Table of Contents
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- Definition of Motivation and Reasons Why It Needs to Be Promoted in an Organization by the Management
- Extrinsic Motivation
- Use of Monetary Rewards to Motivate Employees in an Organization
- Use of Non-Monetary Rewards to Motivate Employees in an Organization
- Intrinsic Motivation
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The question of motivation and its use as a means of employees’ performance enhancement has always interested the management at all types of organizations. Employees who are not properly motivated fail to deliver on their duties effectively and efficiently, and the organization may suffer not only the loss of profit, but also other losses. Besides, unmotivated employees can hardly contribute to the development of the organization, which negatively affects overall performance and poses a significant problem for the management. Therefore, the issue of how to motivate employees is among the most essential ones for the management of any organization. Although researchers and managers have for a long time been interested in finding and implementing the most effective and efficient ways to motivate employees, there is no single way to do so, as every organization is unique in this respect. Hence, the management has to develop its own motivation programs and incentives with account for the individual peculiarities of all employees and the organization in general. At the same time, there are two traditionally distinguished types of motivation: intrinsic and extrinsic, and some universal recommendations and means can be applied by virtually all organizations to motivate their employees. This paper proves that management can rely on intrinsic and extrinsic motivation to motivate employees in the organization, with the former being based on job enrichment and the sense of autonomy and the latter including monetary (i.e. cash bonuses and payments) and non-monetary rewards such as social recognition, positive feedback, praise, additional training, presents, etc.
Definition of Motivation and Reasons Why It Needs to Be Promoted in an Organization by the Management
Prior to describing the ways the management can motivate employees, it is necessary to provide the definition of this concept, since the management has to clearly understand what it tries to promote in the organization. Motivation means that an individual has a desire and stimuli to perform a certain activity at the highest level possible and with high quality. Scientifically, it can be defined as “psychological processes that cause the arousal, direction and persistence of behavior” (Ganta, 2014, p. 222). It should also be noted that most researchers emphasize that motivation is “a multidimensional construct” (Cho & Perry, 2011, p. 3). Furthermore, it is an integral element of any model relating to human resources management because of its significance and the potential to have a profound impact on the employees’ performance. Therefore, motivation and the ways of its promotion have been a widely researched topic of industrial and organizational psychology for a long time, but researchers still disagree on the best practices that could be universally used by all managers. Still, it is an undeniable fact that “If you want people to perform better, you reward them, right? Bonuses, commissions, their own reality show. Incentivize them” (Cerasoli et al., 2014, p. 1). Hence, it is traditionally assumed that motivation can be fostered and promoted.
The key reason for the management to promote motivation is to improve performance by means of offering incentives to its employees. Hence, motivation is tightly related to these two notions that should be understood in order to be able to motivate employees. Performance can be defined as a synonym to “behavior… it is something that people actually do and can be observed” (Cerasoli et al., 2014, p. 2). In fact, motivation is a topical issue in the industrial and organizational psychology because of its direct and indirect correlations with performance and its ability to improve the latter to a certain extent. Employees can be motivated to improve their performance with the help of various incentives, which are “plans that have predetermined criteria and standards, as well as understood policies for determining and allocation rewards” (Cerasoli et al., 2014, p. 2). These incentives, including both monetary and non-monetary ones, constitute the essence of extrinsic motivation practices discussed below.
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Nowadays, the management mainly relies on extrinsic motivation to motivate employees to improve their performance. Thus, extrinsic motivation comes not from within an individual, but from extrinsic incentives and the expectation to receive these external rewards. Individuals are said to be extrinsically motivated “when they engage in the work in order to obtain some goal that is apart from the work itself” (Cho & Perry, 2011, p. 3). Besides, extrinsically motivated performance is ruled by the “prospect of instrumental gain and loss (e.g. incentives)” (Cerasoli et al., 2014, p. 1). These extrinsic incentives are instrumental in that they allow obtaining some other desired things, for instance, food, housing, or symbols of prestige. Most organizations rely on the promotion of extrinsic motivation by means of offering monetary and non-monetary incentives for desirable behaviors demonstrated by employees.
