Employee Motivational Theories - Case Study Example

Performance Management - Short Report Executive summary Employee performance management and motivation theories have been accumulating in number though very few of them have been able to highlight the ever increasing reality, viz. that employees aren’t motivated by monetary compensation alone. They need to be motivated on a combined admixture of incentives, both monetary and non-monetary. This report identifies three main areas of motivation related to Focus Pointe’s relationship with the recruiter, Angelo. In the first place as modern expectancy and contingency theories point out employee motivation is related to both leadership related implications and organizational outcomes. Focus Pointe lacks in these areas of motivation. Secondly Angelo’s inability to match Focus Pointe’s current skills requirements with the available skills of his recruits is attributable to the failure of Cheryl in articulating and implementing a proper motivation strategy. Finally Angelo’s inefficiency in recruiting the right type of people into Focus Pointe is determined by his lack of capacity for retraining the new recruits. Introduction The theoretical and conceptual models on monetary and non-monetary incentives to motivate recruiters and employees have been in use for more than a number of decades. However monetary benefits used as inducement to motivate staff have been questioned by many modern motivation theorists. Despite efforts made by smaller competitors to recruit and retain skilled workers by offering them monetary incentives, the modern work ethics and practices demonstrate that non-monetary incentives can be far more effective in motivating employees to perform better. Angelo is not alone in being sidestepped for non-monetary incentives by companies that hire the services of recruiting companies to carry out staffing services on their behalf. Angelo’s failure to match the skills requirements of company with his new recruits like professionals could be a clear reflection of the fact that retraining of the recruits has to be integrated into the existing recruitment strategy. Skills mismatches often lead to poor performance. The company’s decision to hire less number of people must be directly correlated to the declining retention standards. When the skills levels are dubiously lower than expected by hiring companies, employee retention strategies fail. Employee retention strategies of Focus Pointe are essentially characterized by the company’s needs for professionals and as such recruiters like Angelo have to be retained on a more or less complementary plus cumulative compensation strategy. For instance Information and Communication Technology (ICT) firms like IBM and Microsoft adopt such strategies with a greater focus on enhancing skills in the long term. Accenture, the biggest strategic management consultancy in the world, appoints its departmental heads on a secure cumulative compensation package that reduces the number of constraints related to retention strategies. For instance a monthly all-inclusive pay package of $ 8,000 for a middle level executive grade employee is just likely to scrape the average upper limit. In all probability he might expect the package to grow cumulatively with additional compensation. However, the extent to which Cheryl’s offer to Angelo to increase his salary by 4% and pay an additional $ 500 per recruit will go to retain Angelo is questionable, especially in the absence of non-monetary incentives. Compensation packages have to include both monetary and non-monetary incentives so that the principle of complementarity will be fulfilled. That’s why big firms adopt complementary plus cumulative benefit packages that include both monetary and non-monetary incentives. Recruitment strategy of Focus Pointe has not been based on such a priority determined process though Cheryl might be bothered about retaining the well skilled staff. Analysis Angelo’s HRM related function in recruiting employees is based on a minimum number of people being hired and accepted by Focus Pointe. As such it is possible that Angelo’s current inability to match numbers as expected of him is due to any one or more of the following reasons. Angelo is purely motivated by monetary benefits only. Angelo is motivated by both monetary and non-monetary incentives. Angelo has been less efficient in identifying the right skills of recruits. Thus there is a mismatch between company requirements and Angelo’s new recruitment skills. The company has changed its incentive and pay schemes. Lack of training of new recruits could have affected the hiring decisions of the firm. Assuming that the first assumption is true then Angelo’s behavior in failing to match the skills of his recruit with the skill requirement of the company can be justified. Because he thinks that the company is pay other monetary incentives are not in conformance with his expectations. Assuming that this assumption is true then the outcome is that Angelo has been expecting the company to compensate him adequately by any means, such as salary increments or/and non-monetary benefits. Angelo’s successful recruitment drive in