The importance of motivation in work and

CSR.

L 5

Ing. Jiří Šnajdar 2015

Motivation is essential not only to boost employees to perform better, but in the long run, would aid in the growth of the organisation for the better.  Whether its McGregor’s X and Y Theory, Maslow’s Need Hierarchy Theory or McClelland’s Motivation Theory, it is difficult to understand motivation without considering what people need and want from their work.

All these theories of motivation encompass the dynamic relationship between efforts, performance and rewards for each individual. 

Some of the ways to motivate employees could be either intrinsic/ inner or extrinsic/ external:

1.Appropriate compensation and benefits

2. Give recognition, rewards and value to their work

3. Create a hierarchy for transitions and promotions

4. Scope for growth by job rotation, training and development measures

Some of the ways to motivate employees could be either intrinsic/ inner or extrinsic/ external:

5. Give them a road-map for their growth by aligning their competencies respectively.

6. Create an environment that they would hate to leave.

Motivating people is not as easy as it sounds. It needs clear thinking and hard work. Therefore, having the clarity of goals and expectations complemented by rewards, both tangible and intangible, motivates people to achieve organisation goals.

1. Desire to be great: People have a great desire to contribute to something lasting and get motivated naturally when they feel that they are working on something important, rare and marvelous.

2. Motivating by caring: Showing genuine concern towards employees goes a long way in inspiring them. Whether it’s spending on their ailing parent, sending a child to school or meeting their healthcare concern, it creates a sense of loyalty in the employees and thus helps in retaining them.

3. Motivating people at different levels:

Different people could be motivated at different motivation levels. A senior management team would be looking for recognition and ownership (maybe by shares or stocks), the middle management may be in need for opportunities to demonstrate and develop their talents and the frontline staff maybe be looking out for just job stability.

4. Motivating by setting difficult goals: Difficult goals stimulate greater effort and greater performance.

This linear relation could be explained by the following equation:

Job performance= f ability + knowledge + Motivation

Abilities of a person could also be enhanced by the right motivation. This could be done by constantly exploiting the strengths of a person and ignoring his weaknesses.

5. Motivating problem people: Understanding human nature becomes very critical in this regard. To motivate a problem employee, one should know what drives him. Then identify blocks to his drives and try removing those impediments.

A popular principle from Western management states the “50:50 rule” by John Adair. According to this, 50 per cent of motivation comes from within a person and the remaining 50 per cent from his environment especially from the leadership encountered there.

Leadership is an exercise in human relations.

A person does not become a leader by working alone and carrying out his own work but becomes a leader when others think of accepting him as a leader.

Acceptance by others for a person requires time, respect for the work of the person acceptance of the person as leader and respect for that leader. A person who is able to inspire and motivate other persons to carry out the necessary work gets accepted as a leader or a manager.

Rewards and Recognition:

Achievements are important and represent a major part of job satisfaction. Recognition of achievement is more vital. Though, it can be minor or momentary, it still acts as a good motivator.

A simple “well done” or “great job”, or extending it to an “employee of the month” scheme, or a certificate or a badge, act as definite triggers to improve performance.

Effectiveness of people at the workplace depends on how their work will fit into the grand vision of organization and what the future holds for the organization and to them.

With the combination of recognition along with tangible rewards, the way motivation works is thus progressive and cumulative.

A suitable mix of rewards, incentives, and recognition augmented by a series of employee engagement activities must be integrated to retain people and encourage them to remain in the organisation.

Maslow's Hierarchy of Needs

At the most basic level, an employee is motivated to work in order to satisfy basic physiological needs for survival, such as having enough money to purchase food. The next level of need in the hierarchy is safety, which could be interpreted to mean adequate housing or living in a safe neighborhood.

The next three levels in Maslow's theory relate to intellectual and psycho-emotional needs: love and belonging, esteem (which refers to competence and mastery), and finally the highest order need, self-actualization.

Cognitive process theories

Equity Theory - is derived from social exchange theory. It explains motivation in the workplace as a cognitive process of evaluation, whereby the employee seeks to achieve a balance between inputs or efforts in the workplace and the outcomes or rewards receive or

anticipated.

