In today’s competitive climate lots of business owners are trying to get more from their workforce at the same time however their employees are trying to get more from their jobs. Reward and recognition programmes are one way that employers can motivate their staff into changing their key behaviors and work habits, thus benefitting the business. At the same time these schemes can also give the employee that little bit extra they are looking for from job.
Motivation and reward are closely linked and there have been many credible theories written on the subject. It is widely recognised that human beings have a need to feel valued, both in their home lives and in the work place. To keep people motivated they need to be encouraged, rewarded (where appropriate) or recognised in their endeavors.
One of the most valued of the motivation theories was written by Abraham Maslow from the USA back in the 1950’s. As part of his study into motivation Maslow developed a five tiered hierarchy of needs. He argued that the way to motivate individuals in the workplace and indeed in life is to satisfy the need sets one by one and in order. The first of the need sets and the most basic are the biological and physiological needs. These are survival requirements ingrained into us and evolved with mankind for tens of thousands of years, things such as food, shelter, warmth etc. In Maslow’s model it’s these needs that need to be satisfied before anything else, for example there is little point offering status as a motivator, when the individual has not yet satisfied basic requirements such as achieving a livable wage in order to eat, secure shelter etc.
Peformance at Mark-it-Down Co Ltd is not what it should be and it has been decided between senior mangement and the Human Resources department that the introduction of a reward scheme is whats required to motivate the workforce and improve performance overall.
The team in charge of deciding on the reward system to implement have come up up with the following suggestions:
Variable Pay/Bonus Scheme
A scheme of variable pay is one possible solution for the supermarket. In this scheme a portion of the employee’s pay would be considered at risk. This portion of the wage will be rewarded according to the performance of the company as a whole, on the basis of personal acheivement or based on the results of a department or team (this would probably be the most effective for this type of commercial business)
Targets will be set at the beginning of a specified period (per annum is the common period) at the end of this period depending on the how well the targets have been met, a percentage or full quantity of the “at risk” part of their pay will be paid to the individual. This payment could take a few different forms, possibly a cash bonus, a quantity of stock or shares in the business.
Whilst monetary reward has been proven to be effective and can encourage hard work amongst a team or individually, it has the disadvantage of impacting on profit made by the supermarket, for example if the grocery team meet their target for keeping the produce displays replenished to a defined level, then the whole grocery team will have earnt the bonus which must be paid from the profits. You also may have a situation where part of the workforce become demotivated, if their team or they personally have missed out on a bonus.
Bonus and pay based rewards are considered differently depending on which motivation theory you study. For example in Maslows hierachy of needs, financial remuneration is only mentioned within the first tier of the hierachy which covers the most basic and obvious survival needs (physiological needs) Money was not considered by Maslow be a long term motivator.
Frederick Herzberg considered financial reward to be amongst his “hygiene factors” that is that money in itself is not a motivator but actually will only act as a “dissatisfier” if the individual feels that their financial expectations and requirements of the role are not being met.
In contrast to Maslow and Herzberg, John Stacey Adams might have argued that bonus schemes and pay related rewards can indeed be effective motivators. If the individual percieves that they are gettting a fair input to output balance in comparison to their peers eg, works hard (input) for a pay bonus (output) However that motivation through financial reward might not last. If the individual learns that a colleague or peer is benefiting from a better input to output ratio (eg doesn’t work as hard, but gets paid more) then the individual can quickly become dissatisfied.
The introduction of a promotion programme could be a viable option. If the employee’s are aware that there is a realistic opportunity for them to progress within Mark It Down Co then they will likely feel motivated towards improving their standard of work in the hope that they will be one of the employee’s chosen for promotion. Maslow’s heierachy of needs supports promotion as a motivator, however depending on the person promotion/status as a form of motivation might be quite high up on the tiers and as such it would only work if the tiers below have already been satisfied.
There could be several downsides to this however; often with promotion comes a rise in salary for the individual, which will of course impact on any profit made by the supermarket. There might also be a risk of a culture developing within the company whereby individuals take the attitude that they are “out for themselves”
Employee of the Month
One of the suggested recognition programmes is an employee of the month
scheme. The idea is that all employee’s and managers are provided with a brief form to be used to nominate an employee that they believe deserves recognition (they should also explain the reasons behind there nomination)
Due to the nominations for employee of the month being business wide not only is the playing field for recognition level, but there is the scope for recognising excellance in all of the different area’s of the organisation. This reward system could be as low or high cost as Mark it Down Co directors see fit. There is support for this type of recognition reward in Elton Mayo’s Hawthorne Effect theory. Following his studies of workplace behaviour at the Hawthorne Plant Chicago in the late 1920’s and early 1930’s Mayo deduced that emotional factors acted as far better motivators than economical ones, as such a reward scheme of this nature could be very effective indeed, not to mention low cost.
On the downside employee of the mon th schemes can have a tendancy to be considered a little cheesy and may require a little effort on the part of the programme managers in order to keep all of the staff motivated to particiate by completing the nomination slips.
Pass on Praise
Something as simple as passing on positive comments you have heard about an employee direct to the individual can have an extremely motivational effect. Again the hawthorne effect supports this belief. The praise could passed on by way of email, copying in managers or even with a visit to a senior managers office in order to receive thanks directly.
