LAS Module 4

Ability and motivation

Performance is a function of _________

Ability

To drive performance, _______ is important

Motivation

ability is not the only key to success; remember that _____________ is also important

Rewards and motivation

Key components in retaining talent in an organization

Motivation (definition)

Defined as forces within a person that result in effort toward goal achievement. It accounts for willful direction, intensity and persistence of person’s efforts towards achieving specific goals

Maslow’s hierarchy of needs, equity theory of motivation, goal setting theory

Theories of motivation

Maslow’s Hierarchy of Needs

One of the most popular theories that try to explain what motivates individuals

This theory suggests that individuals’ motivations are influenced by the desire to satisfy specific needs.

These needs sit in a ranking, such that, the lower-level needs must be satisfied first before higher-level needs. 

Physiological and safety needs

Lower level needs

include basic needs for survival and safety such as food, shelter and clothing

If a person receives a salary that is not enough for food, shelter and clothing, then they may augment their income with a second job elsewhere—or may be motivated to find a job at another company. 

Social needs

These include being able to interact with others positively, and being accepted by peers. This could include forging positive relationships with other individuals, which is why a healthy work culture is important in organizations

Esteem Needs

Requires a recognition of your own self-worth and having self-respect to uphold your own personal values.

Working in an organization that aligns with your own values is important

Training and development programs help in developing individuals’ esteem needs.

Self-Actualization

The highest level in Maslow’s Hierarchy

Achievement of one’s full potential

Equity theory of motivation

This theory suggests that Motivation is based on the assessment of one’s own ratio of inputs and outcomes compared to others’ ratio of inputs and outcomes.

In an organizational setting, this theory helps explain why high-level managers would have larger rewards packages than those in the lower parts of the organizational hierarchy.

Their inputs—including their responsibilities—would be more extensive and, as such, their “outcomes” should also be larger.

Inputs

refer to one’s abilities and the amount of effort a person puts in

Outcomes

include what that person gets in exchange, like pay or status

Goal setting theory

Related to receiving rewards when playing mobile games

In the field of Organizational Behavior Research, this theory shows much promise in driving success.

This theory suggests that challenging and specific goals increase performance through attention, effort, and persistence.

By providing employees with goals, they are able to focus their attention on achieving objectives, exert effort directed at these same objectives and persist in reaching these objectives even in the face of challenges. 

Factors important in setting goals

Goal difficulty, Goal Specificity, Goal commitment, Participation in goal-setting, Feedback

Goal difficulty

Challenging but attainable goals are seen as most effective. If a goal is too easy, it may be perceived as not worth even pursuing. If a goal is too difficult and is perceived to be impossible, then individuals won’t even bother accomplishing them. 

Goal Specificity

The more specific a goal is, usually the better. Specificity allows individuals to direct their attention further. 

Goal Commitment

Commitment to goals is observed when the goal is perceived to be attainable and if the goal—or the rewards—are perceived to be desirable.

Participation in Goal-Setting

If an individual takes part in their own goal-setting, then they tend to perform better

Feedback

Providing timely _______ is also important when working with goals. Receiving _______ allows individuals to adjust their performance as they work towards their objectives

SMART Goals

Specific, Measurable, Attainable, Relevant, Timely

Specific

Answers 5W’s (who, what, where, when, why, which)

Define the goal as much as possible with no ambiguous language

Measurable

“From and to”

Can you track the progress and measure the outcome?

How much, how many, how will I know when my goal is accomplished?”

Attainable

Answers the question “how”

Is the goal reasonable enough to be accomplished? How so?

Make sure the goal is not out of reach or below standard performance

Relevant

Worthwhile

Is the goal worthwhile and will meet your needs?

Is each goal consistent with other goals you have established and fits with your immediate and long term plans?

Timely

Answers the question “When”

Objective should include a time limit

“I will complete this setup by month/day/year”

It will establish a sense of urgency and prompt you to have better time management

Rewards

One of the most motivating factors for employee

Total rewards

Financial and non-financial gains an employee receives in exchange for the time, effort, competences and results they provide the company

Has multiple levels, and may be used not only to motivate employees, but also to recruit and retain them

Able to drive employees to perform well, and contribute to the organization’s success

5 elements of total rewards

Compensation, benefits, career opportunities and development, recognition, work-life balance

Compensation

One of the more traditional concepts of “rewards”

Refers to salaries which is given by an employer to an employee in exchange for services provided.

In order to be strategic, it has to be tied to goals through the notion of Pay for Performance or Performance-based Pay.

It aims to reward employees to do better in their jobs and meet their individual goals, which, in turn, contributes to the overall organization’s goals.

Can either be fixed pay or variable pay

Fixed Pay

Does not change throughout the year

Ex: 13th month pay (extra month of salary paid on or before Dec 24, or in two installment)

Variable Pay

Associated with certain levels of performance, and is based on individual or group incentives

May change depending on the time periods for measuring performance

Ex. Commissions (If one exceeds his sales target for a specific period, they may earn a certain commission)

Benefits

These are typically programs that employers use to complement compensation given to employees.

