Pay and Motivation
...nd highest and the Directs are paid the lowest. The proportionate average salary presentation for these three salary categories are as per figure (1:0) Hypothesis Salary is a key motivator and Fredric Herzberg was wrong in generalizing “salary” as a hygiene factor which dose not provide motivation. Methodology For the purpose of the study a stratified random sample was used which made up to a 20% representation from each three categories, namely “Directs”, “Staff” & “Executive”. The field investigation was carried out by way of a Survey which was carried out as illustrated below. Each selected employee under the three different categories were presented with a questioner asking them to state the order of different motivators that they think would motivate them best in their work life. Participant’s identity was not requested in the questioner allowing them the total freedom in making their statements. However, a list of factors that can be considered as motivators were provided to the participants, yet allowing them the full authority to list any other factor that they would think would motivate them. Further the participants were asked to reason out their sequence of choice. The factors that were provided for them as guide lines are as follows: (a)Career progression (b)Job rotation (c)Job enlargement (d)More responsibilities / challenging work (e)More training (f)Delegation of authority. (g) Appraisal, praise or Recognition. (h)Participation (i) Job security. (j)Annual pay increases (k)Higher incentive payments Then the feedbacks gathered from different categories were first analyzed separately. However 2% of total expected feedback forms were either not submitted or were not in a form where information could be extracted. Furthermore, information with regard to the following factors was collected from four different organizations which are in the same business. (a)Basic Salary Scale for Operators (b)Overtime (c)Attendance Allowance (d)Other Allowances (e)Transport Facility (f)Free meals (g)Guaranteed Overtime. (h)Recreational Facilities. (i)Turnover Rate. However in future chapters of this dissertation these organizations are referred to as, 1) Organization “A” of Katunayake. 2) Organization “B” of Avissavella. 3) Organization “C” of Katunayake. 4) Organization “D” of Wathupitiwala. This step is taken to safeguard the confidentiality of the information at the request of the information providers. Limitations It is important to note that any methodology used in surveys has its drawbacks. In the methodology used on this study, it should be noted that the selected employees are asked to list out their preferences according to what they think. But what they think may not be the actual fact when it comes to real work situation. Secondly, the external factors which are in force at the time of questioner might have an impact on what they fill out. The applicant’s lack of commitment to the cause may also be a hindrance in gathering correct information. Thirdly the information gathered with regard to different organizations may not be 100% accurate. Theoretical Background. Two factor or Hygiene Maintenances Theory of Herzberg Fredrick Herzberg, a well known management theorist, developed a specific “content theory of work motivation” in the 1950s; he conducted a study of need satisfaction of 200 engineers and accountants employed by firms in and around Pittsburge. He used the critical incidental method for obtaining data for analysis. The purpose of the study was to find out what people want and, what motivates them. He asked the subjects to describe situations in which they found their jobs “exceptionally good” (and therefore motivating) or “exceptionally bad” .It was found that employees named different kinds of conditions which caused each of the two feelings about their jobs. For example, if recognition led to a “good feeling”, the lack of recognition was seldom indicates as a cause of “bad feeling”. The responses were tabulated and categorized. From the categorized responses, Herzberg concluded that the replies given when people feel good about their jobs are significantly different from the replies when they feel bad about it. Herzberg saw that certain characteristics tend to be consistently related to job satisfaction and others to job dissatisfaction. He related the “intrinsic factors” to job satisfaction. When those questioned felt good about their work, they tend to attribute these characteristics to them selves. On the other hand, when they are dissatisfied, they tended to give extrinsic factors as the main reasons. Based on his study, Herzberg came on to the following two conclusions: (1) There are some conditions of a job which operate primarily to dissatisfy employees when they are not present. However the presence of these conditions does not bring strong motivation. Herzberg called these factors maintenance or hygiene factors, since they are necessary to maintain the current status, i.e. a reasonable level of satisfaction. These factors cause much dissatisfaction when they are not presents, but do not provide strong motivation. He also noted that many of these have often been perceived by managers as factors which can motivate subordinates, but they are in fact, more patent as dissatisfies when they are absent. In other words, adding more and more of these hygiene factors (like salary) to the job will not motivate them once the factor (salary) is adequate, these “hygienes” can only keep them from becoming dissatisfied. In fact, such factors are peripheral to the job it self and more related to the external environment of work. When employees are highly motivated they show a high tolerance of dissatisfaction arising out from the peripheral factors. However, reverse is not true. Ten main maintenance factors identified by Herzberg 1. Company policy and administration 2. Technical Supervision 3. Interpersonal relationships with supervisors 4. Interpersonal relationships with peers 5. Interpersonal relationships with subordinates 6. Salary 7. Job Security 8. Personal Life 9. Work Conditions 10. Status (2) There are some job conditions which, if presented, build high levels of motivation and job