Analysis of Staff Motivation Levels

Analysis of Staff Motivation Levels Abstract The objective of this project is to investigate whether employees at WILO company are well motivated and if there is a need for improvement of the level of employee satisfaction in WILO subsidiaries in Poland and Hungary. This research study presents the methods of employee motivation and the rewarding system adopted by WILO company. This project is a result of a theoretical study of available literature as well as empirical research conducted at the company in order to analyse the effectiveness of the implemented methods and system. The analysis has also provided background for defining the role of managers and the required skills in the process of motivating employees. In addition, salary and benefits, good atmosphere, interesting job, professional development and job security have been tested and proved to be key motivating factors for both Polish and Hungary WILO employees. Nowadays in the increasingly competitive global economy it seems to be of great significance that motivated employees might turn into the source of the companys competitive advantage, especially in such areas as: quality, service and costs. Therefore, there seems to be a necessity to create a committed workforce, which is an investment for the future resulting in boosted efficiency, creativity, increased turnover, and subsequently a strong position of the company on the competitive market. PREFACE The current competitive business world is focused on fast development and sustainability of strong position on the market, therefore companies search for various ways of ensuring their success. The success of the business seems to be an outcome of the interaction between employees vs. customers, product and the organisation. Therefore, to create a business oriented company these three elements have to work out together to generate a profit for the organisation and financial benefits for employees. Hence, it is significant for an organisation to create a culture where employees would feel appreciated. This might be reached by providing rewards and incentives or benefits in return for their effective work. As a result of this, employees are expected to make efforts to accomplish objectives of an organisation. Background Employee motivation is a key factor in the success or failure of any organisation. In hard economic times, which require companies to face the need to increase both budget cuts and productivity, it appears crucial to maintain workers loyalty and motivate them continuously. Should an organisation omit to motivate its staff, less productivity may occur, morale is not high as well as products and services are of a lower standard. I have selected the topic of motivating and rewarding of employees as my interests are focused on motivation programmes and I wish to gain an improved understanding of the area of building employee engagement. Moreover, my choice was dictated by my willingness to develop a better understanding of what precisely could motivate employees in different subsidiaries at WILO company. Furthermore, I wish to concentrate on factors which could potentially encourage employees to be committed to work and develop a better atmosphere at a workplace. The objective of the study The main objective of the project is to investigate whether employees at WILO company are well motivated and if there is a need for improvement of the level of employee satisfaction in WILO subsidiaries in Poland and Hungary. Moreover, the goal of the research is to conduct a theoretical study of selected literature as well as empirical data collection by means of a survey, questionnaires and interviews at WILO company. I will also attempt to analyse the data to be aware of the current level of motivation as well as classify significant motivators for the Polish and Hungarian employees at WILO company. Finally I wish to draw a conclusion to improve the level of satisfaction and to build a better committed workforce. Summary The project has been divided into six chapters: Introduction to the study, literature review, WILO company motivation and compensation system, methodology, results of the survey, and conclusion. The literature of the field presents all manner of findings concerning solutions to the problem of motivating and rewarding employees. For the purpose of formulating the main concepts of my thesis, I reviewed a wide variety of relevant literature, which serves to provide a theoretical background to my study. First part of the literature review covers the definition of motivation as well as various theories of motivation. Moreover, I explore Maslows hierarchy of needs theory, in comparison with Herzbergs theory, Alderfer as well as McClelland theory and McGregor theory (Schermerhorn, 2005). Furthermore, I focus on personalities and behaviour of employees and cover various issues regarding motivation and compensation systems, techniques and tools, and, in addition, I wish to explore the role of a manager. The following part focuses on a motivation and compensation system at WILO company. I will attempt to present the way of motivating and rewarding employees at WILO company as well as the benefits and perks received by WILO employees. Furthermore, I introduce the training system which is applied at WILO to boost productivity. The thesis will consist of two parts, that is a theoretical and a practical one. In the theoretical part of my thesis, I intend to examine selected literature of the field in order to present possible ways of motivating and rewarding. In the practical part of my thesis, I will conduct a research whose purpose is to analyse empirical data extracted by means of questionnaires carried out in the Polish and Hungarian subsidiaries of WILO company. My study will explore the role of leadership in the process of motivation and methods of improving working conditions, by means of bonuses provided by the company. Finally, I draw a conclusion and discover crucial findings regarding motivation and compensation of the Polish and Hungarian subsidiaries of WILO company. Motivating and rewarding employees is one of the most significant and the most challenging activities that managers perform. Managers invariably debate on ways of motivating, thus we are in a position to find numerous views and speculations regarding this topic. It appears to be crucial to demonstrate briefly paramount ideas regarding motivation and rewarding of employees, presented by different authors. Moreover, both academic researchers as well as practicing managers have attempted to understand and explain the problem of employee motivation for years (Robbins, Coulter, 2003 p. 425). Furthermore, effective managers who expect from their employees the maximum effort recognise that they are required to be familiar with the way employees are motivated as well as to modify their motivational practices to satisfy their needs. Chapter Two Literature Review Definition of Motivation There is hardly anything more frustrating than working hard, meeting or exceeding expectations and discovering that it doesnt matter to your company. You get nothing special, or you get what everyone else does. People need to get differentiated rewards and recognition to be motivated. (Jack Welch, 2005:107). There seems to be a wide variety of definitions of motivation. It is a term originally descended from the Latin word movere, which means to move (Rue, Byars, 2000). However, it has been extended to include the various factors by which human behaviour is triggered (Campbell Pritchard, 1976). What is interesting, the concept of the motivation was already well-known in ancient times as, for instance, Egyptian pyramids or the Great Wall in China without motivation and determination would not exist. It should be borne in mind that the problem of motivation is not a current development. Research conducted