Managing Employee Motivation and Performance

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INTERNATIONAL BURCH UNIVERSITY

FACULTY OF ECONOMICS
DEPARTMENT OF MANAGEMENT

MANAGING EMPLOYEE MOTIVATION AND PERFORMANCE

RESEARCH PAPER
by
Nedžad ISAKOVIĆ

Project Supervisor
M.A. Edin SMAJIĆ

SARAJEVO
April, 2012

Contents
1.Introduction2
1.1.The Motivation Process2
1.2.Wath Managers Do In Practice2
2.Motivating by Structuring Jobs to Make Them Interesting3
2.1.Job Design3
2.2.Job Enrichment and Job Enlargement3
2.3.The Job Characteristics Model4
3.Conclusion5
4.References7

1. Introduction
Motivation is defined as the process that initiates, guides and maintains goal-oriented behaviors. Motivation is what causes us to act, whether it is getting a glass of water to reduce thirst, reading a book to gain knowledge or performing some specific job assignment to get pay. Why is the motivation of employees so important at the workplace? It is important for managers because it determines individual performance of the workers along with ability of the workers and work environment. The most challenging factor for manager to control of these three is motivation. Individual behavior is a complex phenomenon, and the manager needs to enter the core of the problem if he is going to solve it. 1.1. The Motivation Process

The motivation process progresses through a series of discrete steps. Content, process, and reinforcement perspectives on motivation address different parts of this process (Griffin, 2008). Content perspective tries to find what factor or factors motivate people. The most popular content theories are Maslow’s hierarchy of needs, the ERG theory and Herzberg’s two-factor theory. Process perspectives on motivation explore how the motivation process works and how it occurs. They try to find out why people certain behavior options to fulfill their needs and how workers evaluate their satisfactions after their decisions. Theories of process perspectives are expectancy theory, equity theory and the newer attribution theory. The reinforcement perspective tries to find out which factors force employees to continue being motivated. It tells us that employees will repeat the behavior for which they are rewarded, and they won’t repeat behavior for which they are punished. Reinforcement perspective uses positive reinforcement, avoidance, punishment and extinction as tools to keep employees motivated. These are just theories which help managers to determine what to do in practice. 1.2. What Managers Do In Practice

The most shared thought and strategy among managers in practice is that money motivates. Because of that managers use large variety of reward systems such as merit reward systems, incentive reward systems and team reward systems to improve motivation and performance of their employees. Their assumption is correct and employees do actually perform better when they know that they will receive more money for their improved performance. But another question arises: How long will the improved performance last if money is key motivator? The answer is that it won’t last long. The studies have shown that individuals have difficulty recalling the bonus they receive and it does not seem to have the same impact it did within the first few weeks or months of receiving it. That's because money, in and of itself, will not continuously motivate individuals. Employees are motivated much more if money rewards are combined with recognition and with improved job design. Another problem that arises from using the money as a key factor of motivation is that it costs. The companies need to give large amounts of money to employees as bonuses and there were several cases where bonuses are actually larger than annual salaries of some employees. This becomes a real problem if company wants to decrease the amount of bonuses employees receive. Employees become more dissatisfied and unmotivated because they are used to have large...
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