Monetary Incentives Increasing Employee Motivation - Essay Example

business research methods To Determine Whether Monetary Incentives Increases Employee Motivation/Production To Determine Whether Monetary Incentives Increases Employee Motivation/Production Alignment of aims, purpose and values between staff, teams and organization is the most fundamental aspect of motivation and production. The better the alignment and personal association with organizational aims, the better the platform for motivation. Where people find it difficult to align and associate with the organizational aims, then most motivational ideas and activities will have a reduced level of success. Motivation is a complex area. Its different for each person. People are motivated towards something they can relate to and something they can believe in. Times have changed. People want more. Factors such as job satisfaction, pay, and contributions to the overall business are all influential in employee productivity, but it is the managers, the mid-level managers, that have the biggest influence over employee productivity. Incentive programs may be one of the most common forms of monetary compensation for Productivity. The use of incentives may be viewed to have a positive influence on employee attitudes and behavior. A number of private sector companies use monetary compensation as a way to influence its employees to perform at a higher level. Bonuses can be given to those employees that perform at a consistently high level. "Incentives work to motivate employees. It’s just a matter of finding out which incentives to use." Bonuses are not new concept to the business administration. Some administrators would agree as the benefits of incentives includes: 1. Incentives and bonuses would promote productivity among workers. 2. Many believe that the bonuses create an environment of healthy competition Incentive programs structured with employee input work best. Long-term incentives are more powerful than short-term incentive and certainly can lead to high motivation level among employees and lead to production. While others may believe that the monetary incentive sends the wrong message to the employees. That message being: Get as many task and job cover and finish as he can out of business office at any cost. This could prove to be disastrous for the quality standard. Employees maybe in hurry to complete cases and overlook key elements in the decision making process. As quoted by Sandy Smith: "If you begin rewarding for specific behavior, the purpose of that behavior becomes the receipt of rewards rather than the personal benefits of behaving in that manner. Incentives should be used to engender employees to be safe. You want to encourage an overall philosophy of safe behavior." (Billsims.com) Although increased wages are important, the perceived value of money varies among employees. There are also many other factors that can influence whether monetary incentives will have the desired motivational effect. Incentive or gain-sharing programmes often fail to produce expected results when employees think the programme is unfair. Outside factors can influence employee production. Other issues such as family disputes or crisis, emotional instability (depression), media perception of an agency etc, all affect employee production. “While healthy competition is a benefit to the agency, there is no need to create a hostile work environment because of resentment and animosity. Tension in the workplace can definitely cause employees to be less productive” For better production of the business, a fair balance between what an employee put into his job and what he gets out of it. Employee form perceptions of what constitutes a fair balance or trade of inputs and outputs by comparing his own situation with other examples in the market place. Colleagues, friends, partners in establishing these benchmarks and their own responses to them in relation to company’s ratio of inputs to outputs also influence them. Inputs are typically: effort, loyalty, hard work, commitment, skill, ability, adaptability, flexibility, tolerance, determination, heart and soul, enthusiasm, trust in our boss and superiors, support of colleagues and subordinates, personal sacrifice, etc. People need to feel that there is a fair balance between inputs and outputs. Outputs are typically all financial rewards - pay, salary, expenses, perks, benefits, pension arrangements, bonus and commission - plus intangibles - recognition, reputation, praise and thanks, interest, responsibility, stimulus, travel, training, development, sense of achievement and advancement, promotion, etc If employees feel that that inputs are fairly and adequately rewarded by outputs then they are happy in work and motivated to continue inputting at the same level. If employees feel that our inputs out-weigh the outputs then they become demotivated in relation to our job and employer. People respond to this feeling in different ways: generally the extent of demotivation is proportional to the perceived disparity between inputs and expected outputs. Some people reduce effort and application and become inwardly disgruntled, or outwardly difficult, recalcitrant or even disruptive. Other people seek to improve the outputs by making claims or demands for more reward, or seeking an alternative job. When structuring incentive program employers needs to take these steps: 1. Set a performance standard that employees perceive to be reasonable and includes only performance objectives that employees can control. 