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Goals Of Organisations Essay, Research Paper

GOALS OF ORGANISATIONS

Introduction

This report was compiled to inform the staff of Rostel on the theories and concepts of organisational policies and goals.

Contained within are descriptions of the main theories and their applications to Rostel.

Textbooks used in researching this report were:

Personnel Management Practice by Michael Armstrong

Management A Contemporary Approach by Deode Keuning

Corporate Strategy and Business Planning by Roger Bennet

Strategic management

If we consider the fact that we live in a society of organisations and that this is such an integral feature of our lives, it is surprising that we rarely consider what organisations are, their goals and how they are managed.

An organisation (be it a industrial company, private or government controlled firm; large, medium-sized or small company, national or multi-national company, charity, union, political group etc.), is a group of people who work together and co-operate in order to reach a specific set of goals. Organisations by working together can accomplish goals that an individual would be otherwise unable to reach.

The owners/managers of the organisation must decide on what the company s purpose is; its goals and aims, what policies to adopt to achieve these gaols and the resources available to do so. The planning of these strategies is known as strategic management. G A Cole in his book Strategic Management defines it as follows:

Strategic Management is a process, directed by top management, to determine the fundamental aims or goals of the organisation and ensure a range of decisions which will allow for the achievement of those aims or goals in the long-term, whilst providing for adaptive responses in the shorter term

Mission Statement

A company must have a clear statement of its objectives and areas of activity that will provide the vision and direction for it to operate over the next several years. This mission statement of the company must ask the following questions:

What do we want to be?

What is our business? What will our business be?

Who are our customers? One which customer groups do we want to focus?

In which way do we want to offer a distinguishing and lasting value to our customer?

The questions may seem straightforward, but the answers must be well thought out and considered, as it will have a huge influence on the plans and operations of the company.

Rostel Fragrances mission statement declares that the company wants to be influential in the promotion of beauty and health products and create a climate of healthy living through the use of beauty care; fragrances and cosmetics, vitamins and other health products. More recently Rostel is considering expanding into the health and leisure centre market, a move consistent with Rostel s overall mission.

The customer groups that Rostel have decided to focus on are young people (the under 30 s); not only do young people have more disposable income to spend but they are the customers of the future, and the over 50 s. This group of consumers is living longer and is becoming, in general, wealthier and more health conscious. Rostel has also stated its aims to make their products more appealing to men, a group previously largely ignored by the fragrance and cosmetic market. While the above mentioned groups are the focus of Rostel s products the mission statement also declares that its products should appeal to the widest variety of customers as possible, as to exclude any group from its marketing plans would be disadvantageous.

Rostel has decided that to distinguish its products from its competitors, they would produce the highest quality products made using cruelty free processes and which would in some way reflect the locale i.e. there would be a strong Scottish and Caithness in particular, theme in the products. Rostel have felt that using cruelty free and environmentally friendly products are the way of the future and that any company not doing so will be felt behind.

Strategic Plans

For a company to set in motion the mission that it has chosen it must formulate a strategic plan. A strategic plan can be defined as a broad program for defining an organisation s objectives. It creates a guideline for decision making and channels the organisation s member s thinking so that it is consistent with the objectives. In simpler terms the strategic plan embraces the overall mission statement and formulates them into a series of aims and goals that the organisation can implement. In essence it answers the question of how do we do that?

Rostel has answered the question of how it accomplishes its mission statement of promoting healthy living by producing a range of cosmetics, fragrances, vitamins and health care products designed for customer groups, such as the elderly and the young wage earners. The company has also targeted new groups such as men who not normally considered as potential customers for fragrances and cosmetic products. However the company has not forgotten that it still must attempt to appeal to a more widespread market not confining itself to niche markets alone.

Tactical Plans

The tactical or operational plan states the methods and resources that will be needed if the company s goals and strategic plans are to be implemented. This describes the objectives that need to be obtained, the measurements for obtaining these objectives, the allocation of personnel and resources required and finally they state in which time span the set objectives will have to be obtained.

