MOD003325: Employee Motivation and Performance Enhancement Techniques

This presentation delves into the multifaceted realm of employee motivation, examining various methods to enhance performance and engagement. It begins by defining motivation and its significance in achieving organizational goals, highlighting the factors that contribute to employee demotivation. The presentation then contrasts financial motivation, such as monetary incentives, with non-financial approaches like rewards and recognition, and personal enrichment programs. It explores the advantages and disadvantages of each method, providing real-world examples and theoretical frameworks like Maslow's hierarchy of needs. The analysis covers the reasons why financial motivation can be effective, as well as its limitations, and why alternative methods may be more successful in certain contexts. The presentation concludes by emphasizing the importance of understanding employee needs and preferences when designing motivation strategies to foster a productive and satisfied workforce.

Academic and Professional
Skills

Table of Contents
INTRODUCTION...........................................................................................................................3
Advantages of financial motivation.................................................................................................3
Two main advantages of financial motivation.............................................................................3
Reason because of which financial motivation work..................................................................4
Reasons because of which employees favour this method..........................................................5
Reasons because of which employers favour this method..........................................................5
Disadvantages of financial motivation............................................................................................5
Disadvantages..............................................................................................................................5
Reason because of which financial motivation sometimes fail...................................................6
Reasons because of which employees reject this method...........................................................7
Reasons because of which employers reject this method............................................................7
Rewards and recognition method of motivation..............................................................................8
Relevant theory along with appropriate example........................................................................8
Why rewards and recognition or non financial motivation is. better than financial motivation. 9
Offering personal enrichment and development programs to employees.......................................9
Theory behind this method........................................................................................................10
Reason because of which it is better than financial motivation.................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
This presentation outlines different methods for employee motivation and what makes
them better than financial motivation. Motivation can be defined as an element that initiate,
guide and maintain goal oriented behaviour of employees. There are several reasons because of
which motivation is highly important as this improves level of efficiency of employees and also
lead to achievement of organisational goals and objectives. Encourage employees to stay and
retain within organisation and reduces employee turnover. Motivated behaviour of employees
leads to increase in productivity and profitability of the employees and employee become
diligent concerned with their performance. Even after these benefits and importance of
motivation to organisation and to employees, few employees become demotivated. There are
several reasons for this and mainly these reasons involve feeling under-valued, lack of or no
development opportunities, poor leadership etc. In present times as demand for technically and
professionally skilled and educated workforce increase, employees are looking for a job where
they can develop themselves and learn, it also has direct influence on their motivation. In case
such employees do not get adequate opportunities to learn and develop, this also become an
element in demotivating employees. Improvement in motivation can lead to improvement in
employee performance and productivity of the organisation. This is also important for retention
of employees as demotivated employees often increase absenteeism and turnover of the
organisation.
Advantages of financial motivation
Financial motivation is one in which employees are given monetary incentives for their
performance above standards.
Two main advantages of financial motivation
Extra efforts tied to monetary incentives is perceived fair by employees- This is one of the most
important advantage of financial motivation. Employees when are paid for their extra
performance or are paid for performance, they consider and perceive as fair (Grynko and et.al.,
2017). This is because increase in their performance is not only beneficial for organisation but is
beneficial for them as well and they are being treated fairly and getting advantage of their efforts.

