The Impact of Employee Motivation on the Overall Effectiveness of an Organization - Research Paper Example

The Impact of Employee Motivation on the Overall Effectiveness of an Organization Introduction Every business and organization wants to achieve constant growth and success. The present of era of business can be dubbed as the age of immense competition and business houses regardless of the size, market focus and technology are dealing with employee retention challenges (Jun, Cai and Shin, 2006). In order to overcome these restraints a positive and strong relationship and bonding needs to be created and maintained between the staff members and their organizations. King and Anderson (2002) emphasize that the employees or the human resource of an organization are the central part of an organization and needs to be motivated towards the fulfilment. In order to achieve prosperity, organizations nowadays use different strategies to compete in the marketplace so as to enhance the level of performance of company. Only a few organizations believe on the fact that human resources and employees are the greatest assets of the company that steers a company towards success, or if it is not focused the company fails in achieving the expected outcome (Khan, Farooq and Ullah, 2010). Over the years, good remuneration has always been considered as one of the most effective policies aimed at enhancing the performance level of the workers. As a result of that it is evident that good remuneration has a direct impact on the overall organizational productivity (Mukherji and Albon, 2009). Furthermore, considering the current global economic trend, employers have understood that in order to compete favourably in the market, the performance levels of the employees act as a crucial element determining the success. This study aims at highlighting how an organization stresses on the motivational of the employees and is also aimed at unearthing the impact of employee motivation on the overall effectiveness of the organization. The study will have two subjects of analysis: firstly the study seeks to analyse the factors that leads to increased employee motivation and secondly the study seeks to establish and unearth the relationship between the effectiveness of an organization with employee motivation. In the next segment of the study discussion about the subject of concern will be carried out through comprehensive review of the existing literature and also review of the published report that explored related areas. However, analytical approach will be taken so as to draw out a conclusion out of the findings. Research objective and Research Questions The overall performance of an organization and the level of employee motivation has been one of the key themes of research in the areas of organizational performance management. As a result of that intensive research efforts have been made in the recent times. To what extent an organization is motivating its workforce in order to fulfil its missions and objectives is of paramount significance. The general objective of the study is to investigate the factors responsible for motivating the workforce of an origination and how motivation of the employees is related to the firm’s overall productivity. Hence, the key objectives of this study will be to: - To evaluate the impact of employee motivation on the overall organizational performance. To identify and determine the factors that enhances the level of motivation of the employees in an organization. To establish or unearth the relationship between organizational performance and employee motivation. Although the study has limited scope but is appealing to a mass segment. The study has the ability to showcase the significance of employee motivation in the field of business. Discussion It is a fact that a company does not functions in the market without any aim or objective, there is always a motive behind any activities undertaken by a firm. In the similar way, the activities are carried out properly when there is enough motivation. For example, getting acknowledged by the customers and industry experts can be the motivational factors of a firm. In the similar way, the performance of the employees of an organization is driven by some motivational factors. For example, some of the key motivational elements for an employee are usually promotional chances, financial and non financial rewards, appraisal and also growth opportunities (Abadi, Jalilvand, Sharif, Salimi and Khanzadeh, 2011). The aforementioned factors greatly motivate the employees to perform better and play a crucial role in enhancing their level of performance which ultimately adds to the overall organisational performance. The performance of the employees is vital to any organization, not only for the sake of growth of the organization but also for the growth of the employees. As a result of that it is the duty of the organization to know who the best workers are and who needs additional training. Apart from that a company should also identify the employees who are not perforating to the desired level and is assessed that they might not reach the desired level even after the training and induction program. These assessments allow a company to determine the required training and development and ways to motivate the employees and mitigate risks of bad investments. Hence, from an overall point of view it can be stated that employers must stress on the development of factors that will motivate the employees (Turkyilmaz, Akman Ozkan and Pastuszak, 2011). Employee motivation and satisfaction towards the organizational function refers to the prospect of the employees about the company. Organizational effectiveness on the other hand refers to mapping the targets and attaining those in an efficient manner and obviously in energetic and spirited surroundings. Khalid and Irshad (2010) carried out a study in order to analyze the impact of organizational motivation on the organizational