UNIF-IV EMPLOYEE COMPENSATION Compensation refers to a wide range of financial and non-financial rewards to employees for their services rendered to the organisation. Employee compensation refers to all forms of pay going to employees and arising from their employment- Gary Dessler. It is the total amount an employee can expect to receive when working for an organisation. It is the reward for service. Itrefers to the cash compensation and benefits that an employee receives in exchange for the service they perform for their employer. Compensation is paying people for work-Dale Yoder. The function of compensation is defined as the adequate and equitable remuneration of personnel for their contributions to the organisational objectives- Edwin Flippo.COMPONENTS OF COMPENSATION * Wages and Salary- Wages mark hourly rates of pay and salary marks the monthly rates of pay of an employee. Wages are calculated on the amount of time worked. Salary is the payment made for each period. These are subject to annual increase. * Allowances — It is defined as the amount of something that is allowed, especially within a set of rules and regulations/ for a specific purpose. Various allowances are paid in addition to basic pay. Some of the allowances are: # DA- It is given to protect the real income of an employee against price rise. Itis paid as a % of basic pay. # HRA- Companies do not provide living accommodation to their employees, pay HRA to employees. It is calculated as a % of salary. # CCA- It is paid basically to employees in metro and other big cities where cost of living is comparatively more. It is normally a fixed amount per month.# TA- It is also called as conveyance allowance. Some companies pay TA that accommodates travel from the employees home to office. A fixed amount is paid every month to cover a part of travelling expenses. # LTA- The employees are given allowances to visit any place they wish with their family. These are provided to retain the best talent in the organisation. Incentives- It is paid in addition to wages and salary. It is called Payment by Results. It is performance based pay. It is paid with a view to encourage employees to work hard and do better. It is linked to individual/team/organisational performance. Eg. Bonus, profit sharing, commission on sales etc. Fringe Benefits- It is defined as wide range of benefits and services that employees receive as an integral part of their total compensation package. They constitute indirect compensation as they are usually extended as a condition of employment and not directly related to performance.The basic purpose of fringe benefit is to maintain efficient human resources in the organisation and to motivate the employees. It is divided into 4 types: > Protection against hazards- It helps in protecting against hazards of illness, injury, old age, death, permanent disability. Eg. Medical care, accident relief, health and group insurance etc. >» Employee services- Some big organisations provide housing, low- cost loan, food, medical and day care for children, educational facilities, canteen, uniforms, car etc. >» Payment for time not worked- The employees are also paid for the time they are not working like vacations, holidays, sick leave, paid holidays etc. >» Legal payments- It includes old age benefits, lay-off compensation etc. The fringe benefits is also called as Perquisites or Perks.Compensation may be direct or indirect. Direct Indirect *Basic pay Medical/Life Wages, Salaries insurance * Variable pay Paid time off Bonus,Incentives,ESOP Retirement pensions Workers compensationFACTORS INFLUENCING PAY RATES The factors which influence the employee compensation are-Extemal factors &Internal factors. EXTERNAL FACTORS- Factors external to organisation are labour market, cost of living, labour unions, govt. legislations, the society and the economy. 1. Labour market- The demand and supply of labour influence wage and salary fixation. A low wage may be fixed when the supply of labour exceeds the demand for it. A higher wage will have to be paid when demand exceeds supply. 2. Cost of living- The cost of living must be taken into account while fixing wages. At the time of rising prices it must be considered. The rise in the cost of living must be compensated by the DA hike. The wages increase or decrease depends upon the movement off Consumer Price Index .3.Labour Unions- The employers in non-unionised industry enjoy the freedom to fix wages and salaries. But in case of unionised industry, they have to negotiate with the various unions while fixing wages. Higher wages have to be paid by the firm to its workers under the pressure of trade unions. 4. Labour laws- There are several central and state level labour laws. The provisions of the various Acts must be considered while fixing wages. Laws on minimum wages, hours of work, equal pay for equal work, payment of DA, Bonus etc. to be enacted and enforced as per Law and Govttules. 5. Society- Compensation paid to employees is reflected in the prices fixed by an organisation for its goods and services. For this reason, the general public is interested in remuneration decisions. The workmen living in a society is also to be recognized. 