Importance Of Employees Within An Organization Commerce Essay
The employees within an organization are a key resource. They account for a significant role in achieving the objectives of the organization. The performance and achievement of employees, to a large extent, has a significant impact on the growth and efficiency within an organization. In order to ensure the employees to work consistently with the accomplishment of organizational goals, motivation then is the key in influencing the behavior and morale of employees.
Given the importance of employees’ motivation has increased considerably; this article aims to explore the motivation theories that have been proposed over the years. Specifically, two motivation theories are analyzed based on their validity. These two motivation theories are Equity Theory and Maslow’s Hierarchy of Needs Theory. In addition, five motivation strategies that are successful in motivating employees are also studied, in order to verify the importance of employees’ motivation within an organization.
The next section offers the explanation of how employee motivation affects the accomplishment of an organization and the role of motivation in retaining critical employees. The subsequent sections respectively, describe the methodology and motivation theories. In addition to exploring the motivation theories, the validity of motivation theories is also studied. The final segment of the paper provides the strategies that are effectively motivating employees, followed by a conclusion.
2.0 Role of Motivation
The term motivation is derived from a Latin word, movere, meaning to move (Kretiner, 1998; cited by Ramlall, 2004). According to Certo and Certo (2006, p.382), motivation is defined as ‘the inner state that causes an individual to behave in a way that ensures the accomplishment of some goal’. In today’s highly competitive business environment, motivating employees is considered as an important aspect of improving the efficiency of organizations. This is justified by a survey named SITE Foundation’s 2002 Motivation for Excellence Survey, which was conducted by SITE Foundation. According to this survey, ‘more than 80 percent of the surveyed 2,000 workers saying that their quality of work is significantly enhanced when motivation is high’ (Benitez and Casison, 2003). Besides that, organizations with motivated workforce also tend to achieve increasing organizational performance, such as generating higher profits. As stated by McMaster (2002), Taco Bell Corporation, a Mexican-style quick service restaurant chain based in Irvine, California, achieves double the sales in its stores, owing to its inspired workforce.
Apart from the abovementioned functions, motivation also serves as a tool of organizations in retaining their human capital, in order to accomplish higher organizational growth. In accordance to Fitz-enz (1997; cited in Ramlall, 2004), he stated that ‘the average company loses approximately $1 million with every 10 managerial and professional employees leaving the organization’. Since critical employees are more willing to exert high level of effort towards organizational goals when their individual needs are being satisfied, many organizations are likely to motivate their workforce by fulfilling the latter’s needs, anticipating that these employees would continue to perform their employment in the organizations. This idea is strongly supported by the study conducted by Collins and Allen (2006). According to Collins and Allen (2006), adequate motivation practices have negative relationship with employee turnover rate, in which indicates that there is lower percentage of employees leaving the organization when motivation strategies are implemented to inspire organization members.
The previous studies reviewed above, therefore, lead to a conclusion that employees’ motivation plays a major role in reaching organizational objectives. The following section discusses the methodology in examining the motivation theories and their evaluation, and the effective corporate practices in motivating organizational members.
Secondary references are the core research approach for this paper. In studying the motivation theories and their effectiveness, several texts have been accessed in order to provide insight in the reliability of different motivation theories. On the other hand, research reports and journals have been reviewed to identify motivation strategies that are commonly practiced by various business organizations.
4.0 Motivation Theories
There are numerous motivation theories. Motivation theories can be classified into two major categories, which are process theories and content theories. Process theories of motivation are the justifications of motivation that highlight how employees are motivated. Besides that, these motivation theories also focus on the processes involved in motivation. There are four important process theories of motivation, which are needs-goal theory, Vroom expectancy theory, Equity theory and Porter-Lawler theory. (Certo and Certo, 2006, p. 382)
On the other hand, content theories of motivation provide explanation for the characteristics that a person possesses. The content theories also concentrate on the fundamental human needs and how these needs can be satisfied. Theories such as Maslow’s hierarchy of needs, Alderfer’s ERG theory, Argyris’s maturity-immaturity continuum and McClelland’s acquired needs theory have been developed to help in understanding the human needs. (Certo and Certo, 2006, p.382)
Owing to the space limitations, only one process theories of motivation and one content theories of motivation are examined in the following section. These two motivation theories, Equity Theory and Maslow’s Hierarchy of Needs Theory are also evaluated based on their effectiveness.
