Compensation and Motivation: What Works and What Doesn't

It is understood that many employees hate their jobs. The lack of commitment and passion for the jobs makes it difficult for these employees to be productive. While the employees are the biggest losers, their employers also suffer. When an organization fails to invest in its employees, it cannot expect the employees to demonstrate dedication and productivity. This is the situation that Ellard Williams faces. The company has witnessed a decline in employee performance and it is projected that as it heads into the future, it will continue to suffer high turnover rates and declining productivity. If this company is to revive its fortunes, it must rethink its human resource management strategy. This firm should abandon the strategies that are currently in place and embrace reforms that attend to the needs of all employees especially those that are low-ranking.

Employee motivation strategies 

That many companies are struggling to keep their employees motivated is rather surprising. This is because there are a number of motivation strategies that have been shown to be effective. One of the motivation strategies that are most effective involves organizational leaders serving as role models and inspiring employees to remain dedicated and passionate about their work (Quast, 2012). What makes this strategy effective is that the organizational leaders are deeply and personally involved in offering motivation. Another strategy that yields good results is defining clear organizational goals, mission and vision (Quast, 2012). As organizations define these issues, they should ensure that the employees are involved. It is also important for the organizations to remind the employees of the contributions that they can make towards the achievement of the goals, vision and mission.

The two strategies identified above can go a long way in motivating employees. However, if an organization truly wishes to keep the motivation levels of its employees sustainably high, they need to combine these strategies with others that are equally effective. Assigning employees complex and meaningful tasks that provide them with the challenges and opportunities for growth is yet another motivation strategy (Quast, 2012). This strategy builds on the skills and competencies of employees as it exposes them to new challenges. The motivation strategy that an organization adopts should not only focus on enhancing the productivity of employees. It is also crucial for organizations to ensure that their motivation strategies attend to the personal needs of their employees. Working with employees in developing personal goals is a strategy that ensures that the personal and professional needs of employees are met (Quast, 2012). Offering financial and other rewards is one of the most commonly used motivation strategies. This strategy allows organizations to reward their employees for exceptional performance. Its main drawback is that it can be costly to implement and it is not available to firms that are cash-strapped. An organization should critically examine its situation to identify the motivation strategy that holds the greatest promise.

Role of compensation in the workplace 

Compensation is not a pointless or futile endeavor. There are good reasons why many companies invest huge amounts in the compensation of their employees. Compensation plays a number of important roles in the workplace. Compensation has been found to inspire employees to commit to their jobs even when they encounter negative outcomes. For example, employees who are adequately and appropriately compensated tend to stay at their workplaces even when they are ill (Muller et al., 2013). This means that compensation motivates employees to commit to their jobs even at the expense of their personal wellbeing. Another vital role that compensation plays is that it enables employees to satisfy their personal needs (Lazaroui, 2015). When employees are motivated, they are provided with the resources that they need to pursue personal goals.

In an earlier section, it was pointed out that many employees hate their jobs. Compensation can help to address this. Through compensation, companies can enhance the satisfaction levels of their employees (Olafsen et al., 2015). Satisfied employees are more committed to their jobs. Creating a culture of justice is another role that compensation plays (Olafsen et al., 2015). This is especially the case when a firm adopts a compensation strategy that is pegged on employee performance. When employees are rewarded for excellence, they feel that the organization upholds justice. Compensation has also been shown to inspire intrinsic motivation (Olafsen et al., 2015). This means that even in the absence of extrinsic motivation such as monetary reward, employees remain motivated.

Compensation plan for Ellard Williams 

Given the unique challenges that it faces, Ellard Williams must evaluate the different compensation strategies that are available and select the one that is most promising. It is recommended that the company should adopt an equitable pay structure. Essentially, this structure should compensate employees on the basis of their productivity. This recommendation is based on the current situation at the company. It is noted in the case that the compensation policy currently in place favors those in upper management at the expense of lower-ranking employees. A strategic analysis has also revealed that the company expects to witness an increase in turnover and a decline in profitability. If these negative outcomes are to be averted, the firm needs to move with speed and reform its compensation system. It should ensure that all its employees are rewarded for their effort. The equitable pay structure is based on the equity theory of compensation. Basically, this theory holds that there should be some uniformity in how employees are paid (Miner, 2005). The gap between the remuneration offered to senior employees and lower-ranking employees should not be unjustifiably high. The recommendation that has been offered accounts for the fact that Ellard Williams faces financial difficulties that make it difficult for the company to increase the pay of its employees. The company does not have to increase pay. Instead, it should ensure that the compensation is uniform and streamlined.

In conclusion, compensation is a key factor that promotes motivation. When employees are adequately compensated, they become more committed to their jobs. There are a number of strategies that firms can adopt as they seek to motivate their employees. As they implement these strategies, the companies can expect to enjoy a number of benefits. It is recommended that Ellard Williams should streamline its pay structure to ensure that lower-ranking employees are adequately and fairly compensated for their effort.

References

Lazaroui, G. (2015). Employee Motivation and Job Performance. Linguistic and Philosophical 

Investigations, 14, 97-102.

Miner, J. B. (2005). Organizational Behavior: From Theory to Practice. Armonk: M.E. Sharpe.

Muller, A., De Lange, A., Weigl, M., Oxfart, C. & Van der Heijen, B. (2013). Compensating

Losses in Bridge Employment? Examining Relationships between Compensation

Strategies, Health Problems, and Intention to Remain at Work. Journal of 

Vocational Behavior, 83 (1), 68-77.

Olafsen, A. H., Halvari, H., Forest, J. & Deci, E. L. (2015). Show them the Money? The Role of

Pay, Managerial Need Support, and Justice in Self-Determination Theory Model of

Intrinsic Work Motivation. Scandinavian Journal of Psychology, 56 (4), 447-457.

Quast, L. (2012). 5 Tips for Motivating Employees. Retrieved 29 th December 2017 from

https://www.forbes.com/sites/lisaquast/2012/01/10/5-tips-for-motivating-employees/#631d0b0439a0