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Examining Motivational Strategies in Multinational Organisations

Paper Type: Free Essay Subject: Business
Wordcount: 5446 words Published: 1st Jan 2015

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Motivation is next to directing/leading. Managers can motivate their subordinates while guiding them. Motivating means encouraging people to take more initiative and interest in the work assigned. It is an art of getting things done willingly from others.

Motivation avoids clashes and non-cooperation and brings harmony, unity and co-operative outlook among employees. Managers have to work as motivators of their subordinates. For this, effective communication, proper appreciation of work done and positive encouragement are necessary and useful. Motivation is inspiring and encouraging people to work more and contribute for achieving the objectives of the company The creation of the desire and willingness to perform the job efficiently is known as motivation

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Motivation is a psychological and sociological concept as it relates to human behavior and human relations. It is the most fundamental and all pervasive concept of psychology. For motivation, sweet words are useful but are certainly not adequate. Motivation basically relates to human needs, desires and expectations. In other words, these factors suggest the measures which can be used for the motivation of employees.

In motivation, efforts should be made to satisfy the different needs of employees so that they will be satisfied, happy and away from tensions. This creates favorable environment because of which employees take more interest and initiative in the work and perform their jobs efficiently. Motivation is a technique of creating attraction for the job. It is encouraging employees for better performance in order to achieve the goals of an Organization. The process of motivation is a continuous one (circular one) and is beneficial to both – employer and employees. It is a key to improve work performance of employees.

The term ‘motive’ is derived from the Latin word ’emovere’ which means to move or to activate. Motivation is the act of making someone to act in the desired manner through positive encouragement. It is through motivation that employees can be induced to work more, to earn more and to give better results to the Organization.

2. Definitions of Motivation.

According to W. G. Scot, “Motivation means a process of stimulating people to action to accomplish the desired goals.”

According to Michael J. jucius, “Motivation is the act of stimulating someone or oneself to get a desired course of action, to push the right button to get a desired results.”

3. Features or Characteristics of Motivation.

Psychological Process: Motivation is a psychological process useful for encouraging employees to take more interest in the work assigned. It relates to human relations.

Initiative by Manager: The initiative for motivation is by the manager by offering guidance and also by other methods like appreciation of good work or offering incentives. Management has to adopt special measures for motivating employees. They include monetary as well as non-monetary.

Continuous activity: It is a continuous and circular process. Subordinates need motivation in a continuous manner as their needs and expectations change from time to time. A manager has to study the needs of workers and use the technique of motivation accordingly. The process of motivation must be made a regular and continuous one.

Goal-oriented and action-oriented: Motivation diverts human behavior towards certain goals. Attainment of organizational and individual goals depends on the motivational plans.

Broad concept: Motivation covers needs, human relations and satisfaction of employees. For employee motivation, monetary and other incentives need to be offered. Job satisfaction is one such need and is useful for their motivation.

Essence of management process: Motivation is an essential function of a manager. He has to motivate his subordinates for achieving organizational objectives. Motivated labour force is an asset of a business unit. Motivated employees bring prosperity to a business unit.

Beneficial to employees and management: Motivation offers benefits to employees and Organisation. It avoids crashes and encourages cooperative outlook among employees. Motivation leads to cordial labour-management relations. It provides more profit to management and better welfare to employees.

Varied measures available for motivation: For motivation, various monetary and non monetary incentives can be offered to employees by the management. Attractive wages, welfare facilities, job satisfaction, appreciation of good work, encouragement to self-development, job security and fair treatment are some measures of motivating employees.

Motivation is different from satisfaction: Motivation implies a drive towards a result while satisfaction involves result already experienced and achieved. ‘When desire is satisfied, employee is motivated’.

Related to a person in totality: An employee is motivated in totality and not in part. Employee’s basic needs are interrelated. Management must fulfill all the needs through monetary and non-monetary incentives.

