Employee Motivation at ABC

Contents
1. Introduction.........................................................................................................................................3
2. Different Work-Environments.............................................................................................................4
3. Motivational Policies at ABC..............................................................................................................5
3.1 Establishes specific and challenging goals...................................................................................5
3.2 Makes people feel that the reward worth the effort......................................................................6
3.3 Uses timely rewards to encourage exceptional performance........................................................6
3.4 Provides honest and timely feedback on performance.................................................................7
3.5 Distributes rewards equally..........................................................................................................7
4. Conclusion...........................................................................................................................................8
5. References...........................................................................................................................................8

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 Employee Motivation at ABC

1. Introduction

Today we live in knowledge economy where the intelligence, understanding, skills and
experience of employees play a major role in organization’s performance rather than the
machinery and buildings of the organization (Brook and Josiah 2003). Employees are the key
resource for any organization. Higher the performance of employee, higher will be the
organization’s performance. Hence organizations need to continually motivate their employees
to perform at higher levels.

David et al in their book (1996 p.8) refer to the work of Maier and Lawler (1973), who have
summarized the determinants of performance as follow:

Performance = Ability * Motivation

As per the above formulae, the performance is the product of the ability to perform
multiplied by motivation. Ability depends on education, experience and training and its
improvement is slow and long process. As each employee in any organization will undergo basic
training for performing a task and will be provided with adequate resources required to do the
task, the ability of the performer tends to remain stable over long period of time. But motivation
is like food for brain. One cannot get it all in one sitting. It fluctuates; therefore, it requires closer
monitoring and frequent recharging (Peter n.d).

The purpose of this essay is to discuss how the motivational theories were applied at ABC
Technologies Ltd, a multinational software service providing company. The first section of the
essay will give a brief overview of the different work environments and the motivation level in
these conditions. Next, the essay will discuss on how ABC is trying to motivating its employees
by applying various motivational theories.

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 Employee Motivation at ABC

2. Different Work-Environments

An effective motivational work environment must focus on increasing both employee

satisfaction and productivity (David et al 1996). The figure shown below explains the
relationship between satisfaction and performance.

Figure 1: Relationship between satisfaction and performance [Source: David et al 1996]

A high emphasis on satisfaction with low emphasis on performance represents an

irresponsible view of role of management. This will leads to low work productivity. The
management will become dominated by the needs of employees, which leads to hinder even
good performances.

A strong emphasis on performance to the exclusion of satisfaction is equally ineffective. The

employees become insecure which will directly affect their performance. Imposing work on
employees may increase productivity in short run, but in long term it will affect the productivity
through increased absenteeism, employee attrition rate.

A low emphasis on satisfaction and performance will makes employees feel ignored and
neglected by the management. The resulting neglect, if allowed to continue, may ultimately lead
to the failures of the unit or organization.

An integrated approach emphasizes both on performance and satisfaction. In this approach

both the organization and employees are supportive of one another, which will lead to increase in
productivity and employee happiness.

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 Employee Motivation at ABC

3. Motivational Policies at ABC

ABC uses the integrated approach to motivate its employees. It follows the below mentioned
points for attaining high employee satisfaction and performance:

 Establishes specific and challenging goals.

 Makes people think that the rewards are worth the effort.
 Uses timely rewards to encourage exceptional performance.
 Provides timely and honest feedback on performance.
 Distributes rewards equally.

3.1 Establishes specific and challenging goals

Every six months, each employee at ABC will meet their supervisor or manager to
establish goals for the next six months. These goals will be
specific, challenging and difficult than the goals they have
achieved in their previous cycle. As said by E. A. Locke
(1968) in the goal-setting theory, summarized by Sarah and
Steve (2002, p.84), assigning specific goals will lead the
employee to perform at higher level than the goals such as ‘try
harder’ or ‘do your best’ or specific but moderate or easy
goals. Specific goals will avoid confusion about what the
employee is required to do and helps the employee to focus in
one particular direction. Also challenging but attainable goals
as explained in achievement theory, will lead to maximum motivation than simple and
unchallenging goals.

In the goal-setting meeting, managers will clearly explain the employees about the goals
they need to achieve. Making employees, part of goal setting process, will also help them to
understand their goals and make them to be committed to them. Thus by the end of goal-
setting meeting, each employee will be assigned with specific, consistent and challenging
goals.

