Effective Human Resource Practices and Employee Motivation

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Effective HR Practices

Employees are among the most valuable assets in an organization, and thus the way they are managed contributes significantly to the success or failure of businesses. Companies use human resources management (HRM) as a strategic approach to execute organizational strategies and meet the set objectives in both the short- and long term. The underlying concept of HRM is the practice used in employing people and the associated processes used to develop and utilize skills and offer commensurate compensation for services offered in line with the job and organizational needs. Therefore, HRM is made up of different processes geared towards equipping companies with the right workforce for the realization of economic benefits through the achievement of set goals and objectives. HRM involves labor force planning, recruitment, induction, orientation, onboarding, skills management, training and development, personnel administration, structuring compensation packages, time management, cost planning in terms of workforce, performance appraisal, administering employees’ benefits, and labor relations.

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Therefore, given the elaborate nature of HRM, the involved processes should be managed effectively to ensure that workers perform optimally to create value for an organization. In cases where the HRM is not executed carefully, the affected companies suffer greatly due to dissatisfaction among employees, poor performance, and high turnover rates. As such, HRM specialists, researchers, and scholars have studied this topic widely to give some guidelines that should be followed for businesses to derive value from their workforces. A meticulously executed HR planning and management gives companies the advantage of having satisfied employees. This paper explains the way effective HRM practices help to improve employee satisfaction and development, thus increasing performance in organizations.

HRM Practices and Employee Motivation

Employees’ motivation is a major contributing factor to the level of performance among workers in an organization. Motivated employees are committed to their workplaces, creative in their duties, and have high energy levels. These attributes directly translate into improved organizational performance because strategic goals and other set objectives are executed and achieved accordingly. Therefore, every organization should be concerned with motivating its employees because the workforce is the engine that drives success in businesses. As such, given that HRM is responsible for hiring and managing workers, the underlying practices determine the level of the employees’ motivation (G’omez-Mej’ia, 2007). Numerous benefits are associated with a motivated workforce including increased commitment, job satisfaction, continuous development, and improved efficiency. These factors work in concert to ensure high productivity levels in the workplace hence optimal organizational performance.

Motivation could be extrinsic or intrinsic, but both are important to the workforce. In extrinsic motivation, employees are given external reasons to improve their performance including good remuneration packages, recognition for doing exemplary work, and other forms of appreciation, such as pay raises and promotions, year-end bonuses, and annual appreciation days (Mathis, 2008). In other words, extrinsic motivation is mainly related to monetary rewards. On the other hand, under intrinsic motivation, employees improve their performance and productivity because they enjoy what they are doing, or they find it gratifying and interesting.

Therefore, effective HRM practices focus on both extrinsic and intrinsic aspects of motivation to ensure that the employees’ needs are catered for during their day-to-day execution of duties. This assertion holds because extrinsic motivation is limited in some ways, and thus it should be complemented with intrinsic motivation. For instance, it is not possible to reward employees every time they perform tasks exemplarily. In this case, if the only form of motivation available is extrinsic, workers will not find a good reason to assume extra responsibilities because they cannot see the associated payoff. However, with the inclusion of intrinsic motivation, such employees will take extra responsibilities even in the absence of monetary rewards. The following section explains some of the HRM practices that organizations could apply to ensure both extrinsic and intrinsic employee motivation.

Compensation

People get into employment specifically for the associated financial benefits. Consequently, the kind of remuneration packages that an organization has in place will play a central role in determining the level of employee motivation. In this context, compensation refers to the process that businesses give a monetary value to workers for duties performed. In contemporary times where the cost of living keeps on rising, workers have to be compensated appropriately to enable them to meet their financial obligations and lead quality lives. Additionally, people invest in higher, technical, or specialized education hoping to gain skills that will earn them good pay once they are employed. As such, the effective HRM practices to ensure a highly motivated workforce is to offer good remunerations commensurate with the work done and skills employed in the process (Budhwar et al., 2019). In most cases, compensation is the only way to attract and retain a skilled workforce, which gives an organization a competitive advantage in the marketplace. Companies thus structure compensation packages based on different aspects, such as experience, skills, nature of work done, and the value derived among other related factors.

Employees will be motivated to increase their productivity and performance because they know they will be compensated appropriately for their efforts. Additionally, motivated employees are likely to become creative when undertaking their duties by solving problems, thus creating value for the company (Hassan, 2016). Consequently, an effective HRM strategy should include the compensation mix, including paying for overtime, bonuses, commissions, allowances, medical options, and profit-sharing among other such practices. Some companies opt to offer employees the option to buy shares and own part of the organization. Therefore, with a sense of ownership, employees are motivated to ensure the success of a firm because ultimately, they will benefit from such accomplishment.

