theoretical background on employee motivation

The objectives are listed in details as follows: >To determine how male and female employees at VKX Co., LTD rank the importance of the seven motivators >To determine how the different a

First of all, I would like to express a sincere thanks and appreciation to my supervisor, Professor Tran ThoDat, who helped me a lot to finish this thesis This thesis took me such a long time to complete because of the huge and detailed data collected for the tests which are used as research tools in this material More, I had

to be on a long business trip right at the last month of the thesis submission resulting in a rush He not only motivated me to complete this thesis but also sympathize at my situation and supported me a lot Then I want to give my special thanks to all of the professors, tutors and coordinators supporting me during the whole course of this program

In addition, I would like to thank to VKX Company in general, which creates

a favorable condition and provide me all the databases and documents for my research opportunities Personally, I appreciate the support from VKX employees and my colleagues who helped me with the questionnaire for the research as well as the directions to approach

Last but not least, my huge thanks would be given to my family who always stands by and encourage me for overcoming all the difficulties I have ever faced regarding the studying time of this program

TABLE OF CONTENTS

KEY TERMS IN THE THESIS

1 Motivational Profile

2 Extrinsic motivational factors

3 Intrinsic motivational factors

LIST OF TABLES

LIST OF CHARTS

EXECUTIVE SUMMARY

Motivated employees are one of the key factors that provide competitive advantage forbusinesses By determining the best way to encourage and boost the employee’sperformance in businesses the management ensures success of their business on the market field Customized employee motivation i.e good work environment and the best incentive for each employee individually is what getsthe business closer to reaching its goals and objectives This thesis focuses on the issue ofcustomized employee motivation More specifically, it deals with demographically determined(age and gender) differences in the motivational profiles of the workers In this regard, aliterature review and statistical research was conducted in order to determine the demographicdifferences between the motivational profiles of employees in a manufacturing and R&D company named VKX Co., Ltd inHanoi, Vietnam Even though the literature review suggested significant differences between the motivational profiles of employees at different age and from different gender, this study’s results provide some similarities vs differences The employees from bothgenders and all age subgroups are mostly motivated by challenging job positions, advancementopportunities, good compensation packages i.e money and well managed/good workenvironment At the same time, benefits, job security and location of the work place are less of amotivator and different in ranking for all demographic subgroups Still, this research study suggests that some statistically significant differences do exist The two genders give significantly different importance to benefits and work environment as motivators, while the agesubgroups give significantly different importance to security, challenge and advancement Based on the findings, recommendations were given to the management board of VKX Co., Ltd in terms of improvement of motivation policies and practices and recommendations in future researches

CHAPTER I: INTRODUCTION

1.1 Rationale

It is widely perceived that motivation is very important for an organization as

it can bring it a lot of benefits Every concern requires physical, financial and human resources to accomplish the goals It is through motivation that the human resources can be made full use Motivation will help the organization in securing the best possible utilization of resources For getting the best of their work performance, the gap between ability and motivation has to be filled which helps in improving the performance level of subordinates This will result in productivity increase, cost reduction for operational activities, and overall improved efficiency

So are the concerns from Vietnam Korea Exchange Limited regarding this issue

Being established when Vietnamese government was carrying out Innovation policy; VKX is the result of the cooperation between VNPT Group of Vietnam and LG-Ericsson Group of Korea For over 18 years since the establishing date (6/1994), VKX has attempted to become a prime manufacturing enterprise in Telecommunication - Information Technology in Vietnam

Main business activities centralize on: Supply switchboard equipment, other modern telecommunication equipment based on IP and solutions for telecommunication, mobile providers; enterprises and consumers all over the country Concurrently, with modern facilities and well-skilled employees, VKX has adequate competence to manufacture, supply terminal devices for domestic and abroad markets With the head count of 267, VKX is ranked as a mid-sized enterprise

VKX Saying: We-VKX think that: “Clients and staff should always be

respected, because: Human is an important, core factor, which contributes for the development of enterprises and social community”

1.2 Research Objectives

The objectives are to determine the differences in ranking seven motivators between the demographic groups (gender groups and age groups) The objectives are listed in details as follows:

>To determine how male and female employees at VKX Co., LTD rank the importance of the seven motivators

>To determine how the different age groups at VKX Co., LTD rank the importance of the seven motivators

>To compare the difference in motivation between two genders and between the different age groups at VKX Co., Ltd

>To provide the company’s management level recommendations to improve their employees’ motivation practices which may need different approaches depending on the motivational profile of the different employee groups