6. Economy- The economy in a country also affects remuneration decisions. A depressed economy will probably increase the labour supply. This would lead to lower wage rate. The cost of living will rise in an expanding economy. So the economy of the country will have its ne oent an «vane fivatinn7. Prevailing wage rates-Wages in a firm are influenced by the general wage level or the wages paid for similar occupations in the industry/region. If the wages paid by a firm are lower than those paid by others, the firm will not attract and retain efficient employees. INTERNAL FACTORS 1. Business strategy-The business strategy of an organisation also determines the pay to be fixed for its employees. If the strategy is to achieve rapid growth, remuneration should be higher than what competitors pay. If the strategy is to maintain and protect current earnings because of the decline fortune of the company, pay level needs to be average or even below average. 2. JE and performance appraisal- JE helps to establish satisfactory wage differentials among jobs. PA helps to award pay increase to employees who show improved performance. 3. The Employee- The employee factors like their performance, seniority, experience, potential etc.also to be considered while fixing pay for them. 4. Productivity of the worker- The wages are productivity based to achieve the best results and to motivate the workers.5. Ability to pay-The firms ability to pay is one of the factor to be considered. This depends on the profitability and financial position of the company. INCENTIVE PAYMENTS Incentives are monetary benefits paid to workmen in recognition of their outstanding performance. They are defined as variable rewards granted according to variations in the achievement of specific results. Incentive is the pay for performance. Incentive is the reward for performance. Incentive is an extra reward/ compensation given to employees for their extra effort for special job performance or contributions as evaluated by the organisation. Incentive means variable rewards provided to the employees on the basis of their variable performance in the organisation.FORMS OF INCENTIVES 1. Individual incentive plans- This plan considers performance level. Performance appraisal of each employee is prepared and only those employees who perform above the target standard get the incentives. There can be piece rate plan, bonus and commission. a) Piece rate plan- Under this plan, standard unit of O/P to be produced by an employee within a certain period of time is determined. Compensation is fixed for that minimum amount and the incentive amount is determined to those employees whose performance exceeds the minimum unit of O/P. Employees who produces more than the standard level of O/P receives the incentive. It is used in factory where production units are quantified and not useful for managerial task.b) Bonus- Production bonuses are incentives paid to workers for exceeding the output targets. If an employee receives competitive benefit for finishing the job before the standard time, it is called as bonus. An employee whose contribution is more than the other employees receive bonus. It is also distributed to all employees proportionately. On the basis of PA, highly contributing employees are provided high level of bonus. c) Commission- It is the provision of providing certain margin, generally on sales revenue as an incentive to the employees who works on the basis of quantity of sales. It is provided on total sales. If they sell more, they can earn more commission. The sales compensation may be paid by the following methods: i) Straight salary method ii) Straight commission method iii) Salary + Commission method2. Group incentive plan- If the individual performance is not easy to measure, this plan can be used. Such incentive plan provide equal and professional benefit to all employees. Group/Team based incentive plans reward all team members equally based on overall performance of the team members. Performance is assessed using standard. The payment may be made in the form of cash bonus/ non-cash rewards such as pleasure trips/ luxury items. It is used for fostering cohesiveness among team members. 3.Organisational incentive plans- a) ESOP- It is a form of incentive where the employees are allotted the company shares at a price below the market price. When the company achieves better results, the market price of its shares and the value of the employees shareholdings rise. It increases the sense of belongingness to the organisation. It creates a feeling of organisational ownership among the employees. Employees get a share of ownership and a share in the success of the organisation.b) Profit sharing- In this scheme, employers undertake to pay a particular portion of N/P to their employees on compliance with certain service conditions and qualifications. The object of this scheme is to strengthen the loyalty of employees to the firm by offering them an annual bonus provided they are on the service rolls of the firm for a definite period. c) Co-partnership- In this plan, the worker gets his usual wages, a share in the profits of the company and a share in the management of the company. Thus the employees share the capital as well as the profit. If this plan operates with profit, the employees are allowed to leave their bonus with the company as shares(Bonus shares).EMPLOYEE BENEFITS &SERVICES Employee benefits and services are also known as Fringes. Fringes includes all other benefits and services other than wage and salary that employees receive as part of their total compensation package. The term "fringe benefits’ refers to the extra benefits provided to employees in addition to the normal compensation paid in the form of wage or salary.Main features of Fringe benefits: L. 2. They are supplementary forms of compensation. They are paid to all employees based on their membership in