4.1.0 Process Theories of Motivation: Equity Theory
Equity Theory, which was developed by J. Stacy Adams, discovers that individuals desire equity in an employment situation. According to Ramlall (2004), he states that ‘equity theory recognizes that individuals are concerned not only with the amount of rewards they receive for their efforts, but also with the relationship of this amount to what others receive’. This means that individuals perceive the ratio of their inputs and outcomes, and the ratio of inputs and outcomes of others to make comparisons. The inputs that are considered in measuring the ratio of inputs and outcomes include effort on the job, task performance, skills, experience, educational background and competence. Whereas, outcomes include salary increment, fringe benefits, recognition, promotion etc.
In accordance to the theory, there are two types of inequities. One of the inequities is under-reward. This imbalance arises when it is perceived that an individual’s ratio of input and outcomes is less than the inputs-outcomes ratio of others. Another inequity is over-reward, which happens when one’s inputs-outcomes ratio is greater than the inputs-outcomes ratio of others. As stated by Ramlall (2004), when individuals notice an imbalance in their inputs-outcomes ratio relative to others, tension will be created within the individuals, and the amount of tension is proportional to the magnitude of the inequity. This tension will then act as a motivation force to inspire the individuals to ”strive for what they perceive as equity and fairness’ (Robbins, 1993, cited by Ramlall, 2004).
The consequences of individuals perceiving that they have been treated unfairly in comparisons with other co-workers, they will react in certain manners. (Champagne, 1989, cited by Ramlall, 2004). These manners include the individuals will decrease their work input if they are under-rewarded; if they are over-rewarded, they will increase their work input to match their outcomes. Besides that, individuals will try to change the compensation they receive for their effort by requesting an elevation. Other manner is to equalize the outcomes of co-workers and the ratio of an individual’s inputs-outcomes ratio relatively. Apart from the aforementioned conducts, the employees may decide to withdraw from the situation rather than change it, then quit that job and seek for other employment.
Thus, managers should have appropriate communication with subordinates as the occurrence of inequity can result in major difficulties. This is because inequalities can greatly influence the working atmosphere, which can lead to inefficiency within the organizations. Therefore, managers are advised to ensure equitable treatment for their subordinates at all times.
4.1.1 Evaluation of Equity Theory
For many years, empirical research has documented the reliability and the extensive use of Equity Theory in various types of organizations. In light of several research conducted to test the Equity Theory, it is acknowledged that Equity Theory has generated extensive research, with many significant evidences conclude that fairness considerations influence organizational members’ behaviors. According to the research done by Schultz et al. (2006), workers at an assembly line adjust their speed in working towards the perceived effort of their co-workers, to restore the balance in the input-outcome ratios, when comparing with their referent co-workers. This has clearly shown that an individual’s contribution in his or her work is correlated to the equity in their working places.
Another advantage of Equity Theory is that it recognizes the influence of social comparison processes on motivation. In general, individuals tend to compare themselves with other individuals in every aspect, so as in their employment situation. For instance, employees are concerned not only with the amount of rewards they receive for the inputs in their jobs, but also focus on the relationship of this amount with what their co-workers receive. This could be done by judging the relationship of their input and outcome, and the effort and rewards of others. When employees perceive injustice in treatment, it will motivate them to distort their inputs, in order to restore equity.
However, there is empirical criticism that has been directed towards Equity Theory. According to Anderson et al. (2002, p. 55), one of the greatest criticism of Equity Theory is that it is weak in predicting what course of action an individual will take to restore equity. For instance, when an employee perceives that he or she has been treated unfairly in comparisons with other co-workers, will it lead to a change in the employee choices of comparison standards, or will it lead that employee leaving the situation? This denotes the inability of Equity Theory in providing concrete predictions. Since there are limited concepts regarding the factors that influence the chosen method of equity re-establishment, thus, it demotes the efficiency and validity of Equity Theory.
Furthermore, the individual differences, such as ”the perceptions of inputs and outcomes, and perceptions of equality’ have been largely ignored by researchers (Anderson et al., 2002, p.54). This is mainly due to the difficulties in assessing the perceptions of individuals about the relationships of inputs and outcomes. Besides that, different individuals also have dissimilar levels of tolerance and reactions to inequality. For instance, when an employee has higher level of tolerance, he or she might have different perceptions of equality. As a result, it will lead that employee to take different course of action when comparing to referent co-workers. Seeing that these individual differences are likely to influence the reactions of an employee towards inequality, the failure in incorporating these differences into Equity Theory has caused the theory to be criticized that providing unsophisticated view of motivation.
