Monetary Incentives as Employee Motivation
Info: 5438 words (22 pages) Dissertation
Published: 11th Dec 2019
Chapter 1: Introduction
1.1 Background to Context
In a highly competitive business environment organisations have to generate and sustain higher profits to survive and achieve stable growth in future years within the context of globalisation (Wolfson, 1998:5). The easiest and most practical method of generating profits is to increase the level of sales in a company. This level of sales can be increased through various methods such as implementing effective and efficient marketing strategies and focussing on satisfied customers. Attracting new customers is more difficult in comparison to retaining previous customers. It is without doubt that the attraction of new customers would require additional costs and expenses related to marketing and promotional campaigns. (reference this – if you can ask the question says who then it should be referenced)
The most important and significant strategy of retaining old customers is to keep existing customers satisfied (ref). The satisfaction level of customers is affected (would influenced be better than affected) by a number of variables such as, quality of products, prices of goods and the level and quality of service and support provided by the personnel of an organisation. This implies that if customers are satisfied they will continue buying products from an organisation, their satisfaction and the service and support provided by employees of that organisation plays an increasing role of the success of an organisation (Kuballa, 2006:10). The employees will provide excellent services and support if they are satisfied (satisfied with what?) and company management needs to keep (ensure) the workforce/sales force is consistently highly satisfied and motivated. The motivation and satisfaction of employees especially the sales force within an organisation is of high importance for them, as both the commitment of these employees in achieving the objectives of an organisation and customer satisfaction levels are dependent on the motivation and satisfaction levels of employees (Ekerman et al, 2006). (Do you need a paragraph explaining the terms satisfaction and motivation at the beginning? It may help the reader).
Many organisations regard the workforce and employees (are workforce and employees not the same?) as important assets, who are responsible for achieving the overall aims and objectives of an organisation (reference). Companies and management of companies implement various motivational techniques and strategies to increase productivity levels of employees and effectively resolve and deal with various human resource management issues (Mullins, 2005:834). Managers can motivate employees using various techniques which include excellent and competitive salary and remuneration packages, awarding bonuses and incentives, improving working conditions (including the environment), increasing the level of employee involvement in the decision making process which in turn creates a sense of empowerment on the part of an employee (reference). (deleted the) Managers in organisations can increase employee motivation levels by providing both intrinsic and extrinsic rewards to employees in different forms (Mullins, 2005:473). Money and cash rewards are one of the best motivators of employees in any context and employees can be motivated quite effectively through cash and money rewards or rewards which are materialistic or quantitative in nature (Axelsson and Bokedal,2009).
Application of different techniques of motivation in organisations is of high importance not only to ensure increased level of employee satisfaction but also to ensure increased quality of goods and services having a direct impact on the level of customer satisfaction (deleted words here) which will eventually increase the profit of a company (reference). The sales force in an organisation is one of the most important workforces elements of an organisation; they are directly responsible for increasing and maintaining the level of sales within that organisation. The techniques and strategies of motivation become more important where human resources and personnel are abundant and there is significant competition in employee recruitment and hiring (reference).
Scholars, practitioners, researchers and authors have emphasised the importance of applying effective motivational techniques over the years and argue that motivating employees is one of the most important functions of managers within an in organisations and if organisations want to succeed on a long term basis they need to consistently motivate employees and achieve high levels of employee satisfaction (reference). Providing employees with an incentive in the form of promotions, bonuses and other intrinsic and extrinsic rewards increases the level of employee motivation within an organisation (reference). The implementation of motivation techniques especially monetary based or extrinsic rewards is applicable and effective in any context whether large or small (ref). The companies operating in countries where human resource is abundant and economies are dependent on human beings such as China, India, Vietnam, Taiwan and Philippines need to implement and apply effective strategic motivational techniques in order to retain employees and attract skilled and experienced workers (ref). There are a lot number of organisations that have outsourced their operations to thee these regions due to low cost of labour and human resources but the fact remains that these regions have a very competitive human resource environment and managers in these organisations need to be both diligent and vigilant in motivating employees especially through monetary incentives and benefits (McCourt and Eldridge, 2003).
During my job As part of my role as department manager in Toys R Us I had the opportunity to work closely with various salespersons that were paid by the company in various ways depending upon their performance and the designation they had in within the company. Some people individuals were rewarded with bonuses and incentives quite handsomely while others were never rewarded at all. This made me wonder and question whether money and monetary benefits had any significance and importance in increasing the motivational level of employees and whether or not financial remuneration impacted on the retention retaining of these employees within and the organisation.
