Employee Financial Motivation and Job Satisfaction

Thesis statement

To begin with job satisfaction can be defined as ways in which an individual views his job. This can be as result of performance appraisal, perception of the job, attitude towards the job, and job satisfaction that leads to certain behaviors in the organisation job satisfaction can be as result of many effects among them is monetary benefit. Job satisfaction leads to organisation achievement of her organisational goals. This is due to the fact that satisfied employee carries out his or her job whole heartedly and they can do anything within their powers to ensure that the organisation is successful. This is as result of their attachment and beliefs employee has to the organisation. It is easy to note an employee who is satisfied with his job in organisation through their performance and quality production or service they offer.

Most employees seek for employment which a sole purpose of monetary gains however, monetary gains ceases to have value when an employee reaches a certain level in employement.Monetary benefit is good to employees because its monetary benefit that attracts a person to the company. The monetary benefit is used in the organisation to improve performance by making employees belief that their efforts are valued by the returns the monetary benefit which is designed by an organisation should be in manner that it reflects the efforts an employee makes. Monetary benefit can lead to job satisfaction to certain employees because to some employees are satisfied with monetary rewards.

Job satisfaction is result of many factors, this factors that motivate employees to be satisfied include the money value. The aim of employment is to get or reclued the best employee who will be able to ensure the organisation produces the best result for the company. job satisfaction being an attitude towards a job as well the fill by a person that is comfortable with his job ensures that the organisation has good relation with their outside world the outside employee can lead to problem for the organisation however, their will no job satisfaction without monetary value. In the employment set up the employee goes to work with the hope of receiving some monetary benefit at the end of the day. After he is comfortable with his pay then other factors will be considered. In ensuring that his satisfied with his job. If there is no job satisfaction, the organisation will face with the problem of job turnover.

Job satisfaction

Job satisfaction is due a number of factors within the working environment. These factors contribute job satisfaction and in their absence they will be job satisfaction which lead to failure of the organisation. The factors that contribute to job satisfaction include reward system, company policies, responsibilities, and motivators.

Organiastion commitment is another that contributes tom job satisfaction through influencing the organization behaviouir and employee attitude, as well as perception. The organisation culture where organisation commitment assists the organisation top come up with behaviors will influence attraction, recruitment, retaining and motivating employees. A person develops a desire to continue with work in the organization as well as ensure that the organisation proceeds.

Motivation means the process of energizing and sustaining employee’s efforts. It involves the process of leading people in behaving in specific way. It varies in nature intensity from individual to individual depending on a particular mixture of influences. These influences are related to once need. Effective managers motivate people to joint the organisation, remain in the organisation, come to work regularly, perform at high while at work, and are good corporate citizens.

Monetary rewards

Employee job satisfaction and motivation is key to organizations profitability and competitive advantage sources. Monetary benefit creates relationship between an employer and employee and this how the organisation realizes the mission statement and goals. The monetary must be satisfactory to the employee. Nobody will deliver for more than two months without being demoralized if that person does not receive their pay. Companies usually use financial rewards to improve employees’ performance. This is because good salaries which usually translate to good work meaning that everybody will to continue working with the organization which pays the salaries monetary becomes a source of motivation.

These practices must be developed and implemented to bring long term and quick improvements to the firm. The practices or mechanisms developed for employee rewarding aim to attract retain and motivate sufficient number of suitable employees to meet production needs. This will increase employee satisfaction and improve performance management. Further, these practices will enable the employees to share in the prospering and growth of the organization and encourage them to use the best of their abilities and develop their potential to achieve high results as their efforts will be recognized and rewarded.

Rewards may be personal or official, private or public, formal or informal and it may take the form of activities or gifts.