Apart from that, the Equity Theory is also critiqued that it is unable to identify how employees are likely ”to choose their referent other for evaluating their work situation’ in their workplace (Anderson et al., 2002, p.55). This is because different employees might have different choice of referent: some might choose co-workers with comparable credentials to be their comparison person; some might choose peers with similar opinion on the relationship between inputs and outcomes to be their referent. Besides that, the process used by an individual to decide whom to compare himself with is also failed to examine. As a result, the failure in identifying the way an employee chooses his or her referent has greatly diminish the accuracy of Equity Theory.
Another limitation of Equity theory is that it appears to assume an individual utilizes only one referent other when evaluating their work situation. This is unrealistic as individuals are likely to choose a few referents when considering the equity. Besides that, individuals also likely to ”make use of the information of multiple referents’ when making equity judgment (Anderson et al., 2002, p.55). This is due to the nature of humankinds, who have a drive to evaluate themselves by examining their own attitudes, opinions and abilities in comparison to others. Thus, since multiple referents others are often utilized when evaluating equity, the Equity Theory which concerns with only a single referent is critiqued to be unrealistic or not corresponding to the social comparison theory.
4.2.0 Content Theories of Motivation: Maslow’s Hierarchy of Needs Theory
Abraham Maslow, who developed Maslow’s hierarchy of needs, is one of the most influential writers in the area of motivation. In this theory, he has proposed that every individual possesses five basic needs and these needs are organized in a hierarchy. At the lowest end, there are physiological needs, followed by security needs, social needs and esteem needs. And at the highest end, self-actualization needs are placed. Maslow also stated that each lower need must be met before moving to the next higher level (Sharma, 2004, p.148). The hierarchy of needs is shown as Appendix 1.
Physiological needs relate to the essential needs of human beings, which include the needs for food, clothing and shelter. In the book titled ‘Administrative Thinkers’, it states that an individual will only aim at satisfying his or her security needs when his or her physiological needs are satisfied (Sharma, 2004, p.148).
Whereas security needs, which is also known as safety needs, relate to the security from outside danger, security from fear, security of protection and security from natural disasters etc. (Sharma, 2004, p.149). According to Certo and Certo (2006, p.386), ‘management helps employees satisfy their physiological and security needs by providing the latter adequate salary and wages to purchase things such as housing and food’.
Another need that arises after meeting the security needs is social needs. Social needs relate to ‘the desire for love, companionship and friendship’, which do reveal an individual’s desires to be recognized by others (Certo and Certo, 2006, p.386). After a person has satisfied his or her social needs, he or she will then intend to fulfill their esteem needs.
Esteem needs refer to the wish of gaining respect from others. Maslow has divided esteem needs into two categories, which are achievement needs and recognition needs. The achievement needs refer to self-respect which is achieved without depending on others, whereas the recognition needs relate to the respects gained from others. (Sharma, 2004, p.149-150)
Self-actualization needs take place when all the above mentioned needs have been satisfied. Self-actualization needs refer to an individual’s desire to accomplish higher achievement in his or her life. Maslow has treated these needs as the most significant ones in the hierarchy of needs.
Maslow’s hierarchy is probably the most widely held conceptualization of human needs thus far as it provides useful insights to people, especially to organization leaders when motivating their subordinates. Therefore, it continues to be positively discussed and evaluated in management literature.
4.2.1 Evaluation of Maslow’s Hierarchy of Needs
Past review of motivation writings has extensively evaluated the validity of Maslow’s Hierarchy of Needs Theory. And these evaluations do carry positive assessment. Maslow’s hierarchy of needs is weighed as a widely accepted theory. According to Sharma (2004, p.160), Maslow’s theory has had significant impact on the modern motivation approach, as it leads to further researches in the area of motivation. With this, Maslow’s theory not only provided a basis of McGregor’s revolutionary Theory Y, but also the Two-factor Motivation-hygienic Theory of Frederick Herzberg. Therefore, in the McGregor’s statement, he stated that Maslow’s approach is ‘the most fruitful’ approach (Banerjee, 1995, p.76).
Besides that, Maslow’s theory is also regarded as a guide to management in the process of employee motivation (Gupta, 2006, p.450). Since motivation does help in achieving higher growth, employee motivation becomes increasingly significant in every organization. With this, Maslow’s identification of the five basic needs of individuals is widely acknowledged as assistance to management in distinguishing the needs of subordinates. By examining the unsatisfied needs of their subordinates, the management could identify suitable types of motivational schemes, such as providing rewards and work opportunities with the intention to motivate them to work towards the organizational goals.