Each functional area and department of the company will be given an action plan that will set out a specific objective or target, which is both achievable and realistic in terms of resources, capabilities and time. It will also detail how the progress and eventual success or failure of the plan will be measured. This tactical plan gives the department a clear objective to follow, outlining the critical core tasks that must be achieved and the management systems used to fulfil them.

Rostel has set its departments several operational plans based on the overall strategic plan envisioned for the company. One of the present plans concerns the Christmas gift market. Marketing has predicted that there will be increased demand for Rostel products, especially fragrances as gifts. Due to recent publicity and an effective advertising campaign the Christmas sales of fragrances are expected to almost double. The result is an operational plan to increase the production and distribution of fragrances.

The Fragrance Production Department has had to increase it production twofold. There is now a night shift in operation, which has involved the temporary transfer of employees from other production lines to achieve this level of production. Management has had to work out new employee rotas, working hours and reward schemes.

More raw materials have been ordered from suppliers and due to a cash flow crisis resources have had to be diverted from the other production lines. Management has had to develop a new structure and management system to plan and control the increased production. Above all there is a definite time scale that must be adhered too.

The Distribution Department has had to hire temporary staff and vehicles to get the products into the shops in time for the Christmas market whilst at the same time trying to keep its costs down.

All the departments within Rostel each have their own operational plans detailing the personnel, resources and management systems necessary to meet the Christmas rush for Rostel s fragrances.

Goals and policies

A company will usually state in its strategic plans one or several goals which gives the employees a focus for and direction for their work. These goals provide the framework in which employees can operate knowing that they are working towards the company s overall plans and mission. A company can have different goals for each department depending on its function.

There are four general types of goals:

Consumer Goals in general the company puts the customer first. Customer satisfaction is paramount, the company concentrating on customer service and the methods necessary to achieve this. The employees of the company know that their primary role is in providing the customer with a good service.

Product Goals the company concentrates on the product (or a service); to produce the highest quality or best value or just the cheapest product. This may also be another aspect such as distribution, packaging, marketing, etc. The company concentrates on those aspects of producing the product, the product itself and getting the product to the marketplace.

Operational Goals are of a more tactical nature in that they set out the specific targets to be achieved. This may be production targets (level of production), customer service targets (number of satisfied customers etc.) or for instance, in the case of distribution, delivery times.

Secondary Goals are stepping-stones on the way to achieving a primary or main goal. For example, a company s primary goal may be to achieve one hundred per cent customer satisfaction and it has set several secondary goals to achieve this. The company has secondary goals of having all its employees trained in customer care, product knowledge and empowerment to make their own on-the-spot decisions concerning the customer. When the company has achieved these secondary goals it will know that it is well on the way to fulfilling its primary goal of customer satisfaction.

Rostel Fragrances Ltd has an overall product goal, that is to produce the highest quality fragrances, cosmetics and health care products on the market. However the departments within the company each have different, more specific goals. The production department has several operational goals depending on the actual production line. In general this sets out not only the output targets, but also the quality standards and levels of rejects acceptable. The distribution department an operational goal that details delivery times and targets.

In contrast the Retail Outlets have a consumer goal in mind in their operations, as they are very much concerned with customer service and the image of the company rather than volume of sales.

The Sales Department has operational goals with set sales targets to reach per month. They also have secondary goals in that they have to achieve set targets in obtaining new business and increasing sales in existing customers, both of which if achieved will go a long way to fulfilling their primary operational goal.

The external environment

When a company sets out its mission statement and formulates its strategic and operational plans, it must take into account the fact that the company must operate in the real world and that there are a multitude of factors that can be an influence on the company and its plans.

A successful company must be able to predict and recognise the constant state of change in the environment and have a strategic plan that not only takes this into account, but also be flexible enough to react to any change quickly enough to take advantage before its competitors. A company which ignores the outside world and its changing circumstances and attitudes will not survive for very long.

In considering its plans a company should consider the influences that can affect it. This is known as a PEST analysis, which identifies four areas of effect on an organisation. They are the:

Political environment

Economic environment

Sociological environment

Technological environment

The Political Environment

A company must follow the legislation as set down by the government. Legislation exists to:

Protect the consumers from business. Examples such as the Consumer Protection Act 1987, the Trade Descriptions Act and the General Product Safety Regulations 1994 set out the regulations and standards that companies must adhere to in dealing with consumers.

