HRM Unit-4 Motivational Strategies

7/28/2019 HRM Unit-4 Motivational Strategies

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Unit -4

Motivating Employees-Motivational Strategies,

Incentive Schemes,Empowerment- Job Satisfaction,

Morale, Personnel Turnover


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Motivation

According to Fred Luthans :

Motivation is a process which begins

with a physiological or psychologicalneed or deficiency which triggersbehavior or a drive that is aimed at a

goal or an incentive.Types of Motivation

Intrinsic Motivation

Extrinsic Motivation


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Why in a company one requires motivational

strategies?

How to motivate employees?

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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 andmanagement

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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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.

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Encouraging Open Communication: - Opencommunication improves work motivation inan organization. It must embrace

communication of policies from the top to thedifferent organizational levels; help resolvedifficulties and problems at variousorganizational levels; and flow of supportive

feedback for the superior.

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Enhancing Role Efficacy

Role efficacy is the potential

effectiveness of an individual inhis role.

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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. 10


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Promoting Norms for Recognition of Competence:

Climate of work motivation can be engineered by

promoting norms of recognition for competence injob 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 whodeserve it.

The challenging Job: Work motivation is partly

determined by the challenge which a job providesto 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 supportand 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, thisprinciple 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: Anindividuals motivational pattern is dynamic and itcan be changed. Some needs are stronger thanothers. An understanding of an employeesmotivational profile can help organizations to

form their strategies. Performance as a cause of work satisfaction and

as an outcome of effort: Performance directlyfacilitates work satisfaction and is a direct result

of effort. Work motivation can be increased bystressing increased effort of the individual ongood performance and by linking performancewith right rewards.

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Successful Experience with Challenging Tasks:

An individuals work motivation and capability

for higher achievement can be increased byexposure of successful experience to

increasingly challenging tasks. An attempt

should be made to help the individualexperience 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 compensationsystem is common problem area to all theorganization.

The objective of employee compensation issimple, the process is complex.

In comparison to other aspects of HRM

( training, career management.. etc.)compensation is considered important andcrucial for all employees.


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Incentive

In simple words, incentive is anything that attracts aworker and stimulates him to work.

The incentives can be financial and non-financial.

Both types of incentives play important role underdifferent conditions. For example, financial incentivesare considered to be more valued under the workconditions where wages are at low levels. On thecontrary, nonfinancial incentives are more preferablewhere 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 andtheir 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, forimprovements 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

FINANCIALINCENTIVES

NONFINANCIALINCENTIVES

INDIVIDUALINCENTIVES

GROUPINCENTIVES

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Classification

Incentives are broadly classified into two

categories-

Financial- Individual Incentives & GroupIncentives

Non -Financial

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Individual Incentive Scheme

Piece Rate Plan: Developed by Frederic Taylor

Taylor prescribed two piece work rates- FirstHigher Wage rate for those who reach thestandard work Second A lower wage rate whoseperformance is below the standard.

The standard work is determined on the basis oftime and motion studies. This wage planencourages and rewards the employees who

are efficient by giving them wages at a higherrate, and penalizes those who are slowperformers by paying them a low wage rate.

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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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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 individualsscheme is that output of each worker can be accuratelymeasured. But in some cases operations are performed bythe group & contribution of each worker in the groupcannot 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 followedand earnings are then distributed among the members ofthe group on some equitable basis.

If group consists of members with equal skills, the earningsare divided equally else in the proportion to their individualtime-rate or according to specified percentage or in somecases 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 co-

operative efforts of various parties, so

employees should also share in profits as

shareholders share by getting dividend on

their investment. Categories of Profit Sharing-

Current, 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 ofprofits.

Deferred : Profits are credited to employeesaccount 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 IncentivesUnder 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 applicablecriterion rather than seniority or job title.

Piece Rate (remuneration@ unit produce)

Bonus (Bonus on the basis of good companyperformances)

Gain Sharing (increase in productivity is ameasure to distribute compensation)


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Flexible Benefits

It is the need of current business environment

to customize motivation plans. Under theflexible benefit plan, an employer allow the

employees to pick from a basket of benefit

options. (eg. Petrol allowance , Medical benefitsetc.)


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Skill Based Pay

This involves using an employees skill set todetermine his /her valued contribution to thecompany, and then they are paid accordingly. eg.- if amechanic acquires the skills of an electrician, he willbe rewarded extra for his additional skills used by thefirm.


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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 theorganization over a long period.

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Fringe Benefits

Fringe benefits may be defined as wide range ofbenefits and services that employees receive asan integral part of their total compensationpackage .

