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1) INTRODUCTION
The most important responsibility of a modern manager is to ensure that the employees carryout their designated tasks in a manner that adheres to their individual performance targets which contributes to the achievement of organizational goals & objectives. The magic ingredient the modern manager uses to ensure that they do so is called motivation which can be defined as reasons for specific behaviour.
It’s accepted that an integral requirement of todays’ manager is the ability to motivate employees to contribute to organizational goals. But evidence suggests that motivational theories have become more difficult to apply in modern organisations, simply due to human behaviour being complex. This assignment will look in to how a modern organisation attempts to apply these theories in practice and the complexities they have encountered in the application.
2) CEYLINCO INSURANCE PLC, SRI LANKA
Established in 1939 as Ceylon Insurance Company and being renamed as Ceylinco Insurance in 1987, the company has grown rapidly to become the leading insurance company in Sri Lanka. It was awarded “Most innovative insurance company in Asia” twice in 2003 and 2006 for its innovative VIP vehicle insurance policy and the One and only policy.
The company was recognised as the most valuable company in the insurance sector in Sri Lanka (Business excellence awards 2008) and selected as the preferred insurer for the 3rd consecutive time at SLIM People’s Awards 2008. With the growing overseas presence currently consisting of 9 countries, it can be identified as an international company.
The companies’ dedication to its 3,000 odd staff is evident in its mission statement which reads, “To provide protection and financial security of the highest quality to society, whilst adding to shareholders’ wealth and recognising, rewarding and valuing the dignity of our staff”. Being the hallmark of Ceylinco group with more than 200 subsidiaries and associate companies, it considers rewarding and recognizing employees as an integral part of organizational culture.
3) THEORIES OF MOTIVATION
a) Abraham Maslow: Hierarchy of needs theory
According to Maslow (1943), human behaviour is dominated by a continuous pursuit of unsatisfied needs. He categorizes the basic human needs in to five levels;
1) Physiological needs (lowest): food, water, clothing, sleep, etc.
2) Safety needs: security of health, of employment, of family, of property
3) Social needs: friendship, family, love, intimacy
4) Esteem/ego needs: sense of achievement, self-respect, respect of others
5) Self-actualization needs: acceptance, experiencing purpose and inner potential
Maslow says that when a person achieves one set of needs, he aspires to move onto achieving the next level and this continues until the achievement of self-actualization. In Maslow’s own words, “man is a perpetually wanting animal” who will consider any thwarting of these basic human needs as a psychological threat. Modern managers must therefore develop their understanding of this basic fact and has to exploit these factors in motivating individuals to contribute to organizational success while ensuring that they do not hinder the employees’ pursuits.
b) Fredrick Herzberg: Two factor theory
Herzberg (1959) introduced this theory which examines various factors which affect job satisfaction of an employee. Through his studies, he identified two factors which he called motivators and hygiene factors. Hygiene factors were factors that would not by themselves provide satisfaction but would keep the employee from being dissatisfied. They include the organization and the working environment. Motivators were the factors which would provide satisfaction and motivate the employee. They include what employees actually do on the job which yields motivation through internal instincts.
A typical list of factors which would come under the two ideas would be;
Hygiene factors: Working conditions, pay & job security, supervision, interpersonal relationships, company policy.
Motivators: Achievement, recognition, satisfaction from work, responsibility, advancement, growth
Whether a factor would be a motivator or a hygiene factor would be based on each individual, their goals and their personal circumstances. He identified value of tactics such as job enrichment in satisfying employees.
c) Victor Vroom: Expectancy theory
This theory tries to identify how individuals choose among alternative behaviours. It assumes motivation depends on how much we want something and how likely we think we are to get it.
Effort to performance expectancy is the extent of belief that effort will lead to successful performance. A high expectancy (near 1) will occur if the individual is certain that successful performance results through effort. The expectancy will be low (near 0) if the probability of achieving the outcome is low.
Performance to outcome expectancy on the other hand explains the perception of the probability that performance will lead to certain outcomes. If there’s a certainty it will occur then the expectancy is high. If there’s less probability, the expectancy will be low. The effectiveness of employees’ performance will depend on the ability of the individual and the environment in which he operates.