For the reward system to be successful so as to bring employee satisfaction, it must be implemented in such a manner that it matches the rewards to the person, matches the rewards to the achievements, is timely and specific and has a relative importance and task. This will enhance employee acceptance of the practices used and motivate them to work hard to achieve the necessary objectives or targets for efficient and higher production. Further if the management rewards the desired performance immediately it‘s achieved, the employee becomes highly motivated and appreciative and it makes them to improve their actions since they will clearly understand the best efforts which have been achieved and rewarded.

For the reward system to be successful as performance management, the system must aim to facilitate collaboration within the organisation and recognize the value of job in relation to each other. It must be meaningful and valuable for the individuals within the organisation. Further this system must be based on objectives and achievable goals and it must be acceptable and open to all to reduce unnecessary conflicts since competitive struggle will be low within the work place.

Reward system that is designed by the company should be able to motivate and be inline with the company objectives, goals, mission and vision. The main aim is to attract, maintain and manage the employees of the organisation to be able to manage this resource the monetary system applied because of paramount importance.

A wide variety of different payment systems have long been available, therefore, for management to choose from. Choice, in turn, has been linked in part to the goals management are seeking to pursue through the payment system, with the implication that different systems are better suited to the pursuit of particular goals. In addition, the internal and external circumstances facing an organisation have also been important in the selection of a payment system. Thus, the appropriateness of a payment system has been related to the technology use, as well as the labor and product market within which the company operates.

Some of the payment systems that are used by the human resource management are beneficial to the employees and the organization. They are:

• Time Rate system

Under this system the employees are simply paid a predetermined rate per week, or hour for the actual time. They have worked. The basic rate for the job can be fixed by negotiation, by reference to local rates, or by job evaluation. This system is prevalent in the engineering and processing industries and among clerical, supervisory and managerial personnel where there is no rigid standardization of work and a certain amount of skill is involved. Within the time paid for, a minimum standard of performance is expected. From the point of view of employees, the advantages of time rated are that earnings are predictable and steady. Moreover, they need not argue with supervision and rate fixers about piece rate or time allowances.

The disadvantage of time rates is that they do not provide the motivation of a direct incentive relating the reward to the effort. This problem can be overcome by adopting a system of measured day work, use of merit award, which may be in the form of additions to the base of so much per hour, usually with an upper limit.

• Payment by results system

Under this system the pay or part of the pay is related to the number of items a worker produces or the time he/she takes to do a certain amount of work. It is applicable to simple manual operations, where the effort of an individual can be measured in terms of quantity or quality. This maybe through a straight piece-work or a differential piece-work system

1. Straight-piece-work

This is a payment of a uniform price per unit of production. This is most appropriate where production is repetitive in character and can easily be divided into similar units. In this system, you can pay a worker a flat money price for each piece of operation completed (money piece work), or you can pay him/her for the time allowed to complete a task (time piece-work). In the letter case, if the worker completes the job in less than allowed time he/she gains the advantages of time saved.

Differential piece-work systems- this allows the human resource adjusts wage cost per unit in relation to output. In this system he wages cost per unit of production falls as output increase. As the same time the hourly rate of workers earnings still increase, although not in proportion to the increase output. This system is possible where it is easy to relate effort to production and the work is standardized, repetitive and measureable. There needs to keep and maintain quality in mind, while adopting the piece rate system.

Over the years though this payment system has declined in popularity this is due to the fluctuating earnings’ through no fault of the employee, work study values that are difficult for the employees to understand, distrust of the firmness of such schemes. This scheme however, generates pressure to maximize output which can result to a neglect of quality and decline in skill. The recent trend to total quality has placed more emphasis on team working and delegating responsibility to employees to use their initiative in a manner not fostered by traditional PBR (Payment by Results) Scheme.

Many leading industrial companies are introducing team or cellular working with group bonuses or even flat rate pay, and in this respect are a head of public sector employers (Cannell and long, 1991 and Pickard, 1993). Profit sharing is also on the increase in many companies.