the organisation. They are indirect compensation because they are usually extended as a condition of employment and are not directly related to performance. They help raising the living standard of employees. They may be statutory or voluntary. Eg. PF is a statutory benefit whereas transport is a voluntary benefit.Objectives of FB: To create and improve sound IR_ To motivate the employees by identifying and satisfying their unsatisfied needs. To provide security to the employees against social risks(Old age benefits&maternity benefits). To protect the health of the employees and to provide safety to them against accidents. To promote employees welfare. To create a sense of belongingness among employees and to retain them. To meet the requirements of various legislations reg_FB.Types of FB A)Payment for time not worked- It includes the following: i) Hours of work- Sec.51 of the Factories Act,1948 specifies that no adult worker shall be required to work in a factory for more than 48 hours in any week. Sec.54 of the Act restricts the working hours to 9 on any day. ii) Paid holidays- As per Factories Act,1948,adult worker shall have weekly paid holidays preferably Sunday. When a worker is deprived of weekly holidays,he is eligible fro compensatory holidays of the same number in the same month. iii) Shift premium- Companies operating 2™ and 3 shifts, pay a premium to the workers who are required to work during the odd hours shift. iv) Holiday pay- Generally the organisations pay double the normal rate of the pay to those workers who work during holidays.v) Paid vacation- Workers in manufacturing, mining and plantations who worked for 240 days during a calendar year are eligible for paid vacation @one day for every 20 days worked in case of adult workers and @ 1 day for every 15 days worked for child workers. B. Employee security-Physical and job security to the employee should also be provided with a view to ensure security to the employee and his family members. When the employee’s service get confirmed, his job becomes secure. Then the minimum and continuous wage/salary gives a sense of security to life-The Payment of Wages Act,1936, the Minimum Wages Act,1948, the Payment of Bonus Act,1965 provide income security to the employees.The ID Act,1947 provides for the payment of compensation in case of lay off and retrenchment. The non-seasonal industries employing 50 or more workers have to give one month’s wages to all employees who are retrenched after one year’s of continuous service. The compensation is paid @ 15 days wage for every completed year of service with a minimum of 45 days wages in a year. Lay off compensation- In case of lay off, employees are entitled to compensation @ equal to 50% of the total of the basic wage and DA for the period of their lay off except for weekly holidays. This compensation can normally paid up to 45 days in a year.c) Safety and health- Employees safety and health should be taken care of in order to protect the employee against accidents, unhealthy working conditions and to protect the workers productive capacity. The Factories Act,1948 provides for the health of the workers. These provisions are cleanliness, disposal of waste and effluents, ventilation and temperature, dust and fumes, artificial humidification, over crowding, lighting, drinking water, latrine, urinals and spittoons. This Act also provides for safety and they are- fencing of machinery, work on or near machinery in motion, employment of young persons on dangerous machines, striking gear and devices for cutting off power, self-acting machines, casing of new machinery, prohibition of employment of women and children near cotton openers, hoists and lifts, lifting machines, chains, ropes and lifting tackles, revolving machinery, pressure plant, floors, excessive weight, protection of eyes, precautions against dangerous fumes, explosives, dust, gas etc.d) Workmen’s compensation- The provision for the payment of compensation has been made under the Workmen’s Compensation Act,1923. It says that the employer should compensate the employee for employment injury or an occupational disease specified under the Act.The amount of compensation depends upon the nature of injury and monthly wages of the employee.e) Health benefits- The various medical services like hospital, clinical and dispensary facilities are provided by organisations not only to employees but also to their family members. The ESI Act,1948 deals about the health benefits to be provided. The various benefits are- i) Sickness benefit- Insured employees are entitled to get cash benefit for a maximum of 56 days in a year. ii) Maternity benefit- Insured women employees are entitled to maternity leave for 12 weeks(6weeks before delivery and 6 weeks after delivery) - iii) Disablement benefit-Insured employees, who are disabled temporarily / permanently due to employment injury/ occupational diseases are entitled to get benefit under this head.iv) Dependant’s benefit- If an insured person dies due to employment injury, his dependants who are entitled to get compensation under this Act, shall be entitled to periodical payments referred to as dependant’s benefit. v) Medical benefit- This benefit is given to an insured employee or to a member of his family where the benefit is extended to the family . This benefit is provided for out patient treatment/ treatment as inpatient/ by visit to the home of the insured person.g) Welfare and recreational facilities-This includes canteen, subsidized housing, education facilities, transport, consumer