Unit -4

Motivating EmployeesMotivational Strategies, Incentive Schemes, Empowerment- Job Satisfaction, Morale, Personnel Turnover

Motivation
According to Fred Luthans : Motivation is a process which begins with a physiological or psychological need or deficiency which triggers behavior or a drive that is aimed at a goal or an incentive. Types of Motivation Intrinsic Motivation Extrinsic Motivation

 Why in a company one requires motivational strategies? How to motivate employees?

Characteristics of Well- Motivated Employees

Higher Productivity (i.e. they produce more for a given level of resources than poorly-motivated workers) Better Quality work with less wastage A greater sense of urgency (things happen quicker - when they need to) Motivated Employees take more "ownership" of their work" More feedback demanded from superiors and management Working at 80-95% of their ability

Best businesses have the best motivated Employees

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Levels of Motivational Strategies

The various motivational strategies being used at different levels are : Organizational Level Strategies Job-Role Level Strategies

Individual Level Strategies

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Organizational Level Strategies

Preparing a Profile of the Organizational Climate :A profile of the organizational climate can be prepared through periodical diagnostic studies by analyzing motivational strategies prevailing in the organization.

Organizational Level Strategies

Encouraging Open Communication: - Open communication improves work motivation in an organization. It must embrace communication of policies from the top to the different organizational levels; help resolve difficulties and problems at various organizational levels; and flow of supportive feedback for the superior.

Job-Role Level Strategies

Enhancing Role Efficacy

Role efficacy is the potential effectiveness of an individual in his role.

Job-Role Level Strategies

Enhancing Role Efficacy: Factors which contribute to role efficacy are (a.) the individuals perception of his role being important in the organization (b.) self-role integration (c.) opportunity to take initiative and become creative (d.) integration of the role with other roles in the organization (e.) helping relationships in the organization (f.) possibility to influence and work on larger goals useful to others (g.) opportunity for growth. An attempt should be made to measure role efficacy of various jobs in the organization in order to take appropriate measures to enhance them.
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 Promoting Norms for Recognition of Competence: Climate of work motivation can be engineered by promoting norms of recognition for competence in job and good work performed. If individuals perceive such recognition, they are motivated. The recognition of their contribution should be genuine and given only to those individuals who deserve it. The challenging Job: Work motivation is partly determined by the challenge which a job provides to the individual. It is a most significant factor in employee motivation.
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 Opportunities to Influence Decisions: Work motivation can also be increased by providing opportunities to the individuals to influence decisions concerning them. This is possible if there exists some autonomy and freedom, with adequate support and responsibility, for the individual who is able to perceive it. Opportunities for Development & Growth: Perception of opportunities for development and growth in the job forms a significant measure to improve work motivation. Though, this principle has some limitations as no job can provide a learning opportunity for every individual for all times. A Sense of Contribution to a Larger Goal: The perception of the individual that he is contributing to a larger goal improves his motivation. An attempt may be made to communicate to the individual the importance of his job and to help him understand how it accomplishes broader departmental, organizational and social goals.
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Individual Level Strategies

Dynamic Nature of Individuals Motivation: An individuals motivational pattern is dynamic and it can be changed. Some needs are stronger than others. An understanding of an employees motivational profile can help organizations to form their strategies. Performance as a cause of work satisfaction and as an outcome of effort: Performance directly facilitates work satisfaction and is a direct result of effort. Work motivation can be increased by stressing increased effort of the individual on good performance and by linking performance with right rewards.
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 Successful Experience with Challenging Tasks: An individuals work motivation and capability for higher achievement can be increased by exposure of successful experience to increasingly challenging tasks. An attempt should be made to help the individual experience success in accomplishing goals which can be planned as an ascending series of challenges.