Furthermore, the hierarchical arrangement of needs is evaluated as logical and comprehensive (Gupta, 2006, p.450). This is because it is common that individuals will aim at meeting their basic needs before other needs, such as security needs, social needs, esteem needs and self-actualization needs arise. And it is rational that the self-actualization needs of an individual will only become significant in his or her careers when the lower needs have been satisfied. Moreover, the classification of human needs is regarded as comprehensive because ‘it possibly covers all the needs of human beings’ and these needs are arranged in a hierarchy of importance, which starting with the basic needs and moves up to self-actualization needs.
However, Maslow’s Hierarchy of Needs theory also has some major limitations. The Maslow’s theory is questioned that whether human needs can be neatly arranged in such a hierarchy. Thus, there is argument saying that the hierarchical classification of human needs is not universally applicable to all individuals. This is because each individual might have different orders of needs (Tripathi and Reddy, 2005, p.249). For instance, for singers, painters and musicians, their self-actualization needs might be the most important motivation force among the other needs, such as security needs and esteem needs. Thus, the pre-stated statement is the explanation for the example of creative people living in poverty, as they treat self-actualization needs as their fundamental needs.
Besides that, sometimes an individual may want to satisfy all his or her needs simultaneously. For instance, an individual might be looking for companionship and require the satisfaction derived from the basic needs at the same time. However, Maslow’s theory, which states that the needs at a particular level will arise only when the previous needs have been met, does not support ‘the simultaneous emergence of two or more needs’ (Gupta, 2006, p.451). Therefore, there are several arguments saying that Maslow’s approach is not valid to most of the individuals.
Apart from that, it is claimed that Maslow’s classification of human needs contains overlapping elements. This occurs when a particular need of an individual corresponds to another need in the hierarchy (Gupta, 2006, p.451). For instance, at the highest level of esteem needs of an individual might match with his or her self- actualization needs. This simply indicates that an individual would like to achieve his or her highest potential, owing to his or her desire to gain recognition from other people. Besides that, to some extent, the desire for love and companionship might coincide with the needs of gaining self-respect and respect from the others. This is because humans need to feel a sense of belonging and acceptance, whether it comes from organizations or family and friends. With the support from the loved ones, then only they will feel accepted and focus on their esteem needs.
Other than the pre-stated limitations, it is argued that Maslow’s theory is not the most comprehensive theory. This is mainly due to the exclusion of several important human needs in the hierarchy of needs. These omitting human needs are need for mental peace, need for happiness in life, and personal needs such as needs for patriotism and needs for religion (Gupta, 2006, p.450). Seeing that there are several needs being neglected, therefore, many theorists do not agree on the view which states that Maslow’s theory is a comprehensive theory.
5.0 Strategies for Motivating Organizational Members
Since employee motivation is a key strategy for retaining valuable human capital and is a method for management to improve its overall efficiency and performance towards achieving higher growth and profitability, the importance of motivation level and morale among organizational members has increased considerably over the past few decades. In order to create a working environment that fosters employee motivation, management has been exploring the factors that motivate employees to work through their attitudes. And these employee attitude surveys have been frequently used in different organizations to assess employee morale.
In the past few decades, several managerial motivation strategies have been widely implemented, so as to motivate the employees to enhance their performance. One of the most commonly employed strategies is extrinsic rewards. Extrinsic rewards in the workplace include various forms of compensation, such as base pay incentives, bonuses, fringe benefits, and other cash and cash equivalent. According to a study conducted by Takahashi (2006), it indicated that the relative wage level and wage increments do significantly encourage the employees to perform their tasks in a more efficient manner. One of the companies which have widely used wage incentives as a form of motivation is the Toyota Motors Group in Japan. The survey data collected from the workforce in Toyota Motors Group reveals that wage incentive is a great motivator to its white-collar and blue-collar workers (Takahashi, 2006). This has verified that monetary incentive does have a positive impact on employees’ work motivation. Besides that, some companies even implement another type of extrinsic rewards, Employee Stock Ownership Plan (ESOPs) to motivate their employees. A number of organizations offer their shares to employees with the aim of bringing the interests of employees closer to the interests of shareholders, which eventually will lead the employees to pursue the activities that benefit the organizations. In the research done by Gamble et al. (2002), it showed that the ESOPs did motivate the pilots in three United States-based airlines to be highly involved in their jobs. When these pilots have high job involvement, they will constantly provide high quality of services to their passengers and assist their air companies to achieve greater effectiveness.