4. Importance of Motivation.

Motivation occupies an important place and position in the whole management process. This technique can be used fruitfully for encouraging workers to make positive contribution for achieving organizational objectives. Motivation is necessary as human nature needs some sort of inducement, encouragement or incentive in order to get better performance. Motivation of employee’s offers may benefits to the Organisation and also to the employees. This suggests the importance of motivating employees. Motivation acts as a technique for improving the performance of employees working at different levels.

Motivation of employees is one function which every manager has to perform along with other managerial functions. A manager has to function as a friend and motivator of his subordinates. Motivation is useful in all aspects of life and even our family life. The same is the case with business. This dearly suggests that motivation is extremely important. It is an integral part of management process itself.

5. Advantages of Motivation.

(A) Advantages to Management or Organization:

Increase in the efficiency and productivity of employees. Motivation ensures a high level performance of employees.

Better co-operation from employees and cordial labour-management relations.

Reduction in the rate of labour absenteeism and turnover.

Reduction in the wastages and industrial accidents.

Improvement in the morale of employees.

Quick achievement of business/corporate objectives and favorable corporate image.

(B) Advantages to Employees or Workers:

Employees get various monetary and non-monetary facilities/benefits which provide better life and welfare to them.

Security of employment and other benefits due to cordial relations with the management.

Job attraction and job satisfaction.

Higher status and opportunities of participation in management.

Positive approach and outlook of employees towards company, management and superiors.

Reduction in the rate of labour turnover which is harmful to employees and management.

Better scope for improvement in knowledge and skills of employees.

6. Motivational Factors or Motivational Incentives.

(A) Monetary or Financial Incentives:

Monetary incentives are offered in terms of money. Such incentives provide more cash or purchasing power to employees. Monetary incentives are extremely attractive to employees (particularly those working at lower levels) as they get the benefit quickly and in concrete terms. At the higher levels of management, non-monetary incentives are more important than monetary incentives. Workers prefer monetary incentives as compared to non-monetary incentives. Managements also offer liberal monetary incentives to all categories of workers.

Monetary incentives may be further classified as following:-

Individual Monetary Incentives: The benefit of individual monetary incentive is available to concerned worker only. For example, F. W. Taylor suggested differential piece rate system which offers different wage rates to different workers as per their production efficiency. Different incentive wage plans are the examples of individual monetary incentives as the benefit is offered individually to every worker. Here, a worker is paid as per his efficiency, productivity or as per the production given by him. Efficient/sincere workers give more production and get higher reward in terms of wage payment.

Group Monetary Incentives: In the group monetary incentives, the monetary benefit is not given individually but to a group of workers or to all workers in the Organisation. Workers have to work jointly/collectively as a team in order to secure the benefits of group monetary incentives. Bonus payment, pension, P.F, production/productivity bonus, profit sharing, etc. are the examples of group monetary incentives. For the employer/management, group incentives are more important as they offer many benefits to the management.

(B) Non-monetary Incentives for Employee Motivation:

Job security and job enrichment: Job security is useful for the motivation of employees. Such security keeps the employee away from the tension of becoming unemployed. Job enrichment provides an opportunity for greater recognition and advancement. Job enrichment refers to redesign of jobs.

Fair treatment to employees: Employer should give attention to the needs, difficulties and grievances of employees. Small work groups and effective communication are useful for solving the problems of workers. Employees must be given decent treatment. They will be co-operative only when they are treated with sympathy and love, affection and dignity. Employees should also be given help in personal matters.

Recognition of good work: Recognition of good work at an appropriate time gives encouragement to employees to show better performance in future. As an appreciation of good work, prizes, rewards, promotions, etc. should be given.

Encouragement to self-development and career development: Employees should be given varied training facilities. Training facilitates self-development and also provides opportunities for career development. Every employee has a desire to grow, develop and rise higher. This desire should be exploited fully for motivating employees. For this, training as well as management development programmes should be introduced.