the past has slackened now and as a result there is a mismatch between the skills of these recruits and the skills expected by the company. If this were true, then Angelo has been de-motivated to some negative developments at the company. However Line management techniques ought to cancel out this discrepancy by putting Angelo on driest line with the company managers. If Focus Pointe has changed its policy on pay and incentives, Angelo’s slackening recruitment efforts can be justified, because the company has failed to compensate Angelo adequately for his extra effort to meet the diverse and complex skill requirements of the company. Assuming that Angelo has failed to train and develop the skills of new recruits so that they would be able to perform efficiently when hired by the company, then Angelo’s inefficiency in not recruiting the right people and even worse his inability to train new recruits show that Angelo has knowingly or unknowingly permitted the standard of his new recruits to fall. Outline of motivation theories Motivation theories such as Maslow’s hierarchy of needs, Herzberg’s dichotomy of hygiene factors and motivating factors, McGregor’s theory ‘X’ and theory ‘Y’ people, Edgar Schein’s assumptions based approach and Tailor’s scientific management approach have been in used for long time. However practical situations in the organizational setting can be an admixture of some or all of these theories. Maslow’s hierarchy of needs has five categories of needs, viz. basic needs, security needs, group needs, self-esteem needs and self-fulfillment needs. Only basic needs refer to monetary incentives, while all other four categories are related to various psychological urges of the individual employee (Gawel, 1997). On the other hand Herzberg’s differentiated between two classes of factors. According to him there are nine hygiene factors or dissatisfiers, which discourage employees, such as lack of opportunities. On the other hand motivating factors or satisfiers are all related to recognition and psychological needs (Maidani, 1991). According to McGregor theory ‘X’ people have to be directed and told what to do. They inherently dislike work and therefore they have to be coerced and persuaded. On the other hand theory ‘Y’ people are motivated and they make physical and mental efforts to be more productive, when they are given more responsibility (Juhn, 1972). Schein is the most recent motivation theorists to believe that there are three classes of drives in motivating people, they are socio-economic drives, social drives and complex drives. However more recent theories are hybrids of these classical theories (Schein, 2004). For example managers can use a combination of expectancy and contingency theories to motivate their employees. Modern approaches to motivation Modern theories that have been developed to meet the ever increasing demand for better and more articulate theories of motivation include those expectancy and contingency theories (Donaldson, 2001). According to expectancy theory it’s difficult to align people’s behavior with their goals unless there is a clearly defined approach to motivation. Expectancy theory places emphasis on the link between performance and reward. However unlike the earlier theories it recognizes the ability of the individual worker to reach goals. Thus leaders and managers must be able to identify those values possessed by individual employees and reward them accordingly. On the other hand contingency motivation theories place emphasis on the leadership and its contextual relevance to profiling skills and categories of employees. This is in fact related to job description that is routinely carried out at Focus Pointe and probably by Angelo as well. However mere job description doesn’t help in identifying employees’ skills and assigning them with suitable jobs. According to this theory leadership styles must be able to recognize particular skills and utilize them according to respective situations, thus motivating them to achieve goals. Contingency theories are focused on a number of implications arising from delegation, decentralization, span of control, delegation, chain of command and management structures. In addition to the above it is also concerned with culture related conflicts at the organization. Above all it places emphasis on knowledge of individuals. This is where Cheryl would have gone wrong by altogether choosing to retain Angelo by giving him financial benefits only. Modern theoretical and conceptual frameworks on motivation have much broader contingency parameters. For example Drucker (1999) questioned the credibility of seeking to motivate employees purely on monetary incentives. Theoretically Angelo has been affected by inefficient performance in failing to match the skills requirements of the company with the skills of new recruits. The gap between the two types of skills widens further when Angelo does not get adequate compensation for his efforts. If Angelo were pay a higher salary plus a monetary incentive based on performance he would perform better. However it is not clear to what extent Angelo would be motivated by monetary incentives alone. He might need