The main objective of the (what does the refer to?? Yours or some one elses???) current research is to analyse and interpret the motivational theories and concepts especially with respect to monetary incentive techniques of motivation. The research (your research I think?) will focus on the motivational techniques and extrinsic rewards used by managers in various companies to motivate employees and increase the level of satisfaction of employees. The study will evaluate and analyse several motivation techniques and the implications of these techniques on employee satisfaction and performance within an organisation. The current scenario (what is the current scenario – do you mean in terms of your own study??? i.e. there is a paucity of literature relating to ….) of motivation is quite limited as there is a lack of research in role of money and monetary benefits as motivational forces of individuals and employees. The information and research which is present available is considered quite invalid in the current scenario (what is this current scenario???? Do you mean the focus of your study!!!!) especially motivating the sales force through monetary incentives and benefits. The research will specifically focus on the following objectives.
- Studying motivation as a significant force in an organisation
- Evaluating motivation as a tool for accomplishing success in an organisation
- Motivational theories and their implementation in the workplace
- Impact of monetary incentives in motivation and satisfaction of employees
- Importance and benefits of monetary incentives in motivation of employees
1.3 Rationale for Objective
The theoretical framework of motivation and achieving employee motivation is quite comprehensive and all students who complete their studies in business management know are familiarised with the basics of employee motivation and these students further in turn go on to become managers in organisations in their professional career (ref). The knowledge of theories and techniques of motivation is not enough for achieving employee motivation within an organisation (ref). Managers need to understand the importance of motivation and realise the significance of motivation as a success factor for organisations (ref). Although managers have knowledge of the theories and techniques of motivation they fail to apply these theories in the workplace (ref). The importance and impact of monetary incentives on employees and the role of money as a motivator is taught and discussed quite significantly but managers still fail to recognise this fact (ref). Even today the most significant factor leading to shifting the movement of employees from one organisation to another organisation is the better compensation and monetary benefits. In today’s competitive world and especially after the global financial crisis took toll it has become quite important for companies to retain efficient employees and one way of retaining efficient employees and attracting talented work force is to provide competitive compensation packages and motivate employees through monetary incentives (ref). Therefore this research will analyse the theoretical framework of motivation through monetary incentives and find identify how this framework can practically be implemented in the workplace.
1.4 Research Hypothesis
The current (do you need the word current?) research is carried out based on a hypothesis and data is collected and analysed from various primary and secondary sources to evaluate this hypothesis by implementing an appropriate approach to research selected for the research. The hypothesis formulated and established for the current research is that motivation is the most significant factor for the success of an organisation and employees, especially sales force, can be motivated effectively through monetary incentives.
1.5 Research Questions- is your supervisor happy with this section?
The research hypothesis described in the previous section is tested and evaluated while conclusions to the current research are arrived at by finding appropriate answers to the research questions presented here. The research questions are designed with an objective of not to be exhaustive and other information which is considered to be useful for achieving the objectives of the current research will also be incorporated into the research. The research questions are presented below.
- What is the significance of motivation in organisations in the modern era?
- What conceptual frameworks of motivation can be used by managers?
- Which motivational techniques are mostly applied and implemented by managers in organisations?
- Is employee satisfaction important for growth of an organisation and does motivation through monetary incentives impact employee satisfaction in any way?
- Should various techniques of motivation be implemented in organisations by managers or is motivation through monetary incentives sufficient for achieving employee satisfaction?
The scope of the current research includes and is limited to the research methods and approaches explained in the research methodology chapter of this report. The research deals with the analysis of motivational techniques and the importance of monetary incentives for motivating a sales force within an organisation. The theoretical framework of motivation will be analysed through a comprehensive review of literature coupled with an analysis of data collected from various sources to analyse how the theoretical framework can be implemented practically within organisations. The research will specifically focus on the implementation of monetary motivational techniques to find how a sales force within an organisation can be motivated through monetary incentives. The scope of this research is limited in various ways (WHY??? Important bit) but all information which is deemed significant for achieving an effective outcome will be incorporated in the research.