Protect society as a whole from business. Legislation such as the Fair Trading Act 1873, the Companies Act 1989 and the Competition Commission impose limitations and regulations on the manner in which companies can operate.

Protect Companies from each other. As well as the legislation mentioned above, the Patent Office through Patents, Trademarks and the Copyright Act 1999 protects a company s intellectual property (this includes such things as a company s innovations, trading secrets etc).

Legislation also includes self-regulatory bodies such as the Advertising Standards Authority, The British Association of Travel Agents and the Association of British Healthcare Industries all of who have their own standards which member companies must follow.

The Economic Environment

A company must take into account a multitude of economic factors such as changes in consumer income, the present and future interest rates, taxes, inflation, exchange rates, costs of production and the general feel good factor; the country may be in a recession or coming out of one. The company should look at the effect this will have on their short and long-term plans and adjust them as necessary.

Companies must also look at the global economic environment regardless of whether they export or import, as this will have an affect on there operations in some way. For example, within the next 30 years East Asian countries will increase their share of world production from 15 to 25 per cent. British companies must take account of this, and what it will mean to their long-term strategies. In the short-term bad harvests, the political and economic situation in other counties, international competition and many other factors that exist all can affect the operations and plans of a company.

The Sociological Environment

The sociological factors can be divided into the demographic and cultural factors. However it is important to appreciate that they cannot be so readily separated.

In considering the demographic factors a company should look at the growth, size and composition of the population. Changes in these factors will have an affect on a company s future plans.

Taking the growth in the population as an example, a decrease in the birth rate, for example, will not only mean that there will be less potential consumers, but this will have a more immediate effect on baby food producers such Nestl. For employers this means that there will be less labour available in the future.

The increasing age of the population and lowering of the retirement age will mean a great deal for companies in healthcare and medicine, the leisure industry and financial services; especially insurance and pension companies who will have to pay more pensions and for longer.

The composition, spending power and general trends of the various age groups are of prime importance. The fact that there is a trend for people to move out of larger cities into smaller towns is important for store-chains in that they can follow the consumers and maintain their market share. Identifying those groups with surplus income, such as wage earners in their early twenties with few commitments such as families and mortgages, or the retired provide potential marketing opportunities. Analysing the size of a group and their buying habits is vital to determine if there is a large enough market to be viable.

The cultural factors are of equal importance to a company as the changing attitudes, values and concerns of the population can have a profound affect. Recent trends such as individualisation, assertiveness and consumerism; concern for health and the environment; decrease in the total number of working years; a desire for more comfort; increased role and importance of women in the labour market; redistribution of social roles between couples; safe sex; higher levels of education resulting in fewer people being prepared to undertake unskilled labour and an increasing bias to employ younger people are just some of the factors that a company must take into consideration when formulating its strategy.

The Technological Environment

An essential feature of the twentieth century has been technological progress. Some would argue there has been a new industrial revolution, which has left few industries unaffected.

These changes in technology have resulted in two important consequences for industry, that is the modification of production processes and the development of innovative new products which affect a company both with its own business and other related businesses.

In general, new technology, automation in particular, has resulted in increased production with reduced labour costs. The development of the microchip and consequent computerisation has led to the explosion in the Communications industry. The down side can be seen in the increasing downsizing of organisations and a rise in the unemployment figures. The printing industry for example, has suffered due to the fact that even the smallest one-man business can now, with a simple PC produce its own brochures, leaflets, labels and stationary.

Rostel Fragrances in formulating its strategic plans must look at the present legislation and how it will affect its operations. The company must ensure that all its products are within the standards as set by the Cosmetic Products (Safety) Regulations and that in labelling and retailing the products they observe the Trade Descriptions Act. For example the fragrance Bloom of Heather does indeed have extracts or the essence of heather contained within. As a member of the Cosmetic, Toiletry and Perfumery Association, Rostel must also apply the standards as set by the Association to their products.

