EMPLOYEE MOTIVATION
each unit they produce, directly linking the amount they earn to their produc- tivity. Pro t-sharing plans are based on overall company pro tability. Using an established formula, management distributes some portion of company pro ts to all employees. Gain-sharing plans are incentive programmes based on group productivity. Employees share in the nancial gains attributed to the increased productivity of their group. This encourages employees to increase productivity within their speci c work area regardless of the overall pro t picture for the company as a whole. One well-known approach to mon- etary incentives is the award of stock options, or giving employees the right to purchase a given amount of stock at or below-market prices. Stock can be a strong motivator because those who receive the options have the chance to make a lot of money. One popular incentive is the bonus. A bonus is simply a one-time lump-sum monetary award. In many cases, employees receive bonuses for achieving a particular performance level, such as meeting or exceeding a beer sales quota, and it is not uncommon for bonuses to be substantial. For line and staff employees, bonuses could add up to 3-5% of their annual pay; for middle managers, that gure rises to the low double-digit percentage range. For executives, speci cally senior exec- utives, bonuses can constitute up to 50% of their annual compensation. Trends in employee motivation Companies can improve performance by investing in people. In reviewing the ways companies are currently choosing to invest in their human resources, there are four positive trends: education/training, employee ownership, work-life bene ts, and nurturing knowledge workers. Education and training: Companies that provide educational and training oppor- tunities for their employees reap the bene ts of a more motivated, as well as a more skilled, workforce. Employees who are properly trained in new tech- nologies are more productive and less resistant to job change. Education and training provide additional bene- ts by increasing employees’ feelings of competence and self-worth. When companies spend money to upgrade employee knowledge and skills, they convey the message “we value you and are committed to your growth and development as an employee.”
mean time-off of a month or more, paid or unpaid. In today’s business environment, companies are juggling cutting costs and increasing pro ts while simultaneously battling to keep employees motivated and positive about work. Sabbaticals can be an important tool to help managers achieve this balancing act. Nurturing knowledge: Most compa- nies have specialised workers, and managing them all effectively is a big challenge. In many companies, knowl- edge workers may have a supervisor, but they are not ‘subordinates’ they are ‘associates’. Within their area of knowl- edge, they are supposed to do the telling. Because knowledge is effective only if specialised, knowledge workers are not homogeneous. And because knowledge work is specialised, it is deeply splintered. A knowledge-based workforce is qualitatively different from a less-skilled workforce. Increasingly, the success, indeed, the survival of every business will depend on the performance of its knowledge workforce. The challenging part of managing knowledge workers is nding ways to motivate proud, skilled professionals to share expertise and co-operate in such a way that they advance the frontiers of their knowledge to the bene t of the shareholders and society in general. To achieve that aus- picious goal, companies have created what they call ‘communities of practice’. References OpenStax Introduction to Business, Introduction to Business. OpenStax CNX. 13 Nov 2018
Employee ownership: In an employee stock ownership plan (ESOP), employ- ees receive compensation in the form of company stock – this is not the same as stock options; recall that stock options give employees the opportu- nity to purchase company stock at a set price, even if the market price of the stock increases above that point. Because ESOP employees are com- pensated with stock, over time they can become the owners of the company, an attractive exit strategy for current owners seeking a smooth transition. Behind employee ownership programmes is the belief that employ- ees who think like owners are more motivated to take care of customers’ needs, reduce unnecessary expenses, make operations smoother, and stay with the company longer. ESOPs, however, also have drawbacks. The biggest concern is that some employ- ees have so much of their nest eggs tied to their company’s ESOP. If the company’s performance starts to decline, they risk losing a signi cant portion of their wealth. Work-life bene ts: Companies are helping their employees to manage the numerous and sometimes competing demands in their lives. Companies are taking a more active role in helping employees achieve a balance between their work responsi- bilities and their personal obligations. The desired result is employees who are less stressed, better able to focus on their jobs, and, therefore, more productive. One tool companies are using to help their employees achieve work-life balance is the sabbatical. Today, sabbaticals can
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