2. Measured day work.

In this system the pay of the employee is fixed on the understanding that he/she will maintain a specified level of performance. The pay does not fluctuate in the short-term with performance. The human resource defines the required level of performance and monitors the actual level with the help of work measurement methods. What distinguishes this system from the time rate system is the concept of an incentive level of performance. The human resource puts the employee under an obligation to perform at the effort level required by the guaranteeing the incentive payment in advance.

Measured day work offers enhanced earnings in exchange for an incentives level of performance. The following criteria may be useful for its successive operation;

• Total commitment of management, employees, and their unions. This can be achieved by careful planning. Joint consultation, training and a phased introduction of the system.
• An effective work measurement system, and efficient production planning and control and inventory control procedures.
• The establishment of logical pays structure with appropriate differentials from the beginning of the scheme’s operation. The structure should be developed by the use of job evaluation and in consultation with the employees.
• The maintenance of good control systems to ensure that corrective action is taken quickly if there is any shortfall on target.

3. Incentive schemes

This is an extra-financial motivation, whereby is the payment for work of an acceptable quality produced over and above a specified quantity or standard. It can be applied to an individual, a group or to all the employees of the organizational, hence improving efficiency of the organization. Improving efficiency naturally lowers the costs of the organization. There needs to be a fixed standard of the incentive, but while doing so the organization should ensure the acceptability of the scheme to both the workers and the unions.

4. Performance related pay

This system is usually seen as the way to motivate directors’ and senior managers to achieve targets incorporated into strategic plans. performance related pay in recent years have been adopted in public as well as private-sector organization, including local government, the civil service and the NHS. Although this form of payment system remains contentious. There are wide divisions in opinions as to its efficiency to practitioner, consultants and researcher.

Today performance related pay is a term normally used to describe a specialized from of pay system linked to merit and appraisal. Traditional piecework and payment by results performance related pay schemes for manual workers, commissions’ schemes for sales representatives, annul bonuses and merit pay schemes are usually under the umbrella of performance related pay.

5. Linking pay to performance

In addition to deciding on appropriate measures of performance, consideration must be given to the size of the rewards available, and the manner in which they are related to performance. Many organizations, especially in the public sector, have set very low limits on performance related pay, frequently in the order of 7% or less of basic pay, with a presumed median payment in the order of half of this amount. It is scarcely surprising when such schemes fail to motivate and have a significant impact on productivity schemes in the private sector frequently provide the opportunity to earn 30% or more on top of basic salary (Armstrong and Murlis, 1994)

Problems associated with performance related to pay

Unfortunately much of the current evidence points to a considerable degree of dissatisfaction with performance related pay, and little evidence that it leads to higher levels of productivity. Its important to remember when considering the results of recent research in to performance related pay and higher productivity, and that performance related pay frequently disturbs working practices and changes expectations in a manner disturbing to employees used to traditional pay systems. However the pace of economic change is forcing employers to move in the direction of performance related pay schemes, whether they like it or not. The study has found that many employed objected to having the size of their pay packets determined by what they saw as poor line manager, the survey evidence shows that performance pay has failed to motivate employees and may have done to demoralize staff. (Thompson, 1993)

To overcome these problem Armstrong and Murlis advice

• Match the culture
• Link performance related pay to the performance management process
• Ensure individuals are clear about targets and standards of performance against these targets and standards.
• Employees should be able to influence performance
• Employees should be clear about rewards.
• Rewards should be meaningful enough to make the efforts required worthwhile (Murlis and Armstrong, 1994)

There are some companies and organizations that use this system and they include:

• Nissan
• ICI pharmaceuticals
• Rolls-Royce in Derby
• Public Civil Service

Conclusion

Employee monetary benefits alone cannot assist the organisation to achieve their objectives, missions, vision and goals. Job satisfaction is the most important issue in human resource management and it is job satisfaction that assists the organization to be successful. Job satisfaction entails a number of factors and a monetary benefit is one of the elements that contributes to job satisfaction. Money has a directly influence on employees behavior and perception towards to the organization and there will be no relationship between the employee and organisation without it.

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