by William James in the late 1800s pointed out the significance of motivation. He assumed that hourly employees might keep their jobs by applying approximately 20 to 30 percent of their ability. Moreover, he found that highly motivated workers will perform at approximately 80 to 90 percent of their ability. Consequently, highly motivated employees are in a position to increase in performance as well as significantly decrease in problems such as turnover, strikes, absenteeism (Rue, Byars, 2000). As expressed by the 34th American president Dwight D. Eisenhower: Motivation is the art of getting people to do what you want them to do because they want to do it. Motivation might be analysed by the following sequence: Consequently, in motivation needs create motives, which lead to the accomplishment of goals. Moreover, a motive is a stimulus which leads to an action that satisfies the need, which means that motives create actions. When employees achieve the goals, they satisfy the needs and simultaneously decrease the motive. Nonetheless, it might occur that other needs may arise. Understanding the motivation sequence provides managers with slight help in determining what motivates employees (Rue, Byars, 2000). Nowadays it is extremely important to have motivated employees in every organisation. While non-motivated employees will not provide good service, they are likely to make mistakes and the reputation of the organisation may suffer as a result. Therefore, all businesses need enthusiastic and committed employees who work to support organisational goals. What is important, motivation occurs within people; therefore work needs to meet their goals as well. Additionally, people have different motivation, consequently a reward that is attractive to one employee might be unimportant to another (Boddy, 2002). Moreover, one of the paramount factors which has an impact on efficiency and effectiveness of employees work as well as how they organise time at work is their motivation (Bruce and Pepitone, 2001). While, as claimed by Forsyth (2001), non-motivated employees tend to spend more time on breaks, surfing the internet or private discussion. Nevertheless, motivation commences with employee engagement, and engagement starts with effective communication skills. As mentioned by Jack Welch, former CEO of General Electric (GE) and current Business Week columnist, no company, large or small, can succeed over the long run without energised employees who believe in the mission and understand how to achieve it. It is also worth mentioning that three main words in this quotation remain the secret to motivating employees: energised, believe, understand (Gallo, 2008). Moreover, according to Carmine Gallo (2008), successful companies have employees who believe in their mission. As emphasised by Scott Cook (INTU), people want more than a paycheck. They want to feel as though they are part of something bigger than themselves. When discussing motivation, not only should we mention a different management style adopted in Europe in comparison to Asia and America, but also the differences between companies in the same country or even differences between workplaces in the same company. To understand better what precisely could motivate employees I will attempt to explore what motivation means in general. As claimed by Dessler (2004), a motive is an incentive that stimulates the person into the action or provides direction as well as hints to action. However, Robbins and Coulter (2003) presented a different view. They claim that motivation is the willingness which brings out high levels of strivings to achieve goals as well as to satisfy individual needs. What is more, studies conducted by Schermerhorn (2005), also provide a valuable input. He argues that motivation is in charge of the standard, direction, as well as tenacity of effort developed at the workplace. Moreover, in order to understand motivation, it is essential to understand human nature as it might be very simple or very complex at the same time. Hence, understanding the human nature is significant for effective motivation of employees at the workplace. Gary Dessler (2004) argues that motivation is the intensity of an employee desire to engage in some actions. However, Buford, Bedeian Lindner (1995) stated that motivation is a tendency to behave in an intentional manner to fulfil particular and insatiable needs. Nevertheless, Kreitner (1995) presented a different view. According to his statement, motivation is a psychological process that provides behaviour aim and direction. Furthermore, as defined by John Schermerhorn (2005) and subsequently supported by Stephen Robbins and Mary Coulter (2003), motivation is the willingness which presents the level, direction, and perseverance of effort expanded at work to satisfy some individual needs. As claimed by Kondo (1995), motivating the employees is one of the numerous conditions and policies recognised to achieve the objectives of each company. Moreover, people involved in a task have to be sufficiently motivated to overcome all difficulties. Therefore, by saying, a company is its people it is meant that () people are our most important assets (Schermerhorn, 2005). This statement demonstrates that a proper approach to people in an organisation is extremely important, that is, if managers treat employees appropriately, they will be repaid with effective work. What is important, even if we create an outstanding organisation, it will not be effective and even counter-productive if the employees lack motivation (Kondo, 1995). To conclude, highly motivated employees seem to be the most important assets for owners, chairmen, managers. Otherwise the productivity of the employees and the costs of the production will dramatically deteriorate. Personality and behaviour of employees It is commonly known that people differ in characters, abilities, values, behaviour, and needs. Moreover, different actions cause various reactions on people. One employee might jump whenever the boss wishes, while the other would not execute this order (Dessler, 2004). For a manager it is significant to be familiar with how to manage different personalities as ineffective management of a team with different personalities as well as working styles might lead to a failure of a particular project. As stated by Schermerhorn (2005) personality is the mixture or overall profile of characteristics that causes one person to stand out from all others. personality As claimed by Carl Jung, the Myers-Briggs Type Indicator (MBTI) is a popular tool for measuring personality. This system is helpful for organisations to be familiar with the working styles of employees, balance teams and avoid conflicts. According to Myers-Briggs, assessment characteristics of personality are classified as: Introvert/Extrovert; Sensing/Intuition; Thinking/Feeling; and Judging/Perceiving. The MBTI questionnaires categorised people into 16 personality types along four scales (Mutchler, 1998). Employees who possess the introvert personality tend to be introspective, they are often an analytical and scrupulous team member. However, extroverts are active as well as easy-going and comfortable with expressing their ideas openly. The sensing/intuition personalities tend to measure process of information. A sensing person seems to be visual and fact-oriented, whereas an intuitive person has a tendency to be more open and creative. The thinking/feeling type of personalities refers to the decisions making. Thinkers draw conclusions based on external standards and regulations, however, feelers are more focused on protecting feelings and values. As team members, feelers might consolidate people, while thinkers are successful in expressing logical reasons behind decisions. Finally, judging/perceiving concerns the approach people have to their life. People with judging personality tend to be well organised