires can be described as a deficiency or need that activates behavior that is

aimed at a goal or an incentive. These are thought to originate within the individual and may not

require external stimuli to encourage the behavior. Basic drives could be sparked by deficiencies

such as hunger, which motivates a person to seek food; whereas more subtle drives might be the

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desire for praise and approval, which motivates a person to behave in a manner pleasing to

others.

Motivation Process

1. Identification of need

2. Tension

3. Course of action

4. Result –Positive/Negative

5. Feed back

TYPES OF NEEDS

There are many needs which an individual may have and there are various ways in which

these may be classified. The basic objective behind classification of needs into different

categories is to find out similarity and dissimilarity in various needs so that incentives are

grouped to satisfy the needs falling under one category or the other. Thus needs may be grouped

into three categories.

1. Primary Needs: Primary needs are also known as psychological , biological , basic or

unlearned needs . These needs are common to all human beings , though their intensity

may differ . Some of the needs are food , sleep , air to breathe etc. These needs arise out

of the basic physiology of life and are important for survival and preservation of species

These needs are conditioned by social practice .

2. Secondary Needs: As contrast to the primary needs, secondary needs are not natural but

are learned by the individual through his experience and interaction .Therefore, these

are also called learned or derived needs. Emergence of these needs depends on learning .

There may be different types of secondary needs like need of power, achievement,

status, affiliation, etc.

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3. General Needs: There are a number of needs which lie in the grey area between the

primary and secondary classifications. In fact, there are certain such needs for

competence, curiosity, manipulation, affection etc.

Motivation and Behavior

Motivation causes goal-directed behavior. Feeling of a need by an individual generates a

feeling that he lacks something. This lack of something creates tension in the mind of individual.

To overcome this state he engages himself in a behaviour to satisfy his needs. This is goal-

directed behaviour.

Goal-directed behavior leads to goal- fulfillment and the individual succeeds in fulfilling

his needs and thereby overcoming his tension in the favorable environment. Behavior ends the

moment tension is released. However, satisfaction of one need leads to feeling of another need.

Thus goal-directed behavior is a continuous process.

NEED TENTION

GOAL- DIRECTED

BEHAVIOUR

GOAL-FULFILMENT/

NEED SATISFACTION

FAVOURABLE

ENVIRONMENT

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FACTORS AFFECTING INDIVIDUAL PERFORMANCE

1. Motivation: Level of motivation derives an individual for work Motivation is based on

motive which is a feeling that an individual lacks something. This feeling creates some sort of

tension in his mind. In order to overcome this tension, he engages in goal-directed behavior.

Thus motivation becomes a prime mover for efforts and better work performance.

2. Sense of Competence : Sense of competence denotes the extent to which an individual

consistently regards himself as capable of doing a job. Sense of competence of an individual

depends to a very great extent on his locus of control. Locus of control means whether people

believe that they are in control of events or events control them.

3. Ability: Ability is expressed in the form of the following equation:

Ability = knowledge x skill

Knowledge refers to the possession of information and ideas in a particular field which may be

helpful in developing relationships among different variables related to that field . Skill refers to

expertness, practical ability or facility in action or doing something.

4. Role Perception: A role is the pattern of actions expected of a person in activities involving

others . Role reflects a person‘s position in the social system with its accompanying rights and

MOTIVATION

SENSE OF

COMPETENCE

ABILITY RESOURCES

REWARD PERFORMANCE

ROLE PERCEPTION

EXTRINSIC

INTRINSIC

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obligations. Role perception is how he thinks he is supposed to act in his own role and how

others act in their role. There are two types of problems which emerge in role specification:

Role ambiguity and role conflict. Role ambiguity denotes the state in which the individual is

not clear what is expected from him in the job situation. Role conflicts are the situation in which

the individual engages in two or more roles simultaneously and these roles are mutually

incompatible.

5. Organizational Resource: Organizational Resources denote various types of facilities –

physical and psychological – which are available at the work place Physical facilities include la –

physical and psychological – which are available at the work place. Physical facilities include

layout of the work place and physical environment.

Role of Motivation

Motivation is one among the various factors affecting individual performance. All

organizational facilities will go waste in the lack of motivated people to utilize the facilities

effectively. The importance of motivation in an organization may be summed up as follows:

1. High Performance Level: Motivated employees put higher performance as compared to

other employees. In a study it was found that motivated people employees worked close to 80-90

percent of their capability. High performance is a must for an organization being successful and

this performance comes by motivation.

