When the market is highly competitive, costs are cut down. Labour becomes a big victim. People are treated like other assets such as buildings, plant, machines, material. Such employers take the plea that they have no other options if they want to survive. How can they survive in such a scenario without adversely affecting employee motivation?
When the market is highly competitive and costs are cut down, the only way, I belive, to motivate employees is the non-monetary incentives.The perceived value of non-monetary incentives can affects employees more than cash-based incentives.
Dear Debi
In the current globalized situation cost-minimization is inevitable in any organization. Walmart is a classic example of that situation. I don’t think you can survive by reducing wages only, which will ultimately translates to poor quality of work which will damage the organization reputation in the long run. The organization need to follow lean principles and make sure that waste is eliminated and workflow is streamlined. To motivate the workforce
1. Align employee economic interests with company performance
2. Take a genuine interest in the future path of an employee’s career
3. Take a genuine interest in their work-life balance
@Debi
Interesting question indeed, and I think it closely relates to aquestion I posed on another thread: Are employers looking for the five-legged sheep? Please viewthe answers for furthr insights from other participants.
Dear Debi, I think, if employers for long time created consistent teams of satisfied (in various aspects) employees, it will be easier to survive the most difficult times, for such employers.
Many ideas about surviving. Unfortunately, globalization have brought many problems all over the world. The laws of the market are relentless, the consequences are inevitable, and whole strategies were developed for solving the problem of reducing the number of workers, the less painful way! The link to fine paper is attached! By the way, me and my company eXpert (www.expert.rs) were victims of such hard process!
http://www.rightmanagement.ca/en/employment-downsizing-and-its-alternatives.pdf
Reducing personnel often translates into their tasks being distributed to those employees who have been retained. This means an increase in their work load without the associated remuneration. In the long run:
1. Employees end up being overly stretched in their work. This may result in sickness and absenteeism,
2. Slack settles in as an alternative strategy to avoid being overloaded, and
3 As a result of the first two, organisational work ends up being less efficient, although the idea from the start was to make the organisation more financially efficient!
All this fits within the idea of doing more with less! ^
When companies are in trouble they naturally orientate their actions towards cost-cutting. Companies who practice a fair policy of transparency and communicate their performance figures clearly and impartially to their employees should expect to have better cost cutting results without adversely affecting the motivation of their employees.
Dear friends
it has been established beyond doubt that salary/money and related things are only hygiene factors for motivation. That means if you do not provide enough salary, it can demote the employees, but if you pay good salary, there is no guarantee that your people will be motivated and engaged.
in today's' environment, most employers have cost pressures, and can not squander away money. I think, s dear Mahfuz ihas quite rightly said, in this case the motivation would be mostly non-monetary. Tata steel is an excellent example. it is the cheapest steel-producing company in the world, and now after the take-over of the British company Corus, Jaguar, Land-rover, and several others, it is a global brand. i was interviewing a highly qualified manager of Tata Steel. She said the dignity that my company gives me can never be made available by any other company--whether by public sector or any private sector company.
Beata is absolutely right. The employer can keep her/his/its employees "satisfied" that is bound to produce loyalty and /or engagement. There are many Tata Steel and HCL stories about this.
Employees tend to become victims in some cases, where the employer's survival strategy is cost minimization. In order to keep the employees motivated, the employer must clearly communicate the survival strategy, both short term and long term. Maintaining transparency ,communication, explaining the corporate goal is essential , so as to enable employees to synchronize the corporate and personal goals. Once the employees are able to identify the fulfillment of their personal goal through the achievement of corporate goal, they will remain motivated. Employees understand that they can survive only when the company survives. Every enlightened management knows that employees are intellectual capital, which is the source of building core competence for competitive advantage and survival.
CNN was born with young journalists often just married starting their lives after graduation. The company had a proposal for an innovative business model: journalism live 24 hours a day. Approximately one hour of daily journalism at the major networks consumed $ 300 million a year. CNN was trying to deliver 24 hours/day (ie 24 times more content) consuming just $ 100 million a year budget. Actually NO journalist had their wages cut: CNN represented a new business, a new niche, a new job opportunity to those who had never exercised his work as a journalist on a TV. Moreover, the probability of any newly formed journalist come in to work on a TV is too low - even though he was rich enough to want to work for free.
The attempt to bring the innovation of CNN to other businesses or companies, through the use of new technologies is a constant challenge, and does not have ready and equal to all sectors replies.