Another strategy that is successful in motivating organizational members is job design. According to Grag and Rastogi (2006), it is essential to design jobs, so that ”motivation can be enhanced and satisfaction and performance of employees can be improved, so that organizations can effectively compete in today’s highly challenging business environment’. Some well-known companies such as 3M, Xerox and Motorola are among those who have implemented job design strategy motivating their workforce. There are a few approaches in implementing job design within an organization. The earlier approach to job design is job enrichment. However, today’s human resource management pays attention not only to job enrichment approach, but also to quality of work life (QWL) and job characteristics approach to job design. Nevertheless, a number of researchers indicate that the expansion of knowledge and skills that are experienced through job enrichment program still has a dominant influence on employees’ motivation. Job enrichment is a process of incorporating ”greater variety of work contents that require higher level of knowledge and skills, giving employees the responsibility in terms of planning and controlling their performance, and providing the opportunities for personal growth and meaningful work experience’ (Grag and Rastogi, 2006). In accordance with Certo and Certo (2006, pg 393), they state that companies such as Volvo and Texas Instruments had remarkable success in motivating their employees through their job enrichment program. This indicates the effectiveness of job enrichment approach in affecting employees’ motivation.
Apart from job design strategy, empowerment is also a widely implemented motivation strategy in different organizations. Job empowerment, which allows employees to self-managed their jobs and provides them a platform to be participative in decision making, is regarded as one of the influential tool for human resource management in encouraging employees’ motivation and involvement (Karia and Ahmad, 2000; cited by Ooi et al., 2007). Based on the research data collected from the employees in six major semiconductor contract manufacturing organizations in Malaysia, it reveals that job empowerment is positively associated with employees’ job involvement (Ooi et al., 2007). It is believed that when employees are highly involved in their jobs, they will maximize their contribution towards their organizations. This clearly explains that job empowerment does play a significant role in boosting employees’ morale to perform their responsibilities more efficiently.
Promotion incentive is one of the motivation strategies broadly practiced by various organizations. The career advancement incentive is deemed to be a powerful motivator as this practice is valued by employees and it does increase the level of organizational commitment among the employees (Takahashi, 2006). As a consequence, the increase in loyalty among the employees would affect the employees to work industriously to achieve the organizational objectives. In addition, a survey conducted by Ooi et al. (2007) also provides supporting evidence for the view of Takahashi, which discovered that career advancement incentive leads to an increase in employees’ motivation. According to the survey (Ooi et al., 2007) carried out within six major semiconductor contract manufacturing organizations in Malaysia, it reports that promotion incentive is positively associated with employees’ job involvement, in which could improve workers’ motivation. This has clearly shown that the practice of promotion incentive exerts a strong influence in employees’ morale and motivation.
In addition, recognition program is also implemented by the organizations as a tool in motivating their workforce. Usually recognition is a non-financial award given to employees selectively, with the aim of acknowledging effort and commitment, and celebrating the success of organizational members. Thus, recognition program is believed to have a positive influence on motivation and performance within an organization. According to Bartol and Martin (1998), Honeywell, which is a multinational conglomerate company that produces a variety of consumer products, engineering services and aerospace systems, has been working on boosting its employees’ motivation by offering a number of awards to those who attain high achievement. For instance, Honeywell has set up a Chairman’s Achievement Award for employees who have excellent achievement in support of company’s visions and strategies. And these company awards have not only helped in fostering motivation among employees, but also in rekindling its success. Therefore, recognition program is an effective method of improving employees’ motivation on the job.
From the examination of the previous research reports, journal contents and texts, it can be concluded that each motivation theory does have its advantages and limitations. Given the several limitations inherent in the Equity Theory and Maslow’s Hierarchy of Needs Theory, they appear to be less valid for the field of work motivation. Nonetheless, for Equity Theory, its concept of equality in organizations is very useful for future research in employees’ job behaviours. For Maslow’s theory, despite its limitations, the theory is still useful to assess to the needs of employees and identify motivational schemes that are suitable to employees. Thus, motivation theories are still effective for employee motivation up to certain extents.
Besides that, this paper also verifies that employee motivation is significantly vital to organization in achieving increasing performance. Given that motivated employees, who tend to have higher levels of enthusiasm and confidence, can consequently accomplish higher achievement, management should develop a thorough understanding of the motivation process. By doing so, the management will then be more capable in influencing the employees’ behavior and attitude to be more consistent with the attainment of organizational objectives.
Apart from that, there are various motivation strategies that allow management to implement for employee motivation. In order to ensure the practiced motivation strategies to be effective, management needs to look at the aspects of different strategies and only implement those which are better fit the organizational members, environment and the organizational goals. It, then, can effectively improving employees’ motivation and morale to work consistently with the organizational objectives and to attain higher achievement for their employers.