The company has identified that due to the fact that people are living longer; the population as a whole has become older. People are living longer, retiring younger, have more disposable income and an increased awareness of health and fitness. The latest figures from the research organisation MORI indicate that over twenty per cent of the population is over sixty and control eighty per cent of the country s wealth. The over fifties have a gross income of 457 per week as against the national average of 397. They are becoming more health conscious and enjoy more free time to devote to social and leisure activities. This trend is set to continue and Rostel has invested in research into healthcare products designed for the older (over fifty) consumer. In the short term it has repackaged some products that had reached their market peak and re-marketed them specifically for the older customer. Rostel also intends to apply this to the proposed Health and Leisure Centre in having facilities, attendants and leisure services for the old and the retired.

At present Rostel has determined that there is a general air of optimism and a feel good factor that will continue for several years. The effect is that people have more income and they are prepared to spend this on luxuries, such as fragrances and cosmetics. The increasing cultural awareness of the environment and use of cruelty free products, is not only the way that Rostel should research and manufacture its products, but that this should become a major marketing feature; informing customers about the natural and environmentally friendly products the company produces.

Rostel has been observing the trends in other markets and has noted the increased sales for fast-dry nail polish. Currently, fast-dry nail polish is estimated to have grown to a significant 25 percent of the entire nail polish market. This important innovation has been responsible for a pronounced rebound in the US nail care industry. The market, a combination of nail varnish and nail polish remover, grew from a value of $498 million in 1994 to a value of $633 million 1998 at an annual growth rate of 6.2 percent. At present the UK fast-dry nail polish market is small and there is a possibility of Rostel moving into this area. However, Rostel will be moving from its currently successful policy of operating in niche markets into the larger general market. This would mean competing directly with the major cosmetic producers and, even though the present economic factors such as interest rates and inflation are favourable, this would be too big a step to take. If this move were taken it would divert resources from the Health and Leisure Centre, which Rostel considers a safer though potentially less profitable venture.

Rostel has made full use of the latest improvements and innovations in research and laboratory equipment when it set up its research department. The company has reduced waste disposal costs, while at the same time furthering its aim of being environmentally friendly by installing a waste recycling plant. It has managed to reduce production costs by purchasing the latest bottle-labelling machine. The company s two second-hand vans have been replaced with new vehicles fitted with catalytic converters.

The role of stakeholders

Any individual, group or organisation with an interest in and potential to influence a company can be termed a stakeholder. These stakeholders are affected by and can in return affect a company. Ignoring these stakeholder groups can have a negative impact on an organisation.

Stakeholders can be broken down into two groups, direct stakeholders and indirect stakeholders.

Direct stakeholders (i.e. those that deal directly with a company) include groups such as:

Customers

Shareholders (of companies) or taxpayers (for public companies)

Suppliers

Creditors (such as banks and finance companies)

Employees (who can be considered dependent stakeholders)

Indirect stakeholders (i.e. those not directly involved with but are affected or can affect a company) can include such groups as:

Community groups/public opinion (at the local, regional, national and international level)

Competitors (the actions and policies of competitors can have a significant affect on a company)

Stock markets (London Stock exchange as well as foreign stock markets)

The media (a negative public image can be devastating to a company s success)

Other organisations (such as the various professional bodies, trade bodies and trade unions)

The government can have both a direct and indirect affect on a company. Use of legislation can directly affect a company, whereas the economic policies adopted by the government can have an indirect affect.

The major stakeholders and their possible influence on Rostel Fragrances Ltd are:

The employees from the directors down to the shop floor workers all have a vested interest in the success of the company to secure their job and present standard of living. Employees have a direct influence on the company as their work performance can greatly affect the production and effectiveness of the company.

Caithness and Sutherland Enterprise, is a government organisation which promotes and provides finance for businesses in the north. They have an interest in Rostel as the company provides employment and creates wealth in the county. CASE has provided support, both in expertise and finance to Rostel in the past especially when it came to the company s location in the Caithness Enterprise Park in Thurso where it receives much reduced rent and rates charges.

The Local Banks have not only a direct interest in Rostel, providing loans and other bank services, but also an indirect interest in that all of Rostel s employees have accounts with them. So the growth and prosperity of Rostel and its employees means business for the Banks.

