More specifically it aimed to find out which aspects of the reward system functions ell, and which aspects could be further developed and improved in order to increase employee satisfaction. The theoretical part of the study introduces different theories of motivation and rewarding. Emphasis is put on Mason’s hierarchy of needs, the goal setting theory and the total reward system. The empirical part of the thesis was conducted by using a quantitative research method. The data was gathered with the help of a questionnaire and two interviews.
The aim of the research was to compare the different reward systems used in Monnet-Spot and find the pros and cons of them. The research results revealed how Monnet-Spot can develop their reward system by including the employees in the decision making process. The research supports the assumption that a well developed and functional reward system can increase employee motivation and satisfaction.
The aim of this study is to investigate and analyze how well the current reward system of Monnet-Spot helps generate employee motivation. More specifically it aims to find out which aspects of the reward system functions well, and which aspects could be further developed and improved in order to increase employee satisfaction. Monnet-Spot has earlier conducted some smaller research on the overall Job satisfaction of the company, however only little research has been made on employee work motivation and attitudes towards the reward systems in the company.
The driving force behind this study is to enable the employees of Monnet-Spot to give feedback on their work motivation and their attitudes towards the reward systems and hence perhaps increase their commitment to the company. Based on this information, the research question of this thesis work is: 1 . What motivates the employees of Monnet-Spot? 2. Which reward system does the employees perceive the most motivating? 3. How can the reward systems be further developed? 1. 2 Description of Material and Method This paper is constructed in the following way.
In the theory part, the author presents the different reward and incentive types and introduces what motivation is. The process 8 of motivation is introduced together with intrinsic and extrinsic motivation. However, he main emphasis is put on the different reward systems, especially the ones that are used in Monotone-Spot. Also different theories of motivation are presented; some of these are Mason’s hierarchy of Needs and the goal setting theory. The author used Mason’s hierarchy of needs and the goal setting theory in order to examine the effect of the reward systems on employee motivation in Monnet-Spot.
In order to determine what rewards the employees perceive the most motivating and to what extent the employees are ready to increase their work effort, the author used the total reward system. The information to the study was gathered through a quantitative research questionnaire and two interviews. With the help of the information that was gathered, the author was able to compare the different reward systems and make a conclusion on what areas Monnet-Spot could improve in order to increase the employees work motivation.
The questionnaire also included some open questions where the respondents could give own suggestions on how to improve the reward system or recommend other rewards that would motivate them. 1 3 Limitation AT ten study The research conducted focuses only on the employees of Monnet-Spot, which earns that the sample-size is limited. Furthermore, limitations were set on the theories used to analyze the level of motivation and satisfaction with the reward system. The author used Mascots hierarchy of needs, the goal setting theory and the total reward system to analyze the results.
The questionnaire was filled in anonymously and was therefore limited to be analyzed on general and not individual bases. 1. 4 Background Employee motivation is one of the most essential parts in a company’s development and success. In order to maximize the overall performance of the company it is vital for an 9 employer to understand what motivates the employees and how to increase their Job satisfaction. It might however be challenging for a company to find out what motivates its employees, especially because different people are motivated by different things.
A well designed and functional reward system is an efficient way to increase employee work motivation. The appropriate type of reward is developed in accordance to the company’s reward philosophy, strategies and policy. However, it might be challenging to find the right way to combine the company’s integrated policies and practices together with the employee’s contribution, skill and impotence. (Armstrong, 1999, p. 569570). Monnet is a Finnish company that specializes in the automotive aftermarket.
The company’s product range stretches from car and motorbike spare parts and accessories to fishing and boat equipment, industrial tools and D. L. Y-products. The company belongs to BARMAN group Ay, which also owns AD Parallelograms. There are altogether 17 Monnet stores around Finland. The customers of Monnet are mostly private individuals, municipalities and car repair companies. The company is fairly new, it was established 1990 in Turk and employs currently over 420 individuals. The unit of Monotones was founded 2004 and employs 21 full-time and 6 part-time employees. Wry. Monnet. FL) Monnet has made some former research on employee work motivation on a general bases. The research has however been concentrated on the employee’s satisfaction with the employer and the company, not the reward system. The unit of Monnet-Spot has had some problems with finding the right way to motivate its employees and hence the store manager suggested if the author could conduct a survey that would especially concentrate on how to increase work motivation and develop the reward systems.
These needs create wants, which in turn become desire to achieve or obtain something. In order to satisfy the needs and wants, goals are created and a behavior selected in order to achieve these goals. If the goal is achieved, the behavior is likely to be repeated when a similar need emerges. If the goal is not achieved, the same action is less likely to be repeated. (Armstrong 1988, p. 106-107). Managers can motivate employees through methods such as pay, promotion and praise. Employees can also motivate themselves by seeking work where individual goals, needs and wants will be achieved.