The objectives of Fringe Benefits are:

To supplement direct remuneration

Employers prefer fringe benefitsTo retain competent employeesTo develop good corporate imageTo raise employee moraleTo 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 unhealthycompetition among employees.The expected befit may not be available if

the monetary benefits offered adequatelyattractive to employees.The motivation of employees may not be as

per expectation if the implementation of thebenefits scheme is not transparent.

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Non Monetary Incentives

There are two types of programmes-


Employee Involvement Programmes


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Non Monetary Motivation

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 Participation:

An employee participative management program makes

use of joint decision making to ensure employee

involvement. In this subordinates ( or representativeparticipation ) along with their superiors share an

important degree of decision making power.

Limitation-

Only a symbolic form of representation

Employee Involvement

Programmes


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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)

Limitations-The concept of quality circles will work only if top

management is committed.

Quality Circles


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EmpowermentEmpowerment means giving subordinates enough

autonomy for crucial decision making and the freedom

to redefine work priorities.

Employers invite employees to suggest ways and meansof improving their businesses and help in theorganizational growth process.

Empowerment is the process of enhancing feeling of self-efficiency and a sense ofowing a job.

Empowerment = Accountability with PowerLimitations-Care is to be exercised to ensure that employees do not

super cede each others predefined 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 thatlead 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 byRemoving 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. Demonstrate You Value People2. Share Leadership Vision

3. Share Goals and Direction

4. Trust People

5. Provide Information for Decision Making

6. Delegate Authority and Impact Opportunities, NotJust More Work

7. Provide Frequent Feedback

8. Solve Problems: Don't Pinpoint Problem People9. Listen to Learn and Ask Questions to Provide Guidance

10. Help Employees Feel Rewarded and Recognized forEmpowered 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 andreduced turnover.

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Job Satisfaction

Job satisfaction has been defined as a

pleasurable emotional state resulting from the

appraisal ofones job; an affective reaction to

ones job; and an attitude towards ones job.

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J b S i f i M


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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 personalfactors. For each declaration or statement, the

employee is asked to express his opinion on a

Likert scale from highly satisfied to highlydissatisfied.

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Personal Interviews: The experts conduct personal interviewswhere 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 thismethod is likely to have personal biased views of theinterviewer also.

Tendencies: The employees are asked to express their

tendency or inclination on several aspects and this revealstheir satisfaction or dissatisfaction.

Critical Incidents: Herzberg developed this approach. In thisparticular method, the employees were asked to describe

incidents on their job when they were particularly satisfied ordissatisfied. These set of incidents were then analyzed todetermine their positive and negative attitudes.

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Employee Morale

Employee morale describes the overall outlook,attitude, satisfaction, and confidence thatemployees feel at work. When employees arepositive about their work environment andbelieve that they can meet their most importantneeds at work, employee morale is positive orhigh. If employees are negative and unhappyabout their workplace, and feel unappreciatedand as if they cannot satisfy their goals andneeds, 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 improvingemployee 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 frameworkof goals, measurements, and clear expectations

.lsit continues

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Personnel Turnover/Attrition

A reduction in the number of employees throughretirement, resignation or death. It is thevoluntary and involuntary permanentwithdrawal of employees from the organization.

Attrition Rate : The rate of shrinkage in size ornumber of employees in an organization.

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Types of Attrition

Early Attrition: - In this type of attrition there is gradual diminutionin the number /strength of employees within two or three weeks ofjoining. (Moving to another industry)

Medium Attrition: - In this there is gradual diminution after six

months. The reason for medium attrition is higher salary or morebenefits. Employees get experience working in small call centersand after six months they apply in big call centers for more salaryand more benefits.

Late Attrition: - In this type of attrition the employees leaves theorganization after working for a long period of time. Generally

these employees are loyal to the organization and leave on theretirement 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 andassigned 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 ofa job in terms of technique ,systems and

procedures, and on the relationships between the

jobholder 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 anemployee to completely different sets of job

activities.

Basically to make the job more challenging, creatinggreater job interest for the employees and reducing

boredom thru diversifying the employee activities,

more flexibility in scheduling work ,adapting to

changes.Limitation-

Training cost is increased

Job rotation creates disruptions.


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Job Enlargement

The assumptions behind the concept of Job Rotationare

Output will increase if- the workers abilities are fully

utilized, the worker has more control over work andthe 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 addingmore 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.

Five core dimensions of Job Enrichment-


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Task Variety- Optimum variety of tasks within thejob, 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 theirorganization.

Autonomy-Control over their own work. Workersaccept responsibility , if they have some freedom

in setting of standard of quality and quantity ofproduction.

Feedback


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HRM Unit-4 Motivational Strategies

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