Last updated: September 27, 2019
Topic: BusinessEnergy
Sample donated:

 

I.              INTRODUCTION
Real Distribution, Inc. is engaged in the distribution of various products to customer-outlets. The organizational structure is flat and the demographic profile of its employees is wide. The heads of departments is Job Level 12 in the organization while the rank and file employees are at Job Level 1.

 

The decision-making authority resides in the Executive Committee composed of the President and the three Vice Presidents for Sales and Support Services, Logistics and IT, and Credit and Billing Departments. The Management Committee which is composed of the Heads of the different divisions acts as the overseer of departmental functions while they give recommendatory reports and feedback to the Executive Committee.

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Implementation and execution of the organizational goals reside in the Junior Managers Level which is composed of Channel Managers and Managers of the different departments. Supervision and monitoring of day-to-day tasks are handled by the Supervisors and Specialists of the departments. The rank and file level is composed of the warehouse men, warehouse encoders, warehouse checkers, machine operators, department assistants and clerks, messengers, and the telephone operators.

 

The company has been in existence for 23 years. Growth of the business is evident. 23 years ago, the company only distributed products of one manufacturer. Presently, it is the exclusive distributor of five multinational companies. But it is observed, that as the company is growing, turnover rate is also getting higher. Two years back, turnover rate was at 6%. Recently, however, turnover rate went up to 22%. The Human Resource Department has been bogged down on hiring and recruitment to fill-in vacancies. Other HR programs are delayed or even put on hold. The Management Committee members are becoming wary on how to keep their people. The good people have left the company while those who have no place else to go are left behind. Turn-over rate is presently at 22%, based on this formula:

 

Turnover rate =                    Total number of leavers over period x 100
Average total number employed over period

 

While the company is experiencing this predicament, the Human Resource Department made these recommendations to the Executive Committee in one of their ManCom meetings.

1)            There is a need to conduct training needs assessment in order to equip those who are already almost ready to take on higher responsibilities and allow them to fill-up the next vacant positions;

2)            There is a need to conduct a climate survey in order to know the sentiments of the people and gauge why people are leaving the company;

3)            There is need for Management Committee members to open up this turn-over problem with their people and listen to what they have to say.

With the concurrence of all the Management Committee members to the HR recommendation and with the approval of the Executive Committee, the Human Resource Department spearheaded a Herculean task of people development.

 

II.         The Hypothesis

 

From HR point of view, employee motivation is the primary factor that is causing all this uncertainties in the organization. With this in mind, HR made this hypothesis – If employees are motivated, productivity goes up, and this will result to job satisfaction.

 

Why motivation? It is something that is not innate; rather, it can be introduced into a system or organization for appreciation by employees. The motivating factor sets the tone for the employee to be personally motivated for work.

 

Why productivity? It is the driver of human capital. It is the totality of the amount of work that each employee contributes to an organization that will have an impact on the output of the entire business. All the other inputs of the business are highly measurable and controllable such as materials, equipment, systems, and processes. The human capital input, while it is measurable, is a product of an employee’s engagement at work. Employee’s performance may be within expectations, below expectations or one that goes beyond limits.

 

Therefore, if employees are motivated, productivity goes up and this results to job satisfaction.

 

A survey was conducted by Margaret Greenberg and Dana Arakawa among more than 100 information technology professionals in different individual contributor and managerial roles at The Hanover Insurance Group. They published their findings in the paper, “Optimistic Managers and Their Influence on Productivity and Employee Engagement in a Technology Organization.” What they discovered has applications for every business. Greenberg says, ‘In today’s rapidly changing and uncertain business environment, managers and employees need optimism more than ever before to not only cope, but to innovate and flourish. Managers have more influence than perhaps they realize on the employees’ engagement, optimism, and performance, and [managers] can consciously use this influence to benefit these employees and the organization as a whole.’ (Cited in “The Business Benefits of Positive Leadership: Finding the connection between productivity and positive management behavior.” By Jennifer Robison. Gallup Management Journal. May 10, 2007).

 

III.        LITERATURE REVIEW

 

A.   Motivation

 

What is motivation? According to Ms. Susan Velez, motivation is the drive to want to succeed in everything you do. Without it you will never succeed in life; you will surely fail in every venture you set out in. It is not something we are born with you can learn how to develop motivation so that you can succeed in life. (Velez, Susan. “What Is Motivation?” Ezine Articles. http://ezinearticles.com/). Some say that motivation is innate in a person and one does not really need to be motivated by external stimuli in order to perform well at work.

 

Some managers want to believe the answer is money, plain and simple. People work for money; therefore, higher pay equals higher productivity, right? But If you’re an owner who hasn’t seen a burst of energy in the field after spring bonuses, or you notice that your higher paid employees are not always the most productive, then you know there’s more to it than that. (Marcus, Lee. “Employee Motivation.” American Nursery Publication. February 13, 2007. p32).