Delegation of authority: Due to delegation of authority, a subordinate employee feels that superior has faith in him and also in his ability to use authority in a proper manner. Employees get mental satisfaction when authority is given to them. They take interest and initiative in the work and try to prove that they are competent to work at the higher levels. Thus, delegation of authority becomes a motivating factor.

Congenial working conditions: It is a non financial incentive for motivation. Employees should be given various facilities and conveniences at the work place. The work environment should be pleasant and safe. This creates desire to work efficiently.

Helpful attitude of management: The helpful attitude of management towards its employees creates a sense of affinity for the Organisation. Fair treatment to workers creates better understanding among workers. Cordial industrial relations also motivate employees. Thus, enlightened and pro-employee attitude of management acts as a motivating factor.

Fair opportunity of promotion: Fair opportunity of promotion to all eligible workers is one more method useful for motivating employees. They take interest in the work as they feet that they will be rewarded in the form of promotions. Training facility should be provided to employees in order to make them eligible for promotion.

Labour participation in management: Labour participation in management is useful for the motivation of employees. Workers get higher status and better scope for expressing their views through such participation. Even the formation of quality circles or joint management councils is useful for motivating employees.

Designation and status: When an employee is provided with a better designation, it adds to his status. Employees are proud to reveal their attractive and high-sounding designations.

7. Theories of Motivation.

A. H. Maslow’s Need Hierarchy Theory.

Hertzberg’s Motivation Hygiene Theory (Two Factor Theory).

Douglas McGregor’s Theory ‘X’ and Theory ‘Y’.

McClelland’s Achievement Motivation Theory.

8. Elton Mayo’s Hawthorne Experiments 1927-1936.

The most famous of all human relations movement and research were Hawthorne Experiments. So named because they were carried on in Hawthorne plant of western Electric Company of Chicago in USA.

Dr. Elton Mayo led a team from Harward University which cooperated with western electric co. in the period 1927-1936 to carry out Hawthorne Experiments. They identified following details.

Recognized the importance of employee attitudes such as understanding voluntary co-operations and willing dedication in accomplishment of organizational goals.

Found that employee performance is very much influenced by his attitude towards his job, associates and management.

Proved that organizational firm can gain only when its employees are satisfied contented in their jobs.

Pointed out that any change to be should be made should be explained and its meaning should be clear to employees. The fact that change is logical is not enough because employees may not appreciate the logic.

Explored much of information on group behavior.

Thus have provided the basis for much of what we know about getting along with all, problem employees in particular.

Employee Motivation: Theory and practice

The job of a manager in the workplace is to get things done through employees. To do this the manager should be able to motivate employees. But that’s easier said than done! Motivation practice and theory are difficult subjects, touching on several disciplines.

In spite of enormous research, basic as well as applied, the subject of motivation is not clearly understood and more often than not poorly practiced. To understand motivation one must understand human nature itself. And there lies the problem!

Human nature can be very simple, yet very complex too. An understanding and appreciation of this is a prerequisite to effective employee motivation in the workplace and therefore effective management and leadership.

These articles on motivation theory and practice concentrate on various theories regarding human nature in general and motivation in particular. Included are articles on the practical aspects of motivation in the workplace and the research that has been undertaken in this field, notably by Douglas McGregor (theory y), Frederick Herzberg (two factor motivation hygiene theory,) Abraham Maslow (theory z, hierarchy of needs), Elton Mayo (Hawthorne Experiments) Chris Argyris Rensis Likert and David McClelland (achievement motivation.)

Why study and apply employee motivation principles?

Quite apart from the benefit and moral value of an altruistic approach to treating colleagues as human beings and respecting human dignity in all its forms, research and observations show that well motivated employees are more productive and creative. The inverse also holds true. The schematic below indicates the potential contribution the practical application of the principles this paper has on reducing work content in the organization.