The current research has been performed and completed undertaken after proper authorisation and acceptance of the dissertation supervisor. The information and data has been presented in the research after sufficient assurance and consideration that all copyright and plagiarism issues have been addressed throughout the entire covered during the whole research process. Written permission was acquired from the research supervisor before contacting the respondents and participants of the research and utmost care was taken to safeguard the personal and private information of these participants and no personal information has been shared without their consent (?In accordance of the Data Protection Act???). This report is prepared in such a manner that it does not seem exhaustive to readers in any way. Even though the research study has been performed with extreme vital and important business decisions should not be made based on the research report. The research report is distributed with a sole intention of increasing human knowledge and should not by any means of trade, commerce or otherwise be redistributed, lent out, hired out or sold commercial or for business purposes with an intention of making a profit without the prior authorisation and acknowledgment of the researcher and supervisor. Do you have Toys R Us permission to do this study???
1.8 Structure of Report
The dissertation report is organised in various chapters and the layout of the report is described below.
Chapter 1: Introduction
The first chapter of the dissertation is the introduction chapter and explains the background of the current research within the context of this research. The background to context section introduces the basic concept of motivation and establishes a firm foundation for the research to be carried out. The background to context explains the context to which motivation and the theoretical framework of motivation belongs along with the significance of motivating employees through monetary incentives within an organisational context. The primary objectives of the research are also explained in this chapter to provide an overview of the research to the users of this report and what results should be expected from the result. The objectives section also explains how the researcher will accomplish these objectives during the research process. The rationale for selecting specific objectives in the current research is also explained in this chapter. The research hypothesis established for the current research is also discussed in this chapter along with the research questions supporting this hypothesis, which the researcher will try to answer during the research. The scope of the research along with the disclaimer and structure of report are also explained outlined in the last sections of this chapter.
Chapter 2: Literature Review
The literature review chapter is the second chapter of this report and provides a comprehensive and thorough review of the literature relevant to the concept and theories of motivation and the various techniques of motivation along with motivation through monetary incentives. The chapter presents a comprehensive explanation and review of literature studied for the purpose of this research and the data collected from various sources such as journals, books, periodicals, previous research studies and websites in the area of motivation and techniques of motivation. The chapter provides and overview of various theories and concepts of motivation presented by various renowned practitioners. Various models and frameworks for increasing motivation and satisfaction level of employees within an organisation are also discussed in the literature review chapter of the report. The chapter also presents various kinds of motivation including intrinsic and extrinsic motivation.
Chapter 3: Research Methodology
The third chapter of the report explains various research paradigms and approaches which, are available at the disposal of a researcher. The chapter explains qualitative and quantitative approaches to research along with their advantages and disadvantages. The various methods of collecting and analysing data are also explained in this chapter along with their advantages and disadvantages. The nature and process of collecting primary and secondary data through various sources such as interviews, group discussions and survey questionnaires are also discussed in this chapter. The research methodology chapter also explains the proposed research methodology applied in the current research and the strategy to gather and analyse data from primary and secondary sources.
Chapter 4: Findings and Observations
The findings and observations chapter is one of the most important components of a research as it presents the findings, observations and results after a comprehensive and thorough analysis of data collected from various sources. This chapter presents the interpretation and analysis of the gathered data in a systematic manner which eventually leads to effective conclusion from the research. The methods of implementing motivation techniques are analysed in this chapter with a specific focus on motivation through monetary incentives to motivate the sales force within an organisational context. The chapter evaluates the research hypothesis presented in the first chapter of the report in order to accept or reject that hypothesis while answering the research questions and eventually deriving a valid and logical conclusion to the research.
Chapter 5: Conclusions
The last chapter of the dissertation report is the conclusion chapter which presents the overall results of the research and provides the conclusions arrived at after thorough analysis of primary and secondary data and review of literature in the research. The research hypothesis which was evaluated in the findings and observations chapter is accepted or rejected in this chapter. The conclusions chapter also explains the recommendations and limitations of the current research so that any further research in this area can be carried out effectively and efficientl
Chapter 2: Literature Review
2.1 Introduction- overall you need very robust referencing here if you can say – says who? it needs to be referenced
Organisations in the current world are regarded as economic powerhouses because they contribute in the overall development of a country (ref). Organisations are getting bigger and stronger day by day and newer methodologies are incorporated by them so that they can benefit in both the short and the long run (ref). There are different terminologies that are incorporated by organisations because their core objective is to succeed in the competition. Employees are regarded as the assets of organisations and most of the forward looking organisations focus a lot on their employees (ref). Employees on the other hand coordinate with their respective organisations and in this manner a prospective relationship is created in such way that both the parties benefit in both the short and the long run. Although, employees are regarded as the assets of their respective organisations but treating these assets in a proper manner is considered as an important task (ref). Although there are different important factors and departments that are working in collaboration with each other like marketing, finance, human resource management etc but sales and marketing is considered as the most influential element of an organisation because in the longer an organisation operates and excels through sales and marketing department (ref). This paper analyses different aspects of motivation and how an organisation motivates its employees. In the similar manner the core aspects that is discussed in this research paper is that what role does monetary incentives play when a sales forces is being motivated. However, this chapter would only incorporate different theoretical concepts that are attached with the aspect of motivated and different motivational theories are discussed in detail. Referencing in this section needs a lot of attention!