Would include programs like Medical Health Care and Dental Coverage, Life insurance, and even vacation and sick leaves

A number of organizations also offer Retirement or Pension plans, which encourage retention of talent and motivate employees to stay for the long-haul.

SSS, GSIS, PHILHEALTH, PAGIBIG

Mandatory benefits given to employees in the Philippines

Career Opportunities and Development

Having opportunities to develop competences and to progress in careers in a meaningful way are very motivating for employees. As they grow in an organization, they are able to perform even better and take on more responsibilities—making it a Win-Win situation for employer and employee.

Learning opportunities, mentoring, career advancement

Forms of Career Opportunities and Development

Learning opportunities

on-the-job learning, attending workshops or seminars, special programs

Mentoring

coaching, exposure to experts and even consultants. Some organizations have formal mentoring programs where they pair seniors managers with newcomers

Career advancement

promotions, job rotations, opportunities for expatriation

Recognition

Simply, this involves the acknowledgement of an individual or a team’s performance, effort or behavior that contributes to the achievement of the organization’s goals.Is said to be very effective at reinforcing positive performance since people want to feel valued.

• As such, this may be a powerful and strategic tool in driving results. 

Work-life balance

Perhaps often overlooked, but in recent years has gained importance, this refers to a series of policies and programs that understand that employees are not just workers, but also human beings with lives outside of the office.

• These are designed to support employees’ success not only inside but also outside the company. 

Continuance commitment, normative commitment, affective commitment

Three types commitment in the world of organizational behavior

Driving commitment

Total Rewards are usually tools to motivate people.

When leveraged well, these may also drive commitment.

In the world of organizational behavior, there are said to be three types of commitment

Continuance commitment

Loyalty to an organization because of inertia.

Employees with this type of commitment stay because they feel that they will have no other opportunities outside the company or they won’t find higher salaries elsewhere

Normative Commitment

Loyalty to an organization from feelings of obligation. Employees with this type of commitment stay because they will feel guilty if they leave.

This guilt may be because, if they leave, their colleagues will have to pick up their tasks.

Affective commitment

Loyalty because of strong positive attitudes toward an organization.

They actively want to stay in their organization and contribute to its goals.

Usually, they identify with these goals and objectives and want to contribute to their accomplishment.

Most powerful type of commitment

Aligned Reward Strategy

Creating a total rewards package that produces the employee behaviors the firm needs to achieve its competitive strategy.

Providing additional incentives or compensation may be one way to encourage greater performance, but there are other available rewards as well.

Having recognition programs, promoting work-life balance and offering opportunities for development are all very motivating and will also contribute to attaining organizational goals.

External, Internal, Individual, Procedural

Different types of equity

External Equity

How a job’s pay rate in one company compares to the job’s pay rate in other companies. This is why it is good practice to get an idea of how similar roles in the same industry pay their employees in comparable job levels.

Sample question to ask: How much an entry-level Marketing Executive is paid at a competitor—or as an average in your industry.

Internal Equity

How fair a job’s pay rate is when compared to other jobs in the same company.

Sample question to ask: How an entry-level Marketing Executive compared with an entry-level Sales Executive.

Individual Equity

How fair an individual’s pay rate is when compared to others in the same job—or very similar jobs—in the company, and assess this based on performance

Sample question: Look at the different entry-level Marketing Executives and see if they are all paid similarly

Procedural Equity

Fairness in the processes and procedures that are used to make decisions about pay rates

Sample question: Were the processes similar across different teams and, if not, how come there were differences?

Market based approach

This involves assessing external equity, looking at what others in the industry are paying for particular jobs and then, based on the information gathered, deciding what salaries to give the internal jobs.

Job Evaluations

This process assists in producing an equitable pay plan based on external factors—what other employers are paying—and internal factors, how each job is valuable to the employer.

As such, this process includes assigning values to each role within the company.

When performing this, you may determine that some jobs as a whole are more important than others and determine pay by compensating more generously the roles with more weight.

Market based approach, Job evaluations

Two basic approaches to setting pay rates

Compensable factors

These are certain, fundamental factors jobs have in common—they may include level of effort, skill, knowledge, scope of responsibility, working conditions, and, yes, Competences. You would then place a value to these compensable factors in order to determine level of pay.

Job ranking

Simplest way of determining pay or salary

This determines one overall Compensable Factor, like “job

Difficulty” in comparing different jobs in an organization and setting a salary for each.

In this process, you would rank your job roles in terms of level of difficulty

Obtain job information, Select and group jobs, Select compensable factors, Rank jobs, Combine ratings, Compare current pay with what others are paying based on salary surveys, Assign a new pay scale

Steps to undertake when performing job evaluation using ranking method

Obtain job information

First, you would gather data regarding the different jobs within the company.

This should be available based on the Job Descriptions for each role.

Select and group jobs

It might not be prudent to rank all jobs in an organization, especially if the organization is large. As such, based on the information available in Step 1, you would classify jobs together, looking at which jobs are most similar in terms of responsibilities. These are usually referred to as Job Groups or Job Classifications. 