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Employee Compensation
Laying down a fair & equitable compensation system is common problem area to all the organization. The objective of employee compensation is simple, the process is complex. In comparison to other aspects of HRM ( training, career management.. etc.) compensation is considered important and crucial for all employees.
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Incentive
In simple words, incentive is anything that attracts a worker and stimulates him to work. The incentives can be financial and non-financial. Both types of incentives play important role under different conditions. For example, financial incentives are considered to be more valued under the work conditions where wages are at low levels. On the contrary, nonfinancial incentives are more preferable where wage levels are high and the rate of tax is progressive. A review of research evidences indicates that there is a shift in emphasis in the demands of employees and their unions from financial to non-financial benefits.
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Definition

Wage incentives are extra financial motivation. They are designed to stimulate human effort by rewarding the person, over and above the time rated remuneration, for improvements in the present or targeted results "

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Requisition of Good Incentive Plan

Simplicity Encourage initiative Definiteness and flexibility Properly communicated to employees Wide coverage and equitable Guarantee of minimum wage payment Scientific fixation of standard workload Justice to employer and employees Direct efforts- reward relationship Acceptable to workers
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Classification
FINANCIAL INCENTIVES
NON FINANCIAL INCENTIVES

GROUP INCENTIVES

INDIVIDUAL INCENTIVES
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Classification
Incentives are broadly classified into two categories Financial- Individual Incentives & Group Incentives Non -Financial

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Individual Incentive Scheme

Piece Rate Plan: Developed by Frederic Taylor Taylor prescribed two piece work rates- First Higher Wage rate for those who reach the standard work Second A lower wage rate whose performance is below the standard. The standard work is determined on the basis of time and motion studies. This wage plan encourages and rewards the employees who are efficient by giving them wages at a higher rate, and penalizes those who are slow performers by paying them a low wage rate.
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Individual Incentive Scheme

Halsey Premium Plan Under this plan, a guaranteed wage based on past experience is determined . If a worker saves time , he gets 50% of wages of time saved(called premium) in addition to normal wages. It is optional for the worker to work on the premium or not.

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Individual Incentive Scheme

Rowan Premium Plan Unlike a fixed percentage in case of Halsey plan, it considers premium on the basis of proportion which the time saved bears to the standard time.

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Group Incentive Scheme

A fundamental assumption common to all individuals scheme is that output of each worker can be accurately measured. But in some cases operations are performed by the group & contribution of each worker in the group cannot be accurately measured. In such cases, the group incentive method is followed. The total earnings of the group are first determined in accordance with the incentive method which is followed and earnings are then distributed among the members of the group on some equitable basis. If group consists of members with equal skills, the earnings are divided equally else in the proportion to their individual time-rate or according to specified percentage or in some cases among only certain number of members.
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Advantages of Group Incentives

Better co-operation among workers Less supervision Reduced incidence of absenteeism Reduced clerical work Shorter training time

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Disadvantages of Group Incentives

An efficient worker may be penalized for the inefficiency of the other members in the group. The incentive may not be strong to serve its purpose. Rivalry among the members of the group defeats the very purpose of team work and co-operation.
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Group Incentive Scheme

Profit Sharing The rationale behind profit sharing is that organizational profit is an outcome of the cooperative efforts of various parties, so employees should also share in profits as shareholders share by getting dividend on their investment. Categories of Profit SharingCurrent, Deferred and Combination
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 Current: Profits are paid to employees in cash/ cheque or in the form of Stock Option, immediately after the determination of profits.
Deferred : Profits are credited to employees account to be paid at the time of retirement or disassociation with the organization. Combination of Above Two
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Motivational Strategies for Employees

Monetary Incentives Non Monetary Incentives Under this there are two types of programmes Employee Recognition Programmes Employee Involvement Programmes
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Monetary Incentives
Incentives are variable rewards granted to employees according to variations in their performance. Variable Pay( Piece Rate, Bonus, Gain Sharing) Flexible Benefits ( Medical, Petrol, Uniform Allowances etc.) Skill Base Pay
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Variable Pay These are awards linked to some applicable criterion rather than seniority or job title. Piece Rate (remuneration@ unit produce) Bonus (Bonus on the basis of good company performances) Gain Sharing (increase in productivity is a measure to distribute compensation)

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Flexible Benefits It is the need of current business environment to customize motivation plans. Under the flexible benefit plan, an employer allow the employees to pick from a basket of benefit options. (eg. Petrol allowance , Medical benefits etc.)

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Skill Based Pay This involves using an employees skill set to determine his /her valued contribution to the company, and then they are paid accordingly. eg.- if a mechanic acquires the skills of an electrician, he will be rewarded extra for his additional skills used by the firm.

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Fringe Benefits
Fringe benefits are always in addition to regular wage payment i.e. direct remuneration. The purpose of fringe benefits is to retain efficient and capable people in the organization over a long period.

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Fringe Benefits
Fringe benefits may be defined as wide range of

benefits and services that employees receive as an integral part of their total compensation package .

