Lecture 7

Motivational strategies

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 Outline
I. Financial and non-financial strategies
II. Strategies for managing demotivated
employees
III. Comprehensive motivation strategy
IV. Examples of motivation strategy

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 I. Financial and non-financial strategies

Class discussion:
• What motivates employees at work place?

Figure 1: Incentives inspiring performance of US employees

(Inc., 2018)

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 I. Financial and non-financial strategies

• Employee motivation in the workplace are the ways in

which managers motivate and energize the people to
produce their best work. Typical methods for
employee motivation can be financial or non-financial
in nature. 

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 1. Financial strategies
• Financial incentives refer to those incentives which are in
direct monetary form or can be measured in monetary
terms.
• Financial incentives can be
provided on an individual or
group basis and satisfy the
monetary and future security
needs of individuals.

• They help to satisfy basic psychological needs of

employees. It is most suitable for lower level of
employees.
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 1. Financial strategies (cont.)

The most commonly used financial incentives are:

• Pay and allowances:
For everyone, salary is the basic financial
incentive. It include basic pay, dearness
allowance and other allowances. Pay hike and
increments improve performance level of
employees.

• Bonus:
A sum of money offered to an employee over
and above the salary or wages as a reward for
his good performance.

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 1. Financial strategies (cont.)

• Productivity linked wage incentive:

These incentives aims at linking wages to
increased productivity, i.e. higher rate of
wages for greater productivity.

• Retirement benefits:
Retirement benefits like gratuity, pension,
provident fund, leave encashment, etc.
provide financial security to the employees
post their retirement. Thus, they work
properly when they are in service.

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 1. Financial strategies (cont.)

• Profit-sharing: Sometimes the

employees are given a share in the
profits of the organization. This
motivates them to perform efficiently
and give their best to increase the
profits of the organization.
• Stock options or co-partnership: Under
these incentives scheme, employees
are offered company shares at a lower
price than the market price. This
creates a feeling of ownership to the
employees and makes them contribute
for the growth of the organization.
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 1. Financial strategies (cont.)

• Commission: Some organizations offer a

commission in addition to the salary to
employees for fulfilling the targets
extremely well. This incentive encourages
the employees to increase the client base
of the organization.
• Perquisites: Several organizations offer
perquisites and fringe benefits such as
accommodation, vacation, car
allowance, medical facilities, education
facilities, recreational facilities, etc. in
addition to the salary and allowances to
its employees.
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 2. Non-financial strategies
• Non-financial incentives are not measured in terms of money,
provide psychological and emotional satisfaction rather than
money driven satisfaction.
• There are chances that a particular non-financial incentive may
also involve the financial incentive as well. E.g. promotion
(psychological needs) comes with a rise in salary.
• These incentives are more suitable for higher level of
employees.

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 2. Non-financial strategies (cont.)
The most common non-financial incentives are:
• Status: refers to the position in the hierarchy of the
organizational chart. The level of authority,
responsibility, recognition, salary, perks, etc. determine
the status of an employee in the organization. Status
satisfies a person’s self-esteem and psychological needs.
• Company culture: Full-time employees
spend a significant portion of their waking
hours at work. If a business has a strong
and inclusive culture along with an
enjoyable work environment, many will
choose to stay even if they could earn
more money elsewhere. It takes genuine engagement and authenticity
to build the kind of company culture that inspires this kind of loyalty.
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 2. Non-financial strategies (cont.)
• Career advancement opportunity: appropriate skill
development program and a sound promotion policy for
its employees which works as a booster for them to
perform well and get promoted. Every employee desires
growth in an organization and when he gets promotion
as an appreciation of his work he is motivated to work
better.
• Job enrichment: the designing of jobs in such
a way that it involves a higher level of
knowledge and skill, a variety of work
content, more autonomy and responsibility
of employees, meaningful work experience
and more opportunities of growth. When the
job is interesting, it itself serves as a source
of motivation.
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 2. Non-financial strategies (cont.)
• Job security: provides future stability and a sense
of security among the employees. The employees
are not worried about the future and thus work
with more enthusiasm. However, there is also a
negative aspect of this incentive that employees
tend to take their job for granted and not work
efficiently.
• Recognition: means acknowledgment and
appreciation of work done by employees.
Recognition in the organization boosts their self-
esteem and they feel motivated. For example,
declaring the best performer of the week or month,
displaying their names on the notice board and
giving them rewards, fall under the Employee
recognition program.
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 2. Non-financial strategies (cont.)

• Employee participation: Involving the

employees in decision making regarding the
issues related to them such as canteen
committees, work committees, etc. also helps
in motivating them and inducing a sense of
belongingness in them.
• Employee empowerment: Giving more
autonomy and powers to subordinates
also make them feel that they are
important to the organization and in turn
they serve the organization better.

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 II. Strategies for managing demotivated
employees
Class discussion:
- What causes employee demotivation at work?
- What are the possible solutions?