Cognitive process theories

In particular, Equity Theory research has tested employee sentiments regarding equitable compensation. Employee inputs take the form of work volume and quality, performance, knowledge, skills, attributes and behaviors. The company-generated outcomes include rewards such as compensation, praise and advancement opportunities. The employee compares his inputs relative to outcomes; and, then, extrapolating to the social context, the employee compares his input/outcome ratio with the perceived ratios of others. If the employee perceives an inequity, the theory expects that the employee will adjust his behavior to bring things into balance.

Expectancy theory - proposes that an individual will decide to behave or act in a certain way because they are motivated to select a specific behavior over other behaviors due to what they expect the result of that selected behavior will be.

In essence, the motivation of the behavior selection is determined by the desirability of the outcome.

However, at the core of the theory is the cognitive process of how an individual processes the different motivational elements.

This is done before making the ultimate choice. The outcome is not the sole determining factor in making the decision of how to behave.

Expectancy theory is about the mental processes regarding choice, or choosing. It explains the processes that an individual undergoes to make choices.

In the study of organizational behavior, expectancy theory is a motivation theory first proposed by Victor Vroom of the Yale School of Management.  

Goal-setting Theory

Studies have shown both feedback from the employer and self-efficacy (belief in one's capabilities to achieve a goal) within the employee must be present for goal-setting to be effective.

However, because of the tunnel vision focus created by goal-setting theory, several studies have shown this motivational theory may not be applicable in all situations. In fact, in tasks that require creative on-the-spot improvising, goal-setting can even be counterproductive.   

Furthermore, because clear goal specificity is essential to a properly designed goal-setting task, multiple goals can create confusion for the employee and the end result is a muted overall drive.

There are three types of factors that influence goal commitment:

External - The external factors that affect it are authority, peer influence and external rewards. Complying with the dictates of an authority figure such as boss has been shown to be an encouragement to high goal commitment. Goal commitment increases when the authority figure is physically present, supportive, pay increases, peer pressure and external rewards.

Interactive - The factors that influence commitment here are competition and the opportunity to participate in setting goals. It has been shown to be an inducement to setting higher goals and working harder to reach them.

Internal- these come from self-administered rewards and the expectation of success. The commitment decreases when the expectation to achieve is decreased.

Social Cognitive Theory

Bandura's Social Cognitive Theory is another cognitive process theory that offers the important concept of self-efficacy for explaining employee's level of motivation relative to workplace tasks or goals.

Self-effectiveness is an individual's belief in his or her ability to achieve results in a given scenario. Empirically, studies have shown a strong correlation between self-efficiency and performance.

The concept has been extended to group efficiency, which is a group's belief that it can achieve success with a given task or project.

Creativity

On the cutting edge of research pertaining to motivation in the workplace is the integration of motivation and creativity.

Essentially, according to Ambrose and Kulik, the same variables that predict intrinsic motivation are associated with creativity. This is a helpful conclusion in that organizations can measure and influence both creativity and motivation simultaneously.

Further, allowing employees to choose creative and challenging jobs/tasks has been shown to improve motivation.

In order to increase creativity, setting "creativity goals" can positively influence the process, along with allowing more autonomy (i.e., giving employees freedom to feel/be creative).

Groups and teams

As the workplace is changing to include more group-based systems, researching motivation within these groups is of growing importance. To date, a great amount of research has focused on the Job Characteristics Theory and the Goal-setting Theory.

While more research is needed that draws on a broader range of motivation theories, research thus far has concluded several things: (a) semi-autonomous groups report higher levels of job scope (related to intrinsic job satisfaction), extrinsic satisfaction, and organizational commitment; and (b) developmentally mature teams have higher job motivation and innovation. Further, voluntarily formed work teams report high work motivation.

Culture

Organizational cultures can be broken down into three groups: Strong, Strategically Appropriate, and Adaptive.

Each has been identified with high performing organizations and has particular implications on motivation in the workplace.