productivity. The study aimed to analyze the same from the perspective of the banking industry and the telecommunication sector. The study had around 103 respondents and the results were as expected. It showed that there is a significant positive correlation between organizational effectiveness and employee motivation. Organizational Effectiveness Composition of people that formulate independent identity of a business for some common and specific purpose is known to as an organization and getting the desired results within the available resources can be treated as effectiveness. Organizational effectiveness can be dubbed as the notion of how effective an organization is pertaining to how an organization successfully accomplished its results. Organizational effectiveness plays a crucial role in accelerating the organizational development. It is often dubbed as the net satisfaction of all the constituents in the process of accumulating and transforming the inputs into the outputs in an efficient manner. Ali and Ahmad (2009) define organizational effectiveness as the extent to which an organization by the use of certain resources fulfils the objectives without exhausting the resources and also without the placement of any undue strain on the employees and other stakeholders. Hence, in simple words it can be stated that organizational effectiveness is the maximum possible combined utility that can be achieved by the organization on application of the primary constituents. It has been observed that the chances of success of an organization increase if it succeeds in bringing high level of efficiency which in turn leads to organizational effectiveness. A number of authors have stated that the role of employees in bring organizational effectiveness is paramount. As a result of that it is extremely important to make sure that the company has competent and skilful workforce. However, on the basis of this statement, authors such as Annamalai, Abdullah and Alasidiyeen (2010) stated that skills and competency of the employees are the not the only factors that will result in organizational efficiency, the workforce need to be motivated. A study carried out by Aydin and Ceylan (2009) has shown that an organization successfully exhibited effectiveness and functioned in the market for a longer period of time if it has a motivated workforce. Theoretical Framework Webster’s New Collegiate Dictionary defines motive as something “a need or desire that causes a person to act” and in turn motivate means “to provide with a motive” and finally motivation is defined as “the act or process of motivating”. In simple words, motivation can be dubbed as the factors that drive an employee to carry out certain activities. Beugré and Offodile (2001) states that, motivation acts as a power that strengthens the behaviour and triggers a tendency to perform well. Employees works for the purpose of earning money and simultaneously employers also want their employees to be relaxed and enjoy the working conditions. Although it is a fact that money is the fundamental encouragement and none of the other motivational factors even comes closer to it, yet there are factors that drive an employee to perform better. According to Chowdhury (2007) there are several other factors that motivate an employee apart from the financial incentives. The author states that the most important thing is to enjoy in what you are doing and that acts as the biggest motivator. According to Jun, Cai and Shin (2006) motivation is the power that strengthens the behaviour of a person and directs a person to behave according to the situation. According to the viewpoint of Khalid and Irshad (2010), motivation is an internal drive that helps to fulfil the unfulfilled desires and the will to accomplish it. Motivation triggers employees to continue what they are currently doing thereby increasing the chances of employee retention. The author also stresses on the point that if an employee is seeking to achieve the goals, he/she needs to be energetic and at the same time remain clear about the destination. Khan, Farooq and Ullah (2010) states employees want to earn reasonable payment and salary. Money acts the basic inducement and none of the other motivational elements comes closer to it. Khan, Farooq and Ullah (2010) further states that it has the supremacy to maintain, magnetize and motivate people towards the achievement of greater performance levels. The research studies carried out by Latt (2008) reflected that rewards offered to the candidates results into satisfaction and that in turn directly influences the performance levels of the employees. The author further states that rewards or any other strategies applied by the management for the sake of retaining the employees are management tools that contributes to the firms overall performance. Majority of businesses makes use of competitive pay packages, hefty bonuses and promotions in order to influence the individuals and encourage them to perform well. Some managers make use of employee-empowerment as a tool to motivate employees. In fact it builds a win- win situation for the firm. Empowering an employee means offering him/her with extra responsibility and power. This greatly increases the sense of responsibility among the employees and results into improved performance. Studies have shown that empowering an employee can flourish human capacities. In addition, it has been also observed that an empowered employee creates a balance between the personal life and professional life and is more productive. Malik, Ghafoor and Naseer (2011) enumerates that employees execute their greatest novelties when endowed with the sense of belonging, delight and enthusiasm. Apart from that they also exhibit higher level of trust and loyalty (Malik, Ghafoor and Naseer, 2011). Turkyilmaz, Akman Ozkan and Pastuszak (2011) state that recognition and rewards are the most important factors that lead to enhancement of the employee