HRM practices on employee motivation

Employee motivation is a key factor in employee performance which adds up to performance of the whole firm. That is why today firms are putting special emphasis to seek people who are motivated. In a firm the HRM department performs the task of managing the most important assets – the people working there. Thus it is the duty of human resource department to address the motivational needs of employees. It is also important to understand here that motivation is not a task but an ongoing process. Organizations change all the time, as do people and to sustain a changing environment each employee needs to be motivated. Another important concern of organizations today is employee retention which can also be addressed through employee motivation.

Background Information

It can be deducted, that from earliest recorded times group of people have been organized to work together towards planned goals. Consider the management skills required to build the pyramids or the Great Wall of China. From these same sources we also come to find out that slavery was common and labor was forced. It was thought that work was something to be avoided as it got in the way of more ideal pursuits. Thus our earliest ancestors used force as tool to motivate. The division of labor was recognized by Plato. He wrote in The Republic, “A man whose work is confined to such limited task must necessarily excel at it”, but it was not until the advent of Islam that slavery was banished and earning a living through labor recognized as a prestigious form of occupation. Work was seen necessary and a service towards society. The motivation behind work in the age of religions was to sustain a living which can then be invested in worship and exploring new bounds. The start of industrial revolution brought with it what we now call “scientific management”. Scientific management focused on economic efficiency labor productivity and job specification resulting in specialized departments like that for human recourse. This era also saw the rise of “nationalism” which eventually gave way to “capitalism”. Capitalism today has radically changed the bases of motivation. Competition and unequal distribution of income have today led to motivation theories which base on personal needs.

Problem Development

Most of the research in the subject of motivation at the workplace has been carried out from a psychological and theoretical perspective. There are a dozen theories, which have developed over time, trying to address the underlying factors of motivation. All these theories consider the human nature and human needs as the base of evaluation. The Human Resource departments all over the world are using these theories to develop tools and practices to motivate their employees. This research is directed to quantitatively analyze whether these tools and practices have any significant effect on employee motivation. From a firm’s perspective this research can help to get a better understanding of practical steps while developing HR practices to boost employee motivation which can lead to greater employee performance.

Literature Review

The term motivation represents “those psychological processes that cause the arousal, direction and persistence of voluntary actions that are goal oriented” (Mitchell, 1982). Motivation as defined by Robbins (1993) is the “willingness to exert high levels of effort towards organizational goals, conditioned by effort’s ability to satisfy some individual need”. The effectiveness of even highly skilled employees will be limited if they are not motivated to perform, however, and HRM practices can affect employee motivation by encouraging them to work both harder and smarter. HRM departments use need theories that attempt to address those factors that increase motivation.

Maslow (1943) believed that there are at least five set of goals which are basic human needs; physiological needs, safety, belongingness, esteem and self-actualization. Equity theory recognizes that individuals are not only concerned with the absolute amount of benefits they receive for their efforts, but also with the relationship of this amount others receive (Robbins, 1993). Similarly expectancy theory holds that “people are motivated to behave in ways that produce desired combinations of expected outcomes” (Kreitner & Kinicki, 1999). Thus it states that tendency of a person to act in a certain way depends on certain perceived strength of expectation that the act will be followed by a given outcome. Literature refers to this concept as total compensation (Beard, Donnadieu and Priouret, 1986). In this classification, fixed pay is compensation where the amount and payment are guaranteed (base pay, seniority bonuses, 13th month, etc.). The second component is flexible pay, which includes variable pay and deferred income (gain-sharing, bonuses, incentives, goal-based pay, overtime, etc.).

Another theory states that “a person’s behavior originates from choices made by that person among alternative courses of action” (Vroom, 1946). An extension of this theory gives way to the idea that the task itself is key to employee motivation. A boring and monotonous job reduces motivation whereas a challenging job enhances motivation (Ramlall, 2004). Bailey (1993) noted that the contribution of even a highly skilled and motivated workforce will be limited if jobs are structured, or programmed, in such a way that employees, who presumably know their work better than anyone else, do not have the opportunity to use their skills and abilities to design new and better ways of performing their roles. Thus, HRM practices can also influence firm performance through provision of organizational structures that encourage participation among employees and allow them to improve how their jobs are performed. Cross-functional teams, job rotation, and quality circles are all examples of such structures.

It was pointed out by Locke (2010) that “Goal setting is recognized, explicitly or implicitly, by virtually every major theory of work motivation”. The idea stems from the fact that rational human action is goal directed. According to Higgins (1998) “Goals are hopes and aspirations. The strategic inclination is to make progress by approaching matches to the desired end state”. Thus HRM departments can enhance motivation by aligning personal and organizational goals.

Related Definitions

Employee Motivation

Employee motivation is the level of energy, commitment, and creativity that a company’s workers apply to their jobs.

Organization culture (operational definition)

An organizational culture is defined as the beliefs and values of an organization. From an HR’s perspective organization culture includes all those activities which provide a platform for employees to interact with each other in a friendly environment.

Career planning

Career planning can be described as “the process by which employees obtain knowledge about themselves (their values, personality, interest, abilities, etc) and info about the working environment and then making an effort to achieve a proper match” and develop activities that will achieve them.

Training

Training may be defined as planned programme designed to improve performance and to bring about measurable changes in knowledge, skills, attitude and social behavior of employees for doing a particular job.

Appraisal

Performance appraisal may be defined as a formal and systematic process by means of which the job relevant strengths and weakness of employees are identified, observed, measured and developed.

