As global competition causes our businesses to restructure, the empowerment of employees to work faster and smarter has become increasingly important. However, the success of employee empowerment depends upon our ability to motivate this extra effort. Motivation may be defined in terms of some performance behaviour. Motivation is an emotive state causing persons to want
or need something intensely enough to put forth the necessary effort to achieve it. This drive to achieve is usually goal-directed, and becomes more complex when dealing with groups or teams. What drives us as individuals to achieve is often difficult to decipher, as our needs and desires will vary over time.

Motivation is a process in which people chose between alternative forms of behaviour in order to achieve personal goals.
The goals sought by individuals can be relatively tangible, such as monetary reward or promotion, or intangible such as self-esteem or job satisfaction. The rewards available to an individual are generally classified under

  • Intrinsic rewards – those that derive from the individuals own experience e.g. sense of achievement or a feeling of self-esteem.
  • Extrinsic rewards – those conferred on a person from outside e.g. a pay rise or promotion. Managers find reliable links between individual motivation and effective performance. There are many theories of motivation. The human relations school believes employees want to do a good job. Although their individual may differ, they would be motivated to achieve their potential.

Hygiene factors include working conditions, pay, company policies, and interpersonal relations. When hygiene factors are only factors present in the job, they do not motive employees, they only satisfy them. However, if they are not present, the work then becomes dissatisfying. To motivation, the employee needs the presence of the hygiene factors plus the motivators. The motivators are higher-level employee needs of achievement, recognition, responsibility and opportunity.

However individuals act to obtain these goals, they must believe their behaviour will lead to their attainment. A crucial element is how valuable the goal is to the individual. The more value the individual attaches to the goal, the more effort the individual will expend to achieve the goal. The three basic needs are achievement, affiliation, and power. The need for power is defined as controlling others, assuming responsibility for others and having authority over other.

Reasons for Pay Performance Plans
Many organizations have implemented incentive plans for a variety of reasons: increasing labour costs, more global competitive markets, faster technological advances and greater needs for productivity quality. In the twenty first century, incentives plans and focusing on pay-for performance, improved quality and productivity. By using pay for performance managers are finding employees improve their job performance.

Incentive plans may not always lead to organization improvement for two main reasons. First some companies feel that incentive plans are in conflict with a team-oriented approach. Second management may have to give sufficient attention to the design and implementation of incentive programs. The success of pay for performance system mainly depends on the organization. If the
organization has a strong corporate culture, high morale, and employees trust the management, then there is a stronger probability of success.

Team incentives should not be used in situations where a few individuals are likely to maximize their output at the expenses of their coworkers. Group incentives should reduce rivalry and promote cooperation and concern for all members in the units overall performance.

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