MBA - DIPLOMA STAGE

International Management

TITLE PAGE:

Report To : Dr Mohammed Haq

Report From : Yogesh Bhujbal

Student ID : S10497122

Date : 7 April 2011

Table of Contents

1

Page no.

1. Summery ………………….……..………………………………………………………..

3

2. Introduction ………………………………………………………………………………..

3

3. Maslow’s Hierarchy of needs ……………………………………………………..

4

4. Hertzberg Two-factor Theory ……………………………………….……………..

6

5. Mclelland Theory of Motivation …………………………………………………

9

6. Conclusion ………………………………………………………………………………….

11

7. References ………………………………………………………………………………….

12

2

SUMMERY:

Many approaches of employee motivation have been established over the years. The study of employee work motivation has focused on how to motivate the employee as well as the manager. Motivation theories are vital to managers attempting to be effective leaders, in gaining loyalty and productivity from worker. Motivation has two primary approaches: content and process. Words like: needs, goals, values, culture, management and incentives are all related to motivation. Mathis & Jackson (1991). There are several theorists who have put forward about motivation, through differing viewpoints and perspectives. The essay’s main emphasis is to discuss those differing views from the perspective of needs, goals, culture, leadership, and, incentives, as well as to examine models currently used in India.

INTRODUCTION:

Motivating employees is a management and leadership concern, often linked to policies, procedures, as well as the structure and cultures of an organization. It begins with human resource management and knowing what the employee is hired to achieve. Motivation is the art of getting things done in a manner that meets or surpasses expected standards of performance. It is defined as "an emotion or desire within a person causing a person to act." In essence, people typically act in order to achieve a goal.No organization can achieve anything without people Drucker, (1999). An Organization is a body of persons arranged for a specific purpose. Because Management is the efficient and effective utilization of resources, we must think of workers as the Human Resource. Management is about human beings. Its task is to make people capable of joint performance, to make their strengths active and their weaknesses immaterial. This is what organization is all about, and it is the reason that management is the critical, determining factor. The single most important thing to remember about any enterprise is that outcomes exist only on

3

the outside. The result of a business is a satisfied customer. The result of a hospital is a healed patient. The result of a school is a student who has learned something and puts it to work ten years later. Inside an enterprise, there are only costs." Drucker, (1996). I am going to explain theory of Maslow, Hertzberg, and Mclelland’s theory implementation in Indian companies.

MASLOW’S HIERARCHY OF NEEDS:

Abraham Maslow, said that our basic needs must be satisfied before we satisfy higher needs. Once we actually meet all the steps (physiological, safety, belongingness and love, esteem and finally self-actualizing) we would then become Self Actualizing. Burger, (1997). In Maslow’s Hierarchy of Needs, money and benefits are associated with the lower order needs and it is the higher order needs – Self-esteem and Self-actualization – that are related to Hertzberg’s motivators. Thus, we come to a reality that, for most of us, is surprising. Money, in and of itself, is not a motivator; yet most managers probably think of it as the primary motivator. And, it is fair to say that so long as employees find themselves at the lower levels of Maslow’s Hierarchy, money will appear to motivate because it pays for the satisfaction of physiological and security needs.

Maslow's hierarchy of needs categories is the most famous example: These ascend the pyramid as illustrated below:

4

(Figure: 1) mba online (2011)

Physiological which is basic needs are essential for survival. They contain the requirements of life, such as food, water, and shelter. In a business environment, these needs transform into a relaxed working atmosphere, and a salary that is adequate enough to sustain life. Security needs, are concerned with maintaining stability in a civil society and having protection from the fearful unknown. In an organizational environment this translates into having job security and pension funds as a safety net for the future.

Social needs involve love, friendship and camaraderie. Employees need to feel that they belong and that the work atmosphere nurtures friendship.

Self-Esteem needs, envelops the needs for self-worth, status and recognition. Businesses can meet these needs by assigning esteemed job titles to their employees, granting a promotion when deserved, and creating incentives.

Self-actualization needs include individual growth and self-fulfilment, to develop ones competences; to live up to one’s full potential. For example, when an employee hears that the company is downsizing, he or she may shift to lower level need and become anxious with physiological and safety needs.

Application of Maslow’s theory in Indian Retail Companies:

5

Indian retail has been following Maslow’s Theory. His theory maintains that a person does not feel a higher need until the needs of the current level have been satisfied. This is exactly what happened in the Indian retail development. All of us were so used to our local grimy Kirana shops that we didn’t feel a higher need, until Indians started travelling abroad and saw the high end retail environment. That, accompanied by liberalising economy, was the indication of modern trade in the Indian retail industry.