Motivation is the key to performance improvement

There is an old saying you can take a horse to the water but you cannot force it to drink; it will drink only if it’s thirsty – so with people. They will do what they want to do or otherwise motivated to do. Whether it is to excel on the workshop floor or in the ‘ivory tower’ they must be motivated or driven to it, either by themselves or through external stimulus.

Are they born with the self-motivation or drive? Yes and no. If no, they can be motivated, for motivation is a skill which can and must be learnt. This is essential for any business to survive and succeed.

Performance is considered to be a function of ability and motivation, thus:

Job performance =f(ability)(motivation)

Ability in turn depends on education, experience and training and its improvement is a slow and long process. On the other hand motivation can be improved quickly. There are many options and an uninitiated manager may not even know where to start. As a guideline, there are broadly seven strategies for motivation.

Positive reinforcement / high expectations

Effective discipline and punishment

Treating people fairly

Satisfying employees needs

Setting work related goals

Restructuring jobs

Base rewards on job performance

These are the basic strategies, though the mix in the final ‘recipe’ will vary from workplace situation to situation. Essentially, there is a gap between an individuals actual state and some desired state and the manager tries to reduce this gap.

Motivation is, in effect, a means to reduce and manipulate this gap. It is inducing others in a specific way towards goals specifically stated by the motivator. Naturally, these goals as also the motivation system must conform to the corporate policy of the organization. The motivational system must be tailored to the situation and to the organization.

In one of the most elaborate studies on employee motivation, involving 31,000 men and 13,000 women, the Minneapolis Gas Company sought to determine what their potential employees desire most from a job. This study was carried out during a 20 year period from 1945 to 1965 and was quite revealing. The ratings for the various factors differed only slightly between men and women, but both groups considered security as the highest rated factor. The next three factors were;


type of work

company – proud to work for

Surprisingly, factors such as pay, benefits and working conditions were given a low rating by both groups. So after all, and contrary to common belief, money is not the prime motivator. (Though this should not be regarded as a signal to reward employees poorly or unfairly.)

Motivation theorists and their theories (1 of 2)

Although the process of management is as old as history, scientific management as we know it today is basically a twentieth century phenomenon. Also, as in some other fields, practice has been far ahead of theory.

This is still true in the field of management, contrary to the situation in some of the pure sciences. For instance, Albert Einstein, formulates a theory, which is later proved by decades of intensive research and experimentation. Not so in the field of management.

In fact this field has been so devoid of real fundamental work so far, that Herbert A. Simon is the first management theoretician to win the Nobel Prize for Economics in 1978. His contribution itself gives a clue to the difficulty, bordering on impossibility, of real fundamental work in this field concerned with people. In order to arrive at a correct decision, the manager must have all the information necessary relevant to the various factors and all the time in the world to analyze the same.

This is seldom, if ever, the case. Both the information available and the time at the managers disposal are limited, but he or she must make a decision. And the decision is, therefore, not the optimum one but a ‘satisficing’ one – in effect, a satisfactory compromise under the real conditions prevailing in the management ‘arena’.

Traditional theory ‘X’

This can best be ascribed to Sigmund Freud who was no lover of people, and was far from being optimistic. Theory X assumes that people are lazy; they hate work to the extent that they avoid it; they have no ambition, take no initiative and avoid taking any responsibility; all they want is security, and to get them to do any work, they must be rewarded, coerced, intimidated and punished. This is the so-called ‘stick and carrot’ philosophy of management. If this theory were valid, managers will have to constantly police their staff, whom they cannot trust and who will refuse to cooperate. In such an oppressive and frustrating atmosphere, both for the manager and the managed, there is no possibility of any achievement or any creative work. But fortunately, as we know, this is not the case.

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Theory ‘Y’ – Douglas McGregor

This is in sharp contrast to theory ‘X’. McGregor believed that people want to learn and that work is their natural activity to the extent that they develop self-discipline and self-development. They see their reward not so much in cash payments as in the freedom to do difficult and challenging work by themselves. The managers job is to ‘dovetail’ the human wish for self-development into the organizations need for maximum productive efficiency. The basic objectives of both are therefore met and with imagination and sincerity, the enormous potential can be tapped.