satisfaction. However, if these conditions are not presented, they do not cause dissatisfaction. He called these ‘motivational’ factors or ‘satisfiers’ They are: 1. Achievement 2. Recognition 3. Advancement (through creative and challenging work) 4. The work it self. 5. The possibilities of personal growth 6. Responsibility Herzberg was of the opinion that these factors, lead to strong motivation, and, therefore, job satisfaction when they are present, but do not cause much dissatisfaction when they are absent. The essence of Herzberg’s theory may be stated thus: (1) Motivational factors or satisfiers are directly related to the job content itself, the individual’s performance of it, its responsibilities and the growth and the recognition obtained from it, i.e. motivators are intrinsic to the job. (2) Maintenance and hygiene factors are extrinsic to the job. They do not provide motivation. If they are adequate and present, they only prevent dissatisfaction; they produce no improvement but needed to prevent unpleasantness. In fact, they provide an almost neutral feeling among the workers of an organization, but if withdrawn create dissatisfaction. According to Herzberg, they help in maintaining “a zero level of motivation”, if they are given to workers, and dissatisfaction if they are withdrawn. (3) In Herzberg’s jargon, “Money and fringe benefits are known as negative motivators”, for their absence from a job unquestionably will make people unhappy, but their presence does not necessarily make them happier or more productive. (4) Fredric Herzberg says that a man has two different needs; one “lower level” set derives from man’s desire to avoid pain and satisfy his basic needs, as well as need for money to pay for basic needs. In this respect it is similar to Maslow’s ‘physiological’ & ‘safety needs’. (5) According to Herzberg the opposite of satisfaction is not dissatisfaction as traditionally believed. Removing dissatisfying characteristics from a job does not necessarily make the job satisfying, or vice versa. (6) Finally, the factors leading to job satisfaction are separate and distinct from those that lead to job dissatisfaction. Therefore, if a manager seeks to eliminate factors that can create job dissatisfaction, he can bring about peace, but not necessarily motivation. Identified shortcomings of two factor theory. Why Herzberg’s theory is not wide enough to cover all cross sections of employments and especially why it is not applicable for lower level employees. The procedure that Herzberg used is limited by its methodology. When things are going well, people tend to take credit for themselves. Contrarily they blame failure to the extrinsic environment. The reliability of the methodology is questioned, since raters have to make interpretations, it is possible that they may contaminate the findings by interpreting one response in one manner while treating another response differently. No overall measure of satisfaction was utilized. In other words, a person may not like a part of his job, yet still think the job is acceptable. The theory is inconsistent with previous research. The motivation – maintenance theory ignores situational variables. Herzberg assumes that there is a relationship between satisfaction and productivity. But the research methodology he used looked only at satisfaction, not at productivity. To make such research relevant one must assume a high relationship between satisfaction and productivity. Since his original study, Herzberg has cited numerous and diverse replications of the original study which supported his position. These subsequent studies were conducted on professional women , hospital maintenance personnel , agricultural administrators , nurses, food handlers, manufacturing supervisors, engineers , scientists and so many other fields of employment under different cultural settings such as Finland , Hungary , Russia and Yugoslavia. However, other researchers who have used the same research methodology employed by Herzberg have obtained results different from what his theory would predict; while several others using different methods have also obtained contradictory results. What fills the distance between not satisfied and not dissatisfied levels? One question hat Herzberg has left unanswered is what fills the gap between no satisfaction and no dissatisfaction. If so called hygiene factors can bring a dissatisfied employee to a not dissatisfied level by being present; if the motivators can elevate an employee from no satisfaction level to satisfaction level; what are the factors responsible in bridging the gap between no satisfaction and no dissatisfaction. There has got to be an element which works within these factors or the factors got to be one and the same. Logically it is one and the same. It has been proven by other researchers over and over again. Secondly, when these levels are one and the same, it is obvious that the factors which drives an employee to a not dissatisfied / not satisfied (i.e. not dissatisfied equals to not satisfied.) level from a dissatisfied level must drive it beyond not satisfied / not dissatisfied level and bring him / her to the satisfied level. This drive is motivation. Therefore motivation starts at the level of dissatisfaction and works it way forward to not dissatisfied / not satisfied level and then to the satisfied level. Different levels of satisfaction and dissatisfaction can be related to different levels of motivation. (Figure 1:1) The sample chosen for the study by Herzberg is not wide enough to make a broad statement covering all levels of Jobs. The subject consisted of engineers and accountants. The fact that these individuals were in such a position indicates that they had the motivation to seek advance education and expect to be rewarded for it. The same may not hold true for the non-professional workers. For example, in the case of a sewing machine operators in the Sri Lankan Apparel Industry. Some of the factors considered as ‘maintenance factors’ by Herzberg such as pay , job security are considered by blue collar workers to be ‘motivating factors’. Herzberg’s inference regarding difference between ‘dissatisfaction’ & ‘motivators’ cannot be completely