Use of Monetary Rewards to Motivate Employees in an Organization
It is a universally acknowledged fact that monetary rewards can be an extremely powerful incentive motivating employees to improve their performance, which can be then translated into positive consequences for the organization. Monetary rewards stand for cash rewards and bonuses. The use of such incentives is justified, as shown by many empirical studies aimed at finding out whether monetary rewards are as effective as they are claim to be. One of the studies has revealed that employees with the same responsibilities and duties perform differently depending on whether or not they are motivated through monetary rewards for exceeding performance-related expectations (Aguinis et al., 2013, p. 242). Moreover, monetary rewards are generally used by organizations of all types all over the world. Nevertheless, monetary rewards do not always lead to the desirable outcome expected by the management. Some of the most common reasons of why monetary rewards fail to motivate employees are related to failures in the implementation of the respective incentive programs. Besides, not all employees can be motivated with the help of financial incentives. Sometimes, monetary rewards and the expectation of receiving them to reach some peculiar indicators may make employees misrepresent their financial and other activities, which has a detrimental outcome for the organization. Some employees experience “sharply increased fear of failure” when they are promised generous monetary rewards for exemplary performance (Aguinis et al., 2013, p. 242). Another reason why monetary reward programs can fail lies in the fact that employees start feeling entitled to receiving additional monetary payouts for their performance besides their salaries. In case they do not receive these additional rewards, they develop negative emotions and attitudes, which in turn have a negative impact on their performance.
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Irrespective of the potential failures relating to monetary rewards, they can be a truly effective and efficient means when properly implemented in the organization. Some wide-spread examples of monetary rewards include short-term monetary incentives, long-term monetary incentives, cost-of-living adjustments, base pay, end-of-the-year bonuses, and other payments paid out in addition to the salary (Aguinis et al., 2013, p. 242). The management should consider implementing some of these monetary rewards in order to motivate employees. According to the findings of various empirical researches, individual monetary incentives can enhance employees’ productivity by about 30% (Aguinis et al., 2013, p. 242). This finding complies with a statement put forward by a senior manager that “people do what you pay them to do, not what you ask them to do” (Aguinis et al., 2013, p. 242). Therefore, a lot of studies support an idea that monetary rewards are a powerful motivating factor. However, this conclusion is not always recognized by human resources departments that carry out various surveys among their employees. According to some such surveys, money is not the most influential factor cited by employees in terms of key drivers of their performance, which is somewhat puzzling, taking into account the findings of the above mentioned empirical researches. Nevertheless, monetary incentives are essential for motivating employees to accept job offers, remain in the organization, and perform their duties at an excellent level. The matter is that monetary incentives allow satisfying both basic and high-level needs of both employees and their families. Moreover, they allow buying symbols of prestige, as well as serve as a symbol of prestige among colleagues. Monetary rewards are also considered to show the management’s recognition of the employee’s achievements and efforts, which contributes to the employee’s motivation.
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At the same time, the management should remember that monetary rewards as the preferred motivation means cannot solve all issues and problems relating to performance in the organization. Hence, they cannot improve the quality of work unless they are spent on some additional training. In case there are problems with the organization’s performance, monetary rewards alone cannot motivate employees to solve these problems, as the underlying causes may be completely unrelated to motivation or lack thereof among employees. Besides, the management should not forget that “monetary rewards do not have a built-in mechanism that prevents such rewards from unintentionally encouraging unethical and counterproductive employee behaviors” (Aguinis et al., 2013, p. 243). Overall, the use of monetary rewards to motivate employees in the organization can be effective and efficient, yet it can also be connected with failures if such incentive programs have significant shortcomings or if the organization experiences problems that are not related to the lack of motivation among employees.