and they know what to do about their daily activities, while people with perceiving personalities are more flexible and spontaneous. It is note-worthy that every team is enriched by diversity, therefore, a range of personalities might create a stronger team. Moreover, the diversity of the team might bring into a project different ideas, which is bound to increase performance and creativity of the team (Boddy, 2002). On the other hand, as claimed by Gary Dessler (2004) and illustrated in Figure 4. psychologists, nowadays emphasise the big five personality traits as they apply to such behaviour at work as extroversion, emotional stability, agreeableness, conscientiousness and openness to experience. Extroversion is personality where a person is outgoing, assertive and friendly. While emotional stability names someone who is relaxed, calm and secure. Moreover, this person is emotionally stable and confident. Agreeableness, in turn, is someone who is good-natured, cooperative and trusting. Furthermore, a person who possesses an agreeable personality is also in good relationships with others, and a disagreeable person generates conflicts and discomfort for others. The following personality is called conscientiousness. An employee with this character trait is responsible, trustworthy and careful. On the other hand, a person who lacks conscientiousness is careless and often doing little. Finally, openn ess is the degree, to which someone is curious, open to new idea and creative. What is more, an open person is tolerant, open to change and receptive to new things. Moreover a person who lacks openness is resistant to change, narrow-minded and has limited sources of interests (Schermerhorn, 2005). Many studies conclude that these five traits signify the essential structure of personality, and therefore influence how the person behaves (Beck, 2000). In addition, personality traits are not the only one factor which is responsible for persons behaviour at work. Therefore, individual differences in abilities also influence workers behaviour and performance (McCormick and Tiffin, 1974). To perform the work successfully every employee needs to possess appropriate abilities. However, even the most competent employee will not perform the task successfully without motivation. Therefore, Performance = Ability x Motivation (Dessler, 2004). As claimed by Richard Field (2002) the main goal of attitudes is information of how to act with regard to other person. Moreover, attitudes are significant in organisations as they affect behaviour. Additionally, we may distinguish three parts of work attitudes that are the affective, such as what the employee feels about work, as well as the cognitive attitude- what the employee thinks about the work and the international- what actions is the employee planning to perform at work. Moreover, the job satisfaction is influenced by both the work environment and by the employees personal traits. It has been assessed that the individuals personality constitute between 10% and 30% of employees job satisfaction, however, 40% to 60% of the discrepancy in job satisfaction is motivated by situational factors. Furthermore, the interaction between personality and the situation constituted between 10% and 20% (Field, 2002). Theories of Motivation There are numerous motivation theories, however, the universal theory of motivation, which can explain all its aspects does not exist as each person is unique and has different needs and expectations. Managers have for ages attempted to understand why for one person work is enthusiastic and challenging, and means a possibility to improve the ability, while for other person work is something which you have to perform, as compulsion to survive and for living in a good condition. Theories of motivation focused on how managers might motivate their subordinates. However, they also have to motivate other people such as colleagues, consumers, or other managers. Psychologists created three main approaches when studied what motivates employees such as the need-based, process based and learning/reinforcement-based approaches. Need-based Approaches to Motivation Need-based approaches to motivation concentrate on how needs trigger people to act the way they act as well as which needs are the most significant for each person. The most common theories of motivation are: Maslows Hierarchy of Needs Theory, Herzbergs theory, McClelland theory and McGregor theory. Scientists generally commence most discussions concerning motivation by explaining individual needs; therefore, as claimed by Schermerhorn (2005), a need is an unmet desire. An extremely significant and generally known theory of motivation is Maslows needs-hierarchy theory. Abraham Maslow a hierarchy of needs Abraham Maslow was an American clinical psychologist, who formed a theory of human motivation to understand the needs of his patients. This model suggests that people have different types of needs. He also found it useful to investigate data and observations of Douglas McGregor theory. He proved that the lower-order needs are leading until they are at least partly satisfied (Maslow, 1970). On the basis of this theory, an unsatisfied need can change a persons behaviour while a satisfied one can be a motivator of immediate action. As illustrated in Figure 5, Maslow argued that there is a hierarchy of five levels of needs. Starting from the lowest one, we may distinguish needs such as physiological, security, social, self-esteem and self-actualisation. Physiological needs are the needs essential for survival, such as: food, water, shelter and clothing. These needs may be satisfied in an organisation by monetary compensation. Maslow proved that if these basic needs are unsatisfied, people will focus on activities that allow them to obtain the necessity of life. If they do not fulfil these basic needs, they will not strive to reach the higher needs (Boddy, 2002). However, if the physiological needs are gratified, new needs would appear which he called security needs. These needs provide such values as: security, protection, stability, dependency (Maslow, 1970). They protect from fears, anxiety and chaos. In the event of this need being paramount for a person, a stable and regular job with secure working conditions may satisfy them. A company may meet these needs by medical or retirement benefits. The following need is belongingness which may be reached by assuring a place in the group or family. This need triggers affection and love and also requires closeness and cooperation with other people. This is the desire for acceptance and approval by friends and co-workers (Boddy, 2002). Maslow discovered that a wide variety of people possess self- esteem needs, which means self-respect and the respect of others. Self-respect is gratified when people have a sense of achievement, confidence, adequacy and competence. Moreover, people search for the respect of others, a desire for reputation in the eyes of other people such as prestige, status, attention and recognition. They wish to be noticed by others. In most cases they take challenging or difficult tasks just to demonstrate that they are good at their job. This behaviour gives them respect and status. To motivate employees through satisfying those needs, management may offer them recognition awards. Finally, Maslow named the paramount range of needs as self-actualisation, which provides the desire for self-fulfilment as well as potential. Maslows pointed out that this need only begins to dominate when the all lower-level needs have been relatively satisfied. People who wish to gratify self-actualisation needs will search for personal relevance in their work. They are more willing to value new responsibilities to realise their potential and also develop new talents, skills or horizons (Boddy, 2002). Unfortunately, on this level it is almost impossible to satisfy a