CIMA E1 Syllabus E3. Human resources - Incentives and Motivation - Notes ^{7 / 9}

Employee motivation is important for organisations.

When staff is motivated, their productivity increases and they are dedicated towards their work. It can also help to reduce absenteeism.

Taylor's theory of maximising prosperity

It establishes four principles to achieve the  maximum prosperity for employers and employees.

1. Science should be used to determine fair pay for a day’s work.

2. Scientific methods should be used in the recruitment and selection of staff who should be developed to ensure they are capable of meeting output and quality targets.

3. ‘Mental revolution’. Staff should be encouraged to fulfil their potential.

4. There should be constant and intimate co-operation between management and staff

Vroom's expectancy theory

Vroom suggested that the strength of an individual’s motivation is the product of two factors. 

The strength of a preference for a certain outcome (valence). It may be represented as a positive or negative number, or zero – since outcomes may be desired, avoided or considered with indifference. 

The expectation that the outcome will result from a certain behaviour (expectancy). Vroom called this a subjective probability that can be represented by any number between 0 (no chance) and 1 (certainty). 

Force or strength of motivation to do something = Valence x Expectancy

Maslow's Hierarchy of Needs:

Maslow's hierarchy of needs states that an individual first tries to satisfy his basic needs of food and shelter and then gradually moves up the hierarchy. His motivation changes as he progresses. 

In relation to an organisation, it is important to understand that different employees will be motivated by different things.

The Psychological Contract

The psychological contract is the set of expectations between an organisation and its employees.

It is the unwritten understanding between employer and employee regarding mutual obligations owed to one another.

There are 3 types of psychological contracts:

1. Coercive contract 

   The individual considers that they are being forced to contribute their efforts and energies involuntarily, and that the rewards they receive in return are inadequate compensation

2. Calculative contract

   The individual accepts, voluntarily, and they expect to do their job in exchange for a readily identifiable set of rewards

3. Co-operative contract

   The individual identifies themselves with the organisation and its goals, so that they actively seek to contribute further to the achievement of those goals.

Flexibility for employees

Workforce flexibility can increase employee motivation and commitment. 

Examples of flexible working arrangements:

1. Remote / teleworking is working away from the office

2. Shift system is working outside of normal working day patterns

3. Compressed week is standard working hours compressed into fewer days

4. Job Sharing is a standard role split between two or more employees

5. Part time is fewer hours than a full time role

Examples of flexibility that related to change in role:

1. Job enlargement sees an employee pick up new tasks at the same level as their existing role.

2. Job enrichment - here a subordinate will be given new tasks at a more senior level to their existing role

3. Job rotation is the movement of an individual to another post in order to gain experience

4. Financial flexibility - here rewards will be built from various elements to encourage the desired performance