Does it sound too good to be true? It could be construed, by some, that Theory ‘Y’ management is soft and slack. This is not true and the proof is in the ‘pudding’, for it has already proved its worth in the USA and elsewhere. For best results, the persons must be carefully selected to form a homogeneous group. A good leader of such a group may conveniently ‘absent’ from group meetings so they can discuss the matters freely and help select and ‘groom’ a new leader. The leader does no longer hanker after power, lets people develop freely, and may even (it is hoped) enjoy watching the development and actualization of people, as if, by themselves. Everyone, and most of all the organization, gains as a result.

Theory ‘Z’ – Abraham Maslow

This is a refreshing change from the theory X of Freud, by a fellow psychologist, Abraham Maslow. Maslow totally rejects the dark and dingy Freudian basement and takes us out into the fresh, open, sunny and cheerful atmosphere. He is the main founder of the humanistic school or the third force which holds that all the good qualities are inherent in people, at least, at birth, although later they are gradually lost.

Maslow’s central theme revolves around the meaning and significance of human work and seems to epitomize Voltaire’s observation in Candide, ‘work banishes the three great evils -boredom, vice and poverty’. The great sage Yajnavalkya explains in the Brihadaranyaka Upanishad that by good works a man becomes holy, by evil works evil. A mans personality is the sum total of his works and that only his works survive a man at death. This is perhaps the essence of Maslow’s hierarchy of needs theory, as it is more commonly know.

Maslow’s major works include the standard textbook (in collaboration with Mittlemann), Principles of Abnormal Psychology (1941), a seminal paper, ‘A Theory of Human Motivation’ (1943) and the book, Eupsychian Management (pronounced yew-sigh-keyan) published in 1965. Maslow’s theory of human motivation is, in fact, the basis of McGregor’s theory ‘Y’ briefly described above. The basic human needs, according to Maslow, are:

physiological needs (Lowest)

safety needs;

love needs;

esteem needs; and

self-actualization needs (Highest)

Mans behavior is seen as dominated by his unsatisfied needs and he is a ‘perpetually wanting animal’, for when one need is satisfied he aspires for the next higher one. This is, therefore, seen as an ongoing activity, in which the man is totally absorbed in order to attain perfection through self-development.

The highest state of self-actualization is characterized by integrity, responsibility, magnanimity, simplicity and naturalness. Self-actualizers focus on problems external to themselves. His prescription for human salvation is simple, but not easy: ‘Hard work and total commitment to doing well the job that fate or personal destiny calls you to do, or any important job that “calls for” doing’.

Maslow has had his share of critics, but he has been able to achieve a refreshing synthesis of divergent and influential philosophies of:

Marx – economic and physical needs;

Freud – physical and love needs;

Adler – esteem needs;

Goldstein – self-actualization.

Frederick Herzberg – Hygiene / Motivation Theory

This is based on analysis of the interviews of 200 engineers and accountants in the Pittsburgh area in the USA. According to this theory, people work first and foremost in their own self-enlightened interest, for they are truly happy and mentally healthy through work accomplishment. Peoples needs are of two types:

Animal Needs (hygiene factors)


Interpersonal relations

Working conditions


Human Needs (motivators)





Unsatisfactory hygiene factors can act as de-motivators, but if satisfactory, their motivational effect is limited. The psychology of motivation is quite complex and Herzberg has exploded several myths about motivators such as:

shorter working week;

increasing wages;

fringe benefits;

sensitivity / human relations training;


As typical examples, saying ‘please’ to shop-floor workers does not motivate them to work hard, and telling them about the performance of the company may even antagonize them more. Herzberg regards these also as hygiene factors, which, if satisfactory, satisfy animal needs but not human needs.