1.3 Research Methodology

1.3.1 Theoretical framework

AgeSeven MotivatorsHow VKX managers motivate employees

Work Motivation in SMEsGender

The figure below is the conceptual framework for the study, which depicts how my research concerns form a main theme and lead to managerial implications of work motivation

>Research, works and theoretical framework about VKX

>Data related to VKX or taken from VKX systems for analytical and illustrated purposes

Data analysis (Qualitative, Statistical) Findings and Conclusions

Data sources: Primary data and Secondary data

Data Collection:

The data were collected from two main sources for analysis

Secondary data: The Company’s documents and/or reports relate to motivation of VKX to analyze the current status of employee motivation

1.3.3 Determination of Demographic Subgroups

The determination of the gender subgroup is obviously simple; however, for the determination of the age subgroups I was in consideration about three different approaches which base on other authors’ research studies

The first approach focuses in different generations depending on their birth year and socio-political circumstances to determine the age subgroups This

“generation” approach was used by Wong, et al (2008) and Lundsford (2009) who analyzed the motivation of Traditionalists, Baby Boomers, Generation X and Generation Y The second approach is the one based on chronological age only and used by Lord (2006) as an instance, who classified the employees to young workers (under 50 years old) and older workers (50 years old or higher) For the third

approach, the employees are divided into subgroups based on their career stage and City&Guilds (Cooper, 2008) was taken as an example in which the employees were divided into four groups: early career stage, mid-career stage (thirties), “career-striving years’ stage and final career stage.

The first approach which is the generations-based determination including Traditionalist, Baby Boomers, Generation X and Generation Y mainly focuses on the socio-political circumstances in the United States – The Vietnam War, financial crises that occurred in its society, etc These circumstances have not influenced the Vietnamese society as much as they influenced the United State The socio-political situation in Vietnam would be more related to the transition into Socialism and the independence of Vietnam and Free trade in Vietnam, which occurred in the last decades of the 20th century Since there are not much data available in the literature regarding the influence of the recent political events on the behaviors of the different generations, I was not able to define generation subgroups applicable to this situation More, the authors (Wong, et al., 2008) suggest that the differences which they discovered in this regard are more related to the career stage of the employees and their chronological age rather than the generation they belong to

The chronologicalage group has its positive sides, since the chronological age plays an important role in the way employees act at work and it is related to the cognitive/mental and physical abilities However, the subdivision that Lord (2006) used seems to be insufficient because the group of young workers including 3 decades of work life

The career stage concept seems most convenient and is determined by many factors: the chronological age, the time when the employee starts working, the time he/she spends on education, the goals and the targets as well which the employees have set for themselves Therefore, I decided to conduct my research by dividing the participants into age subgroups based on the career stage Based on the various career stage concepts found in the literature for more details, many concepts determine the employee’s career as a whole which is made of three, four or more

stages The age ranges for each stage vary considerably and certainly we cannot make strict distinction among the stages Lindstrom (1998) defines career stages as early, mid and late career stage; and as of his concept, the early career stage is considered to range from the age of 20-34 years old, the mid-career from 35 to 50 years old and the late career from 50 to 65 years old After taking a consideration in determining the age subgroups within my participant pool and the national statistics regarding the age structure of employees, I will use the classification similar to Lindstrom’s age ranges with some changes The three age groups that will be used

in my research are:

* Subgroup I: from 20 to 29 years old (early stage)

* Subgroup II: from 30 to 39 years old (mid stage)

* Subgroup III: above 40 years old (late stage)

The employees belonging to Subgroup I have just finished their education process and are actively looking for opportunities to prosper, to find better working chances, to learn new things, to improve their skills and abilities Subgroup II should already be working on the desired positions with up to 10 years of experience and should be experts in their field and work on their stability Subgroup III is determined by employees in their 5th decade of life and later, who should already be settled down on a secured position and would expect their retirement later on

1.4 Scope of Research

This research will be conducted in VKX

Location: No.139-Ngoc Hoi Street-Hoang Mai District- Hanoi-Vietnam The time of conducting: 6 months (March’13 – September’13)