Dear Jaharkanti and Roberto: Thanks for your very interesting threads. @Jaharkanti, what you say is so true. The business situation needs to be communicated to one and all appropriately. rust needs to be created among workers. The employees have to be convinced that it is every one's fate to be in that state in the ever-globalizing world. Companies can use interventions that create fraternal feeling among the workforce. A large number of organizations are in the state where cost is a critical factor. As dear also Mahfuz said, companies in such cases must learn to adopt non-monetary incentives. And, such interventions do work if we see the best employer companies in the SME sector.
The CNN example of @Roberto can be applicable to gold-collared worker sector. Perhaps, it may not be that much relevant to the manufacturing sector. But problems are faced in all sectors, and surely service companies can devise some such schemes for fighting the environmental factors.
The current global economic meltdown is a reflection that those strategies of unwarranted cost cutting or minimization through labour exploitation may not succeed post-global economic meltdown. Organisations that wish to stubbornly continue on those paths will certainly suffer the consequences of demotivated employees, deviant behaviours and economic recession. Over-exploitation of employees lead to erosion of purchasing powers in the hands of employees, the major consumers, which adversely affects (in the long run), the volume of sales and of course, the profitability of organisations, as many goods and services will languish in warehouses. This was what brought us to where we are today. Therefore, there is a need for more awakening and realisations.
There is a paradox inherent to the question. Starting by the premise that motivation is a human factor, it is paradoxical that treating workers are assets/'things' would trigger such human phenomenon. The classic motivation theories referred to in previous answers were elaborated under organizational structures that are characteristic of the 20th century, according to dichotomies that are widely questioned nowadays (planning vs. executing, thinkers vs. doers, etc.).
The traditional business mindset, based on over-exploitation of the work force is what needs to be changed if we want to see people motivated to work. Employees need a work with MEANING, in which their capacities can be developed and APPLIED. An entrepreneurial mindset is much more suitable to current times than the cost cutting approach. Employees are people with ideas, capacities, and domain of the job, which can come up with process innovations that would not necessarily reduce costs, but that could rather lead to better services and products, more efficient production methods, and increased capacity to reach out buyers and alternative markets.
So maybe researchers, managers, business owners, and employees would benefit more from an analytical and participative (in opposition to a prescriptive and normative) approach to the effects of competition and globalization in our organizations.
In this situation company should make their workers to feel they are as a part of the organization such as issuing share for the worker although the company have to cost minimization. This will help to change the workers perception, instead working for the company they will feel self working and this will motivate the workers to double their productivity although their salary minimize.
I think there is false assumption, that cost-minimization is possible only through the cutting employees financial benefits. It is not true. In my view, solution is simple: minimize costs, by do not touch quality of product and financial benefits of emloyees. The big question is: how to realize this simple solution :)
Above it all, there are other tools for motivation of employees. So, other big question is: How to spend money on employees? How to divide them to pure financial benefits and to cost of other ways of motivating them.
this is a very critical question because it is concerned with the mutual survival of both the employers and their employees.To begin with, employees must be able to live if the employers are to survive well. If they (employers) often treat their employees (human resource) like other resources; then they should be able to do so ethically and professionally within a prudent economic principle of efficient allocation scarce resources in order to maximise productivity of labour (inputs), production (outputs), or profits (benefits) as well as to minimise costs or losses. Employees of all categories should be well motivated, developed, and retained through a system of incentives as part of the organisation development (OD) process. This calls for a well coordinated effective internal communication plan, transparency, collective organisational pride, total inclusion of employees in making decision that affect them directly, respect for privacy \9confidentiality) of employees with special needs or conditions, gender equality and equity policy, zero tolerance to corruption or arrogance, as well as realistic terms and conditions of service for all categories of employees or staff.
Not to nitpick, but you are assuming that cost minimization is the only way to survive (and I am going to assume that you know that you are assuming that :) however many companies survive through innovation, adopting new technology, working harder and communicating purpose. These factors can all play a role in employee motivation at any time. Maybe they can play a role in motivating employees when they are facing the prospect of huge wage cuts (British Airways plans to lay off all of it's employees then re-post all positions at half salary! Would YOU want to get in a tin can with 200 strangers 5 times a day for 12,000 pounds a year?)
When companies can no longer rely on wages to retain talent, other solutions exist to keep them happy at work. The classic motivational levers for employees include: interest in the job, responsibilities and benefits, quality of life at work (flexible hours, teleworking) and above all visibility regarding career development, "leadership pipeline". Another convincing element at low cost: recognition by the company, or even by its peers.