Human Resource Management and Motivation: A Case on GSV Group
Chapter 1 – Introduction
Since 1985 lot of firms have started focusing more on their human resource department as they started believing that they can significantly enhance the overall productivity and performance of the employees and that of company as a whole through effective human resource management. It was believed that human resource management is capable enough to transform the workplace (Guest et al., 2003). Although many researchers have performed studies on human resource management and organizations management, but none of the work was able to draw clear linkage between the two. Most of the studies have concluded that employees have a positive motivational response to HRM practices and policies and HRM performance can be linked with the employee motivation, but majority of times these studies majorly focused on company’s performance (Guest et al., 2003). This research is an attempt to fill this gap as our work focuses more on HRM practices and policies and employee motivation. That is, through this work the researcher tries to draw relationship between HRM policies and employee motivation.
In this section three of the most renowned studies related to HRM – motivations are discussed which shows that more in-depth researcher is required on this topic. The first study performed by Appelbaum et al. (2000) on the US manufacturing shows that there is positive and linear relationship between measures of motivation and the intensity of high performance work systems(HPWS: a configuration of HRM focusing on participation, skills, and incentives) (Cappelli and Neumark, 2001). Simultaneously, the study also concluded positive relationship between measures of workplace performance and HPWS. At the same time the study performed by Ramsay et al. (2000) on the British industries contradicts the findings of the study conducted by Appelbaum et al. (2000). In their study they considered three measures of HRM systems and found that there exist both mixtures of positive and negative associations between different motivational outcomes (Cappelli and Neumark, 2001). A year later Godard (2001) performed a national survey of Canadian employees and found that there exist non linear association between variety of motivational measures and composite index of HRM which according to him is ‘alternative work practices’. He used linear-quadratic specification and showed that up till certain level of involvement of the employees in the HRM, there is positive motivational attitude among the workers. However, as the level of involvement increases among the workers, their motivational attitude turned negative (Bowen and Ostroff, 2004).
Apart from the above three studies, many other recent studies by Gong et al. 2009; Macky and Boxall 2008; Nishii et al. 2008; Takeuchi et al. 2007; 2009 and Whitener 2001 established positive and linear relationship between motivation and HRM policies. However, most of these studies rely more on perceptions of the employees towards HRM (Bowen and Ostroff, 2004). According to them, if perception of workplace practice is favourable or positive among the workers, their level of job satisfaction and commitment will be higher in addition to the higher attitudes indicative of motivation. One of the major drawbacks of these studies is that one cannot discount the possibility that attitudes of worker to human resource management and their dedication rating are determined by unobservable traits such as the common influence of personality (Flynn, 2010). Thus, in this work the researcher has adopted a common approach which has been adopted by earlier researcher working on HRM – performance studies. The current approach concerns with the company’s actual policies and their effects.
The present research focuses on GVS group. The company is complete under all HR aspects and the organization structure of the firm is modern and interesting. The company was founded in 1979 and majorly deals in manufacturing of filters and components for applications in the Medical, Laboratory, Automotive, Appliance, Safety and Building Filtration sectors. The company gives much importance to young candidates because of energy, skills and enthusiasm they bring in the company with them (GVS, 2014). To retain them with the company and to motivate them GVS provides incentives for their creativity and courage and cultivating their professional skills. This helps the company in optimizing its processes and leading it towards continuous development. Thus, it can be said that company’s human resource strategies, policies and techniques are strictly linked with innovation, improvement and motivation. In this regards the company’s philosophy is based on three important points, namely, be part of something; transparency and everybody have to participate to the company success (GVS, 2014). This work tries to evaluate whether HR policies of GVS are effective enough to keep its employees motivating and whether the company is practicing transparent human resource activities or not.
1.2: Structure of the Report
It is essential for every researcher to follow a sequential order while conducting a research work. In order to effectively reach to some concrete outcome, researcher of this work has adopted an orderly process as discussed below:
Chapter 1 – Introduction: This is the first chapter of the report and provides brief overview on the topic under study. In addition to this, it highlights the aim and objectives of the work and discusses purpose and significance of the study.
Chapter 2 – Literature Review: To gain bagful of knowledge on the topic under consideration, it is mandatory for all the researchers to perform review of existing literature on the similar topic. In this work the researcher has studied ample of literature on theories, HR policies and practical examples that keep employees motivating at the workplace.
Chapter 3 – Research Methodology: This is one of the most important chanters of the work as the final outcome of the study largely depends on the tools and techniques used by the researcher in performing the process. All such tools, techniques and methods that are used by the researcher during the research process are listed in this section of the report.
Chapter 4 – Data Analysis and Findings: This is the penultimate chapter of the work and is of utmost importance as it leads to conclusion and recommendations. In this chapter all the data collected by the researcher is analyzed to extract meaningful information from it.
Chapter 5 – Conclusion and Recommendations: Based on the finding in the previous chapter, the researcher reaches to some conclusion regarding the study performed by him and on the basis of the final outcome provide certain recommendations.
1.3: Focus and Purpose
The present work focuses on one of the most important topic of human resource ‘motivation’. Through this work, researcher tries to verify whether there is any link between the HR policies practices by any company and motivation level of the employees. Till date many studies have been performed in this area, but almost all the studies focused more on HR practices and organization performance. To fill this gap the present work focuses on HR practises and motivation. Since the scope of this work is very wide, therefore, to reach to more accurate findings the scope of the present work is limited to GVS Pvt. Ltd. The work will evaluate whether the company’s policies are effective enough to keep the workforce motivated at the workplace.