2. Low Employee Turnover: Motivated employees stay in the organization and their

absenteeism is quite low. High turnover and absenteeism creates many problems in the

organization.

3. Acceptance of Organisational Changes: Organisations are created in the society. Because

of changes in society, organisation have to incorporate those changes to cope up with the

recruitment of the time. When thesechanges are introduced in the organisation, there is a

tendency to resist these changes by the employees. However if they are properly motivated, they

accept, introduce, and implement these changes keeping the organisation on the right track of

progress.

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THEORIES OF MOTIVATION

1. Herzberg's theory of motivators and hygiene factors:

Herzberg (1959) constructed a two-dimensional paradigm of factors affecting people's

attitudes about work. He concluded that such factors as company policy, supervision,

interpersonal relations, working conditions, and salary are hygiene factors rather than

motivators. According to the theory, the absence of hygiene factors can create job dissatisfaction,

but their presence does not motivate or create satisfaction.

In contrast, he determined from the data that the motivators were elements that enriched a

person's job; he found five factors in particular that were strong determiners of job satisfaction:

achievement, recognition, the work itself, responsibility, and advancement. These motivators

(satisfiers) were associated with long-term positive effects in job performance while the hygiene

factors (dissatisfiers) consistently produced only short-term changes in job attitudes and

performance, which quickly fell back to its previous level.

In summary, satisfiers describe a person's relationship with what she or he does, many

related to the tasks being performed. Dissatisfies, on the other hand, have to do with a person's

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relationship to the context or environment in which she or he performs the job. The satisfiers

relate to what a person does while the dissatisfies relate to the situation in which the person does

what he or she does.

2. Maslow's hierarchy of needs (Deficient theory of Motivation)

In 1954, Maslow first published Motivation and Personality, which introduced his theory

about how people satisfy various personal needs in the context of their work. He postulated,

based on his observations as a humanistic psychologist, that there is a general pattern of needs

recognition and satisfaction that people follow in generally the same sequence. He also theorized

that a person could not recognize or pursue the next higher need in the hierarchy until her or his

currently recognized need was substantially or completely satisfied, a concept called prepotency.

Maslow's hierarchy of needs is shown in Table 1. It is often illustrated as a pyramid with the

survival need at the broad-based bottom and the self-actualization need at the narrow top.

Table 1

Maslow's hierarchy of needs

Level Type of Need Examples

1 Physiological Thirst, sex, hunger

2 Safety Security, stability, protection

3 Love and

Belongingness

To escape loneliness, love and be loved, and gain a

sense of belonging

4 Esteem Self-respect, the respect others

5 Self-actualization To fulfill one's potentialities

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(i) Physiological needs:

These are important needs for sustaining the human life. Food, water, warmth, shelter,

sleep, medicine and education are the basic physiological needs which fall in the primary list of

need satisfaction. Maslow was of an opinion that until these needs were satisfied to a degree to

maintain life, no other motivating factors can work.

(ii) Security or Safety needs:

These are the needs to be free of physical danger and of the fear of losing a job, property,

food or shelter. It also includes protection against any emotional harm.

(iii) Social needs:

Since people are social beings, they need to belong and be accepted by others. People try

to satisfy their need for affection, acceptance and friendship.

(iv) Esteem needs:

According to Maslow, once people begin to satisfy their need to belong, they tend to

want to be held in esteem both by themselves and by others. This kind of need produces such

satisfaction as power, prestige status and self-confidence. It includes both internal esteem factors

like self- respect, autonomy and achievements and external esteem factors such as states,

recognition and attention.

(v) Need for self-actualization:

Maslow regards this as the highest need in his hierarchy. It is the drive to become what

one is capable of becoming; it includes growth, achieving one‘s potential and self- fulfillment. It

is to maximize one‘s potential and to accomplish something.

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3. ERG theory

Clayton Alderfer, expanding on Maslow's hierarchy of needs, created the ERG theory

(existence, relatedness and growth).

Physiological and safety , the lower order needs, are placed in the existence category,

while love and self esteem needs are placed in the relatedness category. The growth category

contains our self-actualization and self-esteem needs. In addition to the differences in

categorizing human needs, ERG theory adds a regression hypothesis to go along with the

progression hypothesis originally proposed by Maslow.

