Analyzing Organizations as Incentive Mechanisms - Essay Example

?Analysing Organisations as Incentive Mechanisms Economic s serve as the most important part of every human society, as these soffer wide opportunities to the individuals in respect of earning their bread by rendering their services through investment of time, money, energies or all the three. Individuals seek education and learn different skills from formal or informal educational institutions and obtain degrees and certificates, which help them out to get allocated against various jobs, assignments and positions in one or more economic institutions. Hence, financial stability and economic prosperity is the basic motive behind all the efforts made by the individuals for obtaining different skills, degrees and qualifications. Theorists are of the opinion that the higher the level of education and technical skill or both, the brighter the probabilities of attaining respectable socioeconomic status in individual and collective life of the people. “In the age of globalisation, the knowledge economy discourse has become a way to characterise the new relationships between the state, society and economy and rendered higher education increasingly important for the international competitiveness of the nation states through their central tasks of generation, application and dissemination of knowledge and training high skilled labour force.” (Macerinskiene & Vaiksnoraite, 2006) Consequently, the efforts made in learning and studies certainly carry the purpose of enjoying incentives in the form of salaries, profits, facilities and promotions in professional career. All corporate firms and organisations are well aware of this very reality that managers, employees, staff members and workers stick to one company provided it continues the policy of offering various incentives in the form of reasonable salary package, announces bonuses on showing excellent performance, assures job security, medical allowances and regular promotions on the basis on capabilities, dedication and targets achievement. The present study looks for analysing the companies as incentive mechanisms in the light of the theories articulated by the scholars and philosophers time and again pointing out the advantages of incentives in the growth of the organisations on the one hand, and in the performance of the work force on the other. Celebrated psychologist theorist Abraham H. Maslow has articulated his Need Hierarchy Theory in 1943 on the very notion of motivational effects, where he submits to state that five basic motivational scales are inevitable for the companies for the maintenance of the employees’ satisfaction. These levels include fulfilment of physiological needs, safety assurance, social/professional recognition, ego and self- actualising. (Maslow, 1943) The theorist argues that since motivational factors aptly rise from the lowest possible scales, so the most fundamental needs and requirements of the employees must be satisfied in precedence for the upgrading of their performance on the one hand, and for accelerating the pace of their interest in the tasks they are expected to accomplish on the other. Maslow vehemently declares the fulfilment of physiological needs as highly supportive for the job satisfaction of the workers. He is of the opinion that the employees should be assigned the tasks keeping in view their aptitude, interest, dexterity and command, which will not only turn out as the most inspirational factor of motivation for them, but also may pave the way towards the growth and development of the organisation at large. Consequently, the more attractive and relevant to the disposition and aptitude of an employee the work, the higher will be the level of his motivation while performing his obligations and giving results to the organisation. In addition, if an employee's salary or wages are not sufficient to buy basic necessities including food, clothing and shelter for him and his family, his motivation level will surely be low and he will be unable to pay due heed to his work. Furthermore, job security is also a very important incentive for the employees. Keeping in view the changing corporate environment, Frederick Herzburg introduced his Two-Factor Theory. Herzburg’s study argues that there are two factors that contribute to employee satisfaction and dissatisfaction. “The first is referred to as motivators, which includes responsibility, advancement, and recognition. The other is known as hygiene factors.” (Herzburg, 1968) Herzburg views personal achievements, recognition, autonomy, responsibility, advancement and individual growth as the most powerful incentives granted by the organizations to the staff members. On the other hand, strict company policies, relationship with boss, nature of work, salary package and relationship with colleagues are the source of dissatisfaction for employees. (Herzburg, 1968) Hence, the theory presented by Herzburg is almost similar to Maslow’s theoretical framework that achievements, recognition and nature of work play decisive role in the commitment of employees with the work as well as the workplace. “Herzberg asked people about times when they had felt good about their work. He discovered that the key determinants of job satisfaction were Achievement, Recognition, Work itself, Responsibility and Advancement. He also found that key dissatisfiers were Company policy and administration, Supervision, Salary, Interpersonal relationships and Working conditions.” (Quoted in changingmind.org) The theories above-discussed can be analysed in the light of strategies devised by the renowned firms and brands of the globe. The reputed organisations including Microsoft, Coca-Cola, Virgin Atlantic, Honda and others assure job security to the employees, which turn out extremely beneficial for these companies in making rapid