Posted at 12.01.2018
This essay is written to understand, argue and evaluate if financial rewards is the main one best way to stimulate employees in a organization. Motivation can be defined as "the goal directed patterns that is set up, directed and sustained by allowing a cognitive decision making process. " (Buchanan and Huczynski, 2010, P. 267). Determination is very important to improve job performance. Worker in the organization can be determined through financial as well as non-financial rewards or motives. Motive can be defined as "a socially acquired need activated by the desire to have fulfillment. " (Buchanan and Huczynski, 2010, P. 266). Desire pushes the employees in the organization to their fullest and in turn even helps them in personal development. During tough times, employees are the only ones to improve up the amount of the organization, thus, stimulated employees help in achieving the desired goals of the organization and making inspiration a key factor. Financial bonuses or motives " make reference to incentives that happen to be in direct financial form or measurable in economic term and serve to stimulate people for better performance. "(NCERT, 2007, P. 190). Non-financial bonuses or motives are essential as "all the needs of people are not satisfied by money exclusively. Psychological, social and mental factors also play an important role in providing drive. Non-financial bonuses mainly focus on these needs. " (NCERT, 2007, P. 191). The question here's that if financial rewards, motives or bonuses are the best way to increase work desire?
In order to carefully understand why question, evaluations of both financial and non-financial rewards have to be conducted. To begin with, financial rewards have been studied at large by numerous theorists. Some theorists support financial rewards most importantly. Corresponding to Frederick W. Taylor(2011), the main motivator for employees are wages and further benefits such as cash rewards, travel allowances, casing, etc. He also mentioned that whenever employees find the same wage irrespective of their goals they have to achieve, they tend to work less which might lead the company to an unstable situation Similarly Henry Gantt believed money rewards are a much better method for reimbursing the hard work of an employee added to the normal salary. Both methods treat personnel as 'laborers' who toiled limited to money and has been discouraged by the existing form of management system.
One theory was by Douglas McGregor, better known as theory X and theory Y, which differentiated between command styles/skills and management. Firstly he presumed that desire and skills are different for all the members of a company and also that all employees go through the same determination in a different manner. Theory Y focuses on employees who can practice self-control and have the ability to direct themselves plus a preference towards their job. These employees are not merely sensible but are also test seekers. New troubles and opportunities motivate these employees. These employees do not require much of supervision as they are self-motivated and show a great morale at the job. These employees aren't needed to be handled or punished and help achieve goals and goals better. Now when looking at the employees of theory X, one realizes that these employees do not enjoy their job or have a certain amount of disliking towards it. They may be high irresponsible and need to led, supervised and directed every once in awhile when given a certain activity or responsibility. These employees load the managers from time to time as they needed to be required to work and when behaving not according to the code of carry out, they need to be punished. So people who have needs such as self-actualization and much more, are better with managers of theory Y as compared to theory X. But a certain amount of balance is necessary between theory X and Y so all employees can develop and make progress in their occupations.
"The financial incentives generally found in a business are listed below:
Pay and allowances: For every employee, salary is the essential monetary incentive. It includes basic pay, dearness allowance and other allowances.
Productivity linked income bonuses: Several income incentive plans is aimed at linking payment of wages to increase in productivity at specific or group level.
Bonus: Bonus can be an incentive offered over and above the salary/salary to the employees.
Profit writing: Profit sharing is meant to give a show to employees in the gains of the business.
Co-partnership/stock: Under these motivation schemes, employees are offered company shares at a set in place price lower than market price.
Retirement Benefits: Several retirement living benefits such as provident account, pension and gratuity provide financial security to employees after their retirement living.
Perquisites: In lots of companies perquisites and fringe benefits are offered such as car allowance, property, medical aid, and education to the children etc. , in addition to the salary. " (NCERT, 2007, P. 190-191)
However, "if our natural and security needs aren't satisfied, we die. If our needs of love and esteem are not satisfied, we can feel substandard and helpless, but if these needs are satisfied, we feel self-confident. Self-actualization and transcendence, Maslow argued, are our ultimate goals. While the implications if self-actualization have been greatly explored, the meta-physical concept of transcendence has been typically disregarded by management writers and analysts. " (Buchanan and Huczynski, 2010, P. 268).
"Maslow argued that self-actualized people are uncommon, and that creating conditions for all of us to develop our capabilities to this extent was challenging activity. He also argued that these needs are sorted out in a hierarchy, with lower order biological and basic safety needs at the bottom, and higher order self-actualization and transcendence needs at the very top. " (Buchanan and Huczynski, 2010, P. 268).
"Abraham Maslow's needs hierarchy:
Self-actualization: Have to develop our full potential
Freedom of equity and expression: Need that is a prerequisite for the satisfaction of other needs
Transcendence: A religious need, 'to be at one with the universe'
Aesthetics: Need for order and beauty
To know also to understand: Need to gain also to systematize knowledge, the need for attention, learning, philosophizing, experimenting and exploring
Esteem: Need for strength, confidence, achievement, self-esteem, independence, and then for reputation, prestige, identification, attention and appreciation, and admiration of others
Affiliation: dependence on attachment, belongingness, devotion, love, relationship
Safety: Dependence on security, comfort, tranquility, independence from fear and risk from environment, for shelter, order, predictability, an organized world
Biological: dependence on sunlight, sexual expression, food, water, snooze and oxygen-need basic to our success. "(Buchanan and Huczynski, 2010, P. 268).