stores, credit societies, employee counseling, welfare organisations, holiday homes, library, parties&picnics and miscellaneous benefits such as festival gifts, birthday gifts, wedding gifts, organise games and sports with awards etc. f) Voluntary arrangements-Many large organisations provide health services in addition to legal requirements to their employees free of cost, by setting up hospitals, clinics and dispensaries. They provide medical benefit to employee , their family and also to retired employees. They organise camps, health education programmes, health counscling otc.h) Old age and retirement benefits- The employers also provide some benefits to the employees, after retirement and during old age, with a view to create a feeling of security about the old age. These benefits are called as old age benefits. These benefits are: i) PF- This benefit is meant for the economic welfare of the employees. The Employees PF, Family pension and Deposit Linked Insurance Act,1952 provides for the institution of PF for the employees in factories and establishments.This scheme provide monetary assistance to the employees/ their dependants during post retirement life. Both employer and employee contribute to this fund. It provides security against social risk and enables to have better retired life.ii) Pension- The GOI introduced a scheme of Employees Pension Scheme for the purpose of providing Family Pension and Life Insurance benefits to the employees of various establishments to which the Actis applicable. iii) Deposit linked insurance- This scheme was introduced in 1976 under the PF Act,1952.Under this scheme, if a member of the Employees PF dies while in service, his dependants will be paid an additional amount equal to the average balance during the last three years in his account. The amount payable should not be less than Rs.1000 and the maximum amount payable is Rs.10000.iv) Gratuity- It is a type of retirement benefit provided to an employee either on retirement/at the time of physical disability and to the dependants of the diseased employee. It is a reward to the employee for his long service with the present employer. The Payment of Gratuity Act,1972 provides for a scheme of compulsory payment of gratuity by the management of factories, plantations, mines, oil fields, railways, shops and other establishments employing LO or more persons to their employees drawing the monthly wages up to Rs.1600 p.m. Gratuity is payable to all employees who render a minimum continuous service of 5 years with the present employer. It is payable to an employee on his super annuation or on his retirement or on his death or disablement due to disease/accident. The gratuity payable to an employee shall be @ 15 days wage for every completed year of service on part thereof in excess of 6 months.v) Medical benefit- Some of the organisations provide medical benefits to their retired employees and their family members. This benefit creates a feeling of permanent attachment with the firm to the employees even when they are no longer in service.EXECUTIVE COMPENSATION Executive compensation or Executive pay is composed of the financial compensation and other nonfinancial awards received by an executive from their firm for their services to the organisation. The executive remuneration consists of 4 element. They are- Salary, Bonus, Long term incentives and Perquisites. Salary is the basic pay —it must be paid for their capabilities. Bonus-it is based on the performance i-e., a fixed % of earnings. Long term incentives- ESOP Perks- It includes the perquisites such as car allowance, club membership, well furnished house, vacation travel, servants, telephone bill, dailies, gas bills and EB are paid by the company.Features of Executive Remuneration L. It can’t be compared with the wage and salary schemes of other employees. They are denied the privilege of union and they can’t demand high salaries. Secrecy is maintained in respect of executive remuneration. It is not based on individual performance but it is based on organisational performance. It is subject to statutory ceiling.(Not to exceed 10% of the N/P of the company) Private companies have no ceilings/restrictions.EMPLOYEE ENGAGEMENT EE is a work place approach designed to ensure that employees are committed to their organisations goals, objectives, values, encouraged to contribute to organisational success, and are able at the same time to enhance their own sense of well- being. EE is the extent to which employees feel passionate about their jobs, are committed to the organisation, and put discretionary effort into their work. EE is the emotional commitment the employee has to the organisation and its goals.This emotional commitment means engaged employees actually care about their work and their company. They don’t work just for pay/ for promotion but for organisational goals. To win in the market place, you must win in the work place. So EE is the key to activating a high performing a work force. Engaged Employees lead to....... higher service, quality &productivity which leads to higher customer satisfaction, which leads to... increased sales, which leads to ...... higher level of profits, which leads to __.._. higher shareholders returns i-e., stock price.Benefits of EE * Go to extra mile to achieve individual and company success. + Innovative at work place + Attract customers and employees + Infuse energy and positivity at work place + Better engagement means better productivity + Engaged employees are less likely to quit + Engaged employees