Motivation And Retention Is A Key Focus Commerce Essay

Employee motive and keeping is a cardinal focal point for companies presents. What policies and patterns do you see might better motive and keeping? Is there any grounds as to what patterns work?

Presents, Employee motive and keeping is a cardinal focal point for companies. The factors that chiefly influence employee attitude, productiveness and organizational fight are wagess and acknowledgment. Human Resources have become the most of import plus for an administration and people assets are now often viewed as critical to concern success. It is critical for the company to place their “ star ” performing artists, place them in the right places in the organisation and maintain them in the concern for long term to last the environing competition. Therefore, employee motive and keeping schemes should be developed and implemented by the company to increase employee term of office and cut down the turnover rate.

“ Employee keeping is king ” ( Frank et al. 2004 ) . This quotation mark is frequently used to depict keeping of employees as the cardinal factor in an administration ‘s future effectivity. To understand what encourages committedness and the keeping of employees, it is necessary foremost to understand motivational factors, since motive is a cardinal field of human resource direction ( HRM ) .

Different people are normally motivated by different things: some people may be encouraged by pecuniary wagess, while others are motivated by personal accomplishment or by the chance to progress in their calling. Theories of motive are important in HRM as they help administrations to understand or place single demands, so that direction is able to alter the company ‘s strategy to fulfill its employees.

While discoursing the relationships among single motive factors and occupation satisfaction, Abraham Maslow and Frederick Hertzberg stated that the administration must first understand what motivates employee. Therefore, to increase keeping rates, they should offer basic human demands in footings of physical and psychological demands. If an employer is non able to fulfill the demands of its employees, it may ensue in employees go forthing the employer.

By the 1940s, Maslow had developed the ‘hierarchy of demands ‘ attack to motive. This theory attempts to demo how the healthy personality grows and develops over clip and how that personality comes to attest itself in motivated behavior. In an organizational context, the first degree is that of basic demands, such as physical comfort, wage and basic on the job conditions. After these demands are satisfied, the following degree demands are more psychological: such as experiencing safe in one ‘s occupation. The 3rd degree concerns societal demands, which relate to factors such as friendly relationships, relationships between colleagues, and belongingness. The 4th degree relates to respect ; carry throughing such demands may intend that employees are given the chance to accomplish a certain degree of position. Maslow ‘s 5th degree, the demand for self-actualisation, is reached when the employee feels that the occupation itself has the opportunity for growing, which relates to the development and accomplishment of one ‘s possible.

Frederick Hertzberg ‘s two-factor theory, the ‘dual construction theory ‘ , is in an organizational context used to place what motivates employee to work hard and what makes employees satisfied or dissatisfied. The theory is structural because the attitudes of employees are straight related to their workplace environment. This is of great practical usage for houses, because the houses can increase occupation fulfilment by act uponing occupation features that they normally have power over. Hertzberg provides a model for understanding motivational factors, categorised into external and internal factors. The external factors are called hygiene factors, which are needed to guarantee an employee is non dissatisfied. On the other manus, internal factors are known as motivational factors, which are needed in order to actuate an employee to greater public presentation.

There are similarities between Maslow ‘s and Hertzberg ‘s theories in footings of motivational and human demands. Maslow ‘s first three degrees in the hierarchy of demands show some similarities with Hertzberg ‘s external factors, and the 4th and 5th degrees show similarities with his internal factors. The diagram below shows Maslow ‘s hierarchy of demands and besides applies Hertzberg ‘s two-factor theory, which is used when nearing analysis to clear up and discourse an employee ‘s satisfaction within an administration.

The combined hierarchy of demands and two-factor theoretical account ( Wikipedia, 2009 )

Employers should clear up the demands and demands of employees in order to run into employees ‘ demands. Each employee has specific demands, and the undertaking for the administration is to detect these demands in order to obtain and garner information on how to actuate an employee through fulfilling his or her demands. Appraisal is a cardinal constituent of HRM in any administration. Through assessments, the information needed for systematic development of persons – their callings, preparation, wagess and occupation design – is brought frontward. Appraisal is a common method used by an administration to place employees ‘ basic demands by giving them the chance to discourse future development and clear up single demands. In this manner, the house will hold the necessary information for retaining employees through fulfilling their demands. This information is indispensable to explicate keeping schemes, which are presented in the undermentioned subdivision.

Reward direction for an administration is the cardinal issue in actuating employees and retaining staff. Lawler ( 1983 ) emphasises that administrations ‘ wages systems significantly influence HR patterns and procedures by offering higher rewards or better benefit bundles that tend to retain more effectual and efficient employees.

To develop an effectual sum wages system, companies need to promote communicating between employees and the direction. In other words, the company can develop a more effectual method to guarantee employee royalty by sing single penchants on wages and benefits. There are assorted keeping schemes that use a assortment of reward direction systems.