job satisfaction and obviously work motivation. The study conducted by Kallimullah Khan regarding the relationship between employee motivation and rewards in the commercial banks of Pakistan found that recognition has a strong correlation with employee motivation. A number of scholars carried out the similar experiment in other industries and the results were the same. Almost each of the members found that there is a direct and positive correlation between employee work motivation and recognition. In the similar way, study carried out by Jibowo in the year 2007 found that recognition is also having positive correlations with the job satisfaction. When it comes to rewards, the results are again similar. Strong and positive correlation were the findings of the studies. Hence from an overall point of view, it can be stated that companies needs to stress on the rewards and recognition as a motivational tool (Locke, Shaw, Sarri and Latham, 2008). Therefore, the administration department of an organization must build an arrangement that promotes rewards and recognition so as to enhance the motivational levels and satisfaction levels of the employees. It is therefore concluded that employee motivation provides dual benefits to a firm. The first one emerges in the form of greater productivity and the second one is high retention rate. As a result of employers should make strong efforts in understanding the factors that motivates an employee and should devise appropriate strategies in the achievement of the same. Motivational Theory The motivational theories that have been included in this research paper are closely linked with employee motivation. Goal setting theory is an appropriate theory for this research paper. In the goal setting theory, eminent authors such as Locke, Shaw, Sarri and Latham (2008) stated ‘goal’ as anything which an individual is attempting to accomplish. The theory assumes that goals are instant regulator of human action. Evidence from the theory showcases that specific goal leads to enhancement of the performance and in the similar way, difficult goals, when accepted by the individual results into higher level of performance (Jones, 2004). The theory further states that there are four motivational mechanisms. The first motivational mechanism is that goals which are interesting and meaningful tend to grab an individual’s attention on what is most relevant and what is significant. The second motivational mechanism is that goals have an energizing function. Hence, as a soon as a manager sets goals for the followers, it automatically energizes them. The third motivational mechanism is that goals affects persistence. The theory believes that the level of persistence increases with the increase in the difficulty of the goals. The fourth and last motivational mechanism is that goals indirectly affect the actions and this in turn leads to the application of knowledge and strategies. Key Employee Motivators Studies have suggested that employees tend to perform more effectively if the wages are directly related with their performance. This also helps an organization to continuously evaluate the performance levels of the employees. Employees of both private and public sector are becoming increasingly aware of the fact that motivation enhances productivity. The ongoing trend and considering the present economic scenario, it is obvious that the rate of change in the business is presenting new challenges every day. Hence, it is important to shed light on the factors responsible for motivating the employees. Turkyilmaz, Akman Ozkan and Pastuszak (2011) suggest that employee motivation is one of the key policies that are used by the managers with the aim of increasing effectual job management among the employees. However, Malik, Ghafoor and Naseer (2011) believe that a motivated employee is more responsive and focuses on the achievement of the goals. Echoing this statement Latt (2008) enumerates that an organization achieves greater success on having a motivated workforce solely because of the fact that these employees constantly seek new and innovative ways of doing work and therefore it will be a wise decisions for the firm to persuade motivation of their workforce. Getting the employees to work at their possible best levels in strenuous situation is one of the greasy and most stable challenges of an organization can be surmounted only through proper motivational techniques and approaches. Apart from the economic, financial and human resources, the latest trends of motivators can be characterized with the ability to endow an organization with competitive advantage. The competitive advantage is however not achieved direct but is directly proportional to the performance of the employees. The performance of an employee is dependent upon various factors such as employee motivation, performance appraisal, employee satisfaction and compensation. In addition, training and development, organizational structure and job security are the key factors influencing performance of the employees. Some of the other vital that greatly motivates an employee are financial and non financial rewards, personal satisfaction, flexibility, impact and recognition. People basically work for the purpose of satisfying the fundamental needs and supporting their family. As a result of that people extends their working hours and focuses on the performance for the sake of earning extra money. On the contrary, some people accepts less pay packages but in exchange they like to avail other benefits such as health coverage, more number of leaves, retirement packages and obviously other luxury offerings. Another major factor appears in the form of personal satisfaction. It is important that en employee should like his work as if he/she does not enjoys the work, staying engaged with it and exhibiting highest level of dedication became a challenge. Although this factor is absolutely dealt from one’s personal point of view but managing a