accepted. Another limitation of Herzberg’s theory is that his inference regarding difference between ‘dissatisfiers’ and ‘motivators’ cannot be completely accepted, and that the difference between stated sources of ‘satisfaction’ and ‘dissatisfaction’ may be the result of defensive process within those responding. People are apt to attribute the cause of satisfaction of their own achievements, but more likely to attribute their dissatisfactions to obstacles presented by company policies or supervisors than to their deficiencies. In other words individual’s attitudes can make a huge impact when assessing such data and there is no real mechanism to overcome this situation. Motivation and Employees Management generally uses financial and non financial motivation techniques to motivate their employees. Financial motivation is directly linked with money. Wages, salary, bonus, profit sharing, leave with pay, medical reimbursement, etc. are included under this type of motivation. According to Herzberg these factors fall into the low level needs, a need that is quickly satisfied. But in reality this is not true. The reason is that money is more than just a medium of exchange. It is more than a vehicle through which one can satisfy other higher order needs. For example when a person goes out to by a car he is doing more than just spending his money; he is buying at least in his own eyes – prestige , recognition, and visible symbol of his achievements. He uses money to satisfy some of higher – order needs. This is very clear theoretical proof to show that Herzberg has not done justice to the motivational power which lays beneath thee financial motivators such as salary. For this reason, money is some time regarded as the most esteem need and, hence, a most reliable motivator. The other option that the management has to motivate the employees is the non financial motivators. Some claim that these motivators are not connected with monitory rewards. In the words of “non – financial incentives are the psychic rewards, or the rewards of enhanced position, that can be secured in the work organization.” But what he has failed to recognize is that, most of the non finical rewards are tied up with a financial reward which is immediate or distant from the original non financial reward. To understand this issue, we can evaluate some of the non financial motivators to try and see the financial rewards hidden behind the non financial motivator. (1) Delegation of Authority – when authority is delegated it is either because of the enlargement of the present job duties or to asses the suitability of a person to take up more responsibilities. Either way this would mean an addition to the job description. In an era where the worth of a job is most often decided by the weight of the job description, this would ultimately result in a pay hike. The world famous Hay system is one of the job evaluation methods which have recognized this mechanism. (2) Appraisal, prestige & praises are motivators that will invariably add positive marks to individual’s periodical appraisals. These positive points will earn the individual concern advancement in career and finally better financial deal with his/her employer. (3) Job enrichment, enlargement and rotation – would again mean the same circumstances as discussed under the sub section (1). These motivators will provide individuals with more opportunity and scope ultimately resulting in career advancement leading to better financial deals. If someone takes the stance to say that he / or she is not motivated by the end financial benefit, we will have employees who will one day take up manager’s responsibilities but still accept a clerk’s salary for his services. As discussed in the above subsections it is obvious that most of the non-financial motivators bring along a financial factor which is hidden and not seen simultaneously alongside the non financial motivator. Analysis of Findings. Analysis of Executive Feedback. A very high percentage of executives (39%) have indicated Career Progression as their number one choice. Appraisal, praise and recognition & job enlargements were placed in second place with a distance 16% each. However, the executives have ranked “annual pay increases” in the fourth place. (Figure 1:2) Analysis of Staff Feedback. As already seen in the executive feedback, a very high percentage of Staff Grade employees have also viewed opportunities on career progression as the number one motivator. Staff graders have in fact weighted the opportunities for career progression more than Executives. 42% of the staff grade employees think that career progression is the best motivator. This is an increase of 3% when compared to the 39% executives. The Annual pay increases has secured the second slot with 15% and the third place is higher incentive payments with 10%. Apart from these three factors none of the other factors has failed to reach a double figure mark. (Figure 1:3) Analysis of “Directs” Feedback The Directs feedback shows a complete turnaround when compared to Executive and Staff Grades. Annual Pay increases with 40% voting has toped the list followed by higher incentives with 35% backing. Apart from these two factors only career progression has reached the double figure mark (Figure 1:4) In LA Pvt Ltd, there is no pre defined annual increment policy. The increment is based on both company and individual performance and also the cost of living factor. It is important from their point of view to have clearly defined fixed annual increments. In their own words “Some thing solid to look forward to every year”. The information in the personal file data store shows that more than 35% of the “directs” are bread winners for their families. Their sole motive behind employment is to earn their living and a good living wage is the number one motivator for them. The air-conditioned work environment, the reputation of the plant as a part of the industry leader, open work culture, best of the social practices and other fancy programs has little bearing in theses people’s work life. No matter how innovative LA Pvt Ltd is, if they got an opportunity to work for another company with a higher wage, there is a huge p...