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Motivation and Incentives at Work
Public Management Newsletter, Session 11, April 2014

Weekly Summary
by Paulyn May Duman
We spend, on average, eight hours per day at work as this
is the usual working hours (40 hours per week) in the
world. As we use the other eight hours (optimally) for
sleeping, this means that at least half of our waking hours
are spent working. When we consider this, we realize how
important it is to choose carefully where we want to work.
So what do we look for an employer? What makes a good

What is a good employer?
The Civil Service Department in the UK enumerates
characteristics that make a good employer. A good
employer ensures that it offers satisfactory rewards such
as pay, pensions and security, provides a worthwhile job
and the means to do so that in the short-term, the
individual can give of his or her best and in the long-term,

can have opportunities for advancement, provides a good
working environment, shows consideration towards staff
and respects their aspirations and needs, and provides
security and a sense of common purpose (Horton, 2009:
Civil Service Commission, 1975).
Traditionally, the government was considered a good
employer in the UK. Central government offered fair
wages and equal pay for women. It was the first to provide
occupational pension and gradually reduce working hours
(Horton, 2009). Government work was not only
considered stable and secure, it was also a noble job. It
also offered something that cannot be translated to money:
prestige and
status. In fact,
it gained so
that several
give to the
who cannot
be given a
these titles,
such as the
Secretkeeper, and other creative names were used to
compensate for the lack of budget for a higher salary.
However, these titles are not just mere names as the
employees use it to register for special events and such

Good Employer | Motivation and Incentives at Work | Page 1

electronic devices. effectiveness. E-commerce. However. The employers required new skills profile. April 2014 titles got them discounts. e-government. supplier-led and unresponsive to public needs and demands. and rising expectations from the labor market (Horton. better treatment. the dynamics of work changed and the ways things are done were significantly transformed by computers. national pay structures had incremental scale of automatic increases of salary each year and pay and conditions were determined by collective bargaining and join regulation (Horton. and as such. With the rise of technology. and motivate people at work? managers had very few personnel responsibilities (Horton. They are the assets. 2009). There also emerged perceptions of job insecurity as crisis after crisis took waves across the globe. tests. April 2014 Public Management Newsletter. inefficient. Eventually. there were no professional managers dealing with the personnel. it gained ground in the public sector as the need to get and retain highly qualified people became important in the achievement of efficiency. 2009).Public Management Newsletter. Public sector trade unions and professional associations were seen as over-powerful and were able to influence raises in wages that put pressure on the public expenditure and drained resources away from the private sector (Horton. How do we get. or simply tickets with their titles printed on it (Lecture. However. things that traditionally incentivized people changed. Flexible modes of employment. In the civil service. 2009). retain. 2009). more educated labor force. there was a global competition for the best employees. With the reduction of the “big government” through reduction of size and state expenditure. This became a new challenge for personnel management. The administrators had very limited discretion in the application of policies and the line The unit of analysis in assessing motivation is the individual person. Session 11. 2014). Session 11. huge investments were put in human capital. HRM denotes some distinctive approaches such as putting people as the most important resource of the organization and the key to its success. This is the traditional personnel management where recruitment was centralized using prescribed examinations. globalization and internationalization of goods. There were also changes that were driven by the competitive environment such as end of the ‘career for life’ and an increase in job mobility and new career patterns. feminization of the labor market. and egovernance became buzzwords in implementing policies. With these changes came also changes in how employers manage their employees. one question posed to be a great challenge: is it more difficult to motivate people in the public sector? Evolution to human resource management (HRM) What motivates people to perform? Before the 1970s. with the changes in the world of work. and interviews. In the pursuit of adopting this business approach to personnel management. Is it the case that the more motivated people go to the private sector or that motivations of Good Employer | Motivation and Incentives at Work | Page 2 . The private sector also increasingly emerged as a viable employer as global competition and new attitudes penetrated the consciousness of employees. the internet. and public value in the delivery of public service. Although it is loosely used as a synonym for personnel management. privatization of many public utilities and entry of new players in the private sector. Changes in the world of work As the government staff grew larger. HRM is a very business-oriented approach to managing people that permeated the private sector. 2009). the bureaucracy that provides public services were condemned as being overstaffed. finance. and softwares adapted to different types of work. information. there was also a shift to how employees are managed and was called human resource management (HRM). Human resources strategy must be integrated with business strategy to ensure achievement of goals and values of the organization which leads to success. and workers were also witnessed. The contracts were standard across the country. services. the recruitment of staff was done through centrally organized bodies run by the Civil Service Commission and conditions of work were standardize to ensure uniform treatment throughout the countries and to avoid competition (Horton.