2.2 Motivation – An Overview
Motivation is considered as an important factor for nearly all the organisations that are working in the corporate arena. Motivation in a broader sense is basically the activation of certain goal oriented behaviour (ref). Motivation is actually a force that forces an individual to work hard and harder in order to achieve both monetary and non-monetary rewards. This aspect is more visible in an organisational perspective where certain managers are working under the direction of directors and these managers are heading certain subordinates. The core objective in an organisational perspective revolves around efficiency of work and motivation. The employees are motivated by work allotted to them and different monetary and non-monetary rewards that are given to them in both the short and the long run. Motivation in a broader perspective is classified in two forms. These two forms are intrinsic motivation and extrinsic motivation. In a general perspective the term of motivation is used to express the motivational behaviour of humans but in a broader perspective animal behaviour is also explained through it. Motivation is associated with the aspect of incentives, enthusiasm or certain level of interest that actually causes a specific action or results in certain behaviour. Motivation is not only present in business settings it is present in nearly every aspect of life. Like If an individual is hungry then he/she is motivated by food. In the similar manner there are different related examples in this regard. Education is directly motivated by the desire of knowledge. In other words it can also be said that motivation is associated with everything that possess reward and coercion. However, it can be clearly said that the aspect of motivation is of utmost importance and it is beneficial in both the short and the long run. Specially, in a business oriented environment an organisation cannot perform well when its employees are not motivated appropriately. Motivation is directly related with the aspect of coaching and in a broader sense it can be clearly said that motivation and coaching go hand in hand with each other. The element of coaching and motivation is like teaching and education. References through out this section!!!!!!!!!!!!!!!!!
Motivation can be explained in different aspects like motivation can be explained as the phenomenon that drives individuals to do something. Things that are done are actually linked with certain rewards or they have certain consequences. The rewards or consequences that are attached with the scenario of motivation can be of course tangible benefits such as financial rewards, appraisals etc. In the similar manner the consequences attached can be considered as the risk of losing the job etc. There are certain other benefits that are less obvious in both the short and the long run but they motivate an individual to perform certain tasks. These benefits are a pat on the back, recreational facilities in an organisation etc. (Grazier,1998) believes that believs that different members in an organisation are motivated towards the actual needs of an organisation. Grazier also emphasised on the scenario that the expectation of different rewards and benefits motivates an employee in an organisation to work hard in both the short and the long run. The researcher believes that “Each day brings with it an endless list of decisions to be made. The process of making those decisions is driven, in large part, by the hope of a benefit or the fear of a consequence” (Grazier, 1998). Referencing very very poor need more in this
2.2.1 Types of Motivation
Motivation is considered as a broader perspective and that is the reason why it has certain types. Generally, there are four types of motivation which are considered as to be achievement motivation, affiliation motivation, competence motivation, power motivation and attitude motivation. However, in a broader perspective there are two classification of motivation which is considered as intrinsic and extrinsic motivation. Both the general and broader types of motivation are explained below:
Motivation types – look at tenses below – have you lifted some text from papers etc – you need to really look at your referencing
1. Achievement Motivation
Achievement motivation is basically the drive to pursue and attain gaols. An employee that possesses achievement motivation and who actually wishesd to achieve the objectives and advance up the ladder whenever an opportunity is given. This approach is very similar to the Kaizen approach of Japanese Management.
2. Affiliation Motivation
The affiliation motivation is related with the aspect of people’s drive which is on social basis. Persons with affiliation motivation perform in a better way and ultimately it results in favourable attitudes and cooperation.
3. Competence Motivation
The competence motivation is a drive that is revolved around the scenario to be good at something. It directly allows an individual to perform high quality work. When people are competent then motivated people seek job mastery and they take pride in solving different problems when they are facing different obstacles. In this form people actually learn from their experience.