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3.2 Makes people think that the reward worth the effort

During the goal settings process, the mangers will also make the employees aware of the
rewards for attaining the goals. As pointed out by V.Vroom (1964) in expectancy theory,
summarized by Sarah and Steve (2002, p.77), every individual will have some expectations
to achieve a desired results from their actions. An employee will be highly motivated to
perform a task, if his expectancy is strong to achieve his desired results from that task.
Hence, during goal-setting meeting, each employee will also be asked for the rewards they
are expecting from their goals. Some expectations might be realistic and some may not be.

For example, an employee with three years of experience asking for an onsite offer or a
promotion can be considered and these rewards will be linked to their goals. But it would be
a problem, if an employee of one year experience is also expecting
the same rewards from his/her goals. In such situation, manager
will let the employee knows that the rewards are unrealistic and
they will be assigned with the rewards that were realistic for their
assigned goals. At the same time, employee will be explained how
they can make their unrealistic reward at this point of time to
realistic in long term. In this way, the employees were made to
focus on the goals for attaining their desired results. This will also
makes employees think that the reward worth the effort.

3.3 Uses timely rewards to encourage exceptional performance

As the employee goals were set for period of six months, there is high probability of
employees getting distracted from the assigned goals. In order to keep
the employees motivated, they are provided with small rewards for any
exceptional performance within these six months. To keep the
employees focused on their goals, ABC had introduced “On the spot
awards”, which will be given to the employee who had done
exceptional performance in a particular month, and “Most valuable
player award” for the exceptional performance done within a quarter. In
this way the employees were continuously motivated to perform at
higher levels.

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3.4 Provides honest and timely feedback on performance

Providing honest feedback on the work they had done will motivates employee to
perform even better next time. At the goal-setting meeting, each goal assigned to the
employee will be divided into small parts and employee will be
asked to meet the manager after completion of each milestone to
provide continual feedback on the employee performance. The
employee will be provided with feedback on their previous
performance, which allows them to adjust their behavior and
improve their future performance. In this way, providing honest
and timely feedback on the work done will help the employee to
increase their motivation and productivity of work.

3.5 Distributes rewards equally

Once the goals were set and rewards were assigned for the goals, the next process is to
distribute the rewards equally. As stated in equity theory by J S Adam (1963), summarized
by Sarah and Steve (2002, p.62), people will compare the ratio of their inputs and their
outputs with the ratios of inputs and outputs of the people relevant to them. If the employee
experience feelings of inequality, they will adjust their own, or fellow employee’s, inputs
and/or outputs. This may lead to decrease in the motivation and performance of employee.

To decrease the inequality feelings among the employees, after the completion of goals
assigned to them, each employee will be asked to rate each
goal, based on the complexity and priority. Later, manager
will also rate these goals based on the employee
performance. If there were any differences with the ratings
employee had provided and the manager had given,
employees were given an opportunity to discuss on the goal
ratings with their managers. The final ratings for the goals
will be set on the mutual understanding of manager and the
employee. Based on the mutually agreed rating each
employee will be rewarded. This process will minimize the
inequalities, as the rating on which they were rewarded was finalized after discussing with
them.

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4. Conclusion

Motivation represents an employee’s desire and commitment, and is recognized as effort.

Thus, in order to attain high commitment from all the employees, ABC had placed emphasis
both on satisfaction and performance of employees. As mentioned above, ABC had adapted the
main basic process theories, like Goal-setting Theory, Expectancy Theory and Equity Theory to
motivate the employees.

5. References

 Brook Manville and Josiah Ober (2003). Building a Company of Citizens. Harvard
Business Review on Motivating People.
 David Whetten, Kim Cameron and Mike Woods (1996). Diagnosing Work-Performance
Problems. Effective Motivation. pp. 8-10.
 Peter Davis (n.d.). Famous Quotes.
http://famousquotes.psyphil.com/peter-davies/quote/12364/ [Accessed 11/11/2009].
 David Whetten, Kim Cameron and Mike Woods (1996). Fostering a Motivating Work
environment. Effective Motivation. pp. 15-54.
 Sarah Hollyforde and Steve Whiddett (2002). Goal-Setting Theory. The Motivation
Handbook. p 84-93.
 Sarah Hollyforde and Steve Whiddett (2002). Expectancy Theory. The Motivation
Handbook. p 76-83.
 Sarah Hollyforde and Steve Whiddett (2002). Equity Theory. The Motivation Handbook.
p 62-69.

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