Organizational Theory

This paper will discuss that why compensation is used in a company and it will explain in detail that why some mangers believe that money is the only motivation method to motivate employees into doing their jobs. When talking about motivation, the management believes it is best to consider compensation as a best practice what comes to mind is incentives and gain sharing of the employees in the form of money.

Best practice can be defined as an idea that suggests that there is some sort of technique, method, process, incentive or reward which is considered to be more useful at producing the desired outcome or result for the company than any other technique, method or a reward etc. and to do that the management would need to motivate the employees, but it is not always necessary that motivation can only be done through money. Motivation: Motivation is a process that is divided into 3 elements and they are as follows intensity, direction and the persistence of effort of an individual or a group towards the achievement of a goal or an objective.

As we know that there are three elements in motivation they are as follows:-

• Intensity which is concerned with hard working that is how hard a person tries to achieve a goal or an objective

• Effort that is direct towards the achievement of the goal is called direction.

• The individual effort of an employee or a person is called persistence. And it is severely important the employees are persistent in their work activities. (Werther & Davis 1996) But if it is viewed generally motivation is concerned with effort towards any goal and here we are talking about the attainment of an organizational goals and objectives.

For example, the management of IKEA approaches employee motivation as “you need a job right? ” but this is not an effective method to motivate the employees of the company to give their best effort or to perform better. Motivation can be defined as a reason to do something, over here the case would be to provide en employee to perform better on his or her job. In a work environment there are three characteristics that affect the motivation of the employees. Those three characteristics are as follows:-

• Attitude: attitude can be defined as judgment that concerns an object, people or things.

As we know that an individual has different types of attitudes regarding work activities. For example, therefore the people at IKEA make sure that the employees of the company are motivated in such a way that the employees achieve the stated goals of the company.

• Expectancy: expectancy can be defined as that there are people who expect that their ability to perform tasks and will gain them to receive the desired rewards. This kind of characteristic is only relevant when it considers excellent performance on the behalf of the employee on the job.

For example, the more the management of IKEA is particular about the work activities the more likely the employees of IKEA will work harder to achieve the stated objectives in time.

• Harmony: harmony can be defined as a pleasant working environment within the organization. For example, IKEA makes sure that there is harmony in its working environment, because if there is harmony then the employee will be benefited with it and their working performance will improve and they will also be motivated. (Employee motivation 2006) Methods of Motivation:

All the companies respect their boundaries of their culture and so does IKEA. Employee motivation is considered important when an organization is building relationships for better communication with their employees. The elements that are concerned with the methods of employee motivation are as follows:-

• Anticipated rewards: all the employees of the company want to reward for doing a job well done and it is the management’s responsibility to reward the employees. For example, a university student with a strong desire for a B in his Human Resource Management course.

The student has a C+ average and one more exam to, the student’s motivation to study for that test will be influence by the expectation that an A on that test will result in a B for that course. If the student doesn’t believe that he can get an A on the test then will not be motivated to study and will not receive the rewards he so much desires. • Participation: participation can be defined as process where the employees of the company share a certain amount of decision-making power with their immediate supervisors.

This kind of participation helps get the employee motivated and their productivity level increases as well as their poor morale.

• Recognition of effort: IKEA recognizes their employee’s efforts. The supervisor appreciates the efforts that are done by his or her subordinates. Recognition is considered one of the major motivators that motivate the employee towards a better job performance.

• Communication: there is clear communication between the management and the employees of IKEA.

Communication also plays a major role in the motivation of employees. With the help communication it becomes clear to the employees what is to be done and how well they are doing it and what can be done to improve it better still etc.

• Empowerment: empowerment is considered necessary and it is one of the ways of motivation. The employees of the company are motivated and empowered if this method is applied. It is necessary to motivate the workers so that the company’s productivity can increase.

When management distribute jobs activities it is believed that the employees are empowered, but empowerment is not just simple distribution of work activities but it also helps by giving the employees authority, training and resources to make their own decisions but with limited premises. Through these kinds of actions, the employees gain confidence and power and it helps them to grow and develop and it also strengthens the position of the company as well. (Daft 1997) The above tells us about the different ways that the employees can be motivated.

But I believe that the best way to motivate employees is through incentives in the form of money and I do agree with the managers when they say that the best way to motivate employees is through money. Motivational Theories: If we look at some of the motivational theories we will see that, even in those theories the employees can only be motivated through the incentive of money. Motivational theories are divided into following theories. They are as follows:- Hierarchy of Needs Theory: This is the most common theory which is used in motivation.