Alderfer‘s regression hypothesis helped explain people‘s behavior when frustrated at meting

needs at the next higher level in the hierarchy.

4. McClelland’s Theory of Needs:

David McClelland has developed a theory on three types of motivating needs :

1. Need for Power

2. Need for Affiliation

3. Need for Achievement

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Need for Achievement

This need is the strongest and lasting motivating factor. Particularly in case of persons

who satisfy the other needs. They are constantly pre occupied with a desire for improvement and

lack for situation in which successful outcomes are directly correlated with their efforts. They set

more difficult but achievable goals for themselves because success with easily achievable goals

hardly provides a sense of achievement.

Need for Power

It is the desire to control the behaviour of the other people and to manipulate the

Surroundings. Power motivations positive applications results in domestic leadership style, while

it negative application tends autocratic style.

Need for affiliation

It is the related to social needs and creates friendship. This results in formation of

informal groups or social circle.

Basically people for high need for power are inclined towards influence and control. They

like to be at the center and are good orators. They are demanding in nature, forceful in manners

and ambitious in life. They can be motivated to perform if they are given key positions or power

positions.

In the second category are the people who are social in nature. They try to affiliate themselves

with individuals and groups. They are driven by love and faith. They like to build a friendly

environment around themselves. Social recognition and affiliation with o thers provides them

motivation.

McClelland observed that with the advancement in hierarchy the need for power and

achievement increased rather than Affiliation. He also observed that people who were at the top,

later ceased to be motivated by this drives.

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5. “Theory X and Theory Y” of Douglas McGregor:

McGregor, in his book ―The Human side of Enterprise‖ states that people inside the

organization can be managed in two ways. The first is basically negative, which falls under the

category X and the other is basically positive, which falls under the category Y. After viewing

the way in which the manager dealt with employees, McGregor concluded that a manager‘s view

of the nature of human beings is based on a certain grouping of assumptions and that he or she

tends to mold his or her behavior towards subordinates according to these assumptions.

Assumptions of theory X:

Employees inherently do not like work and whenever possible, will attempt to avoid it.

Because employees dislike work, they have to be forced, coerced or threatened with

punishment to achieve goals.

Employees avoid responsibilities and do not work fill formal directions are issued.

Most workers place a greater importance on security over all other factors and display

little ambition.

Assumptions of theory Y:

Physical and mental effort at work is as natural as rest or play.

People do exercise self-control and self-direction and if they are committed to those

goals.

Average human beings are willing to take responsibility and exercise imagination,

ingenuity and creativity in solving the problems of the organization.

That the way the things are organized, the average human being‘s brainpower is only

partly used.

On analysis of the assumptions it can be detected that theory X assumes that lower-order

needs dominate individuals and theory Y assumes that higher-order needs dominate individuals.

An organization that is run on Theory X lines tends to be authoritarian in nature, the word

―authoritarian‖ suggests such ideas as the ―power to enforce obedience‖ and the ―right to

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command.‖ In contrast Theory Y organizations can be described as ―participative‖, where the

aims of the organization and of the individuals in it are integrated; individuals can achieve their

own goals best by directing their efforts towards the success of the organization.

However, this theory has been criticized widely for generalization of work and human behavior.

6. Equity Theory

As per the equity theory of J. Stacey Adams, people are motivated by their beliefs about the

reward structure as being fair or unfair, relative to the inputs. People have a tendency to use

subjective judgment to balance the outcomes and inputs in the relationship for comparisons

between different individuals. Accordingly:

If people feel that they are not equally rewarded they either reduce the quantity or quality of

work or migrate to some other organization. However, if people perceive that they are rewarded

higher, they may be motivated to work harder.

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Two Factor Theories

Douglas mcgregor introduced the theory with the help of two views; X assumptions are

conservative in style Assumptions are modern in style.

X Theory (pessimistic)

Individuals inherently dislike work.

People must be coerced or controlled to do work to achieve the objectives.

People prefer to be directed

Y Theory (optimistic)

People view work as being as natural as play and rest

People will exercise self direction and control towards achieving objectives they are

Committed to

People learn to accept and seek responsibility.