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Our recent survey, says Dr. Woodruff Imberman of Imberman and deforest Inc., of 427 Midwestern manufacturers, including 32 foundries in Indiana, Illinois, Michigan, Ohio, and Wisconsin (states that are home to just over 47% of our nation’s metal casting capacity) revealed that many executives understand the importance of motivating their employees, but they also realize that their efforts are not particularly effective. The results of these ineffective motivational efforts are poor productivity, high turnover, bad employee relations, and a propensity for labor unrest – rather like the well-documented problems in the domestic automotive industry. (Imberman, Woodruff. “Work Harder Work Smarter to motivate employee effectively.” Foundry Management and Technology Journal. November 2007. P32).

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Over the years, behavioral scientists have argued and debated on which motivation indicator is more important to employees – economic or non-economic indicators. (Imberman, p32). In a study conducted among horticultural workers in order to ascertain the common motivating factor among this group of employees. They were asked to rank 10 motivating factors related to work, namely, job security, sympathetic help with personal problems, personal loyalty to employees, interesting work, good working conditions, tactful discipline, good wages, promotions and growth in the organization, feeling of being in on things and full appreciation of work done. The highest-ranked motivators turned out to be interesting work, followed by good wages, then full appreciation of work done. (Marcus, p33). Surprisingly, these same employees were again asked to rank the same set of motivating factors. The results were different from the previous survey. This time employees ranked job security as top and good wages as the next important motivating factor at work (Marcus, p33).

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Non-economic approaches for motivating workers include techniques like service-award lunches, recognition aids (T-shirts, hats with company logos), preferred parking places, good attendance awards, and catalog gift items for workers achieving this or that milestone, etc. While non-economic methods build team spirit and provide workers with a sense that management cares about their performance, the survey indicates most managers feel these efforts are of questionable effectiveness. (Imberman, 32). The reason given for this seemingly indifferent perception of non-economic methods is founded on some provisions in labor laws which prohibit diminution of benefits. Once, employees are already used to receiving these non-economic motivators, these are already identified as benefits. In the process, they lose the essence of being “motivators.”

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Effective economic motivators are transparent, easy-to-understand, and short term. They match the horizons of the workers whose behavior they are designed to affect. Today, the more astute executives I have interviewed told me that pay-for-performance programs with short-term reward horizons, like Gain-sharing, and are the most effective ones. (Imberman, p31).

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During the SHRM’s annual conference and exposition in Las Vegas, Ms. Mindy Chapman, the president of Mindy Chapman ; Associates inspired attendees by sharing her experience in handling and motivating people. According to Chapman, it is often the simple act of recognizing an employee’s contributions that motivates him or her to greater productivity and achievement. A combination of recognition (intangible) with rewards, awards, and incentives (all tangible) should be considered. Different organization will want to use approached that work with their workforce and in their own situation. Chapman reminded session attendees to be specific about the actions that they want to reward and to be sure results are measurable (“25 Easy Ways to Reward and Motivate Employees.” Compensation. HR Focus, October 2007).

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B.        Productivity

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What is productivity? Steve Pavlina in his article “What is Productivity?” October 19, 2005, presents a simple definitions of productivity that is Productivity = Value/Time. By this definition, there are two primary ways of increasing productivity: 1) increase the value created; 2) decrease the time required to create that value (Pavlina, Steve. “What is Productivity?” Personal Development for Smart People. October 19, 2005).

The Productivity Conceptual Model takes the form of a ‘productivity tree’. The roots denote the inputs to the system such as materials, tools, equipment, systems, processes, people, management, and attitude. The trunk denotes the conversion process. The foliage and the fruits denote the systems outputs such as increased volume, improved services, and reduced cost. The successful management of this process is ultimately the key to survival of any organization. It should be the concern of and a development goal for all organizational members, irrespective of their position. (Accel Team. Productivity Improvement. 2008.)

According to the Accel Team, there are six lines of attack to improve the productivity ratio of an organization, namely:

1)            Improve basic process  by research and development (long term);

2)            Improve and provide new plant, equipment, and machinery (long term);

3)            Simplify product and reduce variety (medium term);

4)            Improve existing methods and procedures (short term)

5)            Improve the planning of work and the use of manpower (short term)

6)            Increase the overall effectiveness of employees (short term).

Productivity can be defined in two basic ways. The most familiar, labor productivity is simply output divided by the number of workers or, more often, by the number of hours worked. Output can be anything from tons of steel to airline miles flown, but more generally it is some very broad aggregate like gross domestic product. Measures of labor productivity, however, actually capture the contribution to output of other inputs than hours worked. (Nasar, Sylvia, “Productivity”. The Concise Encyclopedia of Economics. Library of Economics and Liberty. Retrieved April 17, 2008 from the World Wide Web: http://www.econlib.org/Library/Enc/Productivity.html).

There are many ways to compute for productivity depending on the processes of the organization and the productivity model that is adopted. Total productivity is equal to output quantity over input quantity (Seppo Saari. Productivity Theory and Measurement in Business. 2006).