Pension strategies are another manner for the administration to actuate and retain employees. Harmonizing to Taylor ( 2008 ) , the chief aims of occupational pension commissariats are keeping, pulling new staff, bettering employee dealingss and pull offing the clip and mode in which employees retire. Flexible benefits and harmonization are besides cardinal issues. There are many benefits that employees may value, such as ill wage, company auto, vacations and wellness insurance. Harmonization can be advantageous by taking position derived functions between manual and non-manual workers.

Reward direction is non merely about money inducements. It can take the signifier of either fiscal ( extrinsic ) or non-financial ( intrinsic ) wagess. Intrinsic wagess relate to duty, accomplishment and the work itself, and are more of import because they are really single. On the other manus, extrinsic wagess may non last long but can hold immediate and powerful consequences. Fiscal and non-financial wagess are discussed farther below.

1 ) Financial Rewards


Wage is one method used by employers looking to act upon the work force and is a main constituent of employment contracts, whether formal or informal. Wage is used to bespeak the comparative value of occupations and the degree of equity of a concern ‘s pay and salary policy. A suited wage system helps the company to promote high public presentation and retain good employees.

Integrating a skill-based wage system allows the company to honor the employee when she obtains a new accomplishment or farther develops her current accomplishments. This in bend can promote career promotion and hence develop a knowing and adaptable work force. This flexible work force frequently consequences in lower staffing costs, reduced turnover rates, and a higher keeping rate. From the employees ‘ position, they enjoy the chance to develop their accomplishments, to be recognized for their new accomplishments, to accomplish higher wage rate, to progress their calling and therefore they stay loyal to the employer.

1.2 Bonus System and Performance-Related Wage

Performance-related wage ( PRP ) or a fillip system is a method used for keeping and is often based on certain public presentation accomplishments. Aims are set in progress and, if achieved, are frequently rewarded in pecuniary signifier. For illustration, aims can be based on market portions, generated grosss or other things that can be transformed into value.

Recent attempts have been made to redesign occupations to pay more attending to bettering concerted on the job relationships among employees in order to obtain coveted results, for illustration improved quality, greater measure, better communicating and lower costs. Employee squad edifice is required in today ‘s work force and wagess are based on squad public presentation. Team-based public presentation assessment method such as the 360 degree feedback scheme allows each employee to aline single public presentation ends with the organisational ends.


Many administrations believe that finance and non-financial benefits play an of import function in deriving a competitory advantage in labour markets. Complementary fiscal benefits may assist administrations to retain and pull employees, and non-financial benefits may help administrations in run intoing the peculiar demands of employees. Benefits can be offered in a assortment of ways, but because there are besides a assortment of benefits to take from, a alleged cafeteria program offering a pick of benefits may be the cheapest and most straightforward manner for an employer to run into an employee ‘s demands.


Equity and equity is besides a cardinal issue. It is ever of import to hold competitory rewards with the external labor market, in contrast to fairness within the internal market. Equity theory suggests that employees will be better motivated if they feel they are treated every bit, and discouraged if they are treated unevenly. Job rating can be applied by administrations to supply a footing for a just and orderly scaling construction. This is the comparative place of occupations within a hierarchy, which is achieved by utilizing standards drawn from the occupation contents.

2 ) Non-Financial Wagess

2.1 Challenging Work

The desire of many persons to seek chances for personal growing through their work is really powerful. Some employees are motivated by their ain built-in demand to win at a disputing undertaking. There are two common subjects for this non-financial wages: a ) acknowledgment and feedback and B ) engagement, liberty and duty.

Promotion is non merely a method of supplying employees with more ambitious work but is besides a agency to recognize them publically, which frequently motives those who want to be differentiated and are driven by competition. Some people value the ability to act upon their ain work. If direction can happen ways to let go of and tap employees ‘ creativeness – for illustration via employee engagement – employees ‘ committedness to organizational ends would follow. Developing employees as a keeping scheme can look contradictive in this sense, but at the same clip houses must accommodate to alterations to relevant cognition in the market.

2.2 Development and Careers Opportunities

Administrations should supply chances to employees who want to go on to turn and develop their accomplishments. In fact, this chance to turn and develop through preparation is one of the most of import factors in employee motive. The pattern of occupation redesign is a cardinal chance for the employee to progress in this manner. Job redesign is concerned with the allotment of task maps among organizational functions and has been defined as “ any effort to change occupations with the purpose of increasing the quality of work experience and productiveness ” Wilson ( 1999 ) . It can take a broad assortment of signifiers in pattern, such as occupation rotary motion, occupation expansion, occupation enrichment, independent work groups and squad working.