People working in companies have certain anticipations from the surroundings around them. It isn't always the financial incentives but also people, the supervisor, the family time and all the directed at an employee that motivates them. The needs are not satisfied by money only, mental, psychological and communal factors play a key role in providing determination. (NCERT, 2007, P. 190-191). Here is a good example, " In 2008, The Sunday times newspapers, surveyed over 500 companies and 180, 000 employees to recognize the best company to work for' in the UK the award was triumphed in by heat, a central warming installation based in Belfast. W. L. Gore & Associates, who triumphed in the prize in the last four years, came eleventh. Companies were ranked on eight factors:
Leadership: how employees feel about the of the business and senior managers
Wellbeing: how staffs experience stress, pressure and the balance between work and home life
My supervisor: people's feelings towards their immediate manager and their day-to-day managers
My team: people's feelings about their immediate colleagues
Fair package: how happy the labor force is with their pay and benefits
Giving something back again: how much companies are thought by their staff to put back to society, and the local community
My company: emotions about the business as opposed to people they work with
Personal growth: to what level the staffs feel they are stretched and challenged by their job
Heat's managing director said that their success was predicated on the company's approach communication; 'we work hard to make it simple. If you make it simple everyone understands and that means it is more likely to keep going'. "(Buchanan and Huczynski, 2010, P. 271).
The company in the above example isn't a high paid company, but the working environment around them motivates the employees to work hard and give their best. Yes, financial bonuses are important, but with out a friendly work force and enough time given by an organization to their employees because of their family and interpersonal ethics, it's virtually no use. A couple of drawbacks of financial or financial desire, employees in the business might take things for granted. They'll expect bonus products even sometimes when they don't really wrap up working towards organizational goal. But if there aren't any financial incentives given, exactly what will the employee work with. Monetary or financial bonuses also help in guiding and moving the employees towards the purpose of the organization.
Apart from the benefit and downside of financial purpose, non-financial incentives also have their own advantages, keeping the worker happy in the business with the friendly environment, companies providing fair amount of respite time and activity rooms such as Google. The task timings are at most important as the employees get time with their own families and friends and also maintain a great interpersonal life along with their work.
"A number of the important non-financial bonuses are discussed below:
Status: in the organizational framework, status means rank of positions in the business.
Organizational weather: organizational environment reveals the characteristics which summarize an organization and recognize one company from others.
Career progress opportunity: every specific wants to grow to the higher level in the acknowledgement. They believe that what they do should be recognized by others concerned.
Job security: employees want their job to be secure. They want steadiness about their future work and income.
Employee participation: this means including employees in decision making of issues related to the business.
Employee empowerment: empowerment means, offering more autonomy and forces to subordinates. " (NCERT, 2007, P. 192-193)
According to the 2011 Hays Salary Guide, 78 % of employers give their workers benefits, or non-financial rewards, in addition to earnings and bonus items. Health is the main benefit in Hong Kong, made available from 71 per cent of employers. Life guarantee is proposed by 63 per cent, a pension by 60 per cent, and a property allowance by 37 %.
Other benefits include taxes equalisation, team or gym membership, an automobile or car allowance, and private expenses. Typically, benefits increase with experience and the seniority of the positioning. They are used to stimulate and pay back top performers, with employers recognising a motivated employee will achieve the best results. Thus, there may be little room to discuss as your performance and value are the identifying factors.
There are also many instances of employers using benefits to compensate top performers when they cannot increase incomes beyond a certain level. But again, the awarding of additional benefits is based on the employee's previous performance which is also a tool to stimulate future performance. If thinking about negotiating benefits bundle, tread carefully. Employers will only increase their offers so far. So talking to recruiter to ensure targets are sensible for the role and industry, or this could leave the company with doubts over dedication to the role.
As a final note, expatriate plans that include comprehensive non-financial rewards are a thing of the past. Traditionally, expats helped bring an abundance of experience and excellent education from in another country to a corporation, and therefore were rewarded appropriately. But today local candidates are looked at on the same footing since they also have excellent international education and exposure to worldwide marketplaces. (Charnock, 2011)
Thus, analysis unveils that nonfinancial factors play a prominent role in influencing worker motivation and proposal worldwide-a finding that could prove beneficial to employers facing budget constraints. organization. Professionals should provide employees with chance to improve their skills
Job enrichment: is concerned with designing jobs that include increased variety of work content, require higher level of knowledge and skills.
Employee popularity: most people have a dependence on evaluation of the work and due
Workers say that being cured with value is the main nonfinancial factor, followed by work/life balance, type of work, quality of co-workers and quality of management. Among financial factors, bottom pay ranks highest. Benefits and motivation pay can make a difference to other aspects of the employment deal-such as bringing in, retaining and satisfying employees-but they are believed less important by employees when it comes to their day-to-day inspiration and engagement at the job.
"Employee engagement reflects the full total work experience, and a big part from it is how you will are treated, the type of work you need to do and how you feel about your co-workers, bosses and the general work environment, " said Colleen O'Neill, a older spouse at Mercer and the firm's talent head in the U. S. and Canada.
"Without a doubt, financial factors like pay and benefits are a vital part of the employment offer, especially in the U. S. , but employers need to consider and take care of the full range of factors to ensure that their workforce is engaged, " O'Neill described. "When money are limited, organizations can leverage these nonfinancial factors to effectively supercharge employee commitment and output. " (Miller, 2011) And for that reason, this proves that both financial and non-financial rewards are essential for increasing the task motivation of a business.