Employee Motivation and Reward in Entrepreneurial Firm

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Employee Motivation and Reward in Entrepreneurial Firm

Introduction: There is a well accepted saying that employees are an organizations greatest assets. Any successfully and professionally run organization needs that contribution of its employees in order to remain like that. For efficient employee performance a proper system of employee motivation and rewards should be in place. This paper is a review of both employee motivation and rewards with special reference to the Thai Lay Fashion Company Ltd, a garment exporter situated in Hong Kong. The writer (of this paper) is the owner and managing director of the company.

Employee Motivation and reward: Employee motivation can be defined as the the level of energy, commitment, and creativity that a companys workers bring to their jobs. (Legal Definitions: Employee Motivation Law& Legal Definition, 2008). In order to maintain and increase the above factors, the employee will have to be motivated and rewarded. The first reaction about what motivates an employee would be that it is the monetary compensation received in exchange of work performed. Many theories and studies have proved that monetary compensation is only one of the factors that motivate employees.

One of the earliest studies on employee motivation that lasted over twenty years revealed that employees did not consider money among the three most important motivating factors. In one of the most elaborate studies on employee motivation, involving 31,000 men and 13,000 women, the Minneapolis Gas Company sought to determine what their potential employees desire most from a job. (Employee Motivation: Theory and Practice, 2008). The study which started in 1945 and lasted for 20 years also showed that men and women employees think alike in this respect to a large extent. Security, nature of work, and advancement opportunities, and the reputation of the company were the main factors that came up as motivating employees. With regard to Thai Lay, we give our employees job security, advancement opportunities especially in the managerial jobs and the challenge needed for the growth of the company. It is also true that individual employees may have different perceptions about what motivates them. According to the book Employee Reward, the following factors will have to be taken into consideration when trying to motivate and reward employees. They include satisfaction of individual (employee) needs, specific and challenging goals to work for, and the individual expectations of reward by the employee. Other important factors are fairness, equity, and consistency. Motivation strategies should incorporate all the elements referred to above. (Armstrong, 2002). The different theories and studies on motivation is testimony to this fact. They include Douglas McGregor (theory y), Frederick Herzberg (two factor motivation hygiene theory,) Abraham Maslow (theory z, hierarchy of needs), Elton Mayo (Hawthorne Experiments) Chris Argyris Rensis Likert and David McClelland (achievement motivation). (Employee Motivation: Theory and Practice, 2008). Motivation can be extrinsic (tangible) and intrinsic (intangible). An example of each would be monetary compensation (extrinsic) and job satisfaction (intrinsic). The Thai Lay Fashion Company has bonus programs and rewards based on productivity. For example, in its factory in China, employees are given specific targets and a bonus is provided each time it is achieved. Moreover the top worker in each department is given a special cash award in a social gathering of all employees every year. Sick leave, maternity benefits, travel allowances etc are provided in excess of what is required by statutes and labour laws.

There are many innovative ways in which intrinsic motivation can be provided which are a reward in itself. Some of them like challenge and career advancement have already been mentioned above. Another study results published in the Journal of Extension also agrees to what has been said above regarding intrinsic and extrinsic motivation. Employees of the Piketon Research and Extension Centre and Enterprise Centre gave the following factors as motivating for them. The ranked order of motivating factors were: (a) interesting work, (b) good wages, (c) full appreciation of work done, (d) job security, (e) good working conditions, (f) promotions and growth in the organization, (g) feeling of being in on things, (h) personal loyalty to employees, (i) tactful discipline, and (j) sympathetic help with personal problems. (Linder, 1998). With regard to Thai Lay Fashion, the company regularly sends letter of appreciation to its top performers and sees to it that they are also publicly posted in the company bulletin board. We provide clean and safe working environments, a sympathetic but firm managers and supervisors and strong job security. We also provide employee participation by asking for suggestion and ideas. We have also tried and adapted some other non-monetary motivational methods as mentioned in the article titled 25 Ways to Reward Employees (Without Spending a Dime). The article states that We talked to management consultants, HR pros, career coaches, book authors, and bosses from a range of industries to glean the 25 best ways to reward employees without breaking the bank. (Tynan, 2008). The ones we adapted to our company are gives below. They include flexibility in working hours, making the work more enjoyable and fun, strong communication, social gatherings and parties, practical job swaps, recognizing birthdays and anniversaries etc. Providing stock options (ownership) in the company is also a monetary way of motivation and reward. But this practice is not followed at present in our company.

Motivation is a challenging task and we take it very seriously in our company. Setting a reward system is equally challenging and we try to make it perfect by providing proper job descriptions, setting up performance standards and benchmarks, proper monitoring and periodic reviews and changes (to the reward system) when needed.

Bibliography

ARMSTRONG, Michael. (2002). Employee Reward.

Employee Motivation: Theory and Practice. (2008). [online]. ACCEL Team Development.

Legal Definitions: Employee Motivation Law& Legal Definition. (2008).

LINDNER, James R. (1998). Understanding Employee Motivation. [online]. Journal of Extension, Vol. 36.

TYNAN, Dan. (2008). 25 Ways to Reward Employees (Without Spending a Dime). [online]. HR World.

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