Social programme

Companies face increasing pressure from governments, competitors, and employees to play a leading role in addressing a wide array of environmental, social, and governance issues - ranging from climate change to obesity to human rights - in a company’s supply chain.

Over the past 30 years, most of them have responded by developing corporate social responsibility or sustainability initiatives to fulfill their contract with society by addressing such issues.

Yet many companies are creating real value through their environmental, social, and governance activities -through increased sales, decreased costs, or reduced risks - and some have developed hard data to measure even the long-term and indirect value of environmental, social, and governance programs.

Corporate social responsibility

(CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business)

is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. In some models, a firm's implementation of CSR goes beyond compliance and engages in "actions that appear to further some social good, beyond the interests of the firm and that which is required by law."

CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.

The term "corporate social responsibility" became popular in the 1960s and has remained a term used indiscriminately by many to cover legal and moral responsibility more narrowly construed.

Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. McWilliams and Siegel's article (2000) published in Strategic Management Journal, compared existing econometric studies of the relationship between social and financial performance.

They concluded that the contradictory results of previous studies reporting positive, negative, and neutral financial impact, were due to flawed empirical analysis.

McWilliams and Siegel demonstrated that when the model is properly specified; that is, when you control for investment in Research and Development, an important determinant of financial performance, CSR has a neutral impact on financial outcomes.

CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR.

Business ethics (also corporate ethics ) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment.

It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.

Business ethics has both normative and descriptive dimensions. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods.

Business ethics reflects the philosophy of business, one of whose aims is to determine the fundamental purposes of a company.

If a company's purpose is to maximize shareholder returns, then sacrificing profits to other concerns is a violation of its confidant responsibility.

Corporate entities are legally considered as persons in USA and in most nations. The 'corporate persons' are legally entitled to the rights and liabilities due to citizens as persons.

Economist Milton Friedman

writes that corporate executives' "responsibility... generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom".

Similarly author business consultant Peter Drucker observed, "There is neither a separate ethics of business nor is one needed", implying that standards of personal ethics cover all business situations.

Another view of business is that it must exhibit corporate social responsibility (CSR): an umbrella term indicating that an ethical business must act as a responsible citizen of the communities in which it operates even at the cost of profits or other goals.

In the US and most other nations corporate entities are legally treated as persons in some respects.

This can be interpreted to imply that they have independent ethical responsibilities.

Ethical issues include the rights and duties between a company and its employees, suppliers, customers and neighbors, its fiduciary responsibility to its shareholders.

Issues concerning relations between different companies include hostile take-overs and industrial espionage.

Related issues include corporate governance; corporate social entrepreneurship; political contributions; According to IBE/ Ipsos MORI research published in late 2012, the three major areas of public concern regarding business ethics in Britain are executive pay, corporate tax avoidance and bribery and corruption.

Finance

Fundamentally, finance is a social science discipline. The discipline borders behavioral economics, sociology, economics, accounting and management. It concerns technical issues such as the mix of debt and equity, dividend policy, the evaluation of alternative investment projects, options, futures, swaps, and other derivatives, portfolio diversification and many others.

It is often mistaken who to be a discipline free from ethical burdens.

The 2008 financial crisis caused critics to challenge the ethics of the executives in charge of U.S. and European financial institutions and financial regulatory bodies.

Finance ethics is overlooked for another reason -issues in finance are often addressed as matters of law rather than ethics.

However, a section of economists influenced by the ideology of neoliberalism, interpreted the objective of economics to be maximization of economic growth through accelerated consumption and production of goods and services. Neoliberal ideology promoted finance from its position as a component of economics to its core.

The theory holds that open financial systems accelerate economic growth by encouraging foreign capital inflows, thereby enabling higher levels of savings, investment, employment, productivity and "welfare", along with containing corruption.

Other issues

Fairness in trading practices, trading conditions, financial contracting, sales practices, consultancy services, tax payments, internal audit, external audit and executive compensation also fall under the umbrella of finance and accounting.

