How to Build Personnel Motivation System

published in: Leadership

20 Mar
2010

Without knowing the needs and interests of individuals and groups within the company, without knowing the factors that motivate them to work effectively, it is impossible to build a motivation system.


building motivation systemBuilding an effective personnel motivation system requires knowledge on various motivation theories.  Most of them are based on the behaviorism paradigm that people are product of the incentives they receive from the outside world; that their behavior is determined from outside, not inside.  The individual reward or sanction determines certain behavior, which may become permanent if the impact is also permanent.

Studies, however, suggest that regular impact gradually loses its influence, especially when it is expected.           USA ad, 1942

I believe no one has questioned the diminishing marginal utility, if I remember correctly the term from my microeconomics classes.  I had a marvelous professor in marketing - Mr. Boyan Durankiev, and still remember his explanation of the diminishing marginal utility:  “
Imagine that you have just crossed the motivation system, building motivationdesert and you are very thirsty.  For the first glass of water you are ready to pay all the money you’ve got. For the second – you would pay less;  for the third - even lesser.  The tenth cup – you would probably decline.  In other words, each next unit consumed has lower utility.
 
What are the lessons for us here
First, on company level, small and unexpected incentives influence employee motivation more strongly than expected and bigger prizes.

Second, having so many motivation theories means there is not a single one truly effective and valid. It is simply not possible all of them to be true and provide long-term positive outcome. If there was only one effective theory, all corporations would have applied it, to the great disappointment of the consultancy firms that will lose huge money on motivation systems consultancy. Have you ever heard about many theories about the gravity? I know only one. Permanently solved problems have only one theory.

Third, the fact that there is no one right theory is an additional challenge for us when building a motivation system in our company.

Obviously each need generates a desire for it to be satisfied.  Needs and aspirations unity determines the motivation. And the incentives provoke motivation occurrence frequency. In the company we want to stimulate certain behavior, which we define as "correct." Where should we start from? Of course, we shall start from our subordinates’ needs.

Why so many motivation systems do not provide the required results? I think the main reason is that system stereotype importance prevails over its goal: staff motivation. The motivation system implementers operate it as dogma. For example, if department record is prized with a dinner on behalf of the company, the manager provides the money and according to him he’s done his job perfectly. But he does not care about the interests of his subordinates. If they enjoy going to restaurants, the award will delight them. But if they are basketball fans, they would certainly admire top seat tickets in a basketball match.

The next problem we face is the inability to have a single, unified motivation system for companies 10+ staff. There is no way the motivation system implementer to know the needs and interests of 50 people. As mentioned in the article "Recommendations for building organizational and management structures" a manager effectively manages about 8 employees.

This motivation system building begins to sound like "mission impossible". Probably it is not a coincidence that there is no ready to implement a universal motivation system, which we could borrow.

Here is my simple motivation system building "methodology":
  1. The management and other key personnel should study two lists of motivation theories: mandatory and voluntary.
  2. Altogether we define "the correct" behavior.
  3. On a two-day event outside the company we build the elements of the motivation system: why, what, how, how much and when to reward or reprimand. The “how” is open to every manager’s modifications according his style - each manager has the freedom to create techniques, within the limits of the predefined what, how much and when. The second option here is to go through consultants, but in my only attempt I was frustrated by their dogmatic faith in the success of "their" motivation system and their rates.
  4.  Implementation and testing - about 3 months.
  5. Control upon the overall effect and the implementation process. The person in charge for the implementation should originate from the top 2-level managers. He should communicate with department managers the first few incentives given by them, asking why this award, and how it meets the needs or the interests of the praised subordinates.
  6. Twice a year reviewing the system for corrections – the difficult part here is to get honest and unbiased opinion of employees.

It seems easy, but I can assure you that it is not! I experienced hard times with paragraphs 4 and 5 and I can share that for successful implementation the implementer will need to invest at least 1 hour per day during the first 3 months for a company of 45 people, 8 divisions.
 
 

P.S.
If you are interested in various motivation theories, you could check a list of 23 theories that are to be found at the bottom of this linked article.

 

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