Aim, Objectives and Research Questions
Every research work is performed with certain aim. The aim of this work is to evaluate the fairness of GVS's reward system and its effect on employee motivation
- To assess the transparency in GVS's reward system
- To determine the contribution of GVS’s HR policies in employee motivation
- To assess how transparency can be achieved in reward system
- What is the role of HR in an organization?
- How HR policies are related to employee motivation?
- Does transparent reward system contributes in enhancement of motivations at workplace?
It is very important for the companies to keep their workers motivated as motivation is the only source through which company can enhance the productivity of their employee and can improve its performance as a whole. Motivated employees gives hundred percent towards the company and even companies find it easier to retain them. Thus, the main purpose of the work is to evaluate whether HR practices followed by the companies do have their impact on the employee motivation or not and whether or not GVS is practicing correct HR policies to keep its employees motivated.
1.4: Framework Analysis
Research Philosophy: The proposed study is based on Interpretivism philosophy as different companies have different views of HR policies and motivation.
Research Approach: The current research is inductive in nature since the conclusion of the work is based on the premises.
Research Design: Descriptive research design has been applied in this work as the researcher tries to find out the characteristics of the HR policies that lead to employee motivation.
Research Type: The proposed research is qualitative in nature.
Data Collection: Data is collected from both primary and secondary sources. For collecting primary data, interviews of the employees of the GVS Pvt. Ltd. are conducted. On the other hand, secondary data was collected from various journals, books, online articles, etc.
Sampling: A sample of 100 employees of the company was selected on the basis of simple random probability sampling technique.
Data Analysis: Qualitative data analysis technique, that is, thematic analysis is applied to analyze the accumulated data as the work is qualitative in nature.
1.5: Significance of the work
The term motivation holds lot of significance not only for the employees working in different organizations, but also for the scholars pursing their career in human resource management. Therefore, this work has both professional and academic significance. Till date none of the work has been able to draw strict link between motivation and HR policies of a company. Hence, this work tries to fulfil the gap existing in the market. In addition to this, through this study the management of GVS will be able to determine whether employees of their company feel motivated or not from the company’s HR policies and practices. In addition to this, they can evaluate the transparency in their rewards system through this study. On the other hand, this study is also useful for the professor, scholars and students pursuing HR as one of their subjects. Finally, scholars researching on similar area can include this study in their literature review section to gain insight on the topic.
Chapter 2 – Literature Review
2.1: Introduction to Human Resource Management (HRM)
Human resource management of HRM as it is commonly known as is one of the most important areas in an organization. It deals with management practices which concern with the human capital, that is, people or workers. Strategic Human Resource Management or SHRM defines HRM as an organized structure within any company or group which is responsible for all the strategies, principles, operations, factors, decisions, functions, activities, practices and methods related to the management of employees (Gagné and Deci, 2005). In the present business environment, HRM plays significant role as human are the main resource for every organization and therefore it is important for the companies to properly manage them. In many of the research work it has been found that success of any company depends on the methods in which that company manages its workers. Managers play crucial role in any organization as they are in direct contact with the employees and are nearest to them (Gong et al., 2009). Hence it is essential for the managers to possess characteristic through which they can easily influence the performance of their subordinates.
Although findings of the recent research work on HRM are widely accepted by the companies in present era, but earlier it was not as they were not bear in minds of earlier management. The development of human resource management aligns with the progress of the society and because of this nation’s social, economical and political situations greatly influence the management of human force (Guest et al., 2003).
2.2: Historical Development if HRM
Although, in the last decade or so a rapid development was seen in the field of human resource management but the activities and practices differ in different nation because of different external factors. The concept of human resource management was developed in the United States of America. In 1830 an industrial revolution was started in the United Kingdom and spread to America. This industrial revolution brought dramatic changes at the workplace in relation to working environment (Ichniowski, Shaw and Prennushi, 1997). It not only resulted in the speeding in the production process but also contributed in the enhancement of quality and brought dramatic changes for the employees. Before industrial revolution the skills and knowledge of workers very valued very much as most of the workers work as either artisans or farmers. But invention of machines resulted in significant change in the lives of workers. Now only semi skilled workers were required by the companies who can perform actions in sync with the machines and can handle its operations. Now, there was limited demand for the skilled labours as most of the work was performed by the machines. In addition to this, hiring a skilled labour adds to the cost. So, all these factors resulted in great deterioration of the working conditions. Since now companies were not dependent much on workers, they started overlooking the needs of the employees (Nishii, Lepak and Schneider, 2008). As wages of workers were very low, they have to work hard in a dangerous working environment for extended hours. The conditions become worsen after the end of Second World War.
All these situations gave birth to the concept of trade unions. Trade union came into existence to protect the rights of the workers and to develop healthy working environment. He first ever trade union was founded in 1866 with an aim to set an eight hour working day and abolish child labor. As a result of this, in 1938 the Fair Labour Act was passed to abolish child labour and to lower the amount of working hours. Since then the trade union have got high popularity among the workers and presently also the trade union fights on the issues of poor working conditions, higher wages and other benefits (Osterman, 2000).
2.3: Pioneers of HRM
Several people have worked for the improvement of the working condition at the workplace, but Robert Owen, Hugo Munsterberg, Chester Barnard and Elton Mayo are considered to be pioneers of HRM. Robert Owne raised his voice for child labor law, regulated working hours and public education. Hugo Munsterberg (1931) in his work “Work Psychology and Industrial Efficiency” studies human behavior and mind and tried to find out the differences among the individuals. He focused on selecting the right employee for a particular job and tried to found out the activities and practices which result in motivating employees (Pfeffer, 1998). Finally, in his book “Functions of the Executive” Chester Barnard (1938) studies the attitude of executives in the company. He concluded that most important resource for any organization is its human resource and to enhance productivity manager must be capable of establishing better communication between the workers and stimulate them. He focused on two aspects, authority and incentives and believed that employees give more importance to non monetary rewards such as power and position in comparison to monetary rewards.