With the contemporary retail chains, in a comparatively better, safer, well stricken environment, a customer felt safe & secure to buy their groceries. That’s the second level need as Maslow outlined. Safe in the comfort of properly packaged, fixed price, daily use items. Thankful that they will get what they pay for and secure in the thought that if wronged, they had the remedy of returning to the retailer, as he was an institution now, not a petty trader. This phase was marked by the entry of stores like Big Bazaar.

Once the lower need of safety & security was met, particularly for the urban consumer, just like Maslow’s theory says, the consumer in India was ready to move to the next need. That is of Love & Belonging. To fulfil this need, the retail trade answered quickly. There was this phase where almost every retailer had a ‘loyalty programme’ of some sort or the other. Lifestyle, Pantaloons, Shopper’s Stop, Westside, you name them and they had it. These loyalty sequencers rarely gave any substantial material benefit to the consumer, except to the really high end ones, but did give them acknowledgment, enclosure & affection, the three standards that characterize this level in Maslow’s hierarchy of needs. This came through the acknowledgment and apparent special treatment that the consumer received, more than from the ungenerous points, millions of which would be needed to even buy a half decent shirt. Advertising and marketing in this phase highlighted the sense of belonging to a special club.

From this segment, a certain type of consumer was quickly progressed to the next segment of ‘Self Esteem’. The promotions and marketing strategies of the retail industry reflected this. The retail experience was highlighted. Special offers and promotions were run for the coveted high end customers and the platinum card pattern was born. Just as Maslow predicts, Self Respect, Self Esteem and Respect by others describes this phase, so was it seen in the retail industry. Specialised, high end malls, aimed for growth and of course wealthy consumer started escalating.

However, Maslow did leave us a level extra, that of ‘Self Actualisation’. This need is categorized by fulfilment and achieving one’s full potential. As consumers move into this phase, at least some of them, the thin plastic bag of the safety need period, which changed into a brilliantly shaped, thick micron plastic bag of the Esteem phase, switches into jute in the self-actualisation phase. Store brands start making an indentation as consumers refuse to pay a first-rate just for a brand name. You can see this trend in several western markets and it is a matter of time before this is seen in India as well.

6

HERTZBERG TWO-FACTOR THEORY:

Hertzberg’s two-factor theories are concerned with the motivation of employees through needs, and consider money and employment benefits to be hygiene factors or dissatisfies. That is, if the pay and benefits are sufficient, the employee will be satisfied but not motivated. If they are felt, by the employee to be insufficient, the employee will be dissatisfied (Griffin, 1999). In Hertzberg theory, states that job satisfaction and dissatisfaction is dependent on hygiene and motivating factors, which can lead to satisfaction or dissatisfaction with one’s employment that arose from quite different factors and were not simply opposing reactions to the same factors. Hertzberg et.al. (1968). The externally forced effort by management to install a creator in the employee and it has been revealed to be a total failure. Motivation, says Hertzberg, derives from people having a sense of accomplishment, acknowledgment, duty and opportunities for personal development. He evaluates management for overlooking the motivational influences and trying to motivate through things like money and benefits - expensive and not successful.

The absence of such hygiene factors as good supervisor-employee relations and liberal fringe benefits can make a worker unhappy, but their presence will not make them to work harder. Hertzberg’s theory believes that the only way to motivate the employee is to give him exciting work in which he can undertake responsibility. According to Hertzberg, as jobs become improved, the need for much ordinary job management disappears, and previously unsatisfying supervisory tasks can themselves be improved by increasing their duties on a more decision-making level.

The factors that lead to job satisfaction (the motivators) are:

Achievement Recognition Work itself Advancement Responsibility

The factors that may prevent dissatisfaction (the hygiene) are:

Working conditions Company policy and administration Supervision Money Interpersonal relations Security Status

7

Hygiene, if applied effectively, can at best prevent dissatisfaction: if applied poorly, they can result in negative feelings about the job. Hertzberg’s point is that if you want to motivate people, you have to be concerned with the job itself and not simply with the surroundings. Individual views regarding what is a hygiene factor and what is a motivation factor differ. On the one hand, one may think that money is only a hygiene factor. On the other hand, someone else may see money as a motivation factor, a sign of recognition and achievement.