Compensation Package

Sum of direct benefits (such as salary, allowances, bonus, commission) and indirect benefits (such as insurance, pension plans, vacations) that an employee receives from an employer.

Job design

Work arrangement (or rearrangement) aimed at reducing or overcoming job dissatisfaction and employee alienation arising from repetitive and mechanistic tasks.

Growth (operational definition)

If an employee gives certain level of measureable performance it is the role of the HR in consultancy with their managers to replicate this performance in terms of promotions.

Feedback (operational definition)

Every organization has certain defined parameters to measure employee’s performance (commonly known as key performance indicators or KPI’s). It is the role of HR to give timely feedback to translate their performance in monetary or non-monetary benefits.

Goals(operational definition)

Goals are hopes and aspirations or long-term attainable objectives towards which employee performance is geared.

Entitlements (operational definition)

They are certain benefits and facilities provided to employees by the HR as per organization’s rules and regulations.

Problem Definition

To study the impact of; organization structure, career planning, training, appraisal, compensation package, job design, growth, feedback, job security and entitlements on employee motivation.

Statement of study objectives

H0: Organization culture has no significant impact on employee motivation.

H1: Organization culture has significant impact on employee motivation.

H0: Career planning has no significant impact on employee motivation.

H1: Career planning has significant impact on employee motivation.

H0: Training has no significant impact on employee motivation.

H1: Training has significant impact on employee motivation.

H0: Appraisal has no significant impact on employee motivation.

H1: Appraisal has significant impact on employee motivation.

H0: Compensation package has no significant impact on employee motivation.

H1: Compensation package has significant impact on employee motivation.

H0: Job design has no significant impact on employee motivation.

H1: Job design has significant impact on employee motivation.

H0: Growth has no significant impact on employee motivation.

H1: Growth has significant impact on employee motivation.

H0: Feedback has no significant impact on employee motivation.

H1: Feedback has significant impact on employee motivation.

H0: Job security has no significant impact on employee motivation.

H1: Job security has significant impact on employee motivation.

H0: Entitlements has no significant impact on employee motivation.

H1: Entitlements has significant impact on employee motivation.

Theoretical Framework

Organization culture

[Locke, 2010]5

Social gatherings

Departmental Conferences

Compensation package

[Igalens&Roussel 1999]4

Vacations

Pension plans

Stock ownership

Job design

[Huselid, 2010]4

Task design

Career planning

[Ramlall, 2004]7

Career path

Employee Motivation

[Gardner, 2001]2

Absenteeism

Employee turnover

Training

[Huselid, 2010]3

Training programs

Internal training

External training

Appraisal

[Huselid, 2010]3

Performance indicators

Entitlements

Assured benefits

facilities

Goals

[Locke, 2010]5

Measureable goals

Feedback

[Gardner, 2001]2

KPI’s

Meetings

Growth

[Gardner, 2001]2

Promotion

[

Variable Reference List

Colquitt-Jason and LePine-Jeffrey (2000). Toward an Integrative Theory of Training Motivation: A Meta-Analytic Path Analysis of 20 Years of Research. Journal of Applied Psychology, Vol. 85, No. 5, 678-707

Gardner-Timothy M., Moynihan-Lisa M., Park-Hyeon Jeong and Wright-Patrick M. “Beginning to Unlock the Black Box in the HR Firm Performance Relationship: The Impact of HR Practices on Employee Attitudes and Employee Outcomes” (2001). CAHRS Working Paper Series. Paper 75.

Huselid-Mark (2010). The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance. The Academy of Management Journal, Vol. 38, No. 3 (Jun., 1995), pp. 635-672

Igalens-Jacques & Roussel-patrice (1999). A study of the relationships between compensation package, work motivation and job satisfaction. Journal of Organizational Behavior J. Organiz. Behav. 20, 1003-1025

Locke-Edwin (2010). The Ubiquity of the Technique of Goal Setting in Theories of and Approaches to Employee Motivation. The Academy of Management Review, Vol. 3, No. 3 (Jul., 1978), pp. 594-601

Meyer-John & Becker-Thomas (2004). Employee Commitment and Motivation: A Conceptual Analysis and Integrative Model. Journal of Applied , Vol. 89, No. 6, 991-1007

Ramlall-Sunil (2004). A review of Employee Motivation Theories and their Implications for Employee Retention within Organizations. Journal of American Academy of Business, Cambridge; Sep 2004; 5, 1/2; ABI/INFORM Global pg. 52

Theoretical Justification of Variables

All the variables which are identified for this study qualify two important assumptions. First of all, these are established HRM practices and secondly these practices are directed towards increasing employee motivation. These variables increase motivation either directly by addressing to the personal needs of employees (Compensation package, appraisal, entitlements, growth, feedback, career planning and goal-setting) or indirectly by making the job enjoyable (organizational culture and job design).

Elements of Research Design

Type of research: Applied

Study setting: Natural

Nature of data: Cross sectional (Primary Data)

Reference Period: 2010

The population for the study is Lahore City. The actual sample will be employees who are working in private organizations which have HRM departments.

Statement of analytical approach: Statistical modeling.

Expected Findings

It is expected that different HRM practices have a significant effect on enhancing employee motivation which in turn increases employee performance and consequently organizational performance.

Limitations

Respondents’ biases.

The qualitative nature of variables.

Time constraints.

Complete access to HR resources of firms.