2.4: Activities of HRM
At the starting when the concept of HRM was quit new, the only purpose of HRM was to protect the rights of the workers and to select right candidate for the right position in the organization. Later on it started focusing on the issue of workers satisfaction and at present the human resource management is primarily responsible for recruiting, training and dismissal of the employees in addition to the above activities.
The foremost important activity of a HRM in an organization is of staffing. Staffing includes strategic human resource planning, recruiting and selection. This is one of the most important tasks for the company as the organization can attain success and sustainability only through proper staffing of employees (Wall and Wood, 2005). It is essential for the management to put the knowledge, skills and willingness of the employees effectively to the workload.
Second important activity for a HRM is conducting training and development activities for the human resource. In present business era, it is essential for the companies to provide appropriate training to new employees so that they can work effectively in accordance with the demand of the companies (Gagné and Deci, 2005).
Third but the most important activity of HRM is motivation. To retain its employees and to enhance the productivity and performance of the employees and that of company as a whole, it is essential for the management to keep motivating its employees. There are several theories and methods in this regards which are discussed in the later parts of this paper.
Last but certainly not the least; maintenance is also an HRM activity. Every company tries to retain its valuable employees, and thus it is the duty of HRM to maintain healthy and safety relationship between the employees and the organization (Gong et al., 2009).
In the today’s business environment, motivation is one of the most discussed topics as psychologists believe that employees perform actions as per their inner motives and there are various methods available to influence the inner motives of an employee. It is essential for the present business managers to have adequate knowledge of work psychology which deals with motivation and stimulation so that managers can understand the attitude of the employees towards work. In the views of Strucný výkladový slovník managamentu(1995), motivation is defined as psychological state of human being that invokes action, behavior and activity (Guest et al., 2003). In other words it can be said that people feel motivated towards those activities which result in fulfillment of their needs. In similar manner, every company desires to have motivated workforce which works towards the achievement of company’s goals.
2.6: Source of Motivation
If an individual is motivated towards performing certain activity, it means his or her inner power is driving the individual to perform the task. These inner elements which influence the mind of an individual can be habit, needs, values, interest and ideas. Generally these are the motivating forces for an individual to perform and not to perform any activity. Among all the sources, needs are the main motivating source for an individual (Ichniowski, Shaw and Prennushi, 1997). Human beings are greatly influenced by the environment in which he or she lives and therefore it is quite obvious that a British person of 40 year age will have different needs than an American. Thus people tend to compare and perform their task. Even two different persons can have different expectation for a similar job, one may desire for good relationship at the workplace, other may need job security, and when these are fulfilled, they feel satisfied. There are three main dimensions of motivation, these are; direction, intensity and persistence (Nishii, Lepak and Schneider, 2008).
2.7: Theories of Motivation
In the views of Luthans (1992), motivational theories can be defined in two categories. Firstly are those theories which focus on factors that motivate people. This category includes theories such as Maslow’s hierarchy of needs and Herzberg’s Motivation-Hygiene theory. Second category of motivation theories focuses more on cognitive variables and their relation with other variables. Such theories include Vroom’s Expectancy theory, Adam’s Equity theory and McGregor’s X/Y theory (Osterman, 2000).
Hierarchy of Needs Theory
American Psychologist came up with a motivational theory which states that human needs can be categorized in five categories and these categories can be arranged in an ordered hierarchy.
Figure 1: Hierarchy of Needs Theory
Psychological needs are placed at the bottom of the pyramid. It means these needs are the most important needs for all individuals. This includes food, water, sexual satisfaction, etc. Then comes the needs of safety. Human beings want safe and secure shelter and job. Next in the series is a social need which includes belongingness, acceptance in the society and relationship. Forth in the list is the need of esteem which includes both internal (self-respect, autonomy, achievement) and external (status, recognition, attention) factors. Finally, it is the needs of self actualization. This theory is very useful in the business environment as management can determine the method through which it can motivate the employees (Pfeffer, 1998). For example those worker which have low salary will get motivated by some monetary rewards on the other hand, individuals which earns enough money will get motivated if more power or higher position is rewarded to them.
Theory X and Theory Y
According to Douglas McGregor, views of human beings can be differentiated into two parts. One are the passive people which are denoted by theory X and remaining are active people which are denoted by theory Y. Passive people do not like to work and run away from the responsibilities. On the other hand, active people like to take responsibility are have desire to success (Wall and Wood, 2005). Thus, if manager wants work from passive individual, he needs threaten and control then, whereas, for active individual he must provide them open environment so that they feel motivated and can come up with innovative ideas.
Among all the theories of motivation, The Motivation-Hygiene Theory of Frederick Herzberg is the most complex theory. According to him, there are two factors that significantly influence job satisfaction of the employees. First are the motivator factors which leads to motivation but lack of these factors does not result in dissatisfaction. These factors are responsibility, growth, advancement, achievement, reorganization. On the other hand, there are certain factors known as hygiene factors presence of which cause dissatisfaction in the workers, but if these factors are absent, it does not means that they will cause satisfaction (Gagné and Deci, 2005). Such factors includes relationship with supervisor, company policy, supervision, relationship with employees, relationship with peers, working conditions, salary, personal life, status and security. Frederick Herzberg believes that if a manager wants to motivate his team, he must focus more on motivator factors.