person completely as this refers to the feeling of self-fulfilment and the realisation of ones potential, which become higher and higher during persons development. This need may be gratified by paying attention to allowing a person to participate in seminars or temporary assignments to special projects. Maslows hierarchy of needs model is referred to as a content theory, it focuses on what will motivate a person without exactly explaining why an individual is motivated. It is not a complete model of human motivation, but it does demonstrate how managers can approach the basic needs of their employees (Alderfer, 1969). Moreover, it suggests that there are significant differences among people in terms of the needs they may wish to satisfy. A manager should always have in mind that motivators may change over time due to environmental influences and the individuals life cycle. It is also note-worthy that, until basic needs are satisfied, people will not concentrate on high-level needs. However, there is little evidence that people must meet their needs in the same sequence of the hierarchy, for instance not all of them must gratify social needs such as affiliation and esteem before moving on to satisfy self-actualisation needs (Dalrymple, 1992). Furthermore, there are people for whom se lf-esteem is often more significant then love, however, for others creativeness is the priority. In this case, they are not searching for self-actualisation once they satisfied their basic needs. Others had such permanently low aspirations that they experienced life at a very basic level (Boddy, 2002). In other words, it is of great significance that human beings always have a variety of needs (Kondo, 1995). Clayton Alderfer- Existence Relatedness Growth (ERG) Theory The following theory provided by Clayton Alderfer (1969) was based on Maslows research and focuses on three needs: existence, relatedness and growth. His work was built on Maslows ideas, however, he presented an alternative to them. He created and researched his theory in questionnaires as well as interview-based studies conducted in five organisations such as: bank, a manufacturing firm, two colleges and a school. His existence needs are similar to Maslows physiological needs and to security needs such as: concern for losing the job and salary. They include physiological desires such as hunger and thirst which symbolise deficiencies in existence needs. Nevertheless, pay and benefits symbolise ways of satisfying material requirements (Dessler, 2004). Relatedness needs focus on relationships with important people such as: family, friends, but also bosses, subordinates, team members or customers. Additionally, they require interpersonal interaction to gratify the needs such as prestige and esteem from others. People gratify these needs by sharing thoughts and feelings. Moreover, acceptance, understanding, and confirmation are significant for satisfying relatedness needs (Boddy, 2002). Growth needs are approximately equal to Maslows needs for self-esteem and self-actualisation. People satisfy these needs if they deal with problems by using their skills or developing new talents (Alderfer, 1969). Maslows and Alderfer models can be distinguished in two major ways. Maslows created five sets of needs, while Alderfer formulated three. Moreover, Maslow claimed that each of the needs should be satisfied before moving to the next level of needs. However, Alderfer argued that existence, relatedness and growth needs are active simultaneously (Dessler, 2004). David McClelland- Need for Affiliation, Power and Achievement David McClelland (1961) examined the way people think in wide variety of situations. Moreover, he claimed that managers should satisfy employees higher-level needs. His research discovered three categories of human needs. They vary in degree in all employees and managers, and characterise style and behaviour. The need for affiliation means to develop and maintain interpersonal relationships. People who have the need for affiliation are motivated to maintain strong relationships with family and friends. In social meetings they attempt to create friendly atmosphere by being agreeable or providing emotional support (Litwin Stringer, 1968). The need for power means to be in a position to influence and control others. People with the need for power wish to influence others directly by providing opinions, making suggestions. They would find themselves as teachers or public speakers as well as leaders. However, the need for power depends on persons other needs. A person with a strong need for power but a low need for good relationships might turn into a dictator. Simultaneously, a person with strong needs for friendship might turn out to be a social worker or a cleric. McClelland assumed that a good manager is motivated by a regimented and regulated concern for influencing others (McClelland, 1995). It means that a good manager should have the need for power; however it always has to be under control. The need for achievement means taking personal responsibility and demonstrating successful results. People who have a strong need for achievement have a predisposition to reach a success, and they are searching for advancement at work. They possess the strong need to achieve satisfaction from challenging goal or task. These people prefer tasks in which success is reasonably achievable, consequently avoiding tasks which are too easy or too difficult (McClelland, 1961). To sum up, it is note-worthy that what is valuable to one person might mean nothing to another. One manager may aspire for promotion, while other is searching for stability and is more satisfied with a slower track. For some managers independence and autonomy are of great significance as they wish to work on their own, while others are more concerned with long-run career job security and also they wish to have stable future (Dessler, 2004). Frederick Herzberg Hygiene-Motivator (two-factor) Theory The following theory provided by Frederick Herzberg (1959) is Hygiene Motivation Theory. He split Maslows theory into lower-level (physiological, security, social) and higher-level (ego, self-actualisation) needs. According to the motivation theory proposed by Herzberg , motivation is managed by two different types of factors such as satisfiers and dissatisfiers. It seems that employees experience dissatisfaction with things such as low pay or noisy working environment and it is significant to eliminate these dissatisfiers. In turn, to motivate employees it is crucial to enrich daily work in satisfiers. Moreover, to motivate employees it is also significant to involve them in preparing working standards and setting work goals, precisely appraising their results, as well as rewarding them appropriately (Kondo, 1995). Herzberg conducted a research with 200 engineers and he focused on their experience of work. The respondents were asked not only to reminisce about a time when they had good time at work but they were also asked to bring back to memory a time when they felt bad at work and provide the background (Boddy, 2002). Research analysis demonstrated that when employees thought about good times they mentioned factors such as: recognition, achievements, responsibility, advancement, and personal growth, work itself, etc. However, when they were describing the bad time, they mentioned the following factors: supervision, company policy and administration, salary, working conditions, interpersonal relations, etc. Herzberg concluded that factors which generate dissatisfaction are hygiene factors and these satisfiers he called motivators, as they seemed to influence individual performance and effort (Herzberg, 1959). According to Herzebrg, it seems to be significant to motivate employees by creating challenges and opportunities for achievement. Consequently, dissatisfied personnel work with lower motivation and their