Chris Argyris

According to Argyris, organization needs to be redesigned for a fuller utilization of the most precious resource, the workers, in particular their psychological energy. The pyramidal structure will be relegated to the background, and decisions will be taken by small groups rather than by a single boss. Satisfaction in work will be more valued than material rewards. Work should be restructured in order to enable individuals to develop to the fullest extent. At the same time work will become more meaningful and challenging through self-motivation.

Rensis Likert

Likert identified four different styles of management:





The participative system was found to be the most effective in that it satisfies the whole range of human needs. Major decisions are taken by groups themselves and this results in achieving high targets and excellent productivity. There is complete trust within the group and the sense of participation leads to a high degree of motivation.

Fred Luthans

Luthans advocates the so-called ‘contingency approach’ on the basis that certain practices work better than others for certain people and certain jobs. As an example, rigid, clearly defined jobs, authoritative leadership and tight controls lead in some cases to high productivity and satisfaction among workers. In some other cases just the opposite seems to work. It is necessary, therefore, to adapt the leadership style to the particular group of workers and the specific job in hand.

Victor Vroom

Vroom’s ‘expectancy theory’ is an extension of the ‘contingency approach’. The leadership style should be ‘tailored’ to the particular situation and to the particular group. In some cases it appears best for the boss to decide and in others the group arrives at a consensus. An individual should also be rewarded with what he or she perceives as important rather than what the manager perceives. For example, one individual may value a salary increase, whereas another may, instead, value promotion. This theory contributes an insight into the study of employee motivation by explaining how individual goals influence individual performance.

We have discussed above only a selection of the motivation theories and thoughts of the various proponents of the human behavior school of management. Not included here are, among others, the thoughts of:

Seebohm Rowntree – labor participation in management;

Elton Mayo – the Hawthorne Experiments;

Kurt Lewin – group dynamics; force field theory;

David McClelland – achievement motivation;

George Humans – the human group;

William Whyte – the organization man.

What does it all add up to? Back to ‘square one’? Yes, indeed, the overall picture is certainly confusing. This is not surprising, for the human nature and human mind defy a clear-cut model, mathematical or otherwise.

In some of the theories and thoughts presented, however, one can see some ‘glimpses’ of the person and how, perhaps, he or she could be motivated. This is rewarding in itself. But, as noted earlier, practice has been ahead of theory in this field, so let us now move to the practical side of management of human behavior and motivation in the workplace.

Application of employee motivation theory to the workplace

Management literature is replete with actual case histories of what does and what does not motivate people. Presented here is a tentative initial broad selection of the various practices that have been tried in order to draw lessons for the future.

‘Stick’ or ‘carrot’ approach?

The traditional Victorian style of strict discipline and punishment has not only failed to deliver the goods, but it has also left a mood of discontent amongst the “working class”.

Punishment appears to have produced negative rather than positive results and has increased the hostility between ‘them’ (the management) and ‘us’ (the workers). In contrast to this, the ‘carrot’ approach, involving approval, praise and recognition of effort has markedly improved the work atmosphere, leading to more productive work places and giving workers greater job satisfaction.

Manager’s motivation ‘toolkit’

The manager’s main task is to develop a productive work place, with and through those he or she is in charge of. The manager should motivate his or her team, both individually and collectively so that a productive work place is maintained and developed and at the same time employees derive satisfaction from their jobs.

This may appear somewhat contradictory, but it seems to work. The main tools in the manager’s kitbag for motivating the team are:

approval, praise and recognition

trust, respect and high expectations

loyalty, given that it may be received

removing organizational barriers that stand in the way of individual and group performance (smooth business processes, systems, methods and resources – see outline team building program)

job enrichment

good communications

financial incentives

These are arranged in order of importance and it is interesting to note that cash is way down the ladder of motivators. Let’s look at a couple of examples taken from real life situations.

The Swedish shipbuilding company, Kockums, turned a 15 million dollar loss into a 100 million dollar profit in the course of ten years due entirely to a changed perception of the workforce brought about by better motivation. At Western Electric there was a dr


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