Adam proposed equity theory on the basis that people do not live in vacuum and at workplace they keep on comparing themselves with others. For achieving equality in rewarding they keep on comparing their work assignment, knowledge, skills with their peers. In case of positive imbalance, employee performs necessary actions to gain it again (Gong et al., 2009).
V. H. Vroom proposed the expectancy theory of motivation and developed a formula to measure the motivation. The three main variables of the formula are valence, expectancy and instrumentality.
Motivation = f (Valence x Expectancy x Instrumentality)
Where, Valence = the subjective value of the awaiting result
Expectancy = the belief that the output will lead towards expecting performance
Instrumentality = the belief that after meeting the expected performance, they will receive the desired reward.
Thus, if any of the variables is not present, the value of motivation becomes zero; it means employees are not motivated (Guest et al., 2003).
After discussing different motivational theories it can be said that before applying any of the theory into practice, managers must first give attention towards their employees. It is essential to first communicate with them and then plot a picture of their expectations and behavior. Further, none of the theory is fully applicable on any of the situation as all are based on certain assumptions.
2.8: Importance of Motivation within HRM Activities
If an individual is motivated to achieve something or to perform certain action, he or she will put all the efforts in the task. Thus, it is essential for a manager to hire a motivated person with knowledge, skills and experience because hiring a de-motivated worker with knowledge, skills and experience will not solve the purpose. Only motivated employees can attain their goals in sync with the goals of the organization. Every organization has two kinds of people. One which are self motivated and do not require any external impulse to perform a task and other which are much more common and requires external impulse to get motivated for completing the assign task (Cappelli and Neumark, 2001). Three factors play crucial role at the time of evaluation of job performance; motivation, ability and working environment. Thus, job performance can be defined as:
Job performance = f (motivation x ability x work environment)
Motivation is explained in detailed in the above section; ability is related to the physical and mental limits of an individual. It also includes qualification, technical knowledge, training and work experience (Flynn, 2010). Finally, working environment includes relationship with colleagues and supervisors, the level of safety in the workplace, machines or instruments, etc.
2.9: Reward Fairness and Transparency
In the past few years there has been lot of talks regarding transparency in reward systems. Transparency in reward system is very important for the organizations and they cannot keep it in isolation. This is the reason companies are facing pressure from employees and other stakeholders to share more and more financial information and this is one of the growing feature of reward architecture (Lee, Law and Bobko, 1999). Mercer’s recent research report shows ‘reward perception gap’ between the employers and the employees. In their study they found that in most of the UK Company’s perception regarding the value of the reward and benefit programs of the organization differs significantly between employers and employees. The main reason behind this is lack of communication in the organizations and their lack of understanding regarding their reward packages (Lee, Law and Bobko, 1999).
It is essential to have transparency in communication of financial information in the company as it is the right of the employees to know their contribution in the company’s performance as a whole. Further, to have better understanding of the financial information, companies need to train their employees so that they can understand how their benefits and rewards are derived. In this regards the report by Mercer is align with other studies conducted on the similar issues. They found that in most of the cases employees do not have thorough understanding regarding this issue (Shaw and Gupta, 2001). Moreover, they also found that employees are very eager to know how pay and grading decisions are formulated and how rewarding schemes affects them. However, if the employees do not have any knowledge regarding interpreting financial information, they are higher chances that they will misunderstand the final outcome and it will affect engagement and motivation. Thus, it is essential for the companies to make the employees understand that contribution made by them in the company has been recognized and in return they are getting fair rewards. Research by Fattorusso (2004) shows that due to lack of transparency in communication of financial information among the stakeholder, only executive bonus scheme of 31% executives could be verified and it was difficult to make any straightforward judgement on remaining 66% executives as some of the elements used in the financial statements were difficult for the stakeholder to understand (Dulebohn and Martocchio, 1998). They also found that around 3% of the firms do not disclose any kind of information regarding performance and bonus. This raised a question that how a firm can link performance with reward without disclosing required information.
Two of the most important concept associated with the perceptions of pay fairness is equity and justice. All the three elements, that is, reward fairness, equity and justice are strongly related to attitude of the employees which include pay satisfaction, intention to quit, commitment and perceived organization support. In addition to this, these three elements also have their impact on the behaviour of a worker such as individual performance, citizenship behaviour absenteeism and organization outcomes. Perceptions of reward fairness of employees is strongly related to performance, behaviour and attitude of workers, but still it is not clear how reward practices impact these elements. In organization, employees come from varied background with different experience and skill set (Cohen and Gattiker, 1994). Thus, to motivate all the employees and to achieve sustainability with enhance performance it is essential for the companies to include the concept of fairness in their reward programs. In addition to this, formulating a fair reward policy becomes more challenging for those firms which operate globally and have to follow different legislative requirements, cultural, traditional, business and norms.
2.10: Philosophy of GSV Group
The success key of GVS is based on three important points:
Be part of something
Everybody have to participate to the company success
Be part of something
Belongingness means exist. The sense of belongingness helps in creating identity of an individual and is simply a human necessity. The GVS group has included belongingness in his philosophy. The company believes in team work and to maintain this in all the aspects of its business management keeps on providing training and development activities to all the new workers (GVS, 2014). This helps it in achieving synergy and develops positive competition among the workers and because of this company is able to achieve its goals. Moreover, company communicates necessary financial information to all the stakeholders and standard procedure is followed for calculating bonus for all the employees whether the worker is from lower management or from top management. All the information are floated in the entire organization on monthly basis and thus employee working in the company not only works to fulfil his or needs but also for attaining the goals of the firm (GVS, 2014). The sense of group and belonging of GVS it’s very important and vital for the company business growth, GVS as mentioned before makes of the “belonging” a fundamental rule of business and for implement a strategy and a motivational affiliation as the one created by GVS takes research and analysis. The main difficulty in making every employee feel part of a big family consist in matching cultures and different backgrounds of all the participants from all the states of the world.