The outcome here refers to any potential result of performance which can be financial and non-financial incentives or fatigue, stress and punishment which results in an attractive or unattractive valence being perceived by the employee.
The theory states that the motivation of the person depends on 3 conditions;
- The effort to performance expectancy should be above 0, where employee believes in a link between effort and performance.
- Performance to outcome expectancy must be above 0, where employee believes performance will lead to outcomes.
- The positive outcomes must outweigh negatives thereby delivering a valence that is attractive.
4) DISCUSSION
a) Maslow
The various tasks undertaken by Ceylinco Insurance to motivate individuals can be identified as related to various stages of the hierarchy of needs suggested by Maslow;
- Physiological needs: Ensuring employees’ work-life balance by providing leave in excess of standard levels including special holidays for Christmas and New year,
- Safety needs: Provision of health insurance covers for employees and their families.
- Social needs: Organizes annual sports events, company outings and local/overseas tours to employees and their families.
- Esteem/Ego needs: Annual sales conference, Pillars of success and long services award presentations are held annually to recognize the services of sales and non-sales staff.
- Self-actualization: Providing training events for staff to assist career development, employing an achievement based promotion system for sales staff.
But the following complexities are limiting the effectiveness of above actions.
Although Maslow assumes that an individual pursues one level of needs at a time, there are individuals who follow needs at different levels simultaneously. A Sales executive at Ceylinco targets a consistent income from sales commissions, which is a safety need, while targeting promotions and better perks such as a vehicle which is classified as Esteem need.
Being a modern organisation, the employees of Ceylinco consists of people from various backgrounds, cultures, age groups and levels of education. This diversity makes it harder for the manager to undertake an evaluation of each individual in order to identify which needs drives them the most. Although there are possibilities of conducting employee appraisals, it would require time which means money in today’s terms.
Added to this is the difference in weighting people place upon the needs, based on their personal circumstances and the position in the organisation, which changes the hierarchy for that person. For example a Sales person from the Top management of Ceylinco identified rest as important (Physiological). But Starters said they are willing to sacrifice resting with hard work in order to cement their positions at the organisation (Safety) and to achieve goals (Self-actualization).
Based on each employee, various aspects of their employment have relations to various levels of needs. For example, earning potential was viewed by a starter as a safety need as it helps maintaining himself. The same became an esteem need for a manager as it brings a sense of achievement.
b) Herzberg
The main difficulty in the application of Herzberg’s theory in an organization such as Ceylinco is the fact that no two employees are the same. Due to this, motivators & hygiene factors may differ from one person to another. An example is that salary, although accepted as a hygiene factor became a motivator for starters and employees who are earning less and is financially unsound.
Some motivators such as promotions although leading to status and esteem may result in the dissatisfaction of employees if they’re not given proper authority and facilities to go along with the role. Therefore a manager must have the ability to identify the requirements and powers necessary to perform the role prior to promotions. Ceylinco has tackled this problem by providing higher authority for non-sales staff to deal with the added responsibility with the promotion. For sales staff they provide improved perks (higher allowances, vehicles, etc.) enabling them to exercise the prestige while at the same time cope with the added targets & workload burdened with the promotion. But still, the perception of employees about the adequacy of authority and perks differed for each person, identification of which is a complex task.
Although usage of employee appraisals is a positive solution to an organisation such as Ceylinco, the identification and formulation of strategies to motivate each individual in this large organization with a presence of high number of employees may seem impractical and if undertaken, may require high costs of time and money.
c) Vroom
Vroom’s expectancy theory is also applied at Ceylinco Insurance in motivating employees. The outcomes an employee of the company is likely to encounter are as follows.
- Positive: Promotions, better perks, awards (cheques, houses, vehicles), pay raises
- Negative: Stress, job security, fatigue, punishment in terms of removal of perks
By organising meetings and lectures that feature people such as the Chief Executive Director, who achieved success through effort and dedication and reached the pinnacle of the company, they have been able to increase the belief of employees that hard work leads to performance. As a result, 8 out of 10 sales executives who attended the Induction training programme in June 2008 believed that they would reach a senior sales executive level in 1-2 years. They also undertake various training events to improve the skills and knowledge of individuals which improves their performance.