non-monetary incentives to perform much better. In the absence of non-monetary incentives, the company would experience a further mismatch between the company’s requirements and the type of skills possessed by untrained recruits. Angelo’s recruitment drive is ill design and ill planned. In the first place motivation of staff depends on a number of complex and diverse factors. According to recent research studies carried out in some manufacturing industries in Japan, employee efficiency or productivity is basically determined by three factors. (a). The degree of satisfaction that each employee receives by doing the current job in comparison to the degree of satisfaction he will have in doing the next best job. (b).The totality of all monetary benefits including pay. It also includes all monetary incentives such as health insurance and paid holidays. (c). All non-monetary benefits such as promotions, responsibility, the right o join trade union, the freedom to put forward demands, job enrichment, job enlargement, training and development Similarly recruiters have very little freedom in deciding on the company policy impact on the recruiting process. Pay rates determination might lack logical but complex computational methods. Such shortcomings force recruiters like Angelo to be over-anxious about the long term outcomes. Pay rates determination criteria at Focus Pointe are essentially influenced by the HRM department’s evaluation techniques. Cheryl has adopted a purely monetary incentive based assessment approach. Angelo’s frustration is obvious and has a reasonable cause for such frustration. Thus Angelo’s inability to meet the demands of Cheryl by recruiting better skilled respondents can be traced back to the failure of Focus Pointe in strategically adopting retention schemes that are well suited to meeting the skills requirements of the company in the long run. Job enrichment and job enlargement policies adopted by recruiting companies are sometimes geared to meeting the HRM-based functional requirements. For instance efforts by HR managers to reduce the level of absenteeism are reflected in the design and implementation of job enrichment and enlargement strategies that identify and address the overriding concerns of employees. Focus Pointe needs to focus attention on such strategies in order to retain staff. Angelo’s dilemma illustrates this point well. He is unable to make ends meet and financial insolvency is the result of his failure to earn enough at Focus Pointe. The rate of rejection of his recruits at Focus Pointe keeps on rising yet again probably to the inability to identify the skills and to match those Focus Pointe’s requirements through retraining of recruits. However retraining requires a set of techniques that would be causatively superior in enhancing hitherto unused skills. Labor skills cannot be retrained to or reoriented unless the trainee has a degree of flexibility. Angelo’s predicament arises from this inadequacy as well. Cheryl and Castillo agree on one single point, i.e. Angelo’s recruits need to be retrained and the company strategy on recruitment has not changed. Now what’s all the more important to Angelo’s survival is to find out how and where he has gone wrong in recruiting the type of people who are being increasingly rejected by the company. His job security is at stake while Focus Pointe’s market share is being threatened by rivals. Staff inadequacies are reflected in falling efficiency and work standards. Focus Pointe is affected by a similar problem. Cheryl’s responsibility, as the head of recruitment at Focus Pointe, is to recruit the right kind of respondents so that clients would only be too happy to assign them work. According to Drucker (1999) knowledge workers placed themselves at the helm of affairs by controlling the information flow about the workplace requirements. Thus the HR manager is a knowledge worker whose productivity is determined by the amount of knowledge he has on the endogenous and exogenous variables associated with the HRM function. As demonstrated by expectancy and contingency theories of motivation Angelo’s behavior as a recruiter can be subject to a contingency analysis. Given the theoretical perspectives of these modern theories the psychological bias is obvious. In fact the average employee assesses himself through a series of expectations including his ability to adjust to the work environment, capabilities to identify and respond efficiently to day-to-day problems in the workplace (Axson, 2007). Thus these theories focus on the individual’s performance and the corresponding reward. Sheryl’s reply to Angelo’s problem is based on this theoretical and conceptual reality. In fact Angelo’s performance is lacking and therefore the reward is limited. According to contingency theory employees are motivated depending on the leadership style. In other words modern motivation theories are increasingly based on leadership theories. For instance transactional and transformational leadership theories have been made use of in order to identify particular characteristics of employee behavior in the work environment. In other words contingency theory identifies the existence