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Query: Reward employees when the Budget is tight?
Human Resources » Performance Management

Chrm Message From: barkhajain Total Posts: 40 Join Date:
Rank: Executive Post Date: 20/02/2006 22:48:43 Points: 200 Location: India
Good Morning Friends,

I request all of you to please advise me on the following query:

"What are the different ways to keep the employees happy and how to reward them when the Budget is tight?"

I believe Happy employees are more Productive employees. But in this circumstance, many business owners believe they don't have the means to make their employees happy because they can't increase their salaries.

Please share with me your valuable suggestions.

Thanking all
Barkha Jain
Chrm Message From: dineshprabhakar Total Posts: 1 Join Date:  
Rank: Beginner Post Date: 23/06/2006 21:10:40 Points: 5 Location: India

Dear Joshi/Bharka,

In the Globalised market, i dont feel that a competent employee would be satisfied by non monetary rewards. Competators are with fishnet to pouch the competent employees.






Chrm Message From: madure Total Posts: 278 Join Date:  
Rank: Coach Post Date: 23/06/2006 22:35:06 Points: 1440 Location: India

Dear Barka,

Motivation is a very complex issue that cannot be answered with a single prescriptive formula. There are several well know theories of motivation which must be dealt with elsewhere in detail. However a short note on Job enrichment based on the key ideas of two leading motivational theorists – Douglas McGregor and Frederick Herzberg are listed below for your information.

Frederick Herzberg described working conditions as ‘hygiene factors’ and other factors as ‘motivators’. Another theorist, Douglas McGregor described contrasting management approaches to their staff as Theory X and Theory Y.

Control (or ‘stick and carrot’) approach, which McGregor identified as the Theory X approach to management. His Theory Y approach will help you identify how the benefits of this style can work in modern learning organisations.

You then link Theory Y with Herzberg’s Motivators, establishing the relationship of this theory to job rotation, job enlargement and job enrichment.

Ask some of your staff how many of their clerical and administrative staff are now educated to degree  level compared with five or ten years ago. For many organisations, a decade ago raduates were mainly confined to professional or specialist roles, or found in a company’s fast-track management scheme.

Alongside improved education levels, expectations continue to rise, making employees less willing to accept work that allows them little opportunity for self-development and personal growth in their jobs.

All of these factors have contributed to organisations developing new approaches to
attracting, keeping and motivating their workforce.


In his seminal work, McGregor clearly identified the difference between the command and control organisation (Theory X) and those organisations that have a learning culture with an emphasis on including and developing staff (Theory Y).

Theory X: control culture

. Emphasis on rules and procedures
. Precedent provides guidelines
. Emphasis on the letter of the law and compliance
. Centralised power and decision making
. Top-down controls
. A culture of blame and inferiority
. One-best-way philosophy
. Managers know everything and can’t be challenged
. People cause problems and need to be suppressed
. HR issues are secondary to strategic business decisions
. Lack of diversity in the management team
. Closed system, stressing stability
. High resistance to change
. Internally orientated
. Boundary problems and ‘turf wars’
. Political conflict and demarcation
. ‘If it ain’t broke don’t fix it!’

Theory Y: learning culture

. Emphasis on commitment via shared values
. Mission statement provides guidance
. Devolved power and decision making
. Mutual participative influence systems
. A culture of pride and excellence
. People are viewed (and treated) as the company’s greatest asset
. Individuals are trusted and can question the system . Focus on developing new ways
. HR central to strategic business decisions . Open, flexible systems of management
. Emphasis on flexibility and adaptability . External orientation, market led
. Close to the customer and the environment
. ‘Can we think of a better way of doing this?’


Herzberg’s Two Factor Theory covers two techniques that have been widely used in an attempt to overcome lack of motivation in the workforce: job rotation and job enlargement.Job rotation involves moving between jobs and that, with job enlargement, tasks are redistributed to (hopefully) give the employee more variety and interest in
their work.

Job rotation and job enlargement are an attempt by management to tap into such areas as increased responsibility, the work itself and personal growth, as described in Herzberg’s theory.

However please note that both of these approaches can, have problems. Workers can become resistant if job rotation is introduced by management, and results in their social and other ties being broken with their team.The actual content of the job can remain the same – people report being rotated from one boring routine job to another.To be truly successful, the employee needs to see a gain of some sort.

Job enlargement comes about through introducing new technology, and through diversification and company growth. For example, supermarket and other retail chains now offer a much wider range of services, including personal finance, insurance and
online ordering. Current employees therefore have the opportunity to get involved in undertaking a wider variety of tasks compared with their predecessors.

The problems with rotation and enlargement are not insurmountable and may go some way towards maintaining motivation, if introduced sensitively. Managers need to approach the situation cautiously and involve the job ‘owners’. As with other forms
of motivation, managers will need to emphasise intrinsic motivation (which arises from within the job and individual) rather than extrinsic motivation (such as increased money or other material rewards).

Job enrichment

Job enrichment sets out to provide an opportunity for the development of employees’ all-round motivation and growth. It is based firmly on the work of Herzberg and revolves  around the idea that, if the manager can identify employees’ higher needs at work, they will become motivated by the work itself, and this will result in high-performance individuals and teams. Herzberg identified seven principles of job enrichment, which  he linked to his ‘motivators’ rather than his ‘hygiene factors’.

Job enrichment appears to provide more interesting jobs and improvements in performance when combined with setting collaborative, challenging and specific goals. It aims to establish that a job is meaningful, and to provide an opportunity to develop and use skills that the employee values highly and that they can see links in to the overall
objectives of the company.

Based on my experience I prefer to take the job enrichment route rather than focus merely on monetory rewards.

Hope this helps you in some way !!

Prof.Lakshman Madurasinghe

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