Particular corporate ethical/legal abuses include: creative accounting, earnings management, misleading financial analysis, insider trading, securities fraud, bribery/kickbacks and facilitation payments. Outside of corporations, bucket shops and forex scams are criminal manipulations of financial markets. Cases include accounting scandals, Enron,….

Human resource management

Human resource management occupies the sphere of activity of recruitment selection, orientation, performance appraisal, training and development, industrial relations and health and safety issues.

Business Ethicists differ in their orientation towards labour ethics. Some assess human resource policies according to whether they support an egalitarian workplace and the dignity of labor.

Issues including employment itself, privacy, compensation in accord with comparable worth, collective bargaining, can be seen either as inalienable rights or as negotiable.

Discrimination by age (preferring the young or the old), gender/sexual harassment, race, religion, disability, weight and attractiveness. A common approach to remedying discrimination is affirmative action.

Potential employees have ethical obligations to employers, involving intellectual property protection and whistle-blowing/ denunciation.

Employers must consider workplace safety, which may involve modifying the workplace, or providing appropriate training or hazard disclosure.

Larger economic issues such as immigration, trade policy, globalization and trade unionism affect workplaces and have an ethical dimension, but are often beyond the reach of individual companies.

Trade unions

Unions for example, may push employers to establish due process for workers, but may also cost jobs by demanding unsustainable compensation and work rules.

Unionized workplaces may confront union busting and strike breaking and face the ethical implications of work rules that advantage some workers over others.

Management strategy

Among the many people management strategies that companies employ are a "soft" approach that regards employees as a source of creative energy and participants in workplace decision making, a "hard" version explicitly focused on control and Theory Z that emphasizes philosophy, culture and consensus. None ensure ethical behavior. Some studies claim that sustainable success requires a humanely treated and satisfied workforce.

Sales and marketing

Marketing ethics

Marketing ethics was approached from ethical perspectives of virtue or virtue ethics, deontology, consequentialism, pragmatism and relativism.

Marketing ethics is also contested terrain, beyond the previously described issue of potential conflicts between profitability and other concerns.

Sales and marketing

Marketing ethics

Ethical marketing issues include marketing redundant or dangerous products/services transparency about environmental risks, transparency about product ingredients such as genetically modified organisms, which may cause possible health risks, financial risks, security risks, etc., respect for consumer privacy and autonomy, advertising truthfulness and fairness in pricing & distribution.

Sales and marketing

Marketing ethics, regardless of the product offered or the market targeted, sets the guidelines for which good marketing is practiced.

To market ethically and effectively one should be reminded that all marketing decisions and efforts are necessary to meet and suit the needs of customers, suppliers, and business partners.

The mindset/ thinking of many companies is that they are concerned for the population and the environment in which they do business.

They feel that they have a social responsibility to people, places and things in their sphere of influence.

Marketing ethics involves pricing practices, including illegal actions such as price fixing and legal actions including price discrimination and price skimming also the main two issues of pricing involve overprice and price markups and markdowns which may lead to a monopolistic position, force (seller), or ignorance on behalf of the buyer.

Certain promotional activities have drawn fire, including greenwashing, bait and switch, shilling, viral marketing, spam (electronic), pyramid schemes and multi-level marketing.

Advertising has raised objections about attack ads, subliminal messages, sex in advertising and marketing in schools.

Law and regulation Very often it is held that business is not bound by any ethics other than abiding by the law.

Milton Friedman is the pioneer of the view.

He held that corporations have the obligation to make a profit within the framework of the legal system, nothing more. Friedman made it explicit that the duty of the business leaders is, "to make as much money as possible while conforming to the basic rules of the society, both those embodied in the law and those embodied in ethical custom".

Law and regulation

Counter to Friedman's logic it is observed that legal procedures are technocratic, bureaucratic, rigid and obligatory where as ethical act is conscientious, voluntary choice beyond normativity. Law is retroactive.

Also, law presumes the accused is innocent until proven guilty and that the state must establish the guilt of the accused beyond reasonable doubt. As per liberal laws followed in most of the democracies, until the government prosecutor proves the firm guilty with the limited resources available to her, the accused is considered to be innocent.