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Employee Motivation

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Motivation or socially acquired need to fulfill personal goals is a complex concept. Organizations or firms are set out in order to achieve certain targets or goals and those goals are impossible to achieve without motivation. For managers, motivation of employees is considered as one of the most important aspect as well as being difficult to achieve. This is because there is often a misalignment between the firm’s and employee objectives. Firms may have the objective of profit maximization; it would be hard to find an employee who shared the same objective as the firm all the time. There is clear conflict between the goals. This inefficiency means motivation has a big part to play and solve the problem. However, the extent to which managers can change employee’s motivation is debatable since it can be said that it is human nature to be selfish and ‘impossible’ to be altruistic especially to an organization. Thus, it is crucial to assess different mechanisms (incentives and corporate in particular) which may help improve motivation with perspectives from economists, sociologists and psychologists.

Incentives take an economists’ approach since it is strongly linked to the theory of principle and agent. Due to the separation of ownership and control, there is a misalignment between objectives of shareholders and employees. The shareholders’ main goal is to gain profits for the firm whilst having to control the employees’ actions. Problems such as not being able to monitor what the employees are buying and what they should can lead to losses. Monitoring may be the obvious way out for shareholders but in the long run, this can lead to accumulated costs for the firm. Therefore, it is important to overcome this problem with methods s...

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...actors, such as the type of task, need to be carefully examined in order to make the optimal decision about adopting a particular style of management. As we can see, monetary means is not the only factor in which managers can use to motivate employees. Interesting work and employee pay appear to be important links to higher motivation of centers' employees. Options such as job enlargement, job enrichment, promotions, internal and external stipends, monetary, and non-monetary compensation should be considered. Job enlargement can be used (by managers) to make work more interesting (for employees) by increasing the number and variety of activities performed. Job enrichment can used to make work more interesting and increase pay by adding higher level responsibilities to a job and providing monetary compensation (raise) to employees for accepting this responsibility.
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