Analysis of Staff Motivation Levels Analysis of Staff Motivation Levels Abstract The objective of this project is to investigate whether employees at WILO company are well motivated and if there is a need for improvement of the level of employee satisfaction in WILO subsidiaries in Poland and Hungary. This research study presents the methods of employee motivation and the rewarding system adopted by WILO company. This project is a result of a theoretical study of available literature as well as empirical research conducted at the company in order to analyse the effectiveness of the implemented methods and system. The analysis has also provided background for defining the role of managers and the required skills in the process of motivating employees. In addition, salary and benefits, good atmosphere, interesting job, professional development and job security have been tested and proved to be key motivating factors for both Polish and Hungary WILO employees. Nowadays in the increasingly competitive global economy it seems to be of great significance that motivated employees might turn into the source of the companys competitive advantage, especially in such areas as: quality, service and costs. Therefore, there seems to be a necessity to create a committed workforce, which is an investment for the future resulting in boosted efficiency, creativity, increased turnover, and subsequently a strong position of the company on the competitive market. PREFACE The current competitive business world is focused on fast development and sustainability of strong position on the market, therefore companies search for various ways of ensuring their success. The success of the business seems to be an outcome of the interaction between employees vs. customers, product and the organisation. Therefore, to create a business oriented company these three elements have to work out together to generate a profit for the organisation and financial benefits for employees. Hence, it is significant for an organisation to create a culture where employees would feel appreciated. This might be reached by providing rewards and incentives or benefits in return for their effective work. As a result of this, employees are expected to make efforts to accomplish objectives of an organisation. Background Employee motivation is a key factor in the success or failure of any organisation. In hard economic times, which require companies to face the need to increase both budget cuts and productivity, it appears crucial to maintain workers loyalty and motivate them continuously. Should an organisation omit to motivate its staff, less productivity may occur, morale is not high as well as products and services are of a lower standard. I have selected the topic of motivating and rewarding of employees as my interests are focused on motivation programmes and I wish to gain an improved understanding of the area of building employee engagement. Moreover, my choice was dictated by my willingness to develop a better understanding of what precisely could motivate employees in different subsidiaries at WILO company. Furthermore, I wish to concentrate on factors which could potentially encourage employees to be committed to work and develop a better atmosphere at a workplace. The objective of the study The main objective of the project is to investigate whether employees at WILO company are well motivated and if there is a need for improvement of the level of employee satisfaction in WILO subsidiaries in Poland and Hungary. Moreover, the goal of the research is to conduct a theoretical study of selected literature as well as empirical data collection by means of a survey, questionnaires and interviews at WILO company. I will also attempt to analyse the data to be aware of the current level of motivation as well as classify significant motivators for the Polish and Hungarian employees at WILO company. Finally I wish to draw a conclusion to improve the level of satisfaction and to build a better committed workforce. Summary The project has been divided into six chapters: Introduction to the study, literature review, WILO company motivation and compensation system, methodology, results of the survey, and conclusion. The literature of the field presents all manner of findings concerning solutions to the problem of motivating and rewarding employees. For the purpose of formulating the main concepts of my thesis, I reviewed a wide variety of relevant literature, which serves to provide a theoretical background to my study. First part of the literature review covers the definition of motivation as well as various theories of motivation. Moreover, I explore Maslows hierarchy of needs theory, in comparison with Herzbergs theory, Alderfer as well as McClelland theory and McGregor theory (Schermerhorn, 2005). Furthermore, I focus on personalities and behaviour of employees and cover various issues regarding motivation and compensation systems, techniques and tools, and, in addition, I wish to explore the role of a manager. The following part focuses on a motivation and compensation system at WILO company. I will attempt to present the way of motivating and rewarding employees at WILO company as well as the benefits and perks received by WILO employees. Furthermore, I introduce the training system which is applied at WILO to boost productivity. The thesis will consist of two parts, that is a theoretical and a practical one. In the theoretical part of my thesis, I intend to examine selected literature of the field in order to present possible ways of motivating and rewarding. In the practical part of my thesis, I will conduct a research whose purpose is to analyse empirical data extracted by means of questionnaires carried out in the Polish and Hungarian subsidiaries of WILO company. My study will explore the role of leadership in the process of motivation and methods of improving working conditions, by means of bonuses provided by the company. Finally, I draw a conclusion and discover crucial findings regarding motivation and compensation of the Polish and Hungarian subsidiaries of WILO company. Motivating and rewarding employees is one of the most significant and the most challenging activities that managers perform. Managers invariably debate on ways of motivating, thus we are in a position to find numerous views and speculations regarding this topic. It appears to be crucial to demonstrate briefly paramount ideas regarding motivation and rewarding of employees, presented by different authors. Moreover, both academic researchers as well as practicing managers have attempted to understand and explain the problem of employee motivation for years (Robbins, Coulter, 2003 p. 425). Furthermore, effective managers who expect from their employees the maximum effort recognise that they are required to be familiar with the way employees are motivated as well as to modify their motivational practices to satisfy their needs. Chapter Two Literature Review Definition of Motivation There is hardly anything more frustrating than working hard, meeting or exceeding expectations and discovering that it doesnt matter to your company. You get nothing special, or you get what everyone else does. People need to get differentiated rewards and recognition to be motivated. (Jack Welch, 2005:107). There seems to be a wide variety of definitions of motivation. It is a term originally descended from the Latin word movere, which means to move (Rue, Byars, 2000). However, it has been extended to include the various factors by which human behaviour is triggered (Campbell Pritchard, 1976). What is interesting, the concept of the motivation was already well-known in ancient times as, for instance, Egyptian pyramids or the Great Wall in China without motivation and determination would not exist. It should be borne in mind that the problem of motivation is not a current development. Research conducted