Types of Motivation

Intrinsic motivation occurs when people are internally motivated to do something

because it either brings them pleasure, they think it is important, or they feel that what they are

learning is morally significant.

Extrinsic motivation comes into play when a student is compelled to do something or act

a certain way because of factors external to him or her (like money or good grades)

Incentives

An incentive is something which stimulates a person towards some goal. It activates

human needs and creates the desire to work. Thus, an incentive is a means of motivation. In

organizations, increase in incentive leads to better performance and vice versa.

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Need for Incentives

Man is a wanting animal. He continues to want something or other. He is never fully

Satisfied. If one need is satisfied, the other need arises. In order to motivate the Employees, the

management should try to satisfy their needs. For this purpose, both financial and non financial

incentives may be used by the management to motivate the workers. Financial incentives or

motivators are those which are associated with money. They include wages and salaries, fringe

benefits, bonus, retirement benefits etc. Non financial motivators are those which are not

associated with monetary rewards. They include intangible incentives like ego-satisfaction, self-

actualization and responsibility.

Types of Incentives

Financial Incentives

Wages and Salaries

Bonus

Medical reimbursement

Insurance

Housing facility

Retirement benefits

Non-financial incentives

Competition

Group recognition

Job security

Praise

Knowledge of result

Workers participation

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Suggestion system

Opportunities for growth

Motivation is the key to performance improvement

There is an old saying you can take a horse to the water but you cannot force it to drink; it

will drink only if it's thirsty - so with people. They will do what they want to do or otherwise

motivated to do. Whether it is to excel on the workshop floor or in the 'ivory tower' they must be

motivated or driven to it, either by themselves or through external stimulus. Are they born with

the self-motivation or drive? Yes and no. If no, they can be motivated, for motivation is a skill

which can and must be learnt. This is essential for any business to survive and succeed.

Performance is considered to be a function of ability and motivation, thus:

Job performance =f (ability) (motivation)

Ability in turn depends on education, experience and training and its improvement is a

slow and long process. On the other hand motivation can be improved quickly. There are many

options and an uninitiated manager may not even know where to start. As a guideline, there are

broadly seven strategies for motivation.

There are broadly seven strategies for motivation;

Positive reinforcement / high expectations

Effective discipline and punishment

Treating people fairly

Satisfying employees needs

Setting work related goals

Restructuring jobs

Base rewards on job performance

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Essentially, there is a gap between an individual‘s actual state and some desired state and the

manager tries to reduce this gap. Motivation is, in effect, a means to reduce and manipulate this

gap.

Role of monetary and non monetary incentives in the workplace

Managers are constantly searching for ways to create a motivational environment where

associates (employees) to work at their optimal levels to accomplish company objectives.

Workplace Motivators include both monetary and non-monetary incentives. Monetary incentives

can be diverse while having a similar effect on associates. One example of monetary incentives

is mutual funds provided through company pension plans or insurance programs. Because it has

been suggested that

Associates, depending on their age, have different needs pertaining to incentives, traditional

incentive Packages are being replaced with alternatives to attract younger associates. This paper

will discuss how monetary and non-monetary incentives are influenced by career stages and the

problems associated with monetary and non-monetary incentives.

Monetary Incentives

The purpose of monetary incentives is to reward associates for excellent job performance

through Money. Monetary incentives include profit sharing, project bonuses, stock options and

warrants, Scheduled bonuses (e.g., Christmas and performance- linked), and additional paid

vacation Time. Traditionally, these have helped maintain a positive motivational environment for

associates (Kepner, 2001).

Non-Monetary Incentives

The purpose of non-monetary incentives is to reward associates for excellent job

performance through opportunities. Non-monetary incentives include flexible work hours,

training, pleasant work Environment, and sabbaticals.

Incentives across Generations

Research suggests that desired monetary incentives differ for associates based on career

stage and generation. Surveys by the American Association of Retired Persons (AARP) have

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shown that most workers will work past retirement age if offered flexible schedules, part-time

hours, and temporary employment (Nelson, 1999). The generations covered in the AARP

surveys include ―Mature Workers‖ (those born between 1930 and 1945), ―Baby Boomers‖ (those

born between 1946 and 1963), ―Generation x'ers‖ (those born between 1964 and 1981), and

―Generation y'ers‖ (those born after 1982). The information presented below shown non-

monetary incentives that are important to each generation covered in the surveys (Nelson, 1999).

