1. Unit 2 – Leadership & Motivation

2. Motivation
Refers to the desire, effort and passion to achieve something
It is often referred to as the willingness to complete a task or job with enthusiasm
“getting someone to do something you want or, on an individual basis, wanting to do something for yourself for a particular reason.”

3. Benefits of Increased Employee Motivation
Higher morale and job satisfaction (leading to improved productivity)
Improves corporate image (helps attract both customers and potential employees)
Better industrial relations (in a unionized environment)
Lower staff turnover
Lower staff absenteeism
Higher profits

4. Warning Signs of Poorly Motivated Employees
High absenteeism rates
High labour turnover rates
High wastage level
Low quality output
Increasing number of customer complaints
Poor punctuality
Increasing number of discipline problems

5. Intrinsic Motivation
People engage in an activity out of their own desire, such as enjoyment of pursuing a hobby or interest
Activities are undertaken because the person finds them challenging, stimulating or satisfying
Employees can see that their success is a result of something they have done

6. Extrinsic Motivation
Occurs when people participate in an activity because of the benefits and rewards associated with the activity
Rewards can be tangible (wages or bonuses) or intangible (recognition or praise)
Can also come about from threats and pressure imposed by senior management

7. Satisfying Individual Need
Identify the
Need
Incentive
Satisfaction
Result
Revise
Employee is involved in the decision making process
Employee discuss with management about the goals and working practices
Employee feels as if their contribution is valuable
Employee works longer hours or takes on more responsibility

8. Motivation in Practice
Financial Motivation
Payment methods that are used by businesses to motivate their workforce
Non-financial motivation
All other forms, such as praise, recognition and team work

9. Financial Motivation Wages Piece Rate Salary Commission
Profit-related Pay
Performance-related Pay
Employee Share Programs
Fringe benefits

10. Wages, Piece Rate & Salary
Wages are usually expressed as an hourly rate
Some countries have minimum wage limits
Amount is usually based on several factors
Method is straight forward
Piece rate rewards workers that are more productive (taxi drivers etc)

11. Wages, Piece Rate & Salary (continued)
Salaries are a fixed annual rate
Used when output and productivity cannot easily be measured
Overtime is not usually paid
Little incentive to work hard

12. Commissions An output based payment system
Usually based on a percentage of output
Often found in lower salary paying jobs or when the incentive to sell is a key component
Creates added pressure in the workplace
Tasks can be repetitive and monotonous

13. Profit Related Pay Linked to profit (success) of the firm
Paid as an annual bonus
Strengthens employee loyalty and foster a team effort
Managers and employees are working together
Share can be quite small and individual effort is not recognized

14. Performance Related Pay
Rewards employees who meet certain goals
Sales targets, job competence, contract completion
Awarded during a performance appraisal
Problems may arise of performance levels are unattainable
PRP ignores non-financial motivators
Exercise - Hong Kong Football Association

15. Employee Share Programs & Fringe Benefits
Usually shares of a company sold at a discounted or company matched price
Used primarily for senior management
Fringe benefits (perks) are payments to an employee over and above their salary
Potentially a huge cost to the company

16. Problems with Incentive Schemes
Operating problems
Fluctuating earnings
Quality
Changes in payment
Quality of working life
Jealousy
Measured performance

17. Are Incentives Effective?
According to research…
Performance and merit pay had only a modest effect on employee commitment
Use of bonuses for managers had a positive effect on the rate of return on capital employed in the business
Profit sharing had a positive effect on productivity and company performance

18. Case: Incentives for Value Added Resellers
Mini Case Study
Case: Incentives for Value Added Resellers
Source: Jones, Hall, Raffo, Business Studies,3rd Edition, Unit 60, page 434

19. Motivation in Practice – Non-Financial Rewards
Used to improve productivity
However, increasingly businesses have realized that:
The chance to earn more money may not be an effective motivator
Financial incentive schemes are difficult to operate
Individual rewards may be not be effective as work is done in groups
Other factors that employer does not know about

20. Job Enlargement Giving an employee more work to do of a similar nature
This variety prevents boredom
Problem of “horizontal loading”
More efficient if the workers are organized into groups
Leads to job rotation

21. Job Rotation Changing jobs or tasks from time to time
May increase motivation, but a new learning curve for all jobs involved might decrease productivity
Motivation is not guaranteed if worker moves from one boring job to another
Should only be used if rotation involves a similar skill set
Workers do not want to move into a hazardous job possibility

22. Team Work Higher productivity due to pooling of talent
People can specialize
Shared responsibility
Flexible working
Problems include:
Too much emphasis on “harmony”
Poor preparation
Individualism
Seeing teams as the solution for all problems

23. Job Enrichment
“vertical extension” of an employers job responsibilities
Planning a task
Quality control
Work supervision
Ordering
Maintenance
Gives employees a challenge; develop “unused” skills

24. Multi-tasking Process of enhancing the skills of employees
Giving an employee more skills and responsibilities can improve work performance
Criticisms include an expectation that the employee will work harder for the same pay
Training may also be an issue

25. Problems with Job Re-design
Employee’s reaction
Views and costs
Technology
Effects on output
Employee involvement schemes have been used widely in recent years
Success varies from company to company

26. Management by Objectives
Coined by Peter Drucker (1954)
Business objectives should be defined for a specific individual and revised after assessment of the performance of the individual
Satisfaction comes from achieving certain goals
The harder the goals, the greater the satisfaction
Businesses should set specific goals (that are attainable)
Saying “do your best” is not sufficient

27. Organization Behaviour Modification
OBMod
Assumes behaviour is a consequence of action
Thorndike and Skinner studies
Managers should observe behaviour not attitude, and how this behaviour relates to consequences
Employee receives something he likes
Something the employee dislikes is taken away
Something the employee likes is taken away
Something the employee dislikes is given

28. Employee Assistance Programs
EAP’s have been around for 50 years
Designed to help employees cope with difficulties
Usually bereavement issues or job loss
Now it can be anything from budget balancing to raising children

29. Mini Case Study
Case: BET
Source: Management
7th Ed., Schermerhorn