The Suppliers both local and national have an interest in Rostel as the company provides a market for their product and services. This not only includes suppliers of raw materials such the makers of plastic bottles and containers, but local services such as window cleaners, gardeners, electricians and many other local businesses, all of whom are very dependent on Rostel for their business.

The Local Community has an interest in Rostel as the company employs over a hundred employees, all of whom spend a great deal of money in the local shops and services. This stimulates the local economy providing much needed wealth locally and creates even more jobs.

Strategies designed to motivate employees

It is important for a company that aims for high levels of performance that it has a properly motivated work force. A company has to first identify what motivates an employee and then develop a strategy that utilises that motivation for the benefit of the company. As individuals have different motivations the strategies adopted must be tailored to suit the individuals needs and wants.

Theories of motivation

To achieve a high level of performance from an employee they must be properly motivated. This means that the job and its rewards are appropriate to the employee s needs and wants. Failure to do so will result in a demotivated workforce and as a consequence poor working performance. Identifying what motivates an employee and providing that motivation is very important to the company for productivity and an employee s job satisfaction.

There are many theories about motivation and its applications in the workplace. There is Taylor s Instrumentality theory, which states that people work basically for money. To increase an employee s motivation increase their pay. The problem with this theory is that this is a short-term answer and to sustain or increase motivation further, more money must be paid. The inherent flaw in Taylor s theory is that people work for other reasons as well as money.

This fact is recognised in the needs theory as proposed by Maslow, Alderfer and McClelland. Maslow laid out a hierarchy of needs that an individual would progress through to satisfy his needs. The first need is physiological food, water and sex. When a person has secured this need he will move to the next, which is safety protection and security. Once these two have been satisfied the social needs are met love and companionship, then ones esteem self-respect and the respect of others, before the final stage of self-fulfilment growth and development is reached. Maslow states that a person will secure his needs on one level before moving to the next. This theory has been very influential in the past but it is now generally accepted that people have different priorities and therefore, do not in reality operate within such a rigid hierarchy.

Alderfer simplified this theory into three categories: Existence needs, which are concerned with survival; Relatedness needs which stress the importance of interpersonal and social relationships; and Growth needs which are concerned with the individual s intrinsic desire for personal development.

McClelland adapted a similar theory for the motivation of managers which identified three main needs: achievement in the form of competitive success and excellence; affiliation, which is the need for human relationships and finally power, which is the need to control and influence others.

Herzberg two-factor model divides the wants of employees into two groups; the first group revolves around employees need to grow and develop in their job and the second, which is pivotal to the first group, establishes the employees need to be treated fairly in regards to working conditions, supervision, compensation and administrative practices. Herzberg establishes that the first group provides the motivation while the second only prevents job dissatisfaction. This theory has recently come under heavy criticism due to its over simplicity and limitations.

The Process theory or cognitive theory conjectures that it is people s perception of their working environment and the ways in which they interpret and understand it, that determines their motivation. This theory has gained in popularity as it is deemed to be more realistic and practical. It states that there are four processes that motivate a person. They are:

Expectations (expectancy theory), which state that a particular action will be followed by a particular outcome and the certainty in this, will motivate an individual. Change and uncertainty will demotivate a person.

Goal achievement (goal theory), when specific goals are set performance is higher

Behavioural choice (reactance theory), which proposes that people can choose their behaviour to satisfy their needs. If this freedom of choice is threatened they will be demotivated.

Equal treatment (equity theory), which basically states that people will be more highly motivated if they are treated fairly than if not.

Motivational Strategies

A motivation strategy is designed to improve an employee s performance. To be effective it must be relevant to the employee s needs, wants and drives as established by the motivational theories described above.

The main motivational strategies used by organisations are:

Rewards. Put quite simply, by paying an employee more money this will increase performance. This is the basis for Taylor s Instrumentality theory and while it will work in the short term eventually an employee s performance will drop and another reward may be necessary. Not only will this result in increasing labour costs but there is an inherent weakness in this theory in that people are not solely motivated by money. Rewards does not just include wages, but also various benefits such as pensions, company car, sick pay, insurance cover etc. These must be relevant to an employee s needs and wants to be effective.