Basing the tactics on outcomes, they have created very high performance to outcome expectancy. They have managed to reinforce this belief further by organizing annual award ceremonies where the promised positive outcomes are delivered.
The complexity of this is attributable to the difference of reactions a person may have to an outcome. For example stress may be a slight annoyance to a young employee at Ceylinco but it may be a significant negative valence for an employee with adverse health condition such as high blood pressure.
On the same grounds the effect of a positive outcome may also differ due to employee perceptions of importance of specific needs at the stage of their life. As an example a financial reward may be a positive valence for a person in need of money. But for an employee more interested in a getting a promotion, a financial reward may not create such a positive valence.
5) FINDINGS AND CONCLUSION
The findings of Ceylinco Insurance have wider applicability to many organisations where mangers are increasingly experiencing complexities in motivating staff. They can be summarized as follows;
1) Diversity: Modern organisations are diverse with people from vast backgrounds, requiring more knowledge and insights in to the behaviour and response each employee will have to the attempts of applying of theories of motivation at the workplace. In an organisation such as NHS which had a workforce of 1.3 million people in 2004, this becomes unpractical.
2) Lack of Time: The task of carrying out surveys to identify individual needs and formulating plans to motivate the workforce requires higher investment of time & money, which are valuable assets.
3) Teams: The establishment of teams to carry out work in organisations makes motivation more difficult to practise as the effort has to apply to all members of the team as each individual contributes to the total job. Added to this is the contrasting response to management efforts an employee generates as an individual and as a team member.
4) The problem of equity (Adams, 1962): The employees today are more advanced and are more demanding in a way that they require management to be fair in their actions. They tend to compare their inputs such as effort and the outputs they receive such as recognition, pay, etc with which their colleagues receive. It’s a complex task of ensuring equity in treatment and to avoid perceived inequity.
5) Financial constraints: The stringency on the financial front companies are facing due to recessionary climate hinders the use of financial incentives to motivate employees. With increasing levels of challenges being faced on survival of businesses, guaranteeing security of employment is becoming a problem. This is the case for the impending strike at British Airways against pay freezes and possible job cuts where the airline is operating under losses.
The above complexities can be identified as having applicability in most, if not all of modern organisations. We therefore can conclude that it’s a difficult task of ensuring staff motivation, given the complexity of modern working environments.
6) BIBLIOGRAPHY
1) Adams J.S., 1963, “Towards an Understanding of Equity”, Journal of Abnormal and Social Psychology. November, pp. 422-436
2) Adler N., 1997, International Dimensions of Organizational Behaviour, 3rd ed. Boston: PWS-Kent
3) British Airways strike talks 'to end Tuesday' – BBC News
Available at: http://news.bbc.co.uk/1/hi/business/8552049.stm
4) Ceylinco Insurance PLC, 2009, Annual Report 2008, [Online]
Available at: http://www.ceylinco-insurance.com/annual_report.php
5) Ceylinco Insurance PLC, Human Resources survey of employee satisfaction, July 2008 (Report)
6) Herzberg F., Mausner B. & Synderman B.,1959, The Motivation to Work, New York: John Wiley and Sons
7) Herzberg, F., “One more time: How do you motivate employees?”, Harvard Business Review, 1987, No. 5.
8) Maslow A.H., 1998, Maslow on Management. New York: John Wiley and Sons
9) Maslow A.H., “A Theory of Motivation”, Psychological Review, 1943, vol.50.
Available at: http://psychclassics.yorku.ca/Maslow/motivation.htm
10) Moorhead G. & Griffin R.W., 2007, Organizational Behaviour: Managing People & Organizations, 7th ed. New Delhi: Biztantra
11) NHS is world's biggest employer after Indian rail and Chinese Army, The Times Online
Available at: http://www.timesonline.co.uk/tol/news/uk/health/article1050197.ece
12) Vroom V., 1964, Work and Motivation, New York: John Wiley and Sons
13) Vroom V. & MacCrimmon K.R., 1968, "Toward a Stochastic Model of Managerial Careers". Administrative Science Quarterly 13, pp. 26–46
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