Job rotary motion involves employee traveling from one occupation to another occupation in an effort to relieve ennui making the same occupation twenty-four hours after twenty-four hours. Job enlargement involves spread outing a occupation so that one or more related undertakings are added to bing undertakings at a similar degree of duty. This may add to employees ‘ motive if they can see their part to the concluding merchandise or service. Job enrichment is more extremist ; new duties are added, so that employees have the chance to acquire involved in the undertakings in order to derive and develop their accomplishments. Autonomous work groups and squad working involves a group of multi-capable workers for certain undertakings so as to organize high-performance squads.

The undermentioned subdivision nowadayss several instance surveies which provide groundss on how different patterns impact employee motive and keeping in an organisation.

Edinburgh ‘s IKEA shop

Based on the consequences of IKEA ‘s employee sentiment study, the demand to supply more computing machine preparation is identified. With many locations world-wide, e-learning is more cost-efficient to IKEA than the traditional schoolroom preparation. IKEA Edinburgh has introduced its first of all time IT developing programme utilizing NETg ‘s e-Learning in Microsoft desktop accomplishments and the ( ECDL ) class.

“ While many of our employees do non utilize computing machines straight in their functions, we recognise the importance of leting our staff to develop in all countries in the belief that this will assist us to make a more motivated, committed and happy work force. ” ( Neil Crowson, Training Manager, IKEA Edinburgh )

Staff from the Edinburg shop can entree the NETg e-learning via a Personal computer in the Learning Resource Centre or they can reexamine the preparation faculties on CD-ROMs at place. For managerial or supervisory degree employees, Excel and PowerPoint accomplishments are in most demands to execute clerking or transport out presentations efficaciously. For those employees on the store floor, geting basic IT skills and increasing assurance in utilizing computing machines are indispensable. IKEA ‘s preparation policy is targeted to promote the persons to take their duties and prosecute their ain development based on one-on-one treatments with their line directors. Their policy provinces that employees do non hold to turn out the demand to develop any peculiar IT skills, but instead they are committed to self-development of their IT literacy. This is a perfect illustration of authorising the employee by giving them the chance and flexibleness to develop their accomplishment. Therefore, an environment to further a more motivated and committed work force is created.

Beginning: Training Press Release, May 2002: “ IKEA Edinburgh Signs One Year Contract with NETg for Quality e-Learning in IT Skills ”

Claridge ‘s hotel

Senior direction at Claridge ‘s hotel implemented some HR enterprises to foreground the necessity of valuing and affecting employees. Two employee acknowledgment strategies were besides introduced: ‘Employee of the Month ‘ and ‘Going for Gold ‘ . In the Employee of the Month strategy, staffs nominate co-workers for acknowledgment for outstanding attempt or accomplishments each month. Nominations are reviewed by the Executive Committee, which makes the concluding determination. The victor receives verifiers, and their exposure is displayed on a wall. Each twelvemonth, the 12 monthly victors have a opportunity of going ’employee of the twelvemonth ‘ , with awards such as a Caribbean sail worth over ?5,000. The Traveling for Gold strategy offers employees the opportunity to take a ‘lucky dip ‘ in a pot of gold award envelopes kept in the HR manager ‘s office. Harmonizing to direction, these strategies have been really successful and are extremely valued by the hotel staff.

Beginning: IRS Employment Review 792f ( 2004 ) “ Thank you goes a long manner ” , 23 January, pp. 32-6

Some employee keeping schemes could hold inauspicious effects for an organisation if the schemes are non implemented right. For illustration, by supplying acquisition and development chances, companies allow employees to obtain portable cognition and accomplishments, which the employee can utilize to increase their attraction in the labor market. In many instances, companies should concentrate their resources in developing preparations on non-portable acquisition content, which refers to knowledge and skills merely use to their alone merchandises, services, and concern civilizations.

Overall, successful schemes seem to be a mixture of both extrinsic every bit good as intrinsic wagess. Since pecuniary extrinsic wagess are easy for a rival to fit, it appears to be in the company ‘s involvement to procure its employees by non merely concentrating on money. Monetary wagess can present immediate and effectual motive consequences as we have seen, but intrinsic wagess such as varied undertakings and other extrinsic issues such as development are besides extremely regarded.

Retention direction might be difficult for companies to manage if they do non implement sequence planning for the long tally. Companies should research labor market and predict the hereafter occupation tendencies as they could hold troubles to enroll and engage the right people in an economic upswing. Irreplaceable resources and organisational cognition will be lost when cardinal employees leave the company. Recruitment and engaging for new employees could be dearly-won. Retention direction will be significantly less compared to fring cardinal employees. People resource is the most of import assets in an organisation. By implementing the right keeping schemes at the right clip, companies can keep employee royalty, motivate high public presentation, and win in a competitory concern environment. A good developed keeping direction system can offer companies the key to success.


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