Problems with Monetary Incentives

Alfie Kohn (1993) argues that monetary incentives encourage compliance rather than

Risk-taking because most rewards are based only on performance. As a result, associates are

discouraged from being creative in the workplace. Another argument Kohn presents is that

monetary incentives may be used to circumvent problems in the workplace. For example,

incentives to boost sales can be used to compensate for poor management. Employers also may

use monetary Incentives as an extrinsic rather than an intrinsic motivator. In other words,

associates are driven to do

Things just for the monetary reward versus doing something because it is the right thing to do.

This can disrupt or terminate good relationships between associates because they are transformed

from Co-workers to competitors, which can quickly disrupt the workplace environment (Kohn,

1993).

Adoption of Non-Monetary Incentives

Generational non-monetary incentive differences shown below are affected by career

stage and proximity to retirement. The older the associate, the more the focus is placed on

retirement or supplementing Retirement income with part-time or temporary jobs. The younger

the associate, the more the focus is placed on job satisfaction and the work environment. The

bottom line is that incentives must be tailored to the needs of the workers rather than using the

"one-size-fits-all‖ approach, which is impersonal and sometimes ineffective.

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Non-monetary incentives desired by different generations of employees

Mature Workers (1920 -1945)

Flexible schedules

Part-time hours

Temporary hours

Baby Boomers (1946 -1963)

Retirement planning

Flexible retirement option

Job training

Sabbaticals

Generation x’ers (1964 - 1981)

Flexible work schedules

Professional development

Feed back

Tangible rewards

Work environment

Generation y’ers (post 1982)

Flexible work schedules

Professional development

Feedback

Tangible rewards

Work environment

Attentive employers

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Conclusion

Monetary and non-monetary incentives vary in their roles, effectiveness, and

appropriateness, Depending on the type of incentive. Alfie Kohn (1993) argues that incentives

actually hamper Associates and companies by decreasing associates' motivation, interest, and job

satisfaction. This is just the opposite of what incentives were created to do. Incentives must take

into account the workers for whom they were created. A balance between monetary and non-

monetary incentives should be

Used to satisfy the diverse needs and interests of associates. Creating a balance sheet is a

simple exercise that can be used for evaluating incentive programs. On one side of the balance

sheet list all the incentive programs (both monetary and non-monetary) of your organization. On

the other side list all the outcomes (whether desired or not) that can be attributed to these

incentives. Areas of improvement would be those outcomes identified as undesirable.

Techniques of Motivation

Recognition of work

Job Security

Team Spirit

Competition

Status

Desire for recognition

When people receive recognition or affirmation for their efforts it has a positive

motivational effect on them.

Just a few words of encouragement are worth their weight in gold.

Current issues in Motivation

Compressed Workweek

Flexible work hours

Job sharing

Telecommuting

Pay of Performance System

Open-book management

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Rewards and Recognition

Like a child being given a chocolate cupcake and a big hug after cleaning her room, rewards and

recognition can be powerful tools for employee motivation and performance improvement. Many

types of rewards and recognition have direct costs associated with them, such as cash bonuses and

stock awards, and a wide variety of company-paid perks, like car allowances, paid parking, and gift

certificates. Other types of rewards and recognition may be less tangible, but still very effective.

These "non-monetary" rewards include formal and informal acknowledgement, assignment of

more enjoyable job duties, opportunities for training, and an increased role in decision-making.

This paper focuses on non-monetary rewards, and as we will see, these types of rewards can be

very meaningful to employees and so, very motivating for performance improvement.

But first, let's take a quick look at the primary goals of rewards and recognition. Jack Zigon defines

rewards as "something than increases the frequency of an employee action" (1998). This definition

points to an obvious desired outcome of rewards and recognition: to improve performance. Non-

monetary recognition can be very motivating, helping to build feelings of confidence and

satisfaction (Keller 1999). Another important goal is increased employee retention. An ASTD

report on retention research identified consistent employee recognition as a key factor in retaining

top-performing workers. (Jimenez 1999).

To achieve desired goals, reward systems should be closely aligned to organizational strategies

(Allen and Helms 2002). For example, a company focused on a product differentiation strategy

could design their reward practices to foster innovation to provide unique products or services,

while a company focused on a cost reduction strategy might focus on rewards for ideas to

minimize or eliminate costs and employee stock awards to foster an on-going cost reduction

emphasis.