According to Hertzberg, as jobs become enriched, the need for much ordinary job supervision disappears, and previously unsatisfying supervisory tasks can themselves be enriched by enlarging their responsibilities on a more decision-making level. If our place in society is defined by our work, then the compensation for that work will significantly impact the worker's sense of self, his or her self-image and, ultimately, his or her self-esteem which brings us back to the higher order needs in Maslow's Hierarchy and motivators in Hertzberg's two-factor theory. While money is not a motivator, the level and fairness of compensation indirectly impacts employee motivation. (Henderson, 1982). This is linked directly to what Hertzberg tells us are the true motivators: Achievement, Recognition, The Work Itself, Responsibility, and Advancement and Growth.

Application of Hertzberg theory in Google Inc.:

In present corporate scenario, the organization’s bottom line is to make the most profit long term by attracting, holding, and motivating top talent for maximum performance. The way companies can do that is by offering the best rewards in the industry. Google, Inc. operates in India, US, the UK and a large number of other countries.

Google, Inc.’s CEO, Erin Schmitt, adopts the “fun is good” principle and states that they built a company around the idea that work should be challenging, and the challenge should be fun. They put employees first by providing a unique environment to work around. Schmitt states, “We realize and celebrate that our employees have diverse needs, and that this diversity requires flexible and individually directed support.

Google, Inc.’s goal of providing benefits and rewards is to “strip away everything that gets in our employees’ way” (Google, 2009). Google, Inc. provides a standard package of fringe benefits, but on top of that are first-class dining facilities, gyms, laundry rooms, massage rooms, haircuts, carwashes, dry cleaning, commuting buses – just about anything a hardworking employee might want. Schmitt states, “Let’s face it: programmers want to program, they don’t want to do their laundry. So we make it easy for them to do both” (Google, 2009).

8

Google believes in providing both intrinsic and extrinsic rewards. They understand that many humans are not motivated by pay incentives alone. Google Inc. believes in administering rewards and that good company culture is vital to company success, consequently, Google hired a Culture Czar.

Google, Inc.’s CCO, Chief Culture Czar, Stacy Sullivan, is devoted to one thing—make Google employee happy. One way of maintaining Google, Inc.’s culture and keeping employees happy is administering the best perks and rewards (Culture, 2009). Along with its compensation and traditional extrinsic benefits such as free health and dental benefits, flex spending accounts, 401K plans, insurance, tuition reimbursement, and vacation packages, they also have very unique benefits. These exclusive benefits include maternity benefits up to 18 weeks off at approximately 100% pay. In addition, new mothers and fathers get Take-Out Benefits to help make things easier. They are provided with expenses up to $500 for take-out meals during the first three months that they are home with their new baby.

MCLELLAND THEORY OF MOTIVATION:

David McClelland gave a model of motivation, which is based on three types of needs, namely, achievement, power and affiliation. They are stated below:

1. Need for achievement (n-Ach): A drive to excel, advance and grow;

2. Need for power (n-Pow): A drive to influence others and situations; and

3. Need for affiliation (n-Aff): A drive for friendly and close interpersonal relationships.

Achievement motivation: Some people have a convincing drive to succeed and they strive for personal achievement rather than the rewards of success that accompany it. McClelland found that high achievers distinguish themselves from others by their desire to do things better. They pursue situations where they can reach personal responsibility for finding solutions to problems, where they can receive rapid feedback on their performance so they can set reasonably challenging goals. High achievers are not gamblers; they dislike succeeding by chance. They prefer the challenge of working at a problem and accepting the personal responsibility for success or failure, rather than leaving the outcome to chance or the actions of others.

Power motivation: The need for power is a drive to have impact, to be influential, and to control others, individuals high in nPow enjoy being “in charge”, strive for influence over others, prefer to be placed into competitive and status-oriented situations, and tend to be more concerned with gaining influence

9

over others and prestige than with effective performance. Power-motivated people wish to create an impact on their organisations and are willing to take risks to do so.

Affiliation motivation: This need has received the least attention of researchers. Affiliation needs can be viewed as the desire to be liked and accepted by others. It is the drive to relate to people on a social basis. Individuals with a high affiliation motive strive for friendship, prefer cooperative situations rather than competitive ones, and desire relationships involving a high degree of mutual understanding.

Application of Mclelland ’s theory on small industries in India . :

One powerful approach which was seen as being effective, and was therefore widely adopted in India, was based on the McClelland's theory of motivation development.