by William James in the late 1800s pointed out the significance of motivation. He assumed that hourly employees might keep their jobs by applying approximately 20 to 30 percent of their ability. Moreover, he found that highly motivated workers will perform at approximately 80 to 90 percent of their ability. Consequently, highly motivated employees are in a position to increase in performance as well as significantly decrease in problems such as turnover, strikes, absenteeism (Rue, Byars, 2000). As expressed by the 34th American president Dwight D. Eisenhower: Motivation is the art of getting people to do what you want them to do because they want to do it. Motivation might be analysed by the following sequence: Consequently, in motivation needs create motives, which lead to the accomplishment of goals. Moreover, a motive is a stimulus which leads to an action that satisfies the need, which means that motives create actions. When employees achieve the goals, they satisfy the needs and simultaneously decrease the motive. Nonetheless, it might occur that other needs may arise. Understanding the motivation sequence provides managers with slight help in determining what motivates employees (Rue, Byars, 2000). Nowadays it is extremely important to have motivated employees in every organisation. While non-motivated employees will not provide good service, they are likely to make mistakes and the reputation of the organisation may suffer as a result. Therefore, all businesses need enthusiastic and committed employees who work to support organisational goals. What is important, motivation occurs within people; therefore work needs to meet their goals as well. Additionally, people have different motivation, consequently a reward that is attractive to one employee might be unimportant to another (Boddy, 2002). Moreover, one of the paramount factors which has an impact on efficiency and effectiveness of employees work as well as how they organise time at work is their motivation (Bruce and Pepitone, 2001). While, as claimed by Forsyth (2001), non-motivated employees tend to spend more time on breaks, surfing the internet or private discussion. Nevertheless, motivation commences with employee engagement, and engagement starts with effective communication skills. As mentioned by Jack Welch, former CEO of General Electric (GE) and current Business Week columnist, no company, large or small, can succeed over the long run without energised employees who believe in the mission and understand how to achieve it. It is also worth mentioning that three main words in this quotation remain the secret to motivating employees: energised, believe, understand (Gallo, 2008). Moreover, according to Carmine Gallo (2008), successful companies have employees who believe in their mission. As emphasised by Scott Cook (INTU), people want more than a paycheck. They want to feel as though they are part of something bigger than themselves. When discussing motivation, not only should we mention a different management style adopted in Europe in comparison to Asia and America, but also the differences between companies in the same country or even differences between workplaces in the same company. To understand better what precisely could motivate employees I will attempt to explore what motivation means in general. As claimed by Dessler (2004), a motive is an incentive that stimulates the person into the action or provides direction as well as hints to action. However, Robbins and Coulter (2003) presented a different view. They claim that motivation is the willingness which brings out high levels of strivings to achieve goals as well as to satisfy individual needs. What is more, studies conducted by Schermerhorn (2005), also provide a valuable input. He argues that motivation is in charge of the standard, direction, as well as tenacity of effort developed at the workplace. Moreover, in order to understand motivation, it is essential to understand human nature as it might be very simple or very complex at the same time. Hence, understanding the human nature is significant for effective motivation of employees at the workplace. Gary Dessler (2004) argues that motivation is the intensity of an employee desire to engage in some actions. However, Buford, Bedeian Lindner (1995) stated that motivation is a tendency to behave in an intentional manner to fulfil particular and insatiable needs. Nevertheless, Kreitner (1995) presented a different view. According to his statement, motivation is a psychological process that provides behaviour aim and direction. Furthermore, as defined by John Schermerhorn (2005) and subsequently supported by Stephen Robbins and Mary Coulter (2003), motivation is the willingness which presents the level, direction, and perseverance of effort expanded at work to satisfy some individual needs. As claimed by Kondo (1995), motivating the employees is one of the numerous conditions and policies recognised to achieve the objectives of each company. Moreover, people involved in a task have to be sufficiently motivated to overcome all difficulties. Therefore, by saying, a company is its people it is meant that () people are our most important assets (Schermerhorn, 2005). This statement demonstrates that a proper approach to people in an organisation is extremely important, that is, if managers treat employees appropriately, they will be repaid with effective work. What is important, even if we create an outstanding organisation, it will not be effective and even counter-productive if the employees lack motivation (Kondo, 1995). To conclude, highly motivated employees seem to be the most important assets for owners, chairmen, managers. Otherwise the productivity of the employees and the costs of the production will dramatically deteriorate. Personality and behaviour of employees It is commonly known that people differ in characters, abilities, values, behaviour, and needs. Moreover, different actions cause various reactions on people. One employee might jump whenever the boss wishes, while the other would not execute this order (Dessler, 2004). For a manager it is significant to be familiar with how to manage different personalities as ineffective management of a team with different personalities as well as working styles might lead to a failure of a particular project. As stated by Schermerhorn (2005) personality is the mixture or overall profile of characteristics that causes one person to stand out from all others. personality As claimed by Carl Jung, the Myers-Briggs Type Indicator (MBTI) is a popular tool for measuring personality. This system is helpful for organisations to be familiar with the working styles of employees, balance teams and avoid conflicts. According to Myers-Briggs, assessment characteristics of personality are classified as: Introvert/Extrovert; Sensing/Intuition; Thinking/Feeling; and Judging/Perceiving. The MBTI questionnaires categorised people into 16 personality types along four scales (Mutchler, 1998). Employees who possess the introvert personality tend to be introspective, they are often an analytical and scrupulous team member. However, extroverts are active as well as easy-going and comfortable with expressing their ideas openly. The sensing/intuition personalities tend to measure process of information. A sensing person seems to be visual and fact-oriented, whereas an intuitive person has a tendency to be more open and creative. The thinking/feeling type of personalities refers to the decisions making. Thinkers draw conclusions based on external standards and regulations, however, feelers are more focused on protecting feelings and values. As team members, feelers might consolidate people, while thinkers are successful in expressing logical reasons behind decisions. Finally, judging/perceiving concerns the approach people have to their life. People with judging personality tend to be well organised