Participant pool: 150 employees

CHAPTER II: THEORETICAL BACKGROUND

ON EMPLOYEE MOTIVATION

2.1 Importance of Employee Motivation within a Company

One of the main responsibilities of the Human Resources and other managementprofessionals in a company is to achieve competitive success and advantage through theemployees they have hired The managers who can create high levels of motivation can getmuch more work from their employees and thisis a form of competitive advantage that is hard to deny(Wagner and Hollenbeck, 2010, p.81).Successful recruitment process and successful placement of an employee on the demandingposition leads to a new challenging situation where both sides, employee and employer, musttake and give the best of the position that was filled Otherwise, both sides are losing money andtime and are becoming dissatisfied with low outcomes of performance The motivation as career growth and business developmentfactor is very important at this post recruitment stage and is one of the factors that improve theprocess of giving the best by the worker andtaking the maximumby the employer Basically, the issue of motivation involveshow we think about theworkforce and the employment relationship (Pfeffer, 2005) It means achieving success byworking with people, motivating them and constantly improving their performance; not byconstantly replacing them and hiring new staff

or limiting the scope of their activities The workforce should be considered as a source of strategic advantage, not just as a cost that we try to minimizeor avoid Motivated workforce is a powerful business asset and in any given workplace, a teamof people who are motivated, positive and enthusiastic about their work makes

a tremendousdifference to the atmosphere, the quality of work and level of productivity.Some companies choose to invest in good HR practices, such as recruitment andretention, by applying specific tools and systems and one step further would be the determinationof effective motivation practice which will continue and improve this process of employees’engagement In other words, the

motivation of employees, when implemented in the totalmanagement process and synchronized with the rest of the efforts that the companies appliescan have significant effects on the company’s performance By applying efficient motivationtools and techniques and by generating motivated workforce we can contribute to higher staffretention - leading to reduced recruitment costs and we can also have higher levels ofproductivity, more innovation and creativity, higher profits and better reputation – amongpotential employees, suppliers and customers.It is important to realize that in this era of the information super-highway,employers should seek to meet their employees’ needs, in order not to lose their talented andcreative professionals to other companies, which would finally lead to spilling over the profitsand the competitive advantage to competitors Those companies that would choose to hire andterminate more often rather than to dedicate time and effort

to the quality of recruitment,retention and motivation processes are more likely to lose the battle on the market field Ofcourse, in some industries and businesses this may not be the case, where, for example, not somany qualified workers and on-the job training activities are needed But, considering the waythat the technological and scientific development goes today, and the way it affects thebusinesses in terms

of replacing the unskilled workforce with new sophisticated equipment, it ismore likely that those who retain the best brains and the more productive forces will win

on the market field Eventually, in the cases where competitive advantage through technology, asuperior product, or entry barriers is not possible, people are often what differentiate a successful company from an unsuccessful one In this regard, the goal of mostcompanies is to find exactly what drives each employee and build reward systems around thedrivers, taking advantage of each person’s unique set of interest and values (Wagner andHollenbeck, 2010) It is also suggested that companies nowadays use softwareapplications to track and exploit the different values people have, so the companies can tailortheir investments in human resources practices, in a way to maximize their motivational values To summarize, the importance of motivation is high when it comesto employee retention and

performance improvement within the companies Moreover, it can leadto business development, increasing profits and competitive advantage It deserves timeand effort to be evaluated and further on, to be applied as efficient managerial tool

2.2 Early theories

The early theories of motivation provide guidelines towards my research in terms of which specific motivators should be chosen Generally, there are many classifications of the theories and the most commonly used classification is the one

that sorts them into Need Based (or Content) Theories and Process Theories The

classification was based on the influencing factors that determine and explain the motivation Need Theories focus on the personal characteristics of the people/employees and the needs those characteristics create Process Theories focus

on motivation as a process and explain the context and other processes that have impact on themotivation At the same time, one group of theories does not exclude the other While the need-based theories determine the origin of the motivation (a need and its satisfaction), the process theories determine the course of the motivation process (equity or goal driven actions toward their completion) Hence, the Need Theories help in determining the motivating factors through different needs, and the Process Theories provide more specifically the way of satisfying those needs

Need Based Theories

These theories rely on human needs as the point of origin for the motivation process, and most prominent theories that belong to this group are: Maslow’s Theory of Needs, Herzberg’s Two-factor Theory Some of them will be examined further in the text Maslow’s Theory of Needs states that the employees/people are trying to satisfy their different needs ordered in few levels and every higher level leads to more pleasure And, the more needs are satisfied the more new demands people are asking from the actual context, which pictures the Maslow’s hierarchy/pyramid of needs He has ordered the needs in few levels, starting with

psychological needs (health, food, sleep), then safety (shelter, removal from danger), belonging (love, affection, etc.), esteem (self-esteem and esteem from others) and self-actualization(achieving individual potential) (Maslow, 1987) At workplace, employees primarily care for one type of rewards or benefits, for example good salary or good co-workers And when these are provided by the employer, other ones and more sophisticated needs have to be satisfied, such as opportunity to advancement, challenging tasks, etc., in order to keep the employees happy and motivated.