The second key point of the GVS is cantered on transparency and communication inside the company. The transparency gives confidence, cooperation and information to all elements of the group. GVS exploits this idea to make sure that the clarity of the business remains within the company in its evolution.
In many companies, the EBIT is kept secret to the structure, creating a lack of communication between levels and between business elements. This does not happen in the GVS group who firmly believes in communication, transparency and trust inside the corporate strategy. Every month through management report’s meetings EBIT is disclosed to the managers, and in turn the managers of the various groups take care to share the data with their people and discuss the impact that their group has had on the results. This process creates a condition of absolute clarity about errors made that month or on the objectives achieved successfully.
A classic example is the production that has consumed too much material in a short time, increasing product costs and decreasing EBIT or maintenance that has failed to keep the plants as efficient as the target and this has caused increase in the cost of the product. Also, this case has reduced the EBIT (GVS, 2014). Finally, another case may be the logistics that has not shipped, the sales that have not sold enough etc. Keeping this transparency every group and every single person knows why the company has been good or bad and knows what their participation in the result was.
The objectivity of the bonus and the reward system
Transparency is a fundamental fact about the objectivity of the reward system, many old-fashioned managers rewarded with bonuses or punished by not giving bonus with no real explanation, so you arrive at the end of the year that you have perceived a prize with no understanding the reason or you don’t receive anything with no explanation. This is what GVS wants to avoid absolutely, every single person should be able to monitor their progress in bonuses during the year and the company provides all the necessary tools to do it. As previously explained the objectives come from the top, then the managing director compiles a series of personal goals (based on the strategies of the group) that subsequently declined in a number of objectives for all corporate managers and general manager of the geographical groups which in turn directs creating a series of targets for all the groups below them that in some cases open more subgroups going down until the last person in the group. These objectives must be very clear and should be able to decide the difficulty level of achieving them. Every objective must always be discussed and agreed with the subject because so as to seek challenging but achievable goals. The assigned objectives must be easy to interpret and should be easy to understand so as to decide whether you have achieved them or not, so that every single person in the group will always know at any time in the year if he will receives a bonus or not and what he needs to do to get it. This allows people to self-evaluate their work, while avoiding subjectivity where the manager decides whether to give or not the bonus and then not disclose the motivations or reasons for the subject.
This is a key and an essential step inside the GVS; human resources make this process one of the pillars of corporate strategy, because motivation as Frederic Taylor says in his theory must be a process of economic achievement directly related to personal fulfilment. GVS firmly believes in challenging but achievable bonus, and this drives the employee to strive in a positive way to get it, reaching a state of self-esteem and satisfaction that will push him to give more to the company and to give more to his team. For example if we take a student inside a normal public school, for the boy, the task is to study and the boy's prize is the vote of the teacher. If that teacher never gives full marks as may be the boy motivated to give the maximum of him? It is impossible, because it is a system non motivational. GVS has conducted extensive studies on this, going all the motivational theories of historical bonuses and developing it with the tools of today to reach a strategy of stimulating and motivating awards which will work forever keeping the eyes to the long term profit (GVS, 2014).
Everybody have to participate to the company success
The GVS group is divided into geography subgroups: Italy, USA, UK, China, Brazil, Japan, Argentina, Russia, Korea etc. Each geographical group is then divided into functional subgroups like: production, sales, maintenance, IT, etc. Each geographical group is measured on its ability to generate EBIT and within the geographical group each subgroup is measured on its ability to generate EBIT with its activities, with clear objectives that are given at the beginning of the year. Above all geographical groups there is the Corporate Group performance that is measured on its ability to generate EBIT at head level supporting all the geographical groups and rising everybody with the planning and choosing of future strategies. In this way the objectives are developed in October at a corporate level and then are divided by geographical area and then their individual managers are divided again on the breakout thus having a consistency of objectives from the first to the last person inside the company (GVS, 2014). This strategy allows the company to make everyone feel the company is developing and this injects confidence and motivation in the employees.
Thus from the above discuss it is clear that to enhance the performance and productivity and to achieve sustainability it is essential for the companies to keep on motivating their employees. Different employees many have different motivating factors, thus companies must work on different strategies so as to motivate all employees. Moreover it is essential for the organizations to formulate fair reward system. In case if reward systems are not fair enough, employees will compare themselves with other co workers and this will affect the working environment. Bonus and rewards must be as per the performance of an individual and companies must disclose all the information to all the stakeholders. This is the best mode to keep the worker motivated and injects healthy competition.
Chapter 3 Research Methodology
In simple language, research refers to systematic examination of subject matter so as to acquire detailed knowledge about the same. To gain certain knowledge, researcher undertakes series of action such as data collection, analysis and interpretation. Accurate investigation and analysis of relevant facts and issues are of paramount importance for quality research. Several methods, tools and techniques are employed by researcher in order to carry out research in systematic manner and to reach at valid and accurate conclusions (Bryman and Bell, 2007). For this reason, researcher is required to have adequate knowledge about various methods and tools so that correct methodology can be developed (Ethridge, 2004). This chapter of dissertation elucidates all techniques and methods that are implemented in present research so as to get better understanding about the topic. It outlines the research techniques that have been employed to collect, evaluate and analyze the relevant data in order to draw valid inferences.