The main advantage of this idea is that it costs nothing and is extremely easy to implement, however it may not be enough on its own, I would suggest that this tactic be used in conjunction with one of the other employee recognition schemes.
All of the afore mentioned reward options have the potential to be effective, however the success of the chosen scheme could have a lot to do with the
indviduals in nbeed of motivation. For instance in McGregors theory, the two employee types, X and Y differ greatly. What might motivate a Y employee (someone that is naturally happy to take on repsponsibilty and excepts work as part of life) might have the opposite effect on an employee of the X variety (someone that’s avoids repsonsibility and needs to be heavily supervised. The type of employee’s to be motivated should be considered before a motivation and reward scheme is decided upon.
There are various ways to monitor the performance of your workforce. In the supermarket setting of Mark it Down Co, these could be;
Physical: the number of sales made, the number of employee’s served, punctuality or attendance. There can be no disputing these types of performance indicators they are unambiguous and offer a realistic insight into the performance of a team or individual.
Qualiative: these indicators are based on opinions and judgements (the view of a supervisor or the such like). These indicators are just as important as physical ones but managers should be careful to ensure that any measures of performance are considered fair by both the employees and employers.
Goals and Targets
Performance measurement can also be linked to the companies appraisal system, that is performance can be measured by assessing progress made on targets and goals agreed at the previous review. Appraisals are valuable in this respect.
In order to effectively monitor performance in this way it is important to ensure that your employees are aware of the difference between target and goal.
Goals: These are long term ambitions that should relate to the individual aims for progressing within the company.
Targets: These are the steps taken in order to achieve the goal. There is an acronym that can act as a guide for the criteria that any targets should adhere to. They should be Specific, Measurable, Achievable, Realistic and Time bound. There is little point setting targets outside of these parameters.
Monitoring progress towards identified goals and objectives as a way of determining who deserves reward does have its pros and cons though. On the one hand it can be considered an easily measurable method of monitoring performance, but on the other (particularly when the goals and targets have been set for a team or group) it could be argued that the fact that a company/team or individual is achieving its set goals and targets is not a true indication of who has made the most effort towards making that happen and as such is not an effective method for identifying who should qualify for reward. This is an important thing to consider when applying motivation and reward schemes, as an incorrect or ill managed monitoring technique could be costly to a business. For example a company will not want to be handing out cash bonuses to a whole team for reaching a set goal if it transpires that 3 out of 5 team members have made no improvement to their work output and had nothing to do with the team’s progress or achievement!
When considering target setting as a way of monitoring progress and establishing where reward, praise or recognition should be given, serious thought should be given to how the company plans on pinpointing exactly who has been responsible for progress, both positive and negative.
Another way to monitor company performance is to measure its successes and failures against those of other businesses in the same market. For example Mark it Down Co could measure its sales figures against one of its competitors, Lidl for instance. This method is known as bench marking and
it’s all about taking the best practices of the highest achieving businesses in the same market and applying them back in the business in question.
Its has been brought to management attention that one of the employee’s at Mark it Down Co believes that he is receiving less salary for the same work as one of his peers. The following two methods can be used to evaluate the jobs of the individuals in question in order to assess whether theses concerns are justified or not.
Job ranking is one of the simplest methods of job evaluation. Its considers the job as a whole and ranks it against another whole job within the organisation. This is usually carried out by the raters comparing the jobs using their general knowledge of the roles themselves. The jobs are ranked in order of the difficulty of the job itself or the importance of the role to the company. The procedure is followed for each department and then a comparison of jobs at all levels is made and jobs are given grade levels which define salary groups.
The job ranking method is easily understood by all employees and simple to administer, however it does have its disadvantages, this technique is not really suitable for large organisations with complex structures where its is much harder to gain familiarity with all of the job roles. With this in mind it is probably not the solution that should be used at Mark it Down Co Ltd.
Point Factor Method
The point factor method establishes job values by assigning points to each area within a group of defined factors, below are some examples but there any many different factors that could be defined further and given points in order to be used for job evaluation;
Skill: Within this group there might be points available for, experience or training.
Effort: The points available for effort might be divided between mental and physical effort.
In this method each job is rated using the defined points system. The points are totaled to form the final score for that particular role. From there jobs are grouped into salary grades (jobs with similar points ratings would be placed together in the same salary grade) This method can be tailored to meet the needs of specific companies and is suitable for use within larger organisations where there are a large number of jobs to evaluate. It’s an easy model to work with once it’s in place but can be very expensive and time consuming to develop in the first instance. In my opinion the point factor method would be a the better job evaluation model to use for Mark it Down Co. Job ranking is just too simplistic to cope with the amount of individuals roles at this organisation. The factors I think should be used to develop the point system are as follows; Skill – Experience, Training, Ability, Education
Responsibilities – Monetary, Supervisory, Reporting
Effort – Mental, Physical
Environment – Job Location, Hazard’s
In order to establish if the employee in question has a case for querying the wage he is on in comparison to his colleague. His overall score for the above factors should be calculated in order to establish his pay bracket. If the pay grade is the same as that of his colleague then his concerns are justified and his wage should be brought into line. If it is not and he is in a lower wage group then there is no case for a wage increase. Equally if the individuals wage bracket is determined to be higher than that of his colleagues then his wage should be adjusted to reflect as much.