are positive + Engaged employees are feel satisfied + Engaged employees are better communicators + Highly engaged employees have less absence days * Highly engaged employees outperform than disengaged employees + Highly engaged employces have more trust in management and committed to the organisationEngaged employees are more loyal, work harder and stay longer. The companies with higher levels of engaged employees perform better. How to engage disengaged employees? OR Ways to engage employees: 1. Ask employees for ideas 2. Hold a competitive fund raiser 3. Schedule a monthly lunch 4. Get employees involved in community work 5. Encourage staff development 6.Have a work night party 7. Employee games and competitions 8. Special days 9.Sports events 10. Recognition program. LL. Organise team building activities 12.Train the employeesRULE OF EE Every HR is bound to follow a set of rules in order to maintain the ethics and justify the role of HR. The following rules must be followed to engage the employees in an organisation: L.Show real concern 2.Share information 3.Communicate job purpose 4 Listen 5 Invest in professional development 6 Say thanks “Engage the Hearts and Minds of All your Employees. Carrots and Sticks Don’t work.” + Engagement is founded on trust. + Engagement is driven by emotions. + Engagement is 20% culture & 80% climate.MENTORING & COACHING Mentoring- It is a working relational experience through which one person empowers and enables another by sharing their wisdom and resources. Mentoring is a formal/ informal process for more experienced workers to share their knowledge about a business/industry to achieve the business goals of the organisation and personal goals of the individual. A mentor is a close personal contact, who has an in depth knowledge of an industry or activity and can assist another person.A mentee is a person who is mentored by a close personal contact, usually within their industry, to assist the mentee in achieving their objectives. Mentorship is a relationship in which a more experienced/more knowledgeable person helps to guide a less experienced or less knowledgeable person. The mentor may be older/ younger than the person being mentored but he/she must have a certain area of expertise. It is a learning and development partnership between someone with vast experience and someone who wants to learn.The person who receive mentorship is called as Mentee/Protege. Mentoring relates personally to the identification and nurturing of potential for the whole person. Mentoring is an ideal way for a more experienced mentor to pass on: # Skills # Business practices # Knowledge about the business culture # Efficiency already found by more experienced workers in work flow # Explanations about the business history-what worked and what didn’t.Coaching- It is a form of development in which a person called a coach supports a learner or client in achieving a specific personal or professional goal by training, advice and guidance. Coaching is a process that enables learning and development to occur and thus performance to improve. Coaching refers to the methods of helping others to improve, develop, learn new skills, find personal success, achieve aims and to manage life change and personal changes. Coaching is defined as a personal and confidential learning process. Its objectives are: # Skill development-, with emphasis on specific task # Performance development, more broadly aimed at the over all job responsibility # Professional development, focused on future responsibilities # Personal development, looking beyond the professional role.In business/ corporate coaching, coaches help their clients advance towards specific professional goals. These include career transition, inter personal and professional communication, performance management, organisational effectiveness, managing careers and personal changes, enhancing strategic thinking, dealing effectively with conflict and building an effective team within an organisation.COACHING Vs MENTORING Coaching Mentoring 1. Goals Improve job Support and performance/skills. guide personal career growth. 2. Initiative Coach directs Mentee is in learning charge of learning. 3. Volunteerism Proetge agrees Both mentor and to accept coaching, mentee are volunteers. may not be voluntary. 4. Focus Immediate problems Longer term personal and learning opportunities development.5. Role 6. Duration 7. Whom 8. Base Focus on telling with Focus on appropriate feedback. Listening, behavioural role model, making suggestions and connections. Short-term Long-term. Given to employees Given to develop when they fail to additional skills in achieve the standards employees. Based on task Based on relationship.BENEFITS OF COACHING & MENTORING 1. Increased stability 2. Increased profitability 3. Decreased turnover 4. Higher motivation 5. Higher productivity 6. Enhances job satisfaction 7. Enhances peer recognition 8. Develops professional relationship 9. Improves self confidence 10. Assists with problem solving 11. Helps to practice inter personal skills 12. Increase individual and team commitment to an organisation and its goals13. Improves communication within the organisation 14. Improves the level of professional success. 15. Changes organisational culture for the better 16. Allows individuals to gain greater insight into the organisations workings 17. Gives individual the chance to meet different people within the organisation and to network. 