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The available literature shows a strong positive correlation between employees’ compensation and motivation levels (Armstrong & Taylor, 2017; Torrington et al., 2017; Dessler, 2017). Therefore, successful companies have perfected the art of creating the right compensation mix to suit the employees’ needs by rewarding them appropriately based on the underlying job requirements. This way, employees are motivated to commit to their workplaces by becoming loyal to their employers. Ultimately, performance increases, and turnover rates decrease with employees recording high levels of job satisfaction. Such organizations benefit immensely from having a workforce aligned with the underlying values and committed to executing their duties diligently to achieve the set goals, thus ensuring success and progress.

Training

The long-term success of an organization depends largely on the level of preparation and planning invested in HRM. According to Ozkeser (2019), “In today’s conditions, long-term success and competitive advantage of enterprises depend on giving importance to human because many of the resources owned by enterprises can be imitated, except for human resources” (p. 803). Training is one of the ways to ensure that employees are equipped with the relevant skills needed for an organization to remain competitive in the marketplace both in the short- and long term. Thoroughly trained employees will be confident in their undertakings and motivated because they know that they bring value to their employers.

Therefore, successful businesses have integrated employee training into their HRM practices as a continuous function for facilitating workers to adapt to the dynamics of their work environments. As a way of employee motivation, training increases the capacity to make decisions and solve problems in the workplace. Ozkeser (2019) argues that training employees shows them that they are valued, and this perception keeps them motivated because they know they are part of a culture that treasures personal development. Additionally, using company resources to train employees makes them feel privileged because the skills they gain can be used in other areas of life, and in the process, the affected individuals execute their duties confidently knowing that they have what it takes to be competent.

Training also allows employees to advance in their careers, which is a major motivating factor. When people start working, the majority of them aspire to progress and make the best use of their time and commitment to a certain path. As such, workers know that one of the ways to get ahead is through learning and developing skills for both existing and future performances by increasing their capacity to execute their duties efficiently. In literature, career development is defined as “moving forward on a chosen business path, making more money with the progress, taking on more responsibility. In this process of progress, the development of knowledge, experience, mastery, and education is achieved” (Ozkeser, 2019, p. 807). With this knowledge, HR managers invest sufficiently in employee training as a way of motivating employees to remain committed to their places of work and diligent when executing their day-to-day duties. Ultimately, with improved employee productivity, organizational performance increases in tandem, and in the end, both the company and employees benefit from this mutual association. Without proper employee training strategies, skills and knowledge become redundant, and without this competitive advantage, businesses cannot survive and thrive in the marketplace.

Career Planning

Career planning as an employee motivational tool is closely related to the training aspect discussed in the preceding section. Hassan (2016) defines career planning as the process whereby the HR department sets goals for employees and creates elaborate ways to achieve the same. In other words, this process requires workers to plan life work at an individual level. At a personal level, employees want to progress and advance their careers. However, this process should not take place at the expense of business objectives. Therefore, HR managers need to help employees strike a balance between personal and organizational goals. Through career planning, HR identifies employees’ skills and experiences and assigns duties accordingly for optimal performance. Additionally, HR follows the same strategy when determining areas of training that should be focused on to ensure that employees are adequately prepared for their duties.

In the modern workplace, career planning is a useful tool used to deliberately create opportunities for both personal and organizational development. According to Hassan (2016), “Individuals prefer to join those organizations where they get enough opportunities to pursue their career goals and exploit their potential fully” (p. 16). Consequently, when employees are working in environments where they are supported to become the best version of themselves by being assigned roles that are in line with their skills and experiences, they are motivated to in their work. With proper planning, HR managers create specific and well-defined ladders in different occupational fields within an organization based on the underlying responsibilities. As such, employees can predict their career progression trajectory within a company, which motivates them to work hard to advance from one level to another.

Employees will become motivated once they believe their employer is involved in their growth by creating avenues for the achievement of the organization’s mission and objectives, while at the same time realizing individual career goals. Based on this understanding, HR managers provide employees with a clear-cut development path as an ongoing process to enhance their skills and master their current job positions, thus enhancing their probability of being promoted or transferred to different areas where they could be highly valuable. In the process, employees are motivated with improved job satisfaction, which in turn increases their productivity and that of the organization (Budhwar et al., 2019). Without such a strategy to motivate employees, companies are likely to experience high turnover rates as workers leave to join other businesses where they feel they stand a good chance of career progression.

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Employee Involvement and Engagement

Well-managed employees will be satisfied with their jobs, lead fulfilling lives, and be motivated to improve their performance at the workplace. Employee engagement is the process through which companies create an environment allowing workers to make decisions on their own and take the relevant actions concerning their jobs. In other words, employees are empowered to execute duties independently as long as their actions are consistent with the organizational values, goals, objectives, and mission. This way, employees feel motivated because they become part of the businesses where they work by contributing their ideas. Hassan (2016) posits, “Employee involvement increases job satisfaction, motivation and employees commitment as employees feel more involved in the success of the organizational goals” (p. 17). Ultimately, organizations benefit immensely from such employees, as they are encouraged to become innovative and solve arising problems in the course of executing their day-to-day duties. This process creates leaders as workers take responsibility for their actions.