Select compensable factors

In this case, “Job Difficulty” is selected as the compensable factor. You may choose other compensable factors to include in your Job Evaluation, keeping in mind important Compensable Factors in your organization.

Rank Jobs

Considering the compensable factor you listed down, you would then rank each of the jobs.

Combine ratings

Job Evaluations are usually done in teams. In this step, you would need to combine the ratings for each member of the Job Evaluation team. Once a ranking is developed, you will be able to assess whether pay is Internally Equitable. Are the “more difficult” jobs paid higher than the easier jobs? 

Compare current pay with what others are paying based on salary surveys

Aside from looking at internal equity, it is necessary to look at external equity as well. Looking at information gathered from industry experts and competition, you would assess whether your salary levels externally equitable.

Assign a new pay scale

In this step you would adjust the pay for employees based on your findings from previous steps

more traditional, almost transactional

Compensation and Benefits, together, are viewed as the ______

Total rewards → Career Opportunities & Development

Self-Actualization

Total rewards → Recognition & Work-Life Balance

Esteem, Social Needs

Total rewards → Compensation and benefits

Safety needs, physiological needs (basic needs)

Informal, Formal

Types of recognition

Informal recognition

More everyday gestures from people, especially managers, that cost little to nothing. Expressing appreciation, commending colleagues, cultivating a positive work environment and building a culture of recognition would benefit organizations by providing an environment where colleagues support one another.

Should also be timely—it does not make sense to commend someone for an exceptional presentation four (4) months after the presentation.

Showing appreciation, acknowledging achievement

Forms of informal recognition

Showing appreciation

This includes verbal or written ‘thank you’ notes, and even celebrating teammates’ birthdays. Simple, genuine positive reinforcement during meetings, such as saying someone has a “great idea” or “I like what he/she said” is oftentimes overlooked, but also contributes to more open communication.

Acknowledging Achievement

This may involve having celebrations when the team reaches a milestone, or including an individual or group’s success story in the company newsletter.

May also take the form of giving an individual a special project that recognize the person’s skill.

Formal Recognition

Come in the form of programs that are endorsed by the organization and usually involve a nomination and selection process, as well as an actual “award” or “prize” that the company gives.

This award or prize usually conferred is a title such as “Employee of the Year” and usually has a gift that has some financial value to it, such as a gift certificate or, in some cases, an additional monetary bonus.

Loyalty Awards for employees who stay for 10, 15, 20 or more years is another example.

Define objective, think about logistics, spread the word and execute, evaluate

When setting up formal recognition initiative, it is important to _________

Define the objective

Look into what behaviors you want to reinforce in the organization

Examples: Loyalty to the organization or performing well against business metrics

Think about the logistics

Consider how individuals or teams are nominated, how the winners will be selected— and there should be impartiality to this— among other things

Will the recognition be given every year? Are these prizes desirable and commensurate to the achievement?

Spread the word and execute

Formal recognition initiatives are a great opportunity to engage with employees and have them show appreciation for their colleagues by nominating others in the organization

Make sure to communicate the guidelines as you are implementing

Evaluate

Make sure to assess if the program is successful

Did employees participate? Did employees feel that the process was fair? Were the behaviors you awarded previously reinforced? Was the criteria fair?

Workplace flexibility, Creative Use of Paid and Unpaid Time Off, Supporting health and wellness, community involvement, caring for dependents, financial support, culture change initiatives

Seven areas of support in work-life balance (though may not apply to every organization)

Workplace flexibility

Through Offering more flexible work arrangements, including time management, location and processing. This includes things like working from home and flexi-time

Creative Use of Paid and Unpaid Time Off

Similar to the vacation and sick leaves, this area focuses on personal time to spend with people outside of work. This is influenced by government regulations in each country of operation—like regulations on maternity and paternity leaves.

Supporting Health and Wellness

These include stress management programs for emotional/mental health, as well as health checks.

The aim of these initiatives would be to promote healthy lifestyles for employees—which also promote increased productivity by reducing absenteeism.

Community Involvement

Includes offering assistance to employees affected by disasters. However, CSR activities that enjoin employees to contribute to the greater community are also included.

This is part of assisting in improving communities where organizations operate to provide better conditions for greater society, and consequently, the employees themselves.

Caring for dependents

Providing day care services for parents and short-term leaves in cases of emergency are important elements of this area of support.

Flexi-time may also be considered a policy to support this, aside from being part of “Workplace Flexibility.”

Dependents in this case may be children or even senior parents.

Financial Support

Guiding employees in managing personal finances may also help. This includes providing pension funds for employees and offering loans at discounted rates to employees.

Culture change initiatives

This means building a culture that is both diverse and inclusive, and upholding the rights of employees and customers.

Advocating for employees’ rights even outside the company shows how the organization is committed to protecting employees that identify with minority and oppressed groups and is in line with ensuring the success of employees both inside and outside the organization.