and they know what to do about their daily activities, while people with perceiving personalities are more flexible and spontaneous. It is note-worthy that every team is enriched by diversity, therefore, a range of personalities might create a stronger team. Moreover, the diversity of the team might bring into a project different ideas, which is bound to increase performance and creativity of the team (Boddy, 2002). On the other hand, as claimed by Gary Dessler (2004) and illustrated in Figure 4. psychologists, nowadays emphasise the big five personality traits as they apply to such behaviour at work as extroversion, emotional stability, agreeableness, conscientiousness and openness to experience. Extroversion is personality where a person is outgoing, assertive and friendly. While emotional stability names someone who is relaxed, calm and secure. Moreover, this person is emotionally stable and confident. Agreeableness, in turn, is someone who is good-natured, cooperative and trusting. Furthermore, a person who possesses an agreeable personality is also in good relationships with others, and a disagreeable person generates conflicts and discomfort for others. The following personality is called conscientiousness. An employee with this character trait is responsible, trustworthy and careful. On the other hand, a person who lacks conscientiousness is careless and often doing little. Finally, openn ess is the degree, to which someone is curious, open to new idea and creative. What is more, an open person is tolerant, open to change and receptive to new things. Moreover a person who lacks openness is resistant to change, narrow-minded and has limited sources of interests (Schermerhorn, 2005). Many studies conclude that these five traits signify the essential structure of personality, and therefore influence how the person behaves (Beck, 2000). In addition, personality traits are not the only one factor which is responsible for persons behaviour at work. Therefore, individual differences in abilities also influence workers behaviour and performance (McCormick and Tiffin, 1974). To perform the work successfully every employee needs to possess appropriate abilities. However, even the most competent employee will not perform the task successfully without motivation. Therefore, Performance = Ability x Motivation (Dessler, 2004). As claimed by Richard Field (2002) the main goal of attitudes is information of how to act with regard to other person. Moreover, attitudes are significant in organisations as they affect behaviour. Additionally, we may distinguish three parts of work attitudes that are the affective, such as what the employee feels about work, as well as the cognitive attitude- what the employee thinks about the work and the international- what actions is the employee planning to perform at work. Moreover, the job satisfaction is influenced by both the work environment and by the employees personal traits. It has been assessed that the individuals personality constitute between 10% and 30% of employees job satisfaction, however, 40% to 60% of the discrepancy in job satisfaction is motivated by situational factors. Furthermore, the interaction between personality and the situation constituted between 10% and 20% (Field, 2002). Theories of Motivation There are numerous motivation theories, however, the universal theory of motivation, which can explain all its aspects does not exist as each person is unique and has different needs and expectations. Managers have for ages attempted to understand why for one person work is enthusiastic and challenging, and means a possibility to improve the ability, while for other person work is something which you have to perform, as compulsion to survive and for living in a good condition. Theories of motivation focused on how managers might motivate their subordinates. However, they also have to motivate other people such as colleagues, consumers, or other managers. Psychologists created three main approaches when studied what motivates employees such as the need-based, process based and learning/reinforcement-based approaches. Need-based Approaches to Motivation Need-based approaches to motivation concentrate on how needs trigger people to act the way they act as well as which needs are the most significant for each person. The most common theories of motivation are: Maslows Hierarchy of Needs Theory, Herzbergs theory, McClelland theory and McGregor theory. Scientists generally commence most discussions concerning motivation by explaining individual needs; therefore, as claimed by Schermerhorn (2005), a need is an unmet desire. An extremely significant and generally known theory of motivation is Maslows needs-hierarchy theory. Abraham Maslow a hierarchy of needs Abraham Maslow was an American clinical psychologist, who formed a theory of human motivation to understand the needs of his patients. This model suggests that people have different types of needs. He also found it useful to investigate data and observations of Douglas McGregor theory. He proved that the lower-order needs are leading until they are at least partly satisfied (Maslow, 1970). On the basis of this theory, an unsatisfied need can change a persons behaviour while a satisfied one can be a motivator of immediate action. As illustrated in Figure 5, Maslow argued that there is a hierarchy of five levels of needs. Starting from the lowest one, we may distinguish needs such as physiological, security, social, self-esteem and self-actualisation. Physiological needs are the needs essential for survival, such as: food, water, shelter and clothing. These needs may be satisfied in an organisation by monetary compensation. Maslow proved that if these basic needs are unsatisfied, people will focus on activities that allow them to obtain the necessity of life. If they do not fulfil these basic needs, they will not strive to reach the higher needs (Boddy, 2002). However, if the physiological needs are gratified, new needs would appear which he called security needs. These needs provide such values as: security, protection, stability, dependency (Maslow, 1970). They protect from fears, anxiety and chaos. In the event of this need being paramount for a person, a stable and regular job with secure working conditions may satisfy them. A company may meet these needs by medical or retirement benefits. The following need is belongingness which may be reached by assuring a place in the group or family. This need triggers affection and love and also requires closeness and cooperation with other people. This is the desire for acceptance and approval by friends and co-workers (Boddy, 2002). Maslow discovered that a wide variety of people possess self- esteem needs, which means self-respect and the respect of others. Self-respect is gratified when people have a sense of achievement, confidence, adequacy and competence. Moreover, people search for the respect of others, a desire for reputation in the eyes of other people such as prestige, status, attention and recognition. They wish to be noticed by others. In most cases they take challenging or difficult tasks just to demonstrate that they are good at their job. This behaviour gives them respect and status. To motivate employees through satisfying those needs, management may offer them recognition awards. Finally, Maslow named the paramount range of needs as self-actualisation, which provides the desire for self-fulfilment as well as potential. Maslows pointed out that this need only begins to dominate when the all lower-level needs have been relatively satisfied. People who wish to gratify self-actualisation needs will search for personal relevance in their work. They are more willing to value new responsibilities to realise their potential and also develop new talents, skills or horizons (Boddy, 2002). Unfortunately, on this level it is almost impossible to satisfy a