Another classic theory within the concerning pool of need theories is the Herzberg Two Factor Theory His theory also relies on the needs and their satisfaction concept, but according to this theory, the needs are grouped in two levels/groups: 1) hygiene or dissatisfaction avoidance factors (imperative to be satisfied) and 2) motivating or growth factors (additional motivating force after the basic needs are satisfied) He suggests that the factors involved in producing job satisfaction (and motivation) are separate and distinct from the factors that lead to job dissatisfaction (Herzberg, 2003, p.6) Herzberg also characterized the two groups of motivating factors according their origin The dissatisfaction avoidance or hygiene factors are extrinsic to the job, and those are company policy and administration, supervision, interpersonal relationships, working conditions, salary, status, security, etc Growth or motivating factors are intrinsic to the job and those are achievement, recognition, the work itself, responsibility, and growth or advancement At workplace, the employees must be provided with good extrinsic factors (good pay, good environment, safety, etc.)in order not to be unhappy Further

on, if the employers need them motivated to perform even better, they need to provide the additional intrinsic factors

There are several theories that belong to this group and the most commonly used are: Adam’s Equity Theory, Vroom’s Expectancy Theory, Goal-Setting Theory, Reinforcement Theory and Attribution Theory

The Adams Equity Theory explains the motivation process as reduction of inequity - the individuals evaluate their outcome/input ratio and compare against other employees Then they tend to and are motivated to reduce the inequity (Gagne and Deci, 2005)

The Goal Setting Theory, as one of the most prominent process theories, assumes that the human behavior is guided by conscious goals and it suggests that other concepts, such as needs, values and motives, affect and moderate the actions through different goals (Gagne and Deci, 2005) It suggests that the employees are motivated and driven by the goals they set for themselves and the performance is better when they set specific, rather than unclear goals Managers can affect employee’s actions through the goals and objectives they apply to their work And they need to consider what the needs, personalities and the personal goals of their employees are before they set the goals and their employee’s personal goals should support the company’s goal and vision

Vroom’s Expectancy Theory is one of the most popular motivation theories This theory focuses on three motivation elements: inputs, performance and outcomes (Daniel and Metcalf, 2005) According to Vroom’s theory, in order to have high motivation, employees need to have high expectation, i.e when they believe that high level of effort leads to high performance and high performance leads to desired outcomes, only then they are highly motivated.

2.3 Motivational Profile

The term motivational profile is commonly used in the literature as basis for research studies, referring to a set of factors that determine what motivates certain person (Ahmad, 2010; Cardona, et al., 2003; etc.) Cardona, et al (2003) defined motivational profile as motivation type typical for an individual in a certain context, referring to four possible combinations of different types of motivators: extrinsic, intrinsic, relational and contributive motivators Every employee/person has a specific motivational profile which is a combination of these four types of motivation Ahmad (2010) defined motivational profile by using different personality traits and needsthey determine His variables were: need for achievement, locus of control, ambiguity tolerance, risk taking propensity and type-

A personality characteristics and based on the combinations of those five components the author determines different motivational profiles

The term motivational profile is not only used as research tool Moreover, it

is considered as useful concept in work settings The determination of the specific motivational profile of an employee can have important implications for HR managers when creating HR practices in terms of selection process, incentive systems, coaching and development, motivation and retention of employees (Cardona, et al., 2003) Furthermore, the set of personality traits that determine the motives i.e the motivational profiles can also be basis for motivating and shaping the future entrepreneurs and CEOs; and the differences between these two profiles

specifically, can be a guideline for directing the career of young employees and for creating successful career development programs (Ahmad, 2010)

For the purpose of this study the term motivational profile will be used, as

well, since the final goal of the thesis is to give practical implications regarding practices that rely on differences in motivation And, since this study also aims to take more specific steps and examine exact motivators that can be implemented and managed within companies, seven specific motivators will be chosen relying on the theories of motivation

Herzberg’s two-factor theory, as explained in Section 2.3 of this chapter, argues that his hygiene factors such as salary, benefits, working conditions or job security, are also considered to be extrinsic in nature, while motivational factors such as the job itself (challenging or not), growth and advancement, achievement;

or job autonomy, job complexity and innovativeness are considered to be intrinsic

in nature The factors that will be analyzed in this research are determined based on the Herzberg’s research (Herzberg, 2003), in which he evaluated the following ten extrinsic/hygiene motivators: security, status, relationship with subordinates, relationship with peers, salary, work condition, relationship with supervisor, supervision, company policy and administration, and personal life At the same time, the following six intrinsic motivators were evaluated: achievement, recognition, work itself, responsibility, advancement and growth This research will examine the importance of the following seven motivational factors: money, benefits, location, job security, work environment (as extrinsic), then challenge and