4. Power Motivation
The power motivation is basically a drive which is used to influence people and change different situations. These types of individuals are more diverged in creating an impact on their organisation and that is the reason why they are willing to take risks.
5. Attitude Motivation
Attitude motivation is related with the aspect that how people think and feel. It is directly related with the element of self confidence and what is the belief of people in themselves it also incorporates the element that what is their attitude towards life and how they feel about their future.
2.2.2 Kinds of Motivation
Generally motivation is of two kinds which are named as extrinsic motivation and intrinsic motivation.
220.127.116.11 Intrinsic Motivation
The element of intrinsic motivation is considered as a major concern in today’s world because this form of motivation is implemented by different organisations (ref). Intrinsic motivation is a considered as a growing area on concern because it is used to reinforce different employees and learning communities. The core ideology of intrinsic motivation has actually evolved from psychology and has been closely related with the concept of cognitive psychology (Deci and Ryan, 1985). Motivation is generally applied in the workplace and different researches depict that motivation plays a vital role in the development of leadership. According to (Deci and Ryan 1985) defined intrinsic motivation as “Intrinsic motivation is defined as the doing of an activity for its inherent satisfaction rather than for some separable consequence. When intrinsically motivated, a person is moved to act for the fun or challenge entailed rather than because of external products, pressures or reward (Deci and Ryan, 1985).
In the similar manner it can also be said that incentives as implied by the name is related with the aspect of personal qualities, intentions and values. The satisfaction that is attained from such incentives can be considered as intrinsic. These types of rewards are beneficial in both the short and the long run because they motivate an individual from insight and that is the reason why individuals who are internally motivated perform well and ultimately organisations benefit in this regard (Atkinson and Walker, 1956). However, in certain conditions intrinsic motivation might be considered as unnecessary to an individual because he/she is looking for monetary rewards. That is the reason why organizations usually try to form a complete of both these factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.104.22.168 Extrinsic Motivation
These rewards are usually associated with the element of money and different monetary aspects. It can be said that extrinsic motivation is used to reduce the aspect of intrinsic motivation but this is not viable in all circumstances. Different researchers have actually emphasized on different aspects and it is depicted through research that monetary rewards definitely increase an individual’s performance and different incentives urge an individual to perform more and more (DiClemente and Velasquez, 2002, cited Miller and Rollnick, 2000). In the scenario of intrinsic motivation people need time to make wide range of choices, novel events and unexpected possibilities. They need certain amount of time and freedom to make different choices in different scenarios. However, in the scenario of extrinsic rewards people are more attracted towards shortened time perspectives and that is the reason why the final result achieved is much more efficient however, it is also subject to predefined job. The element of job commitment and long term commitment of an individual may be affected negatively.
Rewards and benefits in most of the conditions are tangible and in certain conditions there are intangible rewards like appreciation, a smile of supervisor, etc. The tangible rewards are associated with extrinsic rewards and due to these rewards employees of an organisation are extrinsically motivated and through intrinsic rewards employees are intrinsically motivated.
2.3 Theories of motivation
There are different theories that are associated with the element of motivation. However, there are certain common theories that are followed by many organisation of today’s world. The core theories of motivation are discussed below:
Frederick Winslow Taylor used motivation a lot in his proposals and managerial models and that is the reason why they developed an idea that workers are motivated mainly by pay. His theory comprised of different aspects like workers are not satisfied with the working condition or they usually don’t enjoy doing work that is the reason why they need close supervision (McClelland and Boyatzis, 1982). That is the reason why management should break down the element of production into small series of tasks. His entire theory focused on the scenario of financial rewards and he believed that workers are paid according to the number of item they produce and this phenomenon is known as time-piece-rate pay. Through these financial rewards workers can definitely enhance their production levels and they can be satisfied too. Taylor’s methods are widely accepted in today’s world and they are used to reduce the cost of the production system. Henry ford is considered as a first individual who utilized Taylor’s models in his production lines. That is the reason why that era was considered as an era of mass production. However, different researchers believe that Taylor’s approach is related with the aspect of autocratic management which is that managers take all the important decision and the subordinates follow these decisions (Emmons, 2003). However, in the longer run people disliked Taylor’s approach because they were getting bored of doing repetitive jobs and they were working and characterised as human machines.
Elton Mayo believed that all the workers that are working in different organisations can be motivated if there social needs are met while they are working. He also introduced the human relation school of thought in which the managers o
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