of a positive correlation between leadership style and employee motivation (Deiss, 1996). This is not a new idea though. This link has been there for number of years. However Angelo’s declining performance can be attributed to the total absence of non-monetary compensation for his efforts rather than the time specific performance curve’s declined. In other words Angelo’s efficiency in recruiting the right type of respondents might be the result of a purely cyclical tendency to match the immediately available skills with the company requirements. In other words Focus Pointe’s requirements have not been defined by Sheryl adequately. Therefore the modern theories based on expectancy and contingency models of employee behavior cannot be exclusively applied to interpret Angelo’s declining performance. However his behavior can be partially explained with reference to these theories because HRM function is exclusively determined by the nature of the work environment and company requirements. Conclusion Exclusive reliance on monetary compensation to motivate staff has been questioned by many theorists. Other than the classical theories, modern theories increasingly focus their attention on employee motivation as a complex strategy approach to HRM. In other words the functional parameters associated with HRM and employee motivation have undergone a rapid transition. Such parameters have increasingly been redefined by modern theorists to improve a variety of work environment based practices. Independent analysts have identified a completely different set of variables that directly affect employee motivation. The strategic significance of these modern approaches depends on a number of factors such as organizational and management structures, culture, leadership style, corporate goals, stakeholder satisfaction and external environmental pressers, especially related to competition. The classical theories of motivation have adopted a compartmentalized approach to understanding and interpreting the causes of employee motivation. For instance Maslow, McGregor, Herzberg, Schein and Taylor all adopt an identical theoretical and conceptual framework with little differences between employees based on attitudes to work and compensation (DanielsAubrey C. Daniels (Author) › Visit Amazons Aubrey C. Daniels Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central & Daniels, 2004). In fact they lack the interpretational rigor that modern theories have in interpreting employee motivation. In other words Focus Pointe’s HRM strategy and Angelo’s declining performance cannot be adequately explained by these classical theories of motivation. Angelo is a victim of both his own inefficiency and Cheryl’s inability to put in place a comprehensive non-monetary package of incentives to reward performance. Angelo is inefficient because he has failed to match Focus Pointe’s skills requirements with the skills of his recruits and as a result his recruits lack the capacity to respond readily to the contingency demands of their assignments. While Cheryl has not initiated comprehensive job enrichment and enlargement programs to enhance the capabilities of staff, Angelo has not been able to address the need to adopt skills retraining programs to reorient the recruited respondents. It is a complex situation in which there is not only lack of coordination but also growing ineptitude. All the more lack of retention strategies at Focus Pointe has been responsible for the current failures, because Cheryl as the head of HRM is responsible for recruitment. Therefore it’s essential that Cheryl concentrates on the skills requirements as much as Angelo reorients himself towards meeting retraining requirements. Line management techniques would probably put Cheryl in control of its managers’ coordination efforts with employees. Line management is not adopted at Focus Pointe though. Line management would also benefit Angelo’s relationship with the company. Recommendations Focus Pointe’s organizational structure might be at fault for the current developments. Exclusively pay based compensation does not work in knowledge based industries. Therefore Focus Pointe’s needs to reorganize itself on the basis of modern HRM techniques. In other words the HRM function must be reorganized to facilitate a flatter and shorter hierarchical departmental structure so that communication feedback from lower level employees would be more efficient. Focus Pointe’s must adopt non-monetary non-pay based motivation and performance enhancing strategies such as job enlargement, job enrichment and T&D programs. Cheryl ought to redefine her skills requirements in accordance with company strategy including the long-term recruitment policy. Line management techniques should be adopted as an essential technique to bring about more effective direct links between the manger and the employee at Focus Pointe. Angelo as a recruiter must be able to identify appropriate skills to go with existing jobs. He must also be able to change his attitude towards employees existing capabilities. He must initiate T&D programs to retrain his recruits. REFERENCES 01. 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