This theory is also known as Abraham Maslow’s hierarchy of needs. This theory is based on every five needs of the hierarchy. And those needs are as follows; 1) Physiological need, 2) Safety needs, 3) Social need, 4) Esteem need and 5) Self –actualization need. (Fullmer 1983) And if view this theory we will see that a person can be motivated only when his or her basic needs are fulfilled starting from the physiological needs to safety needs and so on and so forth until the last one that is self-actualization need is not fulfilled.

And if we look at the core of this theory we will see that the theory is based upon money, how, well in the physiological need the employee needs the basic salary, in the safety need he or she would require fringe benefits which can be in the form of bonuses, in the esteem needs he or she requires status, which can only be gained from wealth and money. For example, if a union wins good pay and working conditions for its members, the basic needs are met; union members may then desire to have belongingness and esteem needs met in the workplace.

ERG Theory: This theory suggests that there are three groups of core needs. The ERG model is somewhat related to the Maslow’s Hierarchy because both of them are quite similar to each other and both of the theories are in a hierarchical form and the individuals start to move up the hierarchy one step at a time. They are as follows:- • Existence: suggests that with providing the basic material existence requirements such as hunger, thirst, shelter, safety, protection and security etc.

• Relatedness: suggests the desire for maintaining important interpersonal relationships. These factors are associated with social and status desires.

• Growth: suggests that individuals have intrinsic desire for personal development. This would include self-fulfillment, self-actualization etc. This theory is conceived to be a bit complex, why, because it reflects upon the frustration regression principle, that is, the failure to meet high order needs can trigger a regression to an already fulfilled lower need.

In this case the employees can be motivated through money, because when this happens’ the employee feels the urge to make a great deal of money. Hence the incentive of money can be a trigger to an employee’s motivation and he or she will work to achieve it. Two Factor Theory: This theory is based on two elements which are intrinsic and extrinsic factors they are as follows; 1) The intrinsic factors are related to job satisfaction of the employee and 2) extrinsic factors are related with dissatisfaction of the employee about his or her job.

Two factor theories are also known as the motivation hygiene theory as well. The hygiene factors are those factors involve the absence and the presence of job dissatisfies which include working conditions, pay, company policies etc. When the factors are poor, work becomes dissatisfying to the employees. It must be remembered that good hygiene factors can remove the dissatisfaction but the employees do not become highly satisfied or motivated towards work. (Daft 1997) The motivator factors are those factors that involve recognition, responsibility, work it-self etc.

When the factors are motivators the employees of the company will not be dissatisfied by their jobs and will not leave the company they will be neutral. If we view this theory it would not be ale motivate the employee as it should for him or her to achieve their desired goals and the goals of the company because the incentive or the drive i. e. money is missing. The implication of this theory is clear for the manager to see, by providing the hygiene factors dissatisfaction will be completely removed but the employees will be not motivated to achieve higher achievement.

Expectancy Theory: This theory defines that motivation depends on the employee’s expectations about their ability to perform tasks and receive desired rewards. Expectancy is actually based on the relationship among the individual’s effort and performance. This theory is based on two things 1) whether applying effort for a task which will lead to a high performance and 2) the successful performance by the person would lead to the desired outcome.

And in this case it would be the For example, IKEA conducted a special bonus for its employees by pledging the entire day’s sales revenue for its employees. That day the sales were doubled and all the employees received $2400 each. (Werther & Davis 1996) Conclusion: An organization can be defined as a social entity which is goal oriented and deliberately structure and it is very important the employees of the company are motivated so that they are no dissatisfied with their work activities and do not leave the organization.

Motivation is a process that is divided into 3 elements and they are as follows intensity, direction and the persistence of effort of an individual or a group towards the achievement of a goal or an objective. But if it is viewed generally motivation is concerned with effort towards any goal and here we are talking about the attainment of an organizational goals and objectives. And they best way to motivate an employee to do his or her work is through money because in a work environment there are three characteristics that affect the motivation of the employees.

They are as follows harmony, attitude and expectancy, which mean that the employees will be rewarded for their hard work. Bibliography Daft, R (1997), ‘Management’. The Dryden Press Employee Motivation (2006) Available from <www. business. lovetoknow. com/wiki/Employee_Motivation> [Accessed on 15th March’09] Fullmer, R. M. (1983), The New Management. New York: Macmillan Publishing Company Luthans, F. (1989) Organizational Behavior. McGraw-Hill Robbins, S. P. (2000), Organizational Behavior. Prentice Hall Werther, W B. & Davis, K (1996), Human Resources & Personnel Management. McGraw-Hill