Last updated: March 20, 2019
Topic: AutomotiveCommercial
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Motivation systems influence attraction and retention of employees. Overall, those organizations that give the most rewards tend to attract and retain the most people. This seems to occur because high reward levels lead to high satisfaction, which in turn leads and more job applicants.

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The best performers represent a particularly interesting retention problem. To retain them, a motivation system has to work on a par with those received by individuals performing similar jobs at a similar level in other organizations. The emphasis here is on external comparisons because turnover means leaving an organization for a better situation as well. One way to accomplish this is to reward everyone at a level that is above the reward levels in other organizations.

When certain specifiable conditions exist, reward systems have been demonstrated to motivate performance. However, performance motivation depends on the situation, how it is perceived, and the needs of people. The connection between performance and rewards must be visible, and a climate of trust and credibility must exist in the organization. The belief that performance will lead to rewards is essentially a prediction about the future. For individuals to make this kind of prediction, they have to trust the system that is promising them the rewards

Just as reward systems motivate performance, they can motivate the learning of skills and the development of knowledge. Individuals need to see a connection between learning specific skills and a valued reward. Pay for performance systems may motivate learning and development because individuals perceive that they must develop their skills in order to perform effectively. Sometimes pay for performance systems may discourage individuals from learning new skills or motivate them to learn wrong skills. This can happen when the skills that should be learned are not directly related to present performance.

The reward systems in hierarchical organizations act as a strong motivation to learn those skills that are perceived to lead to promotion. To counter this tendency some organizations are using skill-based pay when they want individuals to add new skills that do not involve promotions.

Reward systems also contribute to the overall culture and climate of an organization. Depending on how reward systems are developed, administered, and managed, they may cause the culture of an organization to vary quite widely. They may influence the degree to which it is seen as a human resources-oriented culture, an entrepreneurial culture, an innovative culture, a competence—based culture, and a participative culture. Reward systems are often a significant cost factor in organizations.


One of the important attributes of work organization is its ability to give rewards to their members. Pay, promotions, fringe benefits, and status symbols are perhaps the most important rewards. Because these rewards are important, the way they are distributed have a profound effect on the quality of work life as well as on the effectiveness of organizations.

Organizations typically rely on reward systems to do four things:

1) motivate employees to perform effectively,

2) motivate employees to join the organization,

3) motivate employees to come to work, and

4) motivate individuals by indicating their position in the organization structure


Learning on the job is not a part of every day activity. Location of this learning may be a company classroom, an outside place owned by the organization, an education institution or association, which is not a part of the company.

Case Discussion: Under this method, a real or hypothetical business problem or situation demanding solution, is presented to the group and members are trained to identify’ the problems present. They must suggest various alternatives for tackling them, analyze each one of these, find out their comparative suitability, and decide for themselves the best solution. The trainer only guides the discussion and in the process ensures that no relevant aspect is left out of discussion, and adequate time is spent on each aspect. This method promotes analytical thinking and problem—solving ability. It encourages open-mindedness, patient listening, respecting others’ views and integrating the knowledge obtained from different basic disciplines. Incidentally, it enables trainees to become increasingly aware of job securities, contradictions and uncertainties encountered in a business. This method is extensively used in

management and in supervisory and executive training programmes in industry.


As a leader, one should understand the needs of the people and their desire to work or behave in a way that accomplishes goals that satisfy those needs. This theory is based on a situation of the above kind. If one knows the need of the person and his desire to work and he is able to accomplish the work, he can reward him to make him feel happy and satisfied. In essence, one is doing three things: One, he is motivating the members of the group by clarifying the path to personal rewards that result from attaining work goals. He has thus ‘fixed’ him on the job and made him see that his performance can lead to positive or negative rewards. Two, he has already made the path-goal clear to the member and also told him about what the job requires. He need not say too many things about the job to him as this may decrease his interest in the work and deter his performance. Three, he must offer the reward to the member of the group who actually accomplishes the task. His reward may be praise or increase in the pay or promotion of the member to a higher position. His judgment about the desirability of the member to a higher position is crucial. His judgment about the desirability of the member’s effort and the goal helps him to decide whether a reward can be given.

It is very important for the leader to know every member as a person, in order to use a style to get the best out of the member. A task-oriented leader is preferred by a highly achievement-oriented member, whereas a person-oriented leader is preferred by a person who needs a good deal of affiliation with others. Similarly it does good for the leader to know each situation to adjust his style of functioning for better results. With a clear task on hand, members feel satisfied if the leader is supporting them. They may not show a lot of output, but they are satisfied. On the other hand with a less clear or more vague task on hand, member show more output, if the leader directs them to work better. The member in this situation may not be very satisfied.