Rostel, in the Christmas build-up offered its employees a handsome shift allowance to work around the clock in unsociable hours. This was effective at first, but after several weeks the employees became dissatisfied with the long unsociable hours and many returned to normal hours. To motivate employees to work the night shift Rostel increased the allowance. However, this had little effect as employees have satisfied their need for extra money at this time of the year. This demonstrated where Taylor s theory breaks down and that other theories, such as Alderfer s which established that once a persons existence needs are met, further increases in money will not in itself motivate an employee.

Financial incentive schemes such as a commission based or performance related strategy motivates an employee by the fact that the better their performance the more they will earn. This would imply that under Taylor s theory, the employee would be self motivated and work as hard as possible to earn as much as possible. This is not the case however. Applying Maslow s hierarchy of needs theory, an employee will first of all satisfy his basic physiological and safety needs. Financial incentives will provide the motivation to do this. However once the physiological needs are met financial incentives will no longer motivate an employee, instead they will be motivated by other factors such as social needs, esteem and self-fulfilment.

In the past Rostel motivated its Sales Department simply by commission, reasoning that the more the salesman sold the more he earned for himself. At the start this was effective, with high sales figures. However, very soon the growth of sales started to fall as the Salesmen were now earning enough to meet their basic needs. The salesmen were now making a comfortable living and there was little incentive to work harder to increase sales. Increasing the rate of commission was not the answer, as this would simply mean more money for the same effort. What Rostel did was to look at Maslow s hierarchy of needs and realise that money would have little effect on motivation and that they would have to look at the other levels of needs such as social needs, esteem and self-fulfilment. With this in mind Rostel embarked on a program of involving the salesmen more in the company. The aim was to make them feel part of the team (fulfilling the social aspect); providing recognition for their efforts (esteem) and finally to provide them with the training and advancement necessary to fulfil their need for self development.

Teamworking strategies can motivate employees by the fact that as man is a social animal people work better as part of a team. Maslow in his hierarchy of needs states that there is a need for acceptance as part of a group. Being part of a team satisfies this need for social interaction. The benefits are that people perform better when sharing a common task; the other team members providing comfort and reassurance and also that a team can achieve more than its constituent parts. The disadvantages are that group dynamics may cause rifts that make the team ineffective and not only does it take time for a team to develop but when a member is removed or missing the team may suffer as a whole.

In the Production Department of Rostel the three production lines each operate as a self contained team. They know each other and their respective roles. Each has a knowledge and expectation that what they and their team-mates do will have an expected result. There is comfort in this that motivates the individual and the team (the expectancy theory). The team can produce more as a unit than as separate individuals. However if one of the team is sick and another employee joins, there is uncertainty and a general demotivation of the team as a whole until the new member is accepted.

Job enrichment strategies are those that recognise that it is not only extrinsic factors (pay, praise, promotion etc,) which motivate people but also intrinsic factors such as responsibility, freedom to act, empowerment to make decisions, interest in the work, being challenged and having the opportunity to develop. By designing job roles to provide these factors the motivation of the employee will be increased. While this can lead to a greater sense of job satisfaction and higher commitment from the employees it can create problems with control and in monitoring employees performance. Too much delegation to employees can cause the company to lose unity and the employees can be working at odds with one another.

In Rostel s Sales and Marketing Department there was an attempt to motivate the staff by empowerment. The employees were given greater authority to make decisions, increased responsibilities and the freedom to act. This did result in greater performance; sales figures were up and, in the case of the Retail Outlets, customer service figures were at a high. However, this led to the employees and their respective departments to stop working together and to start operating as individuals with their own objectives and standards. Coupled with the lack of communications and other structural problems this led to the recent chaos in the Sales and Marketing Department and subsequent negative public image of Rostel.

Goal Setting strategies operate on the principle that motivation and consequently performance are higher when an employee has a set goal or target to achieve. Two things are vital for this concept to work. This is that the goals and targets should be agreed between the management and employees and that there is constant feedback to maintain the level of motivation. The strength of this strategy is that the management and employees have agreed on realistic goals and targets in which the employee has the resources and motivation to achieve. There are weaknesses, however, in that management can set targets that fail to get the real support of the workforce, and provide little feedback so that the employees have little knowledge of how they are actually performing. Both these weaknesses can demotivate employees.