person completely as this refers to the feeling of self-fulfilment and the realisation of ones potential, which become higher and higher during persons development. This need may be gratified by paying attention to allowing a person to participate in seminars or temporary assignments to special projects. Maslows hierarchy of needs model is referred to as a content theory, it focuses on what will motivate a person without exactly explaining why an individual is motivated. It is not a complete model of human motivation, but it does demonstrate how managers can approach the basic needs of their employees (Alderfer, 1969). Moreover, it suggests that there are significant differences among people in terms of the needs they may wish to satisfy. A manager should always have in mind that motivators may change over time due to environmental influences and the individuals life cycle. It is also note-worthy that, until basic needs are satisfied, people will not concentrate on high-level needs. However, there is little evidence that people must meet their needs in the same sequence of the hierarchy, for instance not all of them must gratify social needs such as affiliation and esteem before moving on to satisfy self-actualisation needs (Dalrymple, 1992). Furthermore, there are people for whom se lf-esteem is often more significant then love, however, for others creativeness is the priority. In this case, they are not searching for self-actualisation once they satisfied their basic needs. Others had such permanently low aspirations that they experienced life at a very basic level (Boddy, 2002). In other words, it is of great significance that human beings always have a variety of needs (Kondo, 1995). Clayton Alderfer- Existence Relatedness Growth (ERG) Theory The following theory provided by Clayton Alderfer (1969) was based on Maslows research and focuses on three needs: existence, relatedness and growth. His work was built on Maslows ideas, however, he presented an alternative to them. He created and researched his theory in questionnaires as well as interview-based studies conducted in five organisations such as: bank, a manufacturing firm, two colleges and a school. His existence needs are similar to Maslows physiological needs and to security needs such as: concern for losing the job and salary. They include physiological desires such as hunger and thirst which symbolise deficiencies in existence needs. Nevertheless, pay and benefits symbolise ways of satisfying material requirements (Dessler, 2004). Relatedness needs focus on relationships with important people such as: family, friends, but also bosses, subordinates, team members or customers. Additionally, they require interpersonal interaction to gratify the needs such as prestige and esteem from others. People gratify these needs by sharing thoughts and feelings. Moreover, acceptance, understanding, and confirmation are significant for satisfying relatedness needs (Boddy, 2002). Growth needs are approximately equal to Maslows needs for self-esteem and self-actualisation. People satisfy these needs if they deal with problems by using their skills or developing new talents (Alderfer, 1969). Maslows and Alderfer models can be distinguished in two major ways. Maslows created five sets of needs, while Alderfer formulated three. Moreover, Maslow claimed that each of the needs should be satisfied before moving to the next level of needs. However, Alderfer argued that existence, relatedness and growth needs are active simultaneously (Dessler, 2004). David McClelland- Need for Affiliation, Power and Achievement David McClelland (1961) examined the way people think in wide variety of situations. Moreover, he claimed that managers should satisfy employees higher-level needs. His research discovered three categories of human needs. They vary in degree in all employees and managers, and characterise style and behaviour. The need for affiliation means to develop and maintain interpersonal relationships. People who have the need for affiliation are motivated to maintain strong relationships with family and friends. In social meetings they attempt to create friendly atmosphere by being agreeable or providing emotional support (Litwin Stringer, 1968). The need for power means to be in a position to influence and control others. People with the need for power wish to influence others directly by providing opinions, making suggestions. They would find themselves as teachers or public speakers as well as leaders. However, the need for power depends on persons other needs. A person with a strong need for power but a low need for good relationships might turn into a dictator. Simultaneously, a person with strong needs for friendship might turn out to be a social worker or a cleric. McClelland assumed that a good manager is motivated by a regimented and regulated concern for influencing others (McClelland, 1995). It means that a good manager should have the need for power; however it always has to be under control. The need for achievement means taking personal responsibility and demonstrating successful results. People who have a strong need for achievement have a predisposition to reach a success, and they are searching for advancement at work. They possess the strong need to achieve satisfaction from challenging goal or task. These people prefer tasks in which success is reasonably achievable, consequently avoiding tasks which are too easy or too difficult (McClelland, 1961). To sum up, it is note-worthy that what is valuable to one person might mean nothing to another. One manager may aspire for promotion, while other is searching for stability and is more satisfied with a slower track. For some managers independence and autonomy are of great significance as they wish to work on their own, while others are more concerned with long-run career job security and also they wish to have stable future (Dessler, 2004). Frederick Herzberg Hygiene-Motivator (two-factor) Theory The following theory provided by Frederick Herzberg (1959) is Hygiene Motivation Theory. He split Maslows theory into lower-level (physiological, security, social) and higher-level (ego, self-actualisation) needs. According to the motivation theory proposed by Herzberg , motivation is managed by two different types of factors such as satisfiers and dissatisfiers. It seems that employees experience dissatisfaction with things such as low pay or noisy working environment and it is significant to eliminate these dissatisfiers. In turn, to motivate employees it is crucial to enrich daily work in satisfiers. Moreover, to motivate employees it is also significant to involve them in preparing working standards and setting work goals, precisely appraising their results, as well as rewarding them appropriately (Kondo, 1995). Herzberg conducted a research with 200 engineers and he focused on their experience of work. The respondents were asked not only to reminisce about a time when they had good time at work but they were also asked to bring back to memory a time when they felt bad at work and provide the background (Boddy, 2002). Research analysis demonstrated that when employees thought about good times they mentioned factors such as: recognition, achievements, responsibility, advancement, and personal growth, work itself, etc. However, when they were describing the bad time, they mentioned the following factors: supervision, company policy and administration, salary, working conditions, interpersonal relations, etc. Herzberg concluded that factors which generate dissatisfaction are hygiene factors and these satisfiers he called motivators, as they seemed to influence individual performance and effort (Herzberg, 1959). According to Herzebrg, it seems to be significant to motivate employees by creating challenges and opportunities for achievement. Consequently, dissatisfied personnel work with lower motivation and their