Charismatic Power

This is the power of attraction or devotion, the desire of one person to admire another. A subordinate feels a positive attraction towards a leader by identifying himself with the leader, or gets influenced by the leader’s attractive power. This power helps the subordinate to understand and value the leader so much that he understands and acts according to the expectations of the boss or the leader. It helps him to act as his own boss, and behave in ways he thinks the boss will want.


Most of the work in organizations is done in teams. Even though individuals are important, their effectiveness depends, to a large extent, on the teams of which they are members. In modern organizations individuals are required to work in different types of teams. In fact, new organizations can be described as composed of teams.

A team consists of individuals, however, collection of individuals in a place may be only a crowd. When the individuals come together for certain tasks, then we have formation of a group. The main function of a group is to exchange task-

Combining the various approaches the following steps are suggested for team building:

1 ) Projection in the future: The team may prepare a common understanding desirable future of the team. Members individually or in small groups may prepare a picture of their team as they see it in the next five or seven years, A special future scenario will help to inspire  individuals to move towards it. The future is a better diagnosis device than analysis of the past

2) Linkage with individual goals: The future fantasy’ of the team should be linked within the individuals aspirations and goals. Individuals in small groups may discuss how their own expirations and goals of life can be achieved through the ideal future of the team being developed by’ the group:

3) Force field analysis: the team may identify the forces which are positive and helping the team to move towards the desirable future, and forces  which are likely to hinder its progress towards the future. Such analysis is helpful to move into the next step.

4) Strengthen positive forces: The team may go into details of reinforcing the positive aspects which may help the team to achieve its desirable-future. They can take each positive force and work out plans to strengthen it further.

5) Reducing negative forces: The team can take up all the restraining or inhibit forces and can plan specification steps to reduce, if not eliminate them.

6) Monitoring: After decisions are taken to work on strengthening positive forces, and reducing negative forces a plan can be prepared to monitor action being taken. Responsibility of monitoring can be taken up- by one or two persons, and the team may meet from time to time to review the progress of action being taken. Whatever approaches are adopted for team building, emphasis should be given on understanding team effectiveness and taking steps to increase its level. Similar steps can be taken for building inter-team collaboration.  Team members have the responsibility of making their teams effective.


The most significant resource of any organization is often said to be its people. Such claims appear in organizations’ mission statements. Of course, an organization is nothing but a group of people whose activities have been planned and coordinated to meet organizational objectives. An organization that exists to produce goods and services has a good chance to survive and prosper if it consists of the Right People. This is true for all organizations. In a similar fashion, people need organizations. The vast majority of people must work to support themselves and their families. But people work for many reasons other than economic security. Many also work to keep busy and feel useful, to create and achieve something. They want to gain recognition and achieve status or to test and stretch their capabilities. To meet these multifarious needs, people and organizations join forces. This union seldom approaches perfection.

The central challenge facing society is the continued improvement of our organizations, both private and public. Another important purpose of human resource management is to improve the contribution made by people to organizations. Efficient means that it must use the minimum amount of resources needed to produce results. Effective means producing right things through right ways. The resultant productivity gains obtained through HR efforts enable managers to reduce costs, save scarce resources, enhance profits and offer better pay, benefits and working conditions to employees.

• Pervasive force: HRM is pervasive in nature. It is present in all enterprises. It permeates all levels of management in an organization.

• Action oriented: HRM focuses attention an action, rather than on record keeping, written procedures or rules. The problems of employees at work are solved through rational policies.

• Individually oriented: It tries to help employees develop their potential fully. It encourages them to give out their best to the organization. It motivates employees through systematic process of recruitment, selection, training and development coupled with fair wage policies.

*People oriented: HRM is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. The resultant gains are used to reward people and motivate them toward further improvements in productivity.

• Development oriented: HRM intends to develop the full potential of employees. The reward structure is tuned to the needs of employees. Training is offered to sharpen and improve their skills. Employees are rotated on various jobs so that they gain experience and exposure. Every attempt is made to use their talents fully in the service of organizational goals.

• Integrating mechanism: HRM tries to build and maintain cordial relations between people working at various levels in the organization. In short, it tries to integrate human assets in the best possible manner in the service of an organization.

• Comprehensive function: HRM is, to some extent, concerned with any organizational decision which has an impact on the, workforce or the potential workforce.


Talent management is a core element of human capital management. People generate capital for an organization through their competence, their behaviors and their intellectual energy. In a commercial world increasingly dominated by knowledge- intensive organizations, the latter is an ever-more important requirement for competitive success. Intellectual energy is about innovation and change, about new thinking and about opportunities developed from problems.















Katz,R and Kahn,R (1988), Personnel and Human Resource Management  Wiley, New York