Additionally, involving employees in the decision-making process gives them a sense of ownership of ideas, which is highly motivating. Albrecht et al. (2015) argue that employee engagement is closely linked to the transformational leadership style where workers participate in making important decisions. Therefore, HR managers apply this approach to managing workers in various ways. Apart from engaging employees in decision-making, HR managers share important information with the workforce concerning the company’s goals, objectives, financial performance, and strategic direction among other related business aspects. Taking time to explain to employees their important role and place towards the attainment of organizational goals increases the level of engagement, thus making them feel valuable and motivated.

Employee engagement also builds trust between the management and the workforce in any given set-up. Once workers know that they can trust their employees, they are open to giving honest feedback on various areas that could benefit from improvement. Additionally, engaged employees are motivated to challenge themselves to become the best that they could, which functions for the benefit of their companies (Albrecht et al., 2015). Managers are also becoming creative by offering employees the opportunity to own part of the business through purchasing shares. This way, apart from being workers, such individuals become owners; thus, they are motivated to support the success of such businesses. Ultimately, with such motivated employees through engagement, their productivity increases significantly, and so is organizational performance.

Performance Appraisal

Performance appraisal refers to the process by which companies undertake a systematic evaluation of employees’ performance based on the assigned duties and roles in the workplace. Organizations have to track, measure, and evaluate their performance against the set goals to determine areas of improvement. Companies have to work with targets and the workforce plays a central role in the achievement of such goals. Therefore, employees need to be appraised to understand their performance, reward them, or identify areas of improvement (Hassan, 2016). Additionally, evaluating employees’ performance increases their motivation in different ways. First, those that have achieved their goals are rewarded accordingly in bonuses and commissions, which is a major source of motivation. Second, those that have not met their targets are assisted to improve on certain areas, and this aspect translates into personal growth.

Therefore, effective HRM practices should employ transparent performance appraisal systems based on merit. This way, workers will not feel discriminated against or perceive think that the management is unfair in its evaluation. Therefore, HR managers are using this knowledge to create transparent and open appraisal methods and tools that leave or little room for bias. With such honesty in appraisals, employees will have the opportunity to introspect and identify areas of weaknesses and work strategically to improve their performance in line with the set organizational goals. In the end, as employees’ performance improves motivated by the need to improve their appraisal rates, the companies’ productivity also increases in tandem by being competitive in the workplace (Hassan, 2016). Appropriate performance appraisal systems motivate workers to become innovative as they find ways to solve problems and achieve personal and organizational goals. However, if companies lack good systems to evaluate workers’ performance, employees could be demotivated due to the lack of rewards for met targets or unfair and biased approach towards their appraisal.

Conclusion

HRM in organizations deals with recruiting, training, and developing a workforce to meet set goals and objectives. Employees are the most important assets in any organization, and thus they should be managed carefully to derive maximum value from them. Therefore, HR managers employ different strategies to motivate employees to execute their duties with enthusiasm for improved performance and productivity. Some of the techniques that HR managers employ when dealing with workers include compensation, training, career planning, performance appraisal, and employee engagement. First, people join employment aiming to make a living, and thus good remuneration packages motivate employees to give their best when executing their day-to-day duties.

Additionally, training workers improve their competence through the development of the requisite skills needed to perform their duties effectively and efficiently. Similarly, employee engagement creates an environment where workers can contribute their ideas and take part in the decision-making process. This way, they have a sense of ownership, which motivates them to ensure the success of their organizations. Ultimately, these strategies work in concert to compound the issue of employee motivation. As argued throughout this paper, a motivated workforce leads to improved organizational performance and productivity. Therefore, HR managers are continuously designing ways to motivate their workforce as a continuous undertaking, which is part of effective HRM practices.

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References

Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices, and competitive advantage. Journal of Organizational Effectiveness, 2(1), 7-35.

Armstrong M., & Taylor S. (2017). A handbook of human resource management practice (15th ed.). Kogan Page.

Budhwar, P., Pereira, V., Mellahi, K., & Singh, S. K. (2019). The state of HRM in the Middle East: Challenges and future research agenda. Asia Pacific Journal of Management, 36(4), 905-933.

Dessler, G. (2017). Human resource management (15th ed.). Pearson Education.

G’omez-Mej’ia, L. R. (2007). Managing human resources (4th ed.). Prentice-Hall of India.

Hassan, S. (2016). Impact of HRM practices on employee’s performance. International Journal of Academic Research in Accounting, Finance and Management Sciences, 6(1), 15-22.

Mathis, R. (2008). Human resource management (10th ed.). Thomson/South-Western Co.

Ozkeser, B. (2019). Impact of training on employee motivation in human resources management. Procedia Computer Science, 158, 802-810.

Torrington, D., Hall, L., Atkinson, C., & Taylor, S. (2017). Human resource management (10th ed.). Pearson Education.

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