growth in comparison with their rivals and competitor organisations. Honda Car Company and its leadership pays due heed to bestow incentives upon the employees time and again for the sake of drawing out maximum output out of their work. The researches reveal the very fact that mere salary increase is not the only incentive that increases the morale of the employees. Rather, several other factors also work in respect of fulfilling employees’ needs. “Empirical research has consistently shown that employees are not motivated by money alone. However, this is very different from the view that money is way down on the list of employees’ goals.” (hrmreport.com) The same was observed by Honda Company, where its new President, Mr. Nobuhiko Kawamoto, boosted up the morale of the employees by establishing one and the same work place and sitting arrangement for managers, executives and workers, which not only increased the honour of the workers, but also satisfied their ego and prestige, and accelerated the pace of their performance to a great extent. Consequently, ‘right-first-time’ policy upraised quality and controlled the manufacturing cost. All the popularity of Honda is because of company’s policies and strategies, including planning, marketing and advertisement that has very successfully supported in capturing the markets of the world at large from micro to macro level. One of the most influential advantages of analysing the organisations by incentives includes the pace of the growth of both organisation and employees. In other words, the strategy explores in a sonorous manner whether the incentives being granted to the workers are helpful or not in increasing their motivational level. Hence, motivation is directly interlinked with incentives given to the employees by the management. The notion motivation has examined by various theorists in multiple ways. Kreitner (1995) declares it as “the psychological process that gives human behaviour both purpose and direction.” Thus, it serves as an urge that inspires human action while performing his obligations as well as during the course of achieving some targets. Similarly, Higgins (1994) views it as “an inner drive to satisfy an unsatisfied need.” Analysis of incentives offered to employees by the organisations can also be made in the light of Expectancy Theory of motivation by celebrated psychologist V. H. Vroom. Vroom first presented his theoretical framework in his book under the title Work and Motivation (1964) The theory aims to state that all the dedicated efforts rendered by the work force leads to the improvement in performance, which paves the way towards rewards for them from the management subsequently. (Lindner, 1998) Vroom, in his theory, articulates that motivation is the simple combination of the desires of the employees and the appropriate fulfilment of these desires and longings at the management’s end. The theory invites discussion on the concepts of reward and punishment; the same theory has also been devised by twentieth century US sociologist George C Homans under the title Social Exchange Theory, who views reward and punishment as powerful and effective motivational factors within the culture and structure of almost all the existing organisations. (Ritzer, 2003) Reward is said to be an important factor to enhance the working of employees. Vroom is of the view that if proper rewards are offered to the employees by assessing their performances; it may boost their morale and motivation to the great extent. Reward may be in the form of appreciation as well as increase in salary package and incentives etc. To conclude, it becomes evident that incentives and motivational factors are extremely beneficial in respect of analysing the corporate culture, internal structure, growth magnitude and profit volume of an organisation. Since employees serve as the identity mark of the organisations, which play decisive role in the promotion and demotion of the companies, management pay particular heed to the satisfaction of the work force, so that the employees can work diligently for the good name, fame and reputation of the organisation. Incentives are vehemently significant not only for the employees during their job in a corporate firm, so that they can be proved more and more productive for the organisation and work place, but also it is important for the companies and organisations for the enhancement of their sales volume and creativity as well. It is therefore the theorists lay stress upon estimating the magnitude of incentives and rewards while making strategic analysis of the corporate firms and organisations at large. REFERENCES: Herzberg, Fredrick. 1968 One More time: How Do You Motivate Employees?” Harvard Business Review Jan.-Feb. pp. 53-62 Higgins, J. M. 1994 The Management Challenge 2nd Edition New York Macmillan p. 133 Kreitner, R. 1995 Management 6th Edition Boston: Houghton Mifflin Company p. 297 Lindner, James R. Understanding Employee Motivation Journal of Extension Vol. 36 No. 3 1998 Macerinskiene, Irena & Vaiksnoraite, Birute. 2006 The Role of Higher Education to Economic Development VADYBA / MANAGEMENT. M. Nr. 2(11) Available at http://www.leidykla.vu.lt/fileadmin/Vadyba/11/Irena_Macerinskiene__Birute_Vaiksnoraite.pdf Maslow, Abraham H. 1943 The Theory of Human Motivation Psychological Review pp. 370-396 Ritzer, George & Goodman, Douglas 2003 Classical Sociological Theory Fourth Edition McGraw Hill Publishing Company pp. 208-469 Vroom, Victor H. 1964 Work and Motivation New York: Wiley pp. 331 University of Phoenix (Ed) 2002 Organizational Behaviour [University of Phoenix Custom Edition e-text]. New York: Wiley Herzberg's Motivation-Hygiene Theory Available at http://changingminds.org/explanations/needs/herzberg_needs.htm Motivation Incentives Available at http://www.hrmreport.com/article/Motivating-incentives/ Read More