An experiment was conducted for the first time in the world at the 'Small Industries Extension Training Institute, to develop achievement motivation amongst a group of farm owners, to turn them into entrepreneurs, and thereby bring about economic change in a town. A detailed plan of the intervention was prepared by a team of behavioural scientists and was successfully used. The main focus of the intervention was to change the thinking process of persons involved in the experiment by saturating their imagery with concern for excellence and achievement of higher goals. The success of the experiment stimulated large-scale use of this approach by government bodies concerned with development of entrepreneurship and various banks which are also interested in promoting successful entrepreneurship. Currently three national institutions are working in this field with a large number of other institutes in various parts of the country. Some critiques have appeared. Some new developments have also been reported. Currently many modifications have been made in this approach and some institutions are developing facilitators to use this intervention more effectively.

Different Approaches:

Some approaches are briefly mentioned to indicate the increasing variety of such approaches in India.

Action research, in which researchers and practitioners work together on analysis, setting up and testing theory through interferences, and re-planning to improve the quality of action. L-Groups or T-Groups approach, focusing on confronting individuals with intrapersonal, interpersonal issues in a group, and helping them to deal with such realities.

10

Tavistock approach, focusing purely on group dynamics (both small and large groups), with the organiser distancing himself or herself from the participants in this process. Motivation development, by influencing imagery of the persons concerned so that they set new priorities of goals, develop action plans to achieve the goals, and implement them.

Jungian approach, in which exploration is done by probing collective unconscious, examining the personal orientation through the use of an instrument developed on the basis of Jung's Theory.

Transactional analysis, using both the Ego States and Life Positions to deal with various issues of one's effectiveness. Transactional Analysis Society of India has been doing pioneering work. An instrument has been prepared as an aid for examining interpersonal styles based on Transactional analysis. Guna Dynamics, using Indian ancient philosophy and approaches of meditation for mind setting and development of values. Stress management, to help people identify their work related and general stress, and to cope with such stress. Job-related and other stresses have been studied. Some instruments to measure role stress and coping strategies and styles have been developed.

CONCLUSION:

From the research and experiences I have learned, that there is no one factor responsible for motivating employees. Rather, it is a complex combination of many of the factors, given the individual, the corporate culture, and the organizational environment that can motivate employees to performance. What is certain, however, is that it is not merely the financial gains that successfully motivate employees; though we know money it is important. Employees need to feel appreciated, respected, and a sense of worth about their jobs and from their manger, who is hopefully a leader. A leader has the capability of motivating, guiding, counselling, and inspiring worker to perform, instead of just supervising tasks. Theory shows that this management style empowers and has a significant influence on motivation of employees. Motivation is vital at all levels of life and it must have both essential and extrinsic value. Employee motivation can lead to productivity, efficiency, profit, as well as loyalty and promise to a company. When people are motivated, anything is possible. Where there’s a will, there’s a way!" So what motivates me? The challenge of ‘Turning the lights on in young minds,’ enjoying my work, the ability to give, combined with a conducive environment, and financial reward, all contribute towards my motivation. It is ‘Going against the odds’, the challenge of proving people wrong, a few inspiring people in my life, increasing my knowledge at every opportunity, having self-esteem, and striving for self-actualization that further motivates me. What will be precise as a new example for the future is a major task for further exploration. This study by no means covers the entire topic of motivation, but leaves opportunity for further exploration.

11

REFERENCES:

1. Mathis R., Jackson J. (1991). Instructor's manual to accompany Personnel/human resource management. 12th ed. USA: West Pub. Co., 1991. p.80, p.635

2. MBA online (2011) Available: http://http://www.mba-online-program.com/maslow%E2%80%99s-hierarchy-of-needs-business-strategy Last accessed: 2th April, 2011

3. Drucker F. (1999 & 1996). Management: tasks, responsibilities, practices. London: British Library. p.12., p.31-32

4. Burger W. (2010). Human Services in Contemporary America. 8th ed. Balmont CA: Cengage Learning. p.54.

5. Ebert R., Griffin R. (1999). Business Essentials. 3rd ed. Toronto: Prentice-Hall. p. 216-217.

6. Hertzberg, F. (1968). The Motivation to Work. 2nd ed. New York: World Publishing. p. 53–62.

7. Henderson, R. (1982). Compensation Management, 3rd Ed., Reston, VA. Reston Publishing Co. p. 49.

8. Thompson J. (2009). Merchants of Culture, 1st Ed., Cambridge. Polity Press. p. 358.

9. Google, (2009)

12