This was the situation when Rostel added its vitamin production line to the factory floor. The manufacturers of the vitamin plant had made claims as to the output of the plant upon which Rostel set its output targets. The employees could not hope to achieve these targets and resigned themselves to not even trying. This demotivation led to the output falling to fifty per cent of the target figures. The management realised the problem and in consultation with the employees set more realistic target figures which has resulted in output of around eighty per cent of the plant s designed capabilities.

Participation in decision making is a strategy that allows employees to have a say in things that makes them feel more involved in the company. This provides motivation for employees as it fulfils the two levels of social acceptance and esteem in Maslow s hierarchy of need theory. By being part of the decision making process an employee will have a greater sense of involvement and in being part of the company, which fulfils the social needs of the individual. Being able to make decisions increases an employee s perceived respect and status, which supplies the need for esteem. While this delegation of decision making process is beneficial to motivation and employee commitment it does have a few drawbacks. Controlling and monitoring the decisions employees make can be difficult especially considering that, due to their limited view of the company and its plans, employees can make the wrong decisions. Also with many employees making many decisions a manager will have to keep close control to ensure that the department is working together towards a common goal in keeping with the company s plans.

One of the problems with the Sales Department was that they were not properly motivated. Once they had fulfilled their basic physiological and security needs there was little or no motivation to increase sales. According to Maslow s theory the next step to motivate the Sales Department was to provide social acceptance and the need for appreciation. Rostel implemented a strategy that involved the Sales Department more in the Company s plans and decision making. The Sales Department was empowered to make many of their own decisions concerning the way in which they operated. The result was a more motivated sales-team that felt they were not only working for themselves but also for Rostel.

Relating reward and performance in a strategy is very important. The link between performance and reward must be clear and appropriate to an employee to motivate them to higher performance. This can be seen in Porter and Lawler s modification of Vrooms expectancy theory. To produce the desired performance the effective effort that employees put into their jobs are determined by two factors:

The rewards must be pertinent and valued by the employee in respect to satisfying their needs for security, social esteem, autonomy, and self-actualisation.

The rewards and the effort expended to gain the rewards are, according to the employee s expectations, fair. The reward and effort are commensurate.

This strategy is very good at increasing an employee s motivation and performance. However, unless the reward is something that the employee actually values, it can have little motivational use and performance will not be increased. It is also worth pointing out that mere effort is not enough and that to increase performance it must be effective effort.

Characteristics and considerations in motivational strategies

When considering the various theories and the strategies based on them it is important to take into account the following characteristics:

Employee perceptions this is the means by which people interpret the sensory information they receive and assign meaning too. A company must ensure that their employees perceptions of the company s mission, goals and plans, and the employees job role within the plans are in line with what the company has stated.

Employee expectations it is important for a company to know what employees expect for their efforts and the degree to which they are motivated by the fulfilment of these expectations.

Values and needs a company must know an employees values; the basic convictions and beliefs; and the needs that drive an employee. Understanding both these factors and the various theories involved are vital to properly motivate an employee.

Need for flexibility any motivational strategy must be flexible in that it can be modified to suit the individual and be able to adapt in accordance with the change in an employees needs.

Technology a company must be aware of the use of improved technology and the effect it has on motivations. New technology, in the drive for efficiency and cost cutting, can redefine jobs. This can have both a positive and negative influence on motivation. For example the increased use of computer applications such as spreadsheets and databases has revolutionised record keeping, making it easier and more convenient. Trained employees are more motivated in their jobs using such user-friendly applications. The negative side would be the example of an employee who just presses a button on a production line. Previously there were several tasks to perform and though the employee may have an easier time now, but becomes demotivated due to boredom and lack of interest.

Production systems a good production system can help to motivate employees by eliminating blocks to achieving their goals. A good system for the supply and conveyance of resources and raw materials, for instance, will prevent frustration and help to motivate the employees.

Organisational culture a company can have a culture which encourages the motivation of employees by giving them a sense of identity and unity of purpose, generating commitment and providing clear guidelines on what is expected of them.

Scott B Sutherland

HNC Student

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