The objectives of Fringe Benefits are:

To supplement direct remuneration Employers prefer fringe benefits To retain competent employees To develop good corporate image To raise employee morale To motivate employees

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Types of Fringe Benefits

1)Payment for time not worked by the employee: (a)Holiday, vacations, Leave with pay and allowances. 2) Contingent and deferred benefits: (a) Pension payment, Group life insurance benefit, (b) Group health insurance.

3) Legally required payments: (a)Old age, disability and health insurance. (b)Unemployment compensation. (c)Workers compensation.
4) Misc. benefits: (a)Travel allowances. (b)Company car and membership of clubs, etc. (c)Moving expenses. (d)Child care facilities. (e)Tool expenses and meal allowances, etc.
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Limitation of Fringe Benefits

Fringe benefit may lead to unhealthy competition among employees. The expected befit may not be available if the monetary benefits offered adequately attractive to employees. The motivation of employees may not be as per expectation if the implementation of the benefits scheme is not transparent.
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Non Monetary Incentives

There are two types of programmes Employee Recognition Programmes Employee Involvement Programmes

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Non Monetary Motivation Programmes

Employee Recognition Programmes Congratulate an employee by writing a mail / letter / complimenting him in a formal meeting Install an award / certificate Group good performance recognition T- shirts, Calendar etc.
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Employee Involvement Programmes

Employee Participation: An employee participative management program makes use of joint decision making to ensure employee involvement. In this subordinates ( or representative participation ) along with their superiors share an important degree of decision making power. LimitationOnly a symbolic form of representation

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Quality Circles
Work group of nearly 8-10 people, shared area of work responsibility, mainly to discuss quality problem and to boost productivity .

Eg. Tata International Ltd.(Dewas) Hindustan Motors Ltd.( Pithampur) TVS Electronics (Chennai) LimitationsThe concept of quality circles will work only if top management is committed.
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Empowerment
Empowerment means giving subordinates enough autonomy for crucial decision making and the freedom to redefine work priorities. Employers invite employees to suggest ways and means of improving their businesses and help in the organizational growth process. Empowerment is the process of enhancing feeling of selfefficiency and a sense of owing a job. Empowerment = Accountability with Power LimitationsCare is to be exercised to ensure that employees do not super cede each others pre defined work limits.
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Stages of Empowerment
Empowerments consist of five stages. The first stage involves identifying the conditions existing in the organization that lead to feelings of powerlessness on the part of organizational members. These conditions manifest through poor communication, centralized resources, authoritarian style of leadership, low incentive value rewards, low task variety and unrealistic performance goals. Diagnosis being completed, the next stage is to introduce empowerment strategies and techniques. Use of participative management, implementing meritpay system and job enrichment are example of possible empowerment practices. It is followed by Removing the Conditions of Powerlessness and providing self efficacy. Thus Feeling of Empowerment is Generated which results in Performance
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Stages of Empowerment
1. Identifying Conditions of Powerlessness 2. Implement Empowerment Strategies and Techniques 3. Remove Conditions of Powerlessness and provide self efficacy information 4. Feeling of Empowerment Generated 5. Empowerment results in Performance

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Top 10 Principles of Employee Empowerment

1. 2. 3. 4. 5. 6. Demonstrate You Value People Share Leadership Vision Share Goals and Direction Trust People Provide Information for Decision Making Delegate Authority and Impact Opportunities, Not Just More Work 7. Provide Frequent Feedback 8. Solve Problems: Don't Pinpoint Problem People 9. Listen to Learn and Ask Questions to Provide Guidance 10. Help Employees Feel Rewarded and Recognized for Empowered Behavior
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Advantages of Empowerment
Increased employee education and training Employees participate in setting their own goals Increased employee contribution Increased respect among employees Lower absenteeism and higher productivity More satisfying work for employees Employee competence increases Less conflict with managers
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Disadvantages of Empowerment
It can be too much responsibility for some employees. All employees must accept the concept first Increased training and educational costs to the company Increased conflict or power struggle Some employees may not be knowledgeable enough to make good business decisions
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Empowerment results into higher the employee morale, higher the job satisfaction and reduced turnover.

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Job Satisfaction
Job satisfaction has been defined as a pleasurable emotional state resulting from the appraisal of ones job; an affective reaction to ones job; and an attitude towards ones job.