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Use of Non-Monetary Rewards to Motivate Employees in an Organization
Extrinsic motivation can be fostered through non-monetary or non-cash rewards granted to employees for their achievements. Non-monetary rewards used by the management include promotions, positive feedback, bonuses, awards, praise, social recognition, presents, and additional training. One of the most widely used non-monetary rewards is “social recognition”, under which the management employs various non-monetary means to recognize their employees’ achievements and promote desired behaviors (Long & Shields, 2010, p. 1146). Grounded upon the premises of behavior modification theories and needs-based theories of motivation, social recognition programs have proven to be a cost-effective and influential motivational tool that can improve employees’ performance. Nowadays, a lot of human resources specialists believe that non-monetary rewards can be more powerful than monetary rewards in terms of motivating employees in an organization. Hence, they develop various non-monetary incentive programs, which reward employees with praise, awards, gifts of different value, training opportunities, promotions, and other non-cash rewards. Such non-cash rewards perform symbolic and informational purposes without the instrumental value component typical for monetary rewards (Long & Shields, 2010). They are also said to improve the overall organization’s performance because of the cost efficiency and the absence of significant expenses connected to rewarding employees, while ensuring that their achievements are recognized. Nevertheless, there is no sufficient evidence to support the assumption that non-cash recognition awards can serve as a substitute for cash rewards. Besides, employees can view a complete lack of monetary rewards in the organization as a sign that the management does not value their efforts and tries to keep the profit to themselves by withholding cash rewards for outstanding performance. Therefore, it seems to be reasonable to combine monetary and non-monetary rewards in the organization, as this way the employees will be maximally motivated to improve their performance.
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Nowadays, there is a wide-spread assumption that intrinsic motivation is more powerful than extrinsic motivation when it comes to motivating employees in an organization. Hence, current human resources specialists advise the management to devise programs within their respective companies that would promote intrinsic motivation in order to ensure that employees are properly motivated to improve their performance and stay in the organization. In order to do that, the management should realize that this type of motivation comes from within an individual who is intrinsically motivated “when they seek enjoyment, interest, satisfaction of curiosity, self-expression, or personal challenge in the work” (Cho & Perry, 2011, p. 3). Intrinsically motivated behaviors are exercised for their own sake without pursuing any other outcome, which is why they are supposed to be powerful instruments of motivation for employees under the self-determination theory (Cerasoli et al., 2014). Besides, the intrinsic nature of this peculiar type of motivation means that the management does not have to spend a lot on motivating employees. Job enrichment is considered to be an effective intrinsically motivating way that can be used by the management in the organization. Under such job enrichment programs, a source of intrinsic motivation for employees has three components related to the satisfaction of three psychological needs: competence, autonomy, and relatedness. Therefore, in order to promote intrinsic motivation, these three needs have to be satisfied, for instance, by increasing skill variety, task identity, task significance, autonomy, and feedback (Ganta, 2014). Nevertheless, it may be extremely difficult for the management to develop detailed programs that would enhance the intrinsic motivation of employees, which is why it is advisable to combine motivational programs that are aimed at promoting intrinsic and extrinsic motivation at the same time. Moreover, the management can combine monetary and non-monetary rewards with elements of job enrichment so that employees are simultaneously motivated intrinsically and extrinsically.
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Motivation is a significant component of the organization’s performance that can essentially improve it by encouraging employees to excel at their duties and exceed their management’s expectations. Even though it has been widely researched for many years, there is no single incentive program that would surely promote motivation among all employees in all organizations. The reason is that each organization is unique and needs to develop its own incentives and rewards that would be the best fit for the type of organization and its employees. Generally, the management can use monetary and non-monetary rewards to extrinsically motivate employees, as well as develop some job enrichment programs to ensure employees’ intrinsic motivation. However, the most reasonable solution seems to be combining various rewards and incentives to promote motivation among all employees within an organization. Besides, such combination is likely to be the most effective motivational mechanism in the organization, as there is no sufficient evidence to claim that one of the two types of motivation is more effective and efficient than the other one.
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