Motivation of employees

The economic crisis led to increased competition among enterprises. Because of that most managers began looking for a way to increase business productivity. Labor productivity is one of the leading indicators of a company’s economic performance. The analysis of productivity thus determines the efficiency of the corporate workforce and working hours.

The most important task when analyzing and planning productivity is to identify and exploit reserves for growth. To do this one needs to determine opportunities for improvement in labor productivity. One way of doing this is to increase the motivation of employees.

The term motivation refers to a process of encouraging ourselves and others to take action, achieve personal goals or business objectives. The primary purpose of the motivational methods is to gain the maximum benefit from the use of the existing workforce, which improves the overall performance and profitability of a company.

Increasing employees‘ motivation is a complex and consistent process. When creating a motivational system, we must take these factors into consideration: technical, organizational, social and economic.

Material motivation: risks and opportunities

Many managers consider the material motivational system as the best motivation. It is true to some extent because a competitive salary is a fundamental element of staff retention. However, just tapping into the material motivation of employees does not always bring expected results. It is a relatively complex instrument of influence, which should be used very carefully, efficiently and skillfully.

The material motivation of employees is based on a financial reward system. There are several types of incentives, which have an impact on increasing productivity at work:

  • Salary raises
  • Bonuses and additional allowance
  • Paid holidays
  • Paid sick leave
  • Surcharge for pension and welfare fund
  • Other benefits

When using money (salary, bonuses, sanctions, etc.) as the only way to motivate new employees, it is possible to reach an acceptable level of compliance with standards; however, it is not feasible to achieve excellent results. Someone’s wage should not be looked at as is a solitary motivator, and it is like a “carrot and stick“ which define the scope of employee’s activities (what he can and cannot he do, what will be supported). Financial incentives have their limits – such as someone who ‘rewards’ employees for proper work and ‘punishes’ them for violations of rules and requirements. The trouble is that just performance standards do not guarantee positive results. For example, dissatisfied workers at one European Ford automobile factory organized an unusual strike by operating in strict accordance with standards, regulations and nothing more. The performance decreased by 25%.

A motivational system that includes work stimulation is crucial. First and foremost one must address the preservation and control of labor standards, and only then stimulate the achievement of results. A reward increase associated with performance indicators (the result, volume of performed work and responsibility) is a short-time solution. An employee can quickly get accustomed to a higher wage for the same amount of work and the higher salary’s impact on one’s motivation will diminish.

Thus by using only financial incentives, maximal efficiency cannot be attained. To achieve new heights, one needs to tap into the intrinsic motivation of its employees. It results from an understanding of common goals and values, having an inspiring and cooperative atmosphere, stimulating work and having respect for the manager – these are unrelated to material motivation.

Non-material motivation: Advantages and disadvantages

There are many ways to motivate employees immaterially: corporate events, training, subsidized vouchers, promotion or new status in the organization, gifts, letter of thanks, certificate of merit, social contributions, invitations to major holidays, discounts, etc. The question is only for which option and based on what to decide.

To avoid unpleasant situations when selecting the manner of appreciation, the manager should imagine how the employees would react to the chosen method.

It is better to ask the employees themselves, what has the motivation power for them. They can best express which ‘reward’ would lead to more efficient work, what would they like to get in recognition for their merits and achievements.

An ideal choice of motivational system is the identity of an organization or department’s objectives with employee’s goals. According to Leo Tolstoy, no activity can be worthwhile unless it is based on one’s interest. More specifically, when performing a task, the employee reaches the result not only for the organization but also for himself.

Let’s suppose that an employee’s goal is to learn English. By fulfilling certain requirements at work or by achieving certain results the employee may get the opportunity to attend English language courses on company’s account or get a partial contribution to further education. This way the organization helps to fulfill the employee’s dream. If an employee wants to spend more time with his family, let him, but under one condition – that he will perform his work well or will solve a significant problem in the organization. Maybe then he can take off twice a month and spend more time on his own or with his family. It does not matter that the employees‘ interests are outside of work. Usually, it is the case of the most productive employees with growth potential.

It is important for managers to understand the interests and priorities of their employees, what are they driven by and what they want to achieve. Identify the primary internal motivation of an employee and keep it in mind when creating the motivational system. In a similar way, a director can stimulate employees‘ efforts to achieve results at minimal costs. A ‘gift’ is not as important as the recognition. It is also important to understand what and when to ‘give’ – e.g. leave a thank you note on a table, flexible working hours, extra days off, perspective assignments, training opportunities, career growth opportunities, name day congratulations or birthday gifts. When using these techniques correctly, it is possible to gain an employees‘ loyalty and ensure a high level of their motivation. It is necessary that the selected method is truly important for the employee, and not to use it just regarding something to ‘check off’ on a task from the manager’s to-do list.

And the most important at the end

In some organizations, teamwork is supported, but the emphasis is exclusively put on group success – regardless of the contribution of individual team members. On the contrary in others, they rely only on personal achievements and thus create a competitive atmosphere that leads to unhealthy rivalries. Based on the above written, we understand that it is necessary to keep a balance between individual and collective motivation in agreement with its and an organization’s objectives. It should be noted that the attitude of a director himself on its own could either be a motivating or demotivating element. According to surveys, the decisive factor for leaving a job is the impossibility of establishing a positive working relationship between an employee and director. Excessive demands, unfair appreciation or punishment, financial dishonesty, unfulfilled promises, incorrect behaviors – just a few examples from the list of complaints accumulated from employees to managers who were on the way out. All these factors are more important to employees than wages, bonuses, rewards and gifts. According to extracts from the “Leadership Secrets of C. Powell“ book: “A sign of a good leader is the readiness of subordinates to follow him just out of curiosity.“ A talented head leader creates an atmosphere of creativity and drive in which the subordinates forget the unpleasant interior or other deficiencies, and lead them to achieve excellent results. A charismatic leader inspires his subordinates by his example, belief in success, support, and leads them to the target.

However, the primary motivating or demotivating element is the employee himself. It was found that high productivity of employees is possible only in the case of them being interested in the final result, and if they have a positive approach to work. When selecting employees, the director should evaluate the candidates not only concerning professionalism, but he also should sense the desire to work and have a desire to pursue career growth. It is much easier to train a beginner than to motivate an experienced but lazy ‘professional.’

Motivation has great power. It is precisely the energy, which drives the enterprise to achieve its objectives.


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