2. Administration may also suggest the bonus should be of lesser monetary value and use multiple performance criteria. 3. Make awards special – If the employee is less likely to purchase the item because he or she cant justify the cost, then making the award special will increase the value of earning it and motivate greater effort to earn it. (Billsims.com) 4. Capitalize on social reinforcement qualities – Honor employees publicly when goals are achieved, and in communications with employees, encourage them to think about the admiration that will result in achieving the award and the performance that lead to it. 5. Vary award types to meet employees diverse needs – When employees can choose from a variety of awards, the perceived value of the award increases because it is an award the employee wants. (Billsims.com) 6. Other potential benefits – vacation travel used as an incentive might bring the company rewards because the employee will be better rested and more relaxed when he or she returns to the job. Employee Motivation for better production Pollock recognizes factors of motivators as being crucial in motivating people. These are recognition, interesting work and responsibility. He says, “Over and above monetary reward, what people crave is praise. They need assurance that their efforts are known, valued, and appreciated. Sometimes all it takes to satisfy this deep desire is a sincere “well done”, preferably delivered in front of their peers. Making peoples work interesting means driving away boredom because it’s a great de-motivator. Make their work meaningful and you will spur them to realize their own highest potential. Giving people additional responsibilities implies not only giving them extra work, but work that is important and requires a higher level of knowledge and skill”. (Pollock 2002) There are three important factors: 1. The need for achievement Every person is achievement motivated and therefore seeks achievement, attainment of realistic but challenging goals, and advancement in the job. There is a strong need for feedback as to achievement and progress, and a need for a sense of accomplishment. 2. The need for authority and power Every person is authority motivated. This driver produces a need to be influential, effective and to make an impact. There is a strong need to lead and for their ideas to prevail. There is also motivation and need towards increasing personal status and prestige. 3. The need for affiliation Every person is affiliation motivated, and has a need for friendly relationships and is motivated towards interaction with other people. The affiliation driver produces motivation and need to be liked and held in popular regard. These people are team players. Conclusion Ultimately, motivation must come from within each person. No leader is ever the single and continuing source of motivation for a person. While the leaders encouragement, support, inspiration, and example will at times motivate followers, the leaders greatest role in motivating is to recognize people for who they are, and to help them find their own way forward by making best use of their own strengths and abilities. In this way, achievement, development, and recognition will all come quite naturally to the person, and it is these things, which are the true fuels of personal motivation. As rightly quoted for effective leadership in Business studies: “Your responsibility as leader is to develop your team so that it can take on more and more of your own responsibility. A mature team should be virtually self-managing, leaving you free to concentrate on all the job-enhancing strategic aspects that you yourself need in order to keep motivated and developing.” The employees who are satisfied in their jobs will be more motivated to perform effectively and there is a scope to gain more and more knowledge, update with new skills and they perform different tasks that require different skills. They are able to perform a complete piece of work. This gives a sense of completion and responsibility for the product. In conclusion all these lead to an ultimate goal of improved productivity; have people perform at full potential, and reward workers for performance. Environmental factors are increasing the need for effective leadership in todays organizations. In order to better motivate, guide, and direct employee teams, leaders require specific skills and expertise in behavioral studies to change their environment. References Caldwell, D. (1978)“Employee Motivation under Merit Systems.” Public Personnel Management. 50- 65. Safety Incentives: Why Cash Isnt King. Billsims.com. Retrieved Jan 31, 2007,from http://www.billsims.com/cashking.php The Impact of Motivation on Job Satisfaction Amongst Employees. Etd.uj.ac.za. Retrieved Feb 14, 2007,from http://etd.uj.ac.za/theses/available/etd-09012006-105759/restricted/Finaldissertation.pdf. Pollock Ted. (2002). Automotive Design and Production. Cincinnati: Jul. Vol. 114, Iss. 7; 5-13 Read More