Hygiene factors are those that keep people away from dissatisfaction. working conditions. growth. This is a challenge for public sector human resource personnel because introduction of rewards might cause the crowding out effect but they are necessary to remove dissatisfaction and demotivation at work. good benefits. and affluence while the Chinese students demanded jobs with high salary. According to Frey. altruism. ‘interesting work’. If we compare this to the results of 18 European countries. ‘interesting activity’ and ‘activity which allows autonomy’ garnered more than 90% of the time as important while ‘job which allows to help others’ and ‘job which is beneficial to society’ were at the bottom of importance. 2012). However. This is better explained in Frederick Herzberg’s two-factor theory of hygiene and motivators. This means that intrinsic and extrinsic motivation cancels each other out instead of building on each other. One group is not more difficult to motivate but just differently motivated. But it is not only extrinsic motivation that crowds out intrinsic motivation. he loses interest in the subject which was the reason why he got good grades in the first place. this is when a reward will undermine intrinsic motivation such as when a child who performs well in his subjects is given money for every good grade and without the money. However. 2012). This is exemplified in jobs where several people of similar competence are doing relatively the same tasks and one person is getting more bonuses and recognition than others. Another important consideration in motivating employees is the need for equity. the work itself. recognition. April 2014 individuals are fundamentally different and they go to where this type of motivation will be fulfilled? Frey and Osterloh (2010) asserted in their book Successful Management by Motivation: “[e]mployees may work hard for one of two reasons: because they are interested in the work itself (intrinsic motivation) or because they are being paid (extrinsic motivation). and relations with supervisor. Examples are salary. These two forms of motivation are interlinked and. companies cannot opt for one of the other in isolation. ‘flexible working hours’ and ‘high income’ came at the bottom three. ‘doing something that is useful to society’ and ‘autonomy to make decisions’ ranked in the top three results while ‘status’. 2009). Extrinsic motivation has the function of keeping the intrinsic motivation in place. economy. Motivating people is always a balancing act based on context and individual persons. Session 11. This underlines the difference in the motivation driving the employees in both sectors. it is important to consider that motivation depends on culture. 2009).” If we only look at the public sector motivation. security. This comparison of balance maintained by others to one’s own make people feel overcompensated or undercompensated (Rainey illustrating Adams. and opportunities for promotion (Belle and Cantarelli. But one important rule must be considered about balancing these two types of motivation – the effect of crowding out. public managers’ motivation to work in the public sector are ‘public service’ and ‘work that is helpful to others’ which is not as strong as motivator in the private sector (the difference is statistically significant) (Belle and Cantarelli. and fulfillment of higher-order needs (Rainey. they do not per se increase motivation but only keeps people away from being demotivated. as such. responsibility. Motivating employees in the public and private sector When an employee survey was made in Vienna asking what characteristics of work they regard as important. Motivators are intrinsic incentives which are the real source of motivation and stimulation for employees such as achievement. This shows that intrinsic motivation is the more important factor in making people engage in their work (Slides 8 and 9). relations with peers. “One group is not more difficult to motivate but just differently motivated.Public Management Newsletter. status. company policy and administration. advancement. Good Employer | Motivation and Incentives at Work | Page 3 . and traditions such as illustrated by a survey whereby American students demanded jobs with high self-actualization.