Zigon offers a variety of ways to reward desired performance and increase the likelihood of it

happening again, and more frequently than it would have, without these types of interventions. His

web site lists ideas that give managers a lot of flexibility both to offer rewards at various cost

levels and to find rewards that match what individual employees will find valuable. To be really

effective, this takes time and effort on managers' parts, to get to know different employees' likes

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and dislikes.

How effective is non-cash recognition? Various anecdotal evidence reports non-monetary

recognition as an important factor in retaining excellent employees and for improving

performance. A quick search of a news service database points to articles extolling various perks

such as an in-house chiropractor, spa gift certificates, days off, fancy parties and the use of

personal trainers. The givers of such perks see these rewards as a way to keep high performing

employees in a shrinking job market; and certainly companies like Walt Disney World have

documented the success of employee recognition programs (Lynch 2003). However I did not find

any strong empirical evidence comparing the relative benefits o f monetary versus non-monetary

rewards.

In the absence of such evidence, we can still consider non-monetary rewards as part of

comprehensive performance improvement strategy.

So what types of non-monetary rewards are the most effective? Bob Nelson, recognition consultant

and self-proclaimed "Guru of Thank You" reports research indicating that the type of recognition

employees appreciate most is to be recognized by people they work directly for. In fact, 78% of

employees indicated that it was very or extremely important to be recognized by their managers

when they do good work (Nelson 2004). The number one choice for recognition is sincere praise

given in a timely manner with specific examples. Allen and Helms' (2002) research confirmed the

importance of regular expressions of appreciation by managers and leaders to encourage behavior

of employees to reach strategic goals; and this was true for each of the strategies they examined.

Mike Rushby, HR Vice President at Weyerhaeuser Company, sees developmental opportunities,

such as assignments to special projects as a powerful form of non-monetary recognition (personal

communication, February 17, 2004). Rushby believes that being chosen to work on a task team to

accomplish a company initiative is motivating because it helps employees gain new skills and

experiences, demonstrates trust in their abilities, and adds variety to an individual's work.

Weyerhaeuser uses the Performance Management Process and Individual Development Plans to

help identify strong candidates for developmental opportunities.

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Team rewards present a great opportunity to help team bonding. With the proper

application of a reward and recognition program, we can help build a high-performance team.

But team rewards are not to be treated carelessly: misapplication could lead to unhealthy

competition, lack of cooperation, and ultimately severe financial consequences for the

organization. Team motivation and rewards programs should make up part of our overall

employee recognition program. we need to consider a mix of team and individual rewards, and

balance the mix between awards that encourage both cooperative and competitive

behaviours.The desired outcome of recognition programs is to improve performance and

improve employee retention.

Organisations that are following the non-monetary rewards and recognition say that:

Recognition is a basic requirement for creating a positive work culture in the

organisation.

Recognition encourages and enthuses employees to believe in themselves and deliver

quality.

Recognition is a powerful motivator that puts the recipient in the limelight which leads to

better performance.

The practice by organisations of honouring the employee‘s achievements, singling out top

performers, and offering benefits to the families, inspire the employees to give their best.

People are motivated to higher levels of job performance by positive recognition from their

managers and peers (Keller). Creative use of personalized non-monetary rewards reinforces

positive behaviors and improves employee retention and performance. These types of recognition

can be inexpensive to give, but priceless to receive.

Employee Motivation using Team Rewards

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Motivation - the need for meaningful self- fulfillment, the need to create personal challenges isn't

only about inspiring people to work harder, it is also an effective way to retain people and build

loyalty. It is an important factor in fostering career progression.

Rewards:

Recognition for innovative ideas and entrepreneurial action from employees.

Honors‘ for unique contribution to sustained high performance by an individual or a

team.

Membership to the exclusive club of top performers.

Recognition to not only super achievers but also employees with long service. Eligibility

for ``Real Old Timers Club.''

Genius Awards for employee children who fare well in studies .

Merits:

Motivates employees to perform better.

Costs the organization next to nothing.

Builds tremendous self-esteem among the employees.

Makes an employee and his family members proud of and loyal to the organisation.

Creates a positive atmosphere where change welcomed.

De-merits:

Remonstrates people if processes are not transparent.

Could result in unhealthy competition among employees.