18. Offers learning opportunities geared to individual needs 19. Encourages a positive attitude for learning 20. Provides individuals and teams with opportunities for gaining new skills and personal development.1.MASLOW’S NEED THEORY Se ten A § § y sav © Frc andénsiore | § ety nangenert i fins ui scl ages teensy safety A con come] Seay i a iy cenaatnte | Psiloc 4 racers 3 oa ALON’ HIERARCHY OF NEEDS ASPRaTON WANAGENENTThe American motivation psychologist Abraham H. Maslow developed the hierarchy of needs consisting of five hierarchic classes. According to Maslow, people are motivated by unsatisfied needs. The needs, listed from basic (owest-earliest) to most complex (highest-latest) are as follows: * Physiology (hunger, thirst, sleep, etc.) * Safety/Security/Shelter/Health * Social/Love/Friendship * Self-esteem/Recognition/Achievement « Self actualization/achievement of full potential1. Physiological needs (c.g. food, water, shelter, sleep) * It includes the most basic needs for humans to survive, such as air, water and food. Maslow emphasized, our body and mind cannot function well if these requirements are not fulfilled. * These physiological needs are the most dominant of all needs. So if someone is missing everything in his/her life, probably the major motivation would be to fulfil his/her physiological needs rather than any others. A person who is lacking food, safety, love (also sex) and esteem, would most probably hunger for food (and also for money, salary to buy food) than for anything else2. Safety and security (secure source of income, a place to live, health and well-being) * Safety needs refer to a person’s desire for security or protection. Meeting with safety needs demonstrated as a preference for insurance policies, saving accounts or job security. * Safety and security needs include: Personal security; Financial security; Health and well-being. 3. Belongingness and love (integration into social groups, feel part of a community or a group; affectionate relationships) + Ifboth the physiological and the safety needs are fulfilled, the affection, love and belongingness needs come into prominence. * Love needs involve giving and receiving affections (love is not synonymous with sex — sex is a physiological need). When they are unsatisfied, a person will immediately eliminate the lack of friends, peers and partner. Many people suffer from social nervousness, loneliness, social isolation and also clinical depression because of the lack of this love or belongingness factor.4. Esteem (respect for a person as a useful, honourable human being) + Esteem means being valued, respected and appreciated by others. Humans need to feel to be valued, such as being useful and necessary in the world. People with low self-esteem often need respect from others. Maslow divided two types of esteem needs: a ‘lower’ version and a ‘higher’ version. The ‘lower’ version of esteem is the need for respect from others: for example attention, prestige, status and loving their opinion. The ‘higher’ version is the need for self-respect: for example, the person may need independence, and freedom or self-confidence. 5. Self-actualization + What humans can be, they must be.’ (Maslow, 1954) + Self-actualization reflects an individual’s desire to grow and develop to his/her fullest potential. Poople like opportunities, choosing his/her own versions, challenging positions or creative tasks. Maslow described this level as the ‘need to accomplish everything that one can, to become the most that one can be’. Maslow believed that people must overcome their other needs — described above -, not only achieve them.Needs Levels | General Rewards ‘Organizational Factors 1. Physiological |Food, water, sex, sleep _|a. Pay 'b. Pleasant working conditions je Cafeteria 2. Safety ‘Safety, security, stability,|a. Safe working conditions iprotection 'b. Company benefits ic. Job security ‘3. Social ‘Love, affection, la. Cohesive work group ‘belongingness: |b. Friendly supervision |e. Professional Associations Ia. Esteem (Self-esteem, solf-respect, a, Social recognition [prestige status [p. Jot ic. High status job |d. Feedback from the job itself 5 Selt- (Growth, advancement, a, Challenging job Jactuatization creativity lorganization Applying Maslow’s Theory2. HERZBERG’S TWO FACTOR THEORY Frederick Herzberg's two-factor theory concludes that certain factors in the workplace result in job satisfaction, but if absent, they don't lead to dissatisfaction but no satisfaction. The factors that motivate people can change over their lifetime, but "respect for me as a person" is one of the top motivating factors at any stage of life. He distinguished between: Motivators (e.g. challenging work, recognition, responsibility) which give positive satisfaction, and Hygiene factors (e.g. status, job security, salary and fringe benefits) that do not motivate if present, but, if absent, result in demotivation.Herzberg concluded that job satisfaction and dissatisfaction were the products of two separate factors: motivating factors (satisfiers) and hygiene factors (dissatisfiers). Some motivating factors (satisfiers) were: Achievement, recognition, work itself; responsibility, advancement, and growth. Some hygiene factors (dissatisfiers) were: company policy, supervision, working conditions, interpersonal relations, salary, status, job security, and personal life. The name hygiene factor is used because, like hygiene, the presence will not improve health, but absence can cause health deterioration.SATISFACTION OAOAYK-HAO= La nA G I E i = = rN Cc U fe) R iS)3. EXPECTANCY THEORY Expectancy theory was proposed by Victor H. Vroom in 