3.2 Research aims and objectives
The main aim of the present research study is to evaluate the fairness of GVS's reward system and its impact on employee motivation. With a view to achieve this aim, following objectives have been formulated:
To assess the transparency in GVS's reward system
To determine the contribution of GVS’s HR policies in employee motivation
To assess how transparency can be achieved in reward system
3.3 Research philosophy
It defines the background and nature of study. Research philosophy explains varied assumptions concerning the individual’s beliefs, opinion, idea, views and perception about the world and its intricacies. It helps researcher in drawing accurate and valid conclusions without getting biased. Basically, research philosophy is of two types Interpretivism and Positivism. According to Interpretivism philosophy, world is too vast and complex to understand (Williams, 2007). Therefore, it is not plausible to develop generalized theories and laws. This philosophy lays huge emphasis on individual’s views and beliefs in order to identify the factors governing such behaviour. On contrary, positivism philosopher assumes that everything in this world can be generalized into laws, concepts and theories. It focuses on investigating the facts and realities so as to gather relevant information for study (Newman and Benz, 1998). As different companies have different views of HR policies and its impact on employee motivation, therefore Interpretivism philosophy is deemed to be appropriate for present research.
3.4 Research Design
Research design provides the framework for carrying out the study in systematic and logical manner. It encompasses four main aspects of study namely research questions, data required for study, methods of collecting data and techniques employed to analyze the data. Primarily there are four types of research design: casual, descriptive, explanatory and exploratory (Research Methodology: An Introduction, n.d). Descriptive research design has been applied in the present study as the researcher tries to find out the characteristics of the HR policies that lead to employee motivation. This research design will aid researcher in gaining deep insight into the topic.
3.5 Research Type
There are two research types; qualitative and quantitative. Qualitative type primarily studies “how” and “why” aspects of related subject matter. It concerns with acquiring extensive knowledge and understanding of issues under consideration. This type of research attempts to assess beliefs, ideas and opinion of individuals regarding the topic, this further aid the researcher in drawing valid conclusions (Glesne, 2005). While on other hand, quantitative research focuses more on mathematical and statistical concepts and tools with a view to carry out study and derive accurate findings. It mainly studies “what” and “where” aspects of issues (Merriam, 2009). The proposed research is qualitative in nature. It will aid researcher in understanding the views, beliefs and opinion of different professionals regarding the impact of HR polices on employee motivation.
3.6 Research Approach
Inductive and deductive are two main research approaches. Under deductive approach, theoretical facts and concepts are used in order to make rational inferences which are further verified with the data so acquired. On contrary, under inductive research approach, new theories and model are developed. Researcher makes general conclusions from specific facts. In addition, this approach allows researcher to make necessary modifications (Kumar, 2005). The current research is inductive in nature since the conclusion of the work is based on the premises. Initially the researcher will study the HR policies of company and then will find out their impact on employee motivation.
3.7 Data Collection methods
There are two types of data sources that are usually used in collecting relevant data for research study; this include primary and secondary data sources. Primary data refers to the information that has been gathered for the first time by researcher for the purpose of study. There are myriads of methods for collecting primary data such as interviews, surveys, observation, focus group and questionnaire. Secondary data refers to the data that has already been collected by some other researcher. This type of data can be gathered from various sources such as books, journals, magazines, online articles, periodicals, annual reports of company, published reports etc (Bryman and Bell, 2007).
The present study employs both types of sources i.e. primary and secondary sources for collecting adequate data for research. In order to strengthen knowledge regarding HR policies and their effects on employee motivation, various journals, books and periodicals have been explored. In addition to this, Internet tool has also been used to search online articles and information regarding the subject matter. Apart from this, for collecting primary data, interviews of the employees of the GVS Pvt. Ltd. are conducted.
3.8 Sampling Technique
Undertaking a research is complex task as it demands huge amount of time, efforts as well as money. It is not possible for researcher to carry out study with such vast population, therefore to make work easy and simple, it is important to employ certain type of sampling technique. Primarily, there are two type of sampling techniques; first is probabilistic in which all the elements in population have equal chances of getting selected for sample and second is non-probabilistic sampling which elements of population do not have equal chances of getting selected. Researcher selects the sample as per his comfort and convenience (Merriam, 2009). In present work, a sample of 100 employees of the company was selected on the basis of simple random probability sampling technique.
3.9 Data analysis
Data analysis is considered to be the most essential and complicated stage of whole research process. Under this stage, information accumulated from both primary and secondary sources are examined and analyzed with a view to derive accurate and valid inferences. As the data acquired from both primary and secondary sources is mostly qualitative in nature, therefore using qualitative technique for analyzing the data will be appropriate. Under this, thematic analysis is applied to analyze the accumulated data (Newman and Benz, 1998). Different themes will be formulated based on the responses gathered from employees of GVS Pvt. Ltd that further will help the researcher in reaching at valid conclusions.
3.10 Validity and Reliability
For maintaining the quality of research, it is important for researcher to emphasis on validity and reliability of study. This ensures that research has been carried out in systematic and logical manner which in turn aid in drawing valid and accurate conclusions. Validity assess whether the research explains and evaluates what it is intended to explain or evaluate. To measure the validity of present study, varied questions were designed that guided the entire research process and aided researcher in undertaking study in correct and systematic manner without getting distracted (Kumar, 2005). As well, to ensure the reliability of study, authentic and reliable sources have been used to collect the data regarding the Human Resources policies and their impact on employee motivation. The key challenge in carrying out research study is collecting valid and unbiased data from primary sources. If the sources are incorrect, it will affect the entire research study by making wrong conclusions. Therefore, in the given case, secondary data have been collected only from authentic work. Furthermore, quality checks have also been conducted regularly at each stage of research process with a view to ensure systematic flow of study.