Decrease in employee turnover and leading to increase employee satisfaction- Employees
when are paid well they are more likely to retain in organisation for longer period of time
compared to those who are not paid well. Fair and high remuneration and monetary incentives is
one of the most important elements of employee satisfaction. Satisfied employee is a great asset
to organisation as they are more likely to get engaged with their job.
Reason because of which financial motivation work
One of the most important reasons that financial motivation works is that every employee
regardless of their needs likes to be paid well. This means that financial motivation gives
employees a sense that their extra efforts are not only for organisation and also are useful and
beneficial for them. In other words, employee may feel that their extra efforts in organisation
have no benefit for them and they will be paid same. Financial motivation ensures that
employees do not feel this way.
Financial motivation is one of the best ways for ensuring effective and higher
performance of employees in work that is of repetitive nature (Jost and et.al., 2017). This means
that employees when do same work every day, after some time their productivity might reduce
but linking monetary incentives with their performance ensures that they are performing
effectively and above standards. For example- Employees who are expected to produce 10 units
of a product a day, are when told to and expected to produce more units, they might get
demotivated or possibility is there that they will not agree with this thought because there is no
benefit for them in producing extra units of product. Contrary to this in a situation employees are
offered that they will be paid extra for each unit they produce above 10 units in a day. This will
motivate them to work hard and produce extra units, this way organisation will be able to utilise
highest potential of the employees.
Another suitable example of this is commission based reward system. In this system employees
are hired for minimum or basic remuneration and further their remuneration is based on clients
they bring to organisation or on the basis of sales that they make. Remuneration when is based
on this criteria employees make their best efforts to ensure that they make higher sales and bring
highest possible clients for the organisation. This is beneficial for both organisation as its sales
get increased and for employees as they receive commission.

Reasons because of which employees favour this method
 One of the most important reason that employees favour this method is that they efforts
are directly linked with rewards
 Increase in pay and remuneration through this is another reason employees favour this
method
 Extra efforts are not only for organisation but are equally beneficial for employees
 Financial motivation involves monetary reward and incentives to motivate employees and
this enables employees to control their income (Wang, 2019). This means that employees
become better at projecting their income and required efforts for that income
 This is simple for calculating and linking with efforts
Reasons because of which employers favour this method
 Employees mainly expect monetary benefits in exchange of their performance in
organisation. Giving them monetary benefits ensure that employers are fulfilling
expectations of employees
 Universal application of monetary rewards this means that monetary rewards and
incentives are liked and preferred by everyone. Other methods of motivation are mainly
based on whether employees like and prefer it or not
 Simple to control and easy to make employees understand
 Straightforward ways to influence specific behaviour of employees
 Most employees do not like to be recognised and rewarded for high performance and
prefer to get paid for higher efforts (Grynko and et.al., 2017).
Disadvantages of financial motivation
As discussed above there are different several benefits and advantages of financial
motivation for employees and for employers as well. But on the other hand there are
disadvantages of using financial motivation.
Disadvantages
Monetary incentives create difficulties for budget of the organisation- This means that when
organisation starts giving monetary incentives, employees increase their performance and output
and this increases requirement for budget. This is because average incentive given to employee

for extra performance or output is higher than their actual average incentive. For example when
employees are given incentives for producing extra units of product above 10 units, in this case
incentive given for this extra unit is higher on the basis of average compared to what employees
are given for producing 10 units on average (Hong, Anh and Tran, 2018). This way financial
motivation is hard on budget of the organisation.
Financial motivation or more money does not guarantee more loyalty of employees- This is
another element to be considered regarding financial motivation. This means that giving extra
incentives and more remuneration for extra output does not guarantee that employees are loyal
for the organisation. This means that employees will not necessarily retain in organisation even
when they are paid higher incentives. This means that employee will retain in organisation and
become more engaged and loyal for the organisation but after certain time monetary benefits will
reduce their importance compared to values, culture and other benefits of the organisation.
Reason because of which financial motivation sometimes fail
Financial motivation is one of the most important method that is used by organisations to
engage employees and ensure that they are using their best potential while working. However,
this is not always successful in motivating employees. This means that in present time when
demand for employees with technical, professional and administrative has increased (Landry and
et.al., 2017). These employees are highly qualified and this is why their expectation from their
workplace are also higher and more than money. This is one of the reason that financial
motivation fails sometimes. There are employees who are looking for some other elements in
their job and this can be flexible working or other benefits except money. Employees having
need for rewards and recognition cannot be motivated by financial motivation as well. Reward
and recognition are two elements that help employees in creating their value as an employee and
also help in building their goodwill and fulfilment of self esteem is also associated with this. This
is why financial motivation fails sometimes. Many of the times when employees are regularly
given benefits, they convert into entitlement rather than incentives and performance linked
benefits.
Incentive based rewards when encourage competition, employees try to out-perform their
colleagues and this is not good for culture and environment of the organisation. This way