These two types of motivation are called intrinsic and extrinsic motivation and are more closely described as follows: (Armstrong 1988, p. 109). Intrinsic motivation refers to the motivation that comes from inside an individual. The motivation is generated trough satisfaction or pleasure that one gets in completing or even working on a task. Factors that influence on intrinsic motivation include responsibility, freedom to act, scope to use and develop skills and abilities, interesting work and opportunities for advancement.
These motivators, which are concerned with the quality of work life, tend to have a long-term effect since they are inherent in individuals and not imposed from outside. (Armstrong 1988, p. 109-110). Extrinsic motivation is something that is done to or for people to motivate them. It arises from factors outside an individual, such as money, grades, criticism or punishments. These rewards provide satisfaction and pleasure that the task itself malign not provoke. An extrinsically motivate person malign work on a task even when they have little interest in it.
This type of motivation usually has an immediate and powerful effect, however it does not tend to last for long. (Armstrong 1988, p. 109-110). 12 Personal Personal Intrinsic Personal Satisfaction Interpersonal Personal Social Interaction Extrinsic Personal Personal Rewards Public Recognition Figure 2. Extrinsic and intrinsic motivation (Michael Armstrong). 2. 2 Theories of Motivation Content Theories of Motivation are based on the needs of individuals. These theories try to explain why the needs of individuals keep changing overtime and therefore focus on the specific factors that motivate them.
In general, these theories explain motivation as the product of internal drives that encourage an individual to move towards the satisfaction of individual needs. Major content theories of motivation are Mason’s hierarchy of needs, Miscellany’s learned needs theory, Alder’s ERG theory and Herbage’s motivation-hygiene theory from which the firstly mentioned will be closer discussed. (Barreled ; Clayton, 2007, p. 492). Mason’s hierarchy of Needs is a theory of personality that identifies five basic need categories: Physiological needs are basic human needs that are vital for survival.
Examples of these needs are food, water, air and comfort. The organization provides a financial reward by paying a salary and this way helps to satisfy employees’ physiological deeds. 13 Safety needs reflect a desire for security and stability. Examples of these needs include desire for steady employment, health insurance and safe neighborhoods. Social needs are the desire for affiliation. They reflect the person’ s desire for love, affection and belonging. These needs can be fulfilled by the organization trough sport teams, parties and celebrations.
The managers can help to satisfy employees’ social needs Dye snowing lealer care Ana concern Tort employees. Esteem needs include the need for things that reflect on personal worth, selflessness and social recognition. Individuals need to attain a good reputation in a group or strive to increase their status in the eyes of others are driven by these needs. The organization can help to satisfy employees’ esteem needs by showing workers that their work is appreciated and recognized. Self-actualization needs are the individuals desire for self-fulfillment and the realization of doing what he or she has the potential of doing.
Assigning tasks that challenge employees’ minds and encouraging their aptitude and training are examples on how the organization can help fulfill self-actualization needs. (Barreled ; Clayton, 2007, p. 93). Self-actualization personal growth and fulfillment Esteem needs achievement, status, responsibility, reputation Social needs family, affection, work group, relationships Safety needs protection, security, law, limits, stability Physiological needs air, food, shelter, sex, sleep, warmth Figure 3.
Mason’s hierarchy of needs (Barreled and Clayton). 14 The basic needs are arranged in a hierarchy where the most basic need emerges fist and the most sophisticated need last. In other words, the higher-order needs including belonging, esteem, and self-actualization are not seen important until the rower-order needs which are safety and physiological are satisfied. Managers should find out what motivates the employees at each of the levels and develop a reward strategy accordingly. (Toss, Orzo & Carroll, 1994, p. 17 and Barreled & Clayton, 2007, p. 493). Mason’s hierarchy of Needs has been criticized because there is little evidence that support its strict hierarchy and the fact that people satisfy only one motivating need at a time. The theory also fails to prove any clear relationship between needs and behavior, and is therefore unable to predict when a specific need will be manifested. Barreled ; Clayton, 2007, p. 493-494). Process Theories of Motivation tries to explain how behavior change occurs and why individuals act in different ways.
In other words, they focus on how workers needs influence their own behavior. Process theories originate from early cognitive theories, which state that behavior is the result of conscious decision-making processes. Following are the most famous process theories: reinforcement theory, expectancy theory, equity theory, and goal setting theory, from which the goal setting theory will be closer discussed. (Toss, Orzo ; Carroll, 1994, p. 226).
The goal setting theory of Locke and Lethal assumes that human behavior is governed by goals and ambitions, which lead to the assumption Tanat an employee Walt enlarger goals will ah netter than an employee Witt lower goals. This theory states that there is a positive relationship between goal precision, difficulty and performance. Hence, if an employee knows precisely what he or she is expected to do, that individual will do better than someone whose goals are vague. Adequate and timely feedback plays an essential role in the goal setting theory sine it has a the following effect on the employees: (Barreled ; Clayton, 2007, p. 98). Increase feelings of achievement increase the sense of personal responsibility for the work reduce uncertainty refine performance.