3.11 Ethical Consideration
While undertaking any type of research, it is important for researcher to consider moral and ethical practices. Below mentioned are some of the ethical practices that have been considered and given due importance while carrying out the study:
Prior permission or approval has been taken from company as well as from its employees who participated in research.
Debriefing was also conducted where all the respondents were informed about the nature and purpose of research and where it will be used.
Not a single participant was forced to be the part of research. Additionally, they were free to refuse to answer any question which they find irrelevant.
Finally, privacy and autonomy of respondents was also maintained. Identity of every respondent was secured.
3.12: Limitations of the study
Due to limited resources, particularly time and money, researcher is required to be competent in making optimal use of limited resources with a view to get best out of them. Nevertheless, researcher has covered all aspects, yet there are certain limitations and barriers encountered by researcher. Following are the major limitations faced by researcher while carrying out the present study:
Firstly, while collecting the primary data, there are huge chances that some of the participants may seem to be reluctant and thus may not provide correct answers to questions. Similarly, collecting secondary data proves to be very tiring and complex process. It is only possible to review such amount of literature related to HR in short period of time.
Second limitation was the time. Limited time was allotted to carry out the entire research process. This may have impacted the quality of research and data collected; researcher may have missed some important facts and concepts in order to accomplish task within specified time.
Thirdly, researcher has emphasised on single organization, thus generalization of final result is other constraint of study.
Lastly, lack of sufficient financial resources also prove to be major constraint as it restricted researcher to carry out study with few respondents which in turn may have impacted the final outcome of research.
Chapter 4 – Data Analysis
This chapter holds lot of importance in the research process as on the basis of the findings of this section, researcher is able to draw some conclusion and can give some recommendations. Researcher collects raw data which does not give any information, it is essential for the researcher to apply certain techniques to convert the data into information. In this section researcher analyse the data collected from the employees of GVS by applying thematic analysis.
Theme 1: Multiculturalism and Consistency of leadership and management are among many factors to be kept under control in the management of human resources inside of an international group such as GVS
When asked about the factors which may create problem in any multinational corporation in the managemnet of human resource, most of the employees said multiculturism and conmsistency in the leadership and management are the two main factors which must be considered by the companies operating in more than one country. In case of GVS, the country started its operations in Europe but with the passage of time it started hiring professional from other parts of the world also. This created a problem of multiculturism as employees coming from different countries have diffeent backgrounds and work style and beliefs. Thus, it is essential for the management to provide similar treatmemt to all the emoloyees whether they belong to same background and country or different background and country. It will help them in keeping the workforce motivated all the time as their is fair system in the company.
According to the employees, after multiculturism, it is the consistecy in the leadership and management style which presents challenges among the organizations in managing their workforce. To keep the workforce motivated, it is essential fo a multinationa company to adopt a standard procedue of communication, leadership and management within the entire company. This will ensure better coordination in all parts of the firm.
Theme 2: GVS’s human resource development programs revolves around participation in the company's results, self esteem, affiliation and career opportunities and relations.
Different scholars have discovered different motivating factors which keeps the employees motivated to work better and to achieve heights. In case of GVS, there are four factors which are focused more on by the company. These are participation in the company's results, self esteem, affiliation and career opportunities and relations. Management of the company feels that it is the fulfilment of the self esteem that motivates an individual. In the present scenario, all the employees are capable enough to meet their basic requirements and hence require fulfilment of their self esteem. In addition to this, the company’s policy is that there must be full participation of all the employees in the achievement of the firm’s goals and objectives. Company believe that if the firm will be able to meet its aims, it will enable the workers to meet their individual goals. Thus, equal participation will also motivate employees. Feel part of something important and having the ability to do new things and challenging are two key elements of the development of human resources of the GVS. The company offers tremendous career and growth opportunities to all the employees to retain and motivate them. Finally, GVS tries to achieve clarity of relationships between the various corporate positions as it helps in creating seamless processes and a work environment in which conflicts are overcome by the cooperation and roles are so clearly determined.
Theme 3: Employee feedback in form of filled questionnaire is the best way to assess whether the motivational system is working properly and to monitor staff satisfaction
In response to the question regarding best method to collect feedback of the employees regarding motivation, most of the managers of the top management agreed that getting a questionnaire filled up by the employees is the best way to assess whether the motivational system is working properly or not. In case of GVS, periodically management of the company distribute a structured questionnaire to all the employees and ask them to fill their responses to all the questions. On the basis of responses of all the employees, management decides whether the employees are motivated by the existing system or not or whether any changes are required in the present HR policies in order to enhance the satisfaction level and motivational level of all the employees. Employees feel satisfied only when the HR policies of the company are fair and the organization follow fair reward policies. In addition to this, it is essential for the management to disclose all the information among the stakeholders. If any company does not disclose all the information to the stakeholders, it becomes difficult for them to calculate actual amount of bonus they will be getting at the end of the year. Moreover, management must impart training related to basic financial analysis so that all the employees can understand the financial of the company. In case of GVS, management disclose all the financial information to all the employees of all the level and this is the reason employees feel satisfied and motivated.
Theme 4: Company follows consistent motivation system across all the parts of the world
In response to the question regarding motivation system, all the top employees responded that the company follows consistent motivations system across the globe. According to the respondents, at 80 per cent of the places, similar system is used for motivating the employees. This helps the company in developing the system in better manner and to make it fairer. In some cases, motivation system depends on the country in which the company is operating. For example, in case of China and America, there is slight difference in the motivational system in comparison to rest of the world. These changes are because of different culture and beliefs of the individuals. Employees in different countries have different beliefs and it is possible that they get motivated from different factors. Therefore, it is essential for the management to understand the factor that motivates the individual the most and then accordingly must formulate their HR policies for motivating their employees. This will also enable them to devise fair HR policies.