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Peter Scholtes states: “More than 95% of your organization’s problems derive from your systems, processes, and methods, not from your individual workforce. Your people are doing their best, but their best efforts cannot compensate for your inadequate and dysfunctional systems.” That is a very strong productivity statement that we know to be true. He further says, “We look at the heroic efforts of outstanding individuals for our successful work. Instead we must create systems that routinely allow excellent work to result from the ordinary efforts of ordinary people. Changing the system will change what people do. Changing what people do will not change the system.” (Cited in Productivity Measurement: Teamwork, Leadership, and Productivity by Richard Barton. APO News, Vol. 37 No. 5. May 5, 2007).

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C.        Job Satisfaction

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Job satisfaction is in regard to one’s feelings or state-of-mind regarding the nature of their work. Job satisfaction can be influenced by a variety of factors, eg, the quality of one’s relationship with their supervisor, the quality of the physical environment in which they work, degree of fulfillment in their work, etc. (Free Management Library. http://www.managementhelp.org/prsn_wll/job_stfy.htm).

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A job satisfaction survey may be conducted by the HR Department before introducing the motivation factors so that there is a baseline data of the study. Another job satisfaction survey may be conducted by HR Department after the introduction of the motivating factors to measure the impact of motivation on employees’ productivity.

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IV.       METHODOLOGY

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Most studies on human resource issues and factors in the work environment are conducted through the use of surveys. These steps will be used in this study.

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A.           The goals of the study shall be firmed up with the concurrence of the Executive Committee and the Management Committee

B.           Interview material has to be drafted and finalized

C.           Questionnaire will be drafted

D.           Pre-test the questionnaire for practicality

E.           Actual conduct of interviews and survey questionnaires

F.            Collate and analyze data

G.           Produce the reports and present to Executive Committee and Management Committee

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Human resource studies have almost always been conducted through surveys. This is a more practical and more efficient method than the other methods of conducting research. In the interest of getting prompt and timely answers to HR issues, a survey can be conducted within a shorter period. Additionally, the interaction between interviewee and interviewer is an additional factor that should be noted during the conduct of surveys. As the saying goes, “action speaks louder than words.” In some settings, employees are not open to let others, much more Management, know how they feel about the organization. These things can be observed during survey interviews.

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V.        LIMITATIONS

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A.           Ethical Issues

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The results of the study may reveal some factors that may not be readily acceptable to Management especially when it relates to the management style or management attitude towards the employees. Thus, results of the study have to be discussed thoroughly and explained to Management.

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B.           Management Commitment

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The use of motivating indicators requires some changes in how the organization is operated and managed. Most of these changes have to be initiated by Management. The success of the study, therefore, would depend on Management’s commitment to effect the change.

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C.           Employee Engagement

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The human factor always plays a significant role in effecting changes at work. The famous question among employees would always surface – “What’s in it for me?” It is important that employees understand the whys and the hows in the organizational change. Their support in the organizational goals would depend a lot on how much they have understood the business and how much they have been made part of the organizational change. The key is communication. Employees need to understand the objectives and consequent actions and behavior toward the desired goal may follow if the employees are engaged. There is ownership in what they do.

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VI.       CONCLUSION

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Change does not happen overnight; but once it happens, a new environment motivates employees to push for higher productivity and excellent performance. Sustaining this motivation is a continuous program which requires regular studies such as this work. While the other inputs of productivity are monitored through the price index, human capital is continuously evaluated through continuous research studies to ensure that employees remain engaged in their work.

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REFERENCES

Accel Team. Productivity Improvement. 2008.

Imberman, Woodruff. “Work Harder Work Smarter to motivate employee effectively.”     Foundry Management and Technology Journal. November 2007.

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Free Management Library. http://www.managementhelp.org/prsn_wll/job_stfy.htm).

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Marcus, Lee. “Employee Motivation.” American Nursery Publication. February 13, 2007.

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Nasar, Sylvia, “Productivity”. The Concise Encyclopedia of Economics. Library of         Economics and Liberty. Retrieved April 17, 2008 from the World Wide Web:             http://www.econlib.org/Library/Enc/Productivity.html.

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Pavlina, Steve. “What is Productivity?” Personal Development for Smart People.          October 19, 2005.

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Productivity Measurement: Teamwork, Leadership, and Productivity by Richard Barton.          APO News, Vol. 37 No. 5. May 5, 2007.

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Robison, Jennifer. “The Business Benefits of Positive Leadership: Finding the             connection between productivity and positive management behavior.” Gallup             Management Journal. May 10, 2007.

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Seppo Saari. Productivity Theory and Measurement in Business. 2006.

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Velez, Susan. “What Is Motivation? ”Ezine Articles. http://ezinearticles.com/

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“25 Easy Ways to Reward and Motivate Employees.” Compensation. HR Focus,           October 2007.

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