motivation may lead to conflicts and element motivation one employee can demotivate few other
employees in organisation.
Another reason because of which this can cause failure sometimes is that there is long delay in
performance and rewards. This means that employees performing on a certain date are rewarded
six months, this way employees will not be motivated through financial motivation (Destin,
2017).
For example employees are rewarded with extra incentives on quarterly or annual basis, this will
not motivate them, on the other hand, this can work in reward and recognition as many of the
organisations provide recognition like Employee of the year, this is a big difference in financial
and non-financial motivation.
Reasons because of which employees reject this method
 There are several reasons because of which employees reject this method is that many of
the times employees are more concerned with culture and environment of the
organisation
 For many employees reward and being recognised is more important rather than
monetary benefits
 Extra benefits and monetary benefits require and compel employees to work hard and
work more and many of the times employees reject financial motivation as they do not
want to work extra
Reasons because of which employers reject this method
 Employers also reject this method of motivation because this create difficulties for budget
maintenance
 This is not suitable for small organisations with limited financial availability and this is
why employers reject this method (Sen and et.al., 2016).
 Employers also reject this method as calculation for incentives is highly complicated
 Employers also reject this method as increasing output of employees often make negative
impact on the quality of the output of product

Rewards and recognition method of motivation
There are several methods of motivation or ways by which employers can motivate to their
employees in an organization. One of the common methods of motivation is financial. Rather
than, financial motivation, employers motivate their employees by rewards and recognition. It is
non financial method. In this rewards and recognition motivation method, employers appreciate
their employees in front of other employees on the basis of their performance. It makes
employees feel valued and motivated (Ndungu, 2017). When employees get non financial
rewards like appreciation, promotional opportunities, responsibilities and opportunities of
participate in organizational decision making and other activities then it increases their self
esteem. Self esteem is increased level of needs. When employers satisfy their higher level of
needs and increase self esteem then employees are more likely to stay with the company for the
long run. It improves their image and helps them out in taking competitive advantages.
Relevant theory along with appropriate example
Maslow’s hierarchy of needs explain all type of needs which employees have within an
organization. In this hierarchy of needs, self esteem needs have also been explained and they are
at higher level. All needs which employees have as per this pyramid include:
Physiological needs: It includes basic needs without which employees cannot live such as food,
shelter and clothing. But nowadays, employees have these needs and by getting basic salary as
per the wage act they can satisfy this need.
Safety needs: After satisfying basic needs, employees want to feel safe and secure as it is
believed that health is important than other things. So, by providing safety at workplace,
employers satisfy these needs.
Belonging needs: Employees at this level have social needs as they want to enjoy social lie
along with professional life. So, employers provide them flexibility working and also create
friendly working environment (Bouzenita and Boulanouar, 2016).
Self esteem: In this stage, employees want to achieve something and some motivation which can
make them feel valued. So by providing promotional opportunities, appreciation, status and
prestige employers can satisfy this need. Self-esteem needs get fulfilled by providing reward and
recognition to employees
Self actualization: After achieving all things, employees want to realize their potential.