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 II. Strategies for managing demotivated
employees (cont.)
Root causes and solutions for eliminating or at least improving the
situation of demotivated employees:
• Poor communication: This is one of the top problems in all
departments. Even if news is not good or pleasant for employees to
hear, they will receive it better if managers communicate it properly.
Meetings, notices, and clear policies on the way the organization's
operations are all good places to start.
• Unfair use of policies: This problem is critical. Whatever a
department's polices, managers must administer them fairly to
everyone.
• Poor hiring practices: Managers get what they hire. Managers should
have clear job descriptions and requirements, as well as simple
aptitude tests to measure and improve the quality of a new employee.
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 II. Strategies for managing demotivated
employees (cont.)
• Lack of training:
All team members should receive proper preparation for the job.
Ongoing training should provide the staff with new skills and
experience that would benefit both company and them in the long
run.
• Feeling under-valued:
If an employee feels that their efforts are not being recognized or
appreciated, they’ll soon begin to lack energy and commitment in
their role. It’s important to celebrate successes and give credit where
credit’s due. Try to make sure that achievements are rewarded – even
if it’s just with a pat on the back.
In a remote and virtual working arrangement, these small but
important recognitions can mean all the difference in how an
employee is feeling in their role. 
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 II. Strategies for managing demotivated
employees (cont.)
• Limited development opportunities:
Regular training and development opportunities can help boost
employee motivation and engagement. Most employees will value
ongoing learning potential and the sense that they’re expanding and
improving their skills and knowledge. If a workplace feels stagnant,
non-progressive, and uninspired  your employees’ motivation levels
will soon dwindle.
• Poor leadership:
If strong leadership is lacking or is negatively affecting the outlook of
the team, certain employees may start to feel demoralized.  Leaders
must have a flexible, inclusive approach to managing a team and be
able to communicate clearly whilst instilling confidence and focus.

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 II. Strategies for managing demotivated
employees (cont.)
• Conflict:
Conflict in the workplace is hugely detrimental. Healthy debate is
often productive, but it’s important to keep an eye out for any
workplace intimidation or bullying. Some employees may feel worried
to come forward about issues relating to a fellow colleague - which is
where an anonymous employee survey may help to reveal any
problem areas.
• Unrealistic workload:
It’s important to keep a check on the expectations and demands that
are being placed upon the employees. If someone feels overburdened
by a large, impossible workload – they can soon become disillusioned,
stressed and lose motivation. Equally, if an employee has a workload
that’s too light or not varied enough, they might quickly lose interest.

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 III. Comprehensive motivation strategy

A sound motivation system in an organization should have the

following features:
• Strong correlation with organizational goals. Thus, the
individual/employee goals must be harmonized with the
organizational goals.
• Relationship with employees: the employees must be dealt and
appraised in a fair and just manner. The grievances and
obstacles faced by them must be dealt instantly and fairly.
• Supportive supervision: sound motivation system should
encourage supportive supervision whereby the supervisors
share their views and experiences with their subordinates,
listen to the subordinates views, and assist the subordinates in
performing the designated job.
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 III. Comprehensive motivation strategy (cont.)

• Elements of motivation system:

– It should involve monetary as well as non- monetary rewards.
– Provide a range of incentives to meet different personalities of needs of
employees.
• Flexibility:
– Ensure flexibility in working arrangements. A sound motivation system
requires modifying the nature of individual’s jobs. The jobs should be
redesigned or restructured according to the requirement of situation.
Any of the alternatives to job specialization - job rotation, job
enlargement, job enrichment, etc. could be used.
– The motivational system must be modified to the situation and to the
organization.

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 IV. Examples of motivation strategy

1. Disney Employee Motivation Strategy

• Disney operates by encouraging leaders to immerse themselves with their
employees. Leaders listen to feedback from cast members and employees
who work at the front line, because they want to communicate the value
  in these employees’ work. 
• Disney also encourages its leaders
to work these front-line shifts to
fully understand the company on a
granular, direct, consumer-facing
level. Employees report feeling that
their contribution to the company
is appreciated, which increases
employee engagement and overall
Picture 1: ‘Leader walks” practice at Disney
work performance. (Inc., 2018)

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 IV. Examples of motivation strategy (cont.)

2. Google Employee Motivation Strategy

• Google is known for its success at keeping employees, its happy
work culture and high level of job satisfaction, and the positive
effects of its motivational strategies.
• By providing a slew of employee benefits and perks, Google has
cultivated a work culture of satisfied and motivated team
members. Between legal expense reimbursements, financial
support for adopting a child, maternity benefits, onsite laundry
facilities, doctors, fitness trainers, and more, Google goes the
extra mile to provide support and encourage motivation
throughout its work environment.

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Some perks for Google’s employees

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 IV. Examples of motivation strategy (cont.)

3. Apple Employee Motivation Strategy

• Apple motivates its employees by offering an abundance of
benefits and incentives, including employee stock purchase
plans, computer programs, tuition assistance, and an onsite
fitness center.
• This company’s strategies for employee motivation also include
bonus compensation for reaching goals, the leaders of Apple
sharing meals and rewards on a personal level with employees,
and free products gifted on a management and corporate level. 
• With numerous ways of motivating employees, Apple has a high
employee retention rate and high employee satisfaction in its
workforce. 

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Some perks for Apple’s employees

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 Class activity
• Work as a group of 4-5 students to develop an
appropriate comprehensive motivation strategy for:
– A coffee shop
– Hospital
– Shoe manufacturer
– Super market
– Primary school
• Present the motivation strategy on an A0 paper with
effective visualization.
• Present your group’s work to the class.

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 Essential readings

• Chapter 7: Work motivation and satisfaction

Mullins, L. J. (2019) Organizational Behavior in the Workplace
12th Ed. Harlow: Pearson
This lecture is related to Learning Outcome 3 of the course.

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