positive working environment greatly fosters job loyalty and can keep employees motivated. Recent studies have shown that offering flexibility can be a great tool for motivating the employees (Khan, Farooq and Ullah, 2010). Flex-time allows an individual to accommodate vacation days, family schedules and other useful works. Lastly, recognition by the employer is another major motivating factor for the employees. There are some employees in an organization who works hard and honestly for the sake of getting praised by the management and achieving recognition. For example, employees striving to achieve the sales goals or offering highest levels of customer service reflects their intention of getting praised by the management. Hence, rather than financial benefits a recognition certificate, a gift card, a bonus card, ‘dinner with boss’ etc. can act as key motivating factors for the employees. However, it should be taken into consideration that the each employee has different set of factors that motivates them to give his/her best shot. As a result of that business houses need to carefully asses the factors that can motivate their workforce to the highest possible extent. Money is obviously a crucial motivator but successful entrepreneurs view it as just another motivating factor. Hence, from an overall point of view it is true that the motivating factors differ from one employee to the other. Impact of Employee Motivation on Organizational Productivity The simple word to describe the impact of employee motivation on the organizational productivity is that employee motivation influences and improves organizational productivity by energizing the employees to perform better. A motivated employee always looks out for the opportunities that will be providing opportunities of achieving the goals set by the organization. Studies have suggested that a motivated employee unleashes their energy and considers their work as the key towards realization of the desired aspirations. Business owners have the tendency to build a business model with a trained workforce and who has the ability to serve customers in the most efficient way. Employees who are actually giving their best performance will be having a positive impact on the organizational performance. On the other hand, employees whose efforts are comparatively less will be responsible for creating gaps in the overall performance of the organization. As a result of those industry experts firmly believes that a business can reap benefits if it embraces a management team that motivates the work force and enhances the overall performance of the business. A study carried out by Jun, Cai and Shin (2006) regarding the same subject but his study was based on the African nations. The aim of the researcher was to analyze the impact of absence of motivation on organizational productivity. The companies belonging to the African nations generally pursue autocratic leadership styles, mechanistic organizational design and authoritarian rules. The decision making is generally done by the top management and employees are just given orders to accomplish certain organizational tasks. As a result of that, employees hardly enjoy any kind of liberty and that hinders them from being creative or innovative. These things have a direct impact on the motivational levels of the employees and results in low level of job satisfaction. Furthermore, the study has confirmed that these factors negatively impact the organizational growth, effectiveness and performance. A similar kind of study had been carried out by Beugré and Offodile (2001) in the context of Nigeria. The interest in the efficient use of rewards so as to influence the performance of workers has been a key area of interest among the mass. The study reflected that the performance of the workers in Nigeria is better when their wages are high. Hence, it can be stated that Nigerian people gets strongly influenced by financial benefits offered to them. Therefore from the findings it is evident that employee motivation has a direct impact on the organizational effectiveness. Another key finding of the analysis is that the factors of motivation differ from one country to the other hence there is obviously a cross cultural relation. A company failing to offer adequate motivation to the employees will find extreme difficulties to sustain for a long period of time. An internally delighted, satisfied and motivated workforce is a key organizational driver and is comparatively more productive. Studies have even shown that the contribution in the effectiveness and efficiency of the organization that leads to profit maximization is also more by a motivated employee. Hence from the given analysis and findings from the literature it can be said that there is a strong and positive co relationship between motivation levels of the employees and overall effectiveness of the organization. Conclusion The principal objective of this study was to investigate the factors responsible for motivating the workforce of an origination and how motivation of the employees is related to the firm’s overall productivity. In simple words, the aim of this project was to scrutinize the impact of motivation level of the employees on the performance of the organization. The study suggested that motivation is one of the key drivers of organizational effectiveness. There are numerous examples that reflected how a firm succeeded in achieving higher efficiency on having a strong and motivated workforce. The analysis of the subject also showed that factors such as remuneration package, recognition, acknowledgement from the peers or management, non financial benefits and empowerment are the key motivational factors. However, the study also made it evident that the factors of motivation have slight differences when comparing from country to the other. 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Industrial Management and Data Systems, 111 (5), pp. 675-696. Read More