So, from the above discussed all needs it can be said that non financial and appreciation,
rewards play a vital role as most of the needs are non financial.
As discussion outlined that reward and recognition is another method for motivating employees
and theory outlines that employees self-esteem needs get fulfilled by reward and recognition. For
example- employees working at senior positions in organisation are paid well and they cannot be
or do not get motivated by extra incentives that they are paid for, in such situation rewarding
them and recognising them with special entitlements contribute in motivating employees.
Why rewards and recognition or non financial motivation is. better than financial motivation
In the context of non financial and rewards and recognition it can be said that it satisfies
higher level of needs of employees. There are different behaviours of employees in which some
wants to be promoted and appreciated and some wants bonus. Financial motivation is
temporarily a it increase needs of employees as financial rewards like incentives and bonus
cannot increase self esteem of employees. Whereas, appreciation makes employees feel valued
they believe on themselves when they are appreciated and promoted on the basis of performance.
It boosts their confidence and motivates them towards increasing performance and bring
innovation and creativity within organization. Non financial or recognition are beneficial for
both employers and employees as it improves overall performance and productivity. When
employees are being promoted and appreciated then it motivates other employees as well and it
leads to improved working and productive environment.
Offering personal enrichment and development programs to employees
This is another method of motivation in which employees are provided opportunity to
participate in programs that add value in their knowledge, skills and competency. This is also
known as career development programs. With help of these programs employees become more
competent that they can be promoted and work on positions that is senior to their current
positions (Abdi Mohamud, Ibrahim and Hussein, 2017). In other words, this means that
employees are offered tuition reimbursement or are sent to workshops and seminars that are
likely to add value in their knowledge and skills. This motivation method is highly important for
the employees and proves to successful in motivating those employees who are growth oriented
and has a need for growth.

Theory behind this method
ERG theory of Alderfer
This theory involve three types of needs and these needs are-
Existence needs- This is concerned with need and all material and psychological needs. These
are needs and desires that are important for survival of individuals and are known as substantial
needs of the employees.
Relatedness needs- This is concerned with the need to encompasses social and external esteems.
In other words this is also known as need for being associated with others and establish relations
with other people working within organisation.
Growth needs- This is concerned with the need in which individuals aims to and desire to fulfil
their esteem and ensure that they are working to their best potential (Chen and Fellenz, 2020).
This means that individuals are willing to perform productively and work that require higher
intelligence and competency.
This is a need that requires individuals to work on their competency and knowledge and
intelligence required for the work. In other words, individuals when employees are willing to
perform better and increase their productivity need assistance of programs through which they
can develop and enhance their skills. Such needs are fulfilled by providing career development
and personal enrichment programs, employees with this need are when provided these program
get motivated and work effectively in such organisation.
Another theory behind this is McClelland’s theory of needs. As per this theory employees have
three types of needs that are achievement, affiliation and power. Among these needs, employees
with dominant need for achievement are motivated when they are offered personal enrichment
and career development programs (Cote, 2019). This means that increase in knowledge and
competency enables them to complete more difficult and complicated task and this add in their
achievements. For example- Individual in their growth needs want to work at senior position in
organisation and organisation enables them to be competent and skilled to work on senior
position. This way employee gets motivated.

Reason because of which it is better than financial motivation
There are several reasons because of which this method is better than financial
motivation. This means that financial motivation is for short term effects, this means that
financial motivation bring short-term results in organisation and as well as for employee, but
through personal enrichment program organisation enables individuals to become more
competent, this has a long term effect and organisation gets direct benefit from increased
knowledge and skills of employees (Rodriguez and Walters, 2017). Financial requirement for
this method is much lower than financial need in financial motivation and this is also another
important reason that this method is better than financial motivation.
CONCLUSION
On the basis of above discussion, it can be concluded that financial motivation is a
method that is universal and is applied by every organisation in some way. This report involves
positive and negative elements of financial motivation and also involves discussion regarding
two other motivational methods. These methods are reward and recognition and personal
enrichment program. Discussion outlines that employees in present times also need to be
motivated through different methods than financial motivation. Because for employees there are
several other factors that are important than money and discussion outlined that using personal
enrichment program is beneficial for organisation in long term. Discussion also outlined that
reward and recognition is also a method for motivation but this can have positive and negative
effect in organisation. Present condition and trends suggest that personal enrichment and career
development program are likely to be highly successful for motivating in future. This is because
employees are getting more conscious towards their career development.

REFERENCES
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