2.4 Motivation

• Motivation refers to the reasons for behaving in a certain way, desire/effort/passion to succeed and reach certain achievements.
• Motivation can be intrinsic (driven by internal factors, when you do something because you want to do it) and extrinsic (driven by external factors, when you do something because you will get a reward or will not get a punishment for doing it).
• Motivation is important, because if staff is motivated, it will result in job satisfaction that will lead to high productivity and high quality output, which will eventually result in higher profitability.
• According to Taylor’s Scientific Management theory, managers are in charge of planning, direction and control, whereas subordinates are rewarded using performance-related pay: the more they work, the more money they get.
• Taylor suggests a strict division of labour and specialisation at a workplace and all the tasks and expectations are clearly set and communicated to employees.
• Performance-related pay (PRP) is a type of financial reward that is usually a bonus that is paid in addition to salary.
• Wage is a type of financial reward where employees are paid based on the amount of output they produce (piece rate) or the amount of time they spend at work (time rate).
• Time rate encourages employees to stay at work longer and do more work, but it doesn’t always relate to quality and efficiency.
• There are 8 types of financial rewards: salary, wage, commission, performance-related pay, profit-related pay, employee share ownership schemes, fringe benefits.
• Commission is a type of financial reward that is a percentage of the deals/sales that an employee makes.
• Salary is a type of financial reward that is a sum of money divided by 12 and paid in equal instalments monthly.
• Financial rewards are cash benefits given to employees in return for their efforts and achievements.
• Piece rate is fair and directly relates to output produced, but it doesn’t motivate employees to produce high quality output.
• All hiring decisions are made based on “scientific” objective parameters, not on how much a manager might potentially like the candidate emotionally.
• Frederick Taylor said: “What the workmen want from employers beyond anything else is higher wages” and “In the majority of cases, man deliberately plans to do as little as possible”.
• Motivation theories include Intrinsic motivation, Extrinsic motivation, Demotivation, Scientific management, Taylor, Hierarchy of needs, Maslow, Physiological needs, Security needs, Social needs, Esteem needs, Self-actualisation, Two-factor theory, Herzberg, Hygiene factors, Motivators, Movement, Job enlargement, Job enrichment, Job empowerment, McClelland.
• Maslow’s Hierarchy of Needs theory suggests that people progress in their needs from the lower to the top level: once they are satisfied with physiological needs, they will be motivated by security; once they are satisfied with security, they will be motivated by social needs, etc.
• The five levels of needs (from the lowest to the highest) are: Physiological (basic) needs Security (safety) needs Social (love & belonging) needs Esteem (ego) needs Self-actualisation.
• A contract of employment is a written agreement that might include the following: job title, duties, dates of employment, hours and days of work, rates and methods of pay, holiday and sick leave, pension scheme arrangements, disciplinary procedures, termination and period of notice, names and signatures of both parties.
• At the final stage, recruiters make the decision about who to offer job to (i.e about who is the best-fit candidate), unsuccessful applicants are informed that they did not get the job and thanked for participation.
• References are similar to college application recommendation letters.
• Successful candidates are offered a contract of employment.
• Shortlisted applicants are invited for an interview — a face-to-face meeting where the recruiters and applicants ask each other questions related to the potential employment.
• Interviews can be one-to-one, two-to-one (usually an expert in the related field of work and someone from HR), or a panel interview (more than two interviewers).
• References are usually confidential (the candidate does not see them, they go directly from references to recruiters) and usually they include some sort of an evaluation form and/or a letter.
• Organisations notify candidates that were not shortlisted (rejected), thank them for their applications and wish them good luck in their future applications.
• If the interview went well, then the recruiters might want to contact candidate’s references (previous employers or teachers or both) and ask them for a reference letter.
• Employment (and thus, contract) can be part-time or full-time (depends on the hours spent at work) and permanent or temporary (depending on the period of employment).
• If the interview is not enough, recruiters might also arrange some tests to the candidates.
• According to Maslow, people can’t skip any levels and won’t be motivated by more than one level ahead.
• Job enrichment is a type of non-financial reward that refers to an increase of challenge and responsibility, but not the increase in the number of tasks.
• Employee share ownership schemes are a type of financial reward that implies giving company’s shares to employees as a bonus.
• Non-financial rewards are non-cash benefits that are given to employees in return for their efforts and achievements.
• Fringe benefits increase the net (“take home”) salaries to employees.
• Employee share ownership schemes incentivise employees to work harder because they become shareholders (owners) of the company and understand that their contributions are directly related to the value of the company (and thus share price).
• There are 6 types of non-financial rewards: job enrichment, job rotation, job enlargement, empowerment, purpose/opportunity to make a difference, teamwork.
• Companies can either give some portion of shares to employees for free or sell shares to employees at a discounted rate or use a combination of these methods.
• Low profit might be caused by external factors, such as recession, which results in lower profits despite the efforts of employees.
• Job enlargement is a type of non-financial reward that refers to an increase in number of tasks, without increase in the challenge and responsibility levels.
• Empowerment is a type of non-financial reward that refers to giving employees more decision-making opportunities and making them more in charge of their jobs.