advancement opportunities (as intrinsic factors) The motivator money refers to Herzberg’s salary factor; the motivator benefits relates to his company policy and administration; location refers to personal life, since it directly influences the

work-life balance and the time employees spend on their personal needs The

motivator work environment includes Herzberg’s relationship with subordinates,

relationship with peers, relationshipwith supervisor, supervision and work

condition Security was evaluated as it is by Herzberg as well As for the extrinsic

factors, advancement was also evaluated as it is by Herzberg whilechallenge that

will be used in this research mostly relates to work itself (as perHerzberg) since it refers to specific characteristics of the job itself and how interesting and challenging they are to the employee

In conclusion, based on the importance which these seven factors have for an employee when choosing a new job and leaving the current one, or while still

performing on the current position, the term motivational profileis determined for

the research purposes of this thesis

CHAPTER III: EFFECTIVE MANAGEMENT OF

MOTIVATION IN COMPANY

HR management and organizational behavior theories suggest that the proper use of people enhances organizational effectiveness - the HRM practices (e.g: effective selection) influence HR outcomes (e.g employee performance and retention), which in turn influence organizationaloutcomes (e.g customer satisfaction) (Koys, 2001) One of the most fundamental issues that botherthe management of the companies is to understand this very important process, i.e how the HRMpractices impact the performance of the organization and without such a conceptual foundation any statistical relationship between HRM practices and employee performance is meaningless

In section3.1, 3.2, 3.3 and 3.4of the thesis,the exact motivation models and how theyresulted in real business situations will be examined I will present few examples of successfullyapplied motivational techniques and will indicate how top performing companies throughout theworld efficiently use the power of the motivation and provide benefit for their businesses I would like topresent the actual and specific results that the companies did or did not achieve, in terms ofincreased profits, improved performance, decreased employee turnover, etc The specificmotivators that will be taken into deep consideration were chosen from the list of seven motivators explained earlierin Section 2.4 of Chapter II, and those are compensation/money, location, advancement and challenge

3.1 Money

The review of many studies, newspaper articles and HR papers shows that there is no consent in the literature and practice regarding the importance of the money as motivator Adilemma in regard of this issue exists, with many authors presenting opposite research results, arguments and judgments While some (Condly, et al., 2003; Pathak, 2008; Pfeffer, 2005) argue about the significant

importance and positive effect of compensation and otherpay incentives on employee motivation, others (Cooper, 2008) argue that other motivators are powerful while money is not.

For instance, Condly, et al (2003) argued thatproperly selected and administered tangible incentives (cash and awards) can dramatically increase work performance and when carefully selected, implemented and monitored, theyincrease work performance an average of 22% Someothers argue that there is consistentbut incorrect message in the literature, that pay is not very effective motivator - a message that can cause practitioners to seriously underestimate the motivational potential of a well-designed compensation system On contrary, their evidences suggest that pay is very important motivator Similarly, Pathak(2008) stated that primary reason why people have to work is because of money and they aremotivated by money the most Cash is a fair and effective way for management

to show appreciation to hardworking staff and by knowing this, many companies reward outstandingemployees with bonuses and cash rewards for good work Pfeffer (2005) in his study analyzedthe management techniques of the five top performing companies in the period from 1972-1992and besides other management techniques he indicated wage compression and incentive pay to have the key role in the organizations’ success He also explains that as a result of the incentivepay for outstanding work policy Wagner and Hollenbeck (2009) also indicated that money/financial incentives havesignificant importance as motivators, besides the other motivation factors, presenting theexample of Netflix - in 2008, the company decided to implement a strategy of building the mostmotivated and talented workforce, and managed to outperform the larger rivals Blockbuster,Apple and Wall-Mart They constantly paid the highest wages and let their employees to structure their own rewards in terms of cash, stock, benefit and vacation time

As opposed to these authors and examples, Cooper (2008) argues that money

is not the key driver for the employees and will certainly not keep staff in the job In addition, Dietrich (2010) analyzed and presented theexample of Google - the

company granted 10% pay increase to all of its 23,000 employees But still, level engineers, product managers and prominent managers are leaving the companyfor high-profile companies such as Facebook and venture-funded start-ups.And it’s a shamethey can’t keep their talent, even with raises and bonuses when the rest of the country is stillunderwater, the author indicated that factors other than money, such as to beimportant and meaningful, are more important.

low-To assume, besides other motivators that the companies use in order to improve theperformance of their workforce, money in form of compensation or other incentives playsa significant role The opinions on how effective the money