1964. Expectancy theory explains the behavior process in which an individual selects a behavior option over another, and why/how this decision is made in relation to their goal. There's also an equation for this theory which goes as follows: M-E*I*V M (Motivation) is the amount an individual will be motivated by the condition or environment they placed themselves in. Which is based from the following hence the equation. E (Expectancy) is the person's perception that effort will result in performance. In other words, it's the person assessment of how well and what kind of effort will relate in better performance. I (instrumentality) is the person's perception that performance will be rewarded or punished. V (Valence) is the perceived amount of the reward or punishment that will result fromthe performance4,Douglas McGregor Theory X and Theory Y McGregor identified 2 distinctive sets of assumptions made by managers about employees. He articulated two extreme attitudes or views and called these Theory X and Theory Y. His thesis was that in practice most people would come somewhere between the two except in certain circumstances. Theory X: Theory X is based on following assumptions: People dislike work and will avoid it if they can People would rather be directed than accept any responsibility People will avoid responsibility and authority if possible + They have no creativity except when it comes to getting around the rules and regulations of the organization. ‘They will not use their creativity in the pursuit of the job, or the interests of the organization People must be forced or bribed to put out the right effort. They are motivated mainly by money, which remains the overriding reason why they go to work The main anxiety concerns is personal security, which is alleviated by carning money People are inherently lazy and require high degrees of supervision, coercion andTheory Y: Theory Y is based on following assumptions: Work is necessary to everyone's psychological growth * People wish only to be interested in work and, under the right conditions, they will enjoy it People gain intrinsic fulfillment from it They are motivated by the desire to achieve and realize potential, to work to the best of their capabilities and to employ the creativity and ingenuity with which they are endowed in the pursuit of this People direct themselves towards given accepted and understood targets People will seek and accept responsibility and authority and they will accept the discipline of the organization in the pursuit of this People will impose self discipline on both themselves and their activities. The Theory Y ideologies and assumptions would create informal, flexible job and role structures. McGregor proposed ideas such as participative decision making, responsible and challenging jobs and good group relations, which could motivate and improve performance5.D C Clelland's Achievement Motivation Theory D C McClelland identified the relationship between personal characteristics, social and general background and achievement. Persons with high need for achievement exhibited the following characteristics: task rather than relationship orientation; a preference for a task over which they had sole or overriding control and responsibility; the need to identify closely, and be identified closely with the successful outcomes of their actions; task balance: this had to be difficult enough on the one hand to be challenging and rewarding; to be capable of demonstrating expertise and good results; and gaining status and recognition from others, while on the other hand it needed to be moderate enough to be capable of successful achievement; tisk balance: in which the individual seeks to avoid as far as possible the likelihood and consequences of failure; the need for feedback on the results achieved to reinforce the knowledge of success and to ensure that the successes were validated and publicizedNeed for achievement is based on a combination of: * a) intrinsic motivation - the drives from within the individual; + b) extrinsic motivation - the drives, pressures and expectations exerted by the organization, peers and society. * It is also influenced by education, awareness, social and cultural background, and values. « Some of the needs mentioned by D C McClelland are as follows: nAch (need for Achievement) * Doing better that competitor + Attaining or surpassing difficult goal + Solving a complex problem + Carrying out challenging assignments successfully » Developing new/ better way of doing something, nPower (need for Power) * Influencing people to change attitude or behavior » Controlling people and activities * Being in a position of authority over others * Gaining control over information and resources * Defeating an opponent and enemnAff (need for Affiliation) * Maintaining harmonious relationships and avoiding conflicts * Being liked by many people * Being accepted as a part of group or a team * Working with people who are friendly and cooperative * Participating in pleasant and social activities nSecurity (need for Security) * Being protected against physical harm and hazardous conditions * Being protected against loss of income or economic disaster * Having secured job * Having protection against illness and disability * Avoiding task of risk of failure and blame nStatus (need for Status) * Living in right neighborhood and belonging to country club * Havingright cars and wearing right clothes * Having executive privileges * Working fora right company and in a right job © Wavwine deoree fram nohtinivereityv