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Job Satisfaction Measurement Techniques

Rating Scales: Most commonly adopted method.It comprises of certain statements describing the attitude of the employees with respect to the job, organization and personal factors. For each declaration or statement, the employee is asked to express his opinion on a Likert scale from highly satisfied to highly dissatisfied.
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 Personal Interviews: The experts conduct personal interviews where employees express their opinions on job satisfaction. The responses delivered through these interviews are analyzed to find their level of job satisfaction. It is believed that this method is likely to have personal biased views of the interviewer also. Tendencies: The employees are asked to express their tendency or inclination on several aspects and this reveals their satisfaction or dissatisfaction. Critical Incidents: Herzberg developed this approach. In this particular method, the employees were asked to describe incidents on their job when they were particularly satisfied or dissatisfied. These set of incidents were then analyzed to determine their positive and negative attitudes.

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Employee Morale
Employee morale describes the overall outlook, attitude, satisfaction, and confidence that employees feel at work. When employees are positive about their work environment and believe that they can meet their most important needs at work, employee morale is positive or high. If employees are negative and unhappy about their workplace, and feel unappreciated and as if they cannot satisfy their goals and needs, employee morale is negative or low.
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Definition of Employee Morale

Employee morale is defined by the employee's outlook, optimism, self-concept, and assured belief in themselves and their organization, its mission, goals, defined path, daily decisions, and employee appreciation. Faith in self and faith in their organization are both important factors in positive employee morale.

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Improving Employee Morale

Various factors which contributes towards improving employee morale: Treating employees with respect Providing regular employee recognition Empowering employees , offering open and regular communication about factors important to employees Providing Feedback & Coaching Offering above industry-average Benefits & Compensation Positively managing employees within a success framework of goals, measurements, and clear expectations .lsit continues
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Personnel Turnover/Attrition
A reduction in the number of employees through retirement, resignation or death. It is the voluntary and involuntary permanent withdrawal of employees from the organization. Attrition Rate : The rate of shrinkage in size or number of employees in an organization.

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Types of Attrition
Early Attrition: - In this type of attrition there is gradual diminution in the number /strength of employees within two or three weeks of joining. (Moving to another industry) Medium Attrition: - In this there is gradual diminution after six months. The reason for medium attrition is higher salary or more benefits. Employees get experience working in small call centers and after six months they apply in big call centers for more salary and more benefits. Late Attrition: - In this type of attrition the employees leaves the organization after working for a long period of time. Generally these employees are loyal to the organization and leave on the retirement or working for the period of around 5-7 years.
Example- Attrition in BPO Sector
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Job Design
Job design involves Deciding what task will be performed by the workforce Deciding how these tasks will grouped together and assigned to individuals Deciding how individuals will relate to each other (co-ordination) Deciding how they will be rewarded.

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Job Redesign
Job Design is a process of deciding on the content of
a job in terms of technique ,systems and procedures, and on the relationships between the job holder and his superiors.
Job Redesign is a technique for enriching the job characteristics with a improving the QWL .

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Job Rotation
Job Rotation involves periodic assignment of an employee to completely different sets of job activities. Basically to make the job more challenging, creating greater job interest for the employees and reducing boredom thru diversifying the employee activities, more flexibility in scheduling work ,adapting to changes. LimitationTraining cost is increased Job rotation creates disruptions.

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Job Enlargement
The assumptions behind the concept of Job Rotation are Output will increase if- the workers abilities are fully utilized, the worker has more control over work and the workers interest in the work and the workplace is simulated. Jobs can be enlarged both horizontal dimension (additional responsibilities) and vertical dimension (additional responsibilities and self control)

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Job Enlargement
Job Enlargement broadly means adding more and different tasks to a specialized job. It aims to making job more interesting , reducing monotony and boredom.

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Job Enrichment
Job Enrichment is defined as The design of a job to provide a worker with greater responsibility ,closure (a complete job) and more timely feedback about the performance.

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Five core dimensions of Job Enrichment Task Variety- Optimum variety of tasks within the job, allowing employees to perform different operations that require different skills. Task Identity- Task identity allows employees to perform a complete piece of work. Task significance-Imparting that workers believe that they are doing something important in their organization. Autonomy-Control over their own work. Workers accept responsibility , if they have some freedom in setting of standard of quality and quantity of production. Feedback
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The End

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