May lead to shortsighted, hasty decision making.

Work intrudes on the home life of employees.

Will never work if monetary rewards are not substantial.

While recognition through non-monetary rewards facilitates participation, and instills

responsibility in the employees, it is important to ensure that the selection process is fair and

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transparent. It is also imperative that the practicing managers accept the fact that recognition is a

way of life and look for areas to award rewards.

The following are some of the areas of non-monetary recognition practices that an

organization can take note of.

Treats: Free lunches, festival bonus, coffee breaks, picnics, dinner with the boss, dinner for the

family, birthday treats etc.

Knick-knacks: Disk accessories, company watches, tie-pins, broaches, diaries/planners,

calendars, wallets, T-shirts.

Awards: Trophies, plaques, citations, certificates, scrolls, letter of appreciation.

Social acknowledgement: Informal recognition, recognition of office get-togethers, friendly

greetings, smiles, e-mail, solicitation of advice, suggestions, use of company facilities for

personal projects.

Office environment: Redecoration, office with a window, piped music, flexible hours.

On the job: More responsibility, job rotation, special assignment, training, representing the

company at public for forums.

Tokens: Movie tickets, vacation trips, coupons redeemable at stores, early time off, anniversary,

dating and Birthday allowances / presents.

Practical examples:

1. Microsoft

Motivation comes from recognition

―Compensation is a right, but recognition, however, is a gift which validates the importance of

their work.‖ –

Steve Ballmer (CEO)

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Employee Motivation

Why do we need motivated employees? The answer is survival (Smith, 1994). Motivated

employees are needed in our rapidly changing workplaces. Motivated employees help

organizations survive. Motivated employees are more productive. To be effective, managers

need to understand what motivates employees within the context of the roles they perform. Of all

the functions a manager performs, motivating employees is arguably the most complex. This is

due, in part, to the fact that what motivates employees changes constantly (Bowen &

Radhakrishna, 1991). For example, research suggests that as employees' income increases,

money becomes less of a motivator (Kovach, 1987). Also, as employees get older, interesting

work becomes more of a motivator.

Most companies have it all wrong. They don't have to motivate their employees. They

have to stop demotivating them.

The great majority of employees are quite enthusiastic when they start a new job. But in

about 85 percent of companies, our research finds, employees' morale sharply declines after their

first six months—and continues to deteriorate for years afterward. That finding is based on

surveys of about 1.2 million employees at 52 primarily Fortune 1000 companies from 2001

through 2004, conducted by Sirota Survey Intelligence (Purchase, New York).

The fault lies squarely at the feet of management—both the policies and procedures

companies employ in managing their workforces and in the relationships that individual

managers establish with their direct reports.

Three key goals of people at work

To maintain the enthusiasm employees bring to their jobs initially, management must

understand the three sets of goals that the great majority of workers seek from their work—and

then satisfy those goals:

Equity: To be respected and to be treated fairly in areas such as pay, benefits, and job

security.

Achievement: To be proud of one's job, accomplishments, and employer.

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Camaraderie: To have good, productive relationships with fellow employees.

According to various literature on motivation, individuals often have problems

consistently articulating what they want from a job. Therefore, employers have ignored what

individuals say that they want, instead telling employees what they want, based on what

managers believe most people want under the circumstances. Frequently, these decisions have

been based on Maslow's needs hierarchy, including the factor of prepotency. As a person

advances through an organization, his employer supplies or provides opportunities to satisfy

needs higher on Maslow's pyramid.

Frederick has tried to modify Maslow‘s need Hierarchy theory. His theory is also known

as two-factor theory or Hygiene theory. He stated that there are certain satisfiers and dissatisfiers

for employees at work. In- trinsic factors are related to job satisfaction, while extrinsic factors

are associated with dissatisfaction. He devised his theory on the question : ―What do people want

from their jobs ?‖ He asked people to describe in detail, such situations when they felt

exceptionally good or exceptionally bad. From the responses that he received, he concluded that

opposite of satisfaction is not dissatisfaction. Removing dissatisfying characteristics from a job

does not necessarily make the job satisfying. He states that presence of certain factors in the

organization is natural and the presence of the same does not lead to motivation. However, their

nonpresence leads to demotivation. In similar manner there are certain factors, the absence of

which causes no dissatisfaction, but their presence has motivational impact.