Theme 5: ADR is the fundamental basis of GVS’s incentive system
As per the respondents the company’s incentive system is based on the concept of ADR that is, Actual, Development and Role. The award or bonus of each individual is decided as per their performance which revolves around the following pillars:
Actual: The first condition is given by the achievement of the final results for the company. If the individual worth of being promoted, then there is a grid of profitability to be achieved as a company under which it makes no sense to talk about incentive because if there is a common result, it makes no sense to encourage the individual service.
Of course, this principle has declined with results that are monitored throughout the Group GVS for the top management to the individual company or local (Italy, Brazil, etc.) for the local management and operational structures of each country, but the basic principle does not change.
Development: If the underlying condition is satisfied, it goes on to assess the specific contribution that the individual has given to achieve the result, but especially to the creation of conditions for achieving better results in the future. Each person (or group of people) has therefore objectives and specific activities to reach and terminate in a given period of time and these targets are monitored on a quarterly basis, are the basis for determining the level of achievement and therefore the level of incentive payable at year end.
Role: Evaluation of individual performance and therefore the incentive final then goes also for the assessment of how it has played its role in order to achieve the objectives. So it is not enough to meet the targets but we have also done the right way.
So just to give a simple example, if you have been the subject of one or more disciplinary measures during the year, it will be very difficult that you can get an incentive at the end of the year. The assessment is a quarterly payment of the premium is annual. Variants of this system are essentially linked to the historical period of the company to be encouraged, so a reality in the start-up of results and grilles will have different goals than company already mature.
Theme 6: Consistent incentive system is practiced by the company across the globe
Employees believe that the cultural difference of the various countries is certainly important. But one thing that surely all the countries in which it operate is the importance of having a clear, transparent and measurable system. If the system is effective, the objectives are shared and measurable then the system is winning everywhere. The big difference in the opinion of the participants is the time horizon on which the company assesses people and pay bonus. On a cultural level and high school levels that provide for the management of most complex projects the annual assessment and the related annual bonuses make sense and allow you to have a good return business. If we talk about roles more operational and more connected to the reality of industrial production becomes much more important to link the goal to a reality in the nearest day by day. At this point the monthly level becomes the best from the point of view of the return. This shows that a consistent approach is better for achieving fair system and it in turn will enhance satisfaction and motivational levels of the employees.
Chapter 5 – Conclusion and Recommendations
Till date much of the studies regarding HRM and motivation have concluded that employees have a positive motivational response to HRM practices and policies and HRM performance can be linked with the employee motivation, but majority of times these studies majorly focused on company’s performance. Thus, this work is performed so as to draw relationship between HRM policies and employee motivation. In the present era it is essential for the business managers to have adequate knowledge of work psychology which deals with motivation and stimulation so that managers can understand the attitude of the employees towards work. If an individual is motivated to achieve something or to perform certain action, he or she will put all the efforts in the task. Thus, it is essential for a manager to hire a motivated person with knowledge, skills and experience because hiring a de-motivated worker with knowledge, skills and experience will not solve the purpose.
It is essential for the management to always keep its employees motivated in order to improve their productivity and to enhance the performance of the organization as a whole. This can be achieved by introducing proper reward and incentive system. Transparency in reward system is very important for the organizations and they cannot keep it in isolation. This is the reason companies are facing pressure from employees and other stakeholders to share more and more financial information and this is one of the growing feature of reward architecture. All the three elements, that is, reward fairness, equity and justice are strongly related to attitude of the employees which include pay satisfaction, intention to quit, commitment and perceived organization support. To motivate all the employees and to achieve sustainability with enhance performance it is essential for the companies to include the concept of fairness in their reward programs. In addition to this, formulating a fair reward policy becomes more challenging for those firms which operate globally and have to follow different legislative requirements, cultural, traditional, business and norms.
The success key of GVS is based on three important points:
Be part of something
Everybody have to participate to the company success
The GVS group who firmly believes in communication, transparency and trust inside the corporate strategy. Every month through management report’s meetings EBIT is disclosed to the managers, and in turn the managers of the various groups take care to share the data with their people and discuss the impact that their group has had on the results. This shows that company is committed towards fair reward system which in turn reflects in the motivation level of its individual who always feels motivated because of such fair system. From the work it has been found that Multiculturalism and Consistency of leadership and management are among many factors to be kept under control in the management of human resources inside of an international group such as GVS. Further, the GVS’s human resource development programs revolves around participation in the company's results, self esteem, affiliation and career opportunities and relations. For monitoring the staff satisfaction and to assess its motivation system, the company makes use of questionnaire to get the responses of all the employees. The company’s motivation system and rewards and incentives are consistent throughout the globe which reflects that its reward and incentive system are fair. Moreover, the performance of the company shows that because of fair reward and incentive schemes, employees of the organization are satisfied and are motivated towards well being of the company.
Here are certain recommendations for the GVS’s HR department which will enable to formulate better HR policies to keep the employees more satisfied and motivated.
GVS’s HR policies must encourage better work life balance
HR policies of the companies must be flexible enough
Company must introduce some employee recognition programs
Communicate regularly with the workers regarding their progress and direction
Conduct periodic survey regarding employee’s attitude
Must show concern towards individual satisfaction
Fair but firm treatment must be given top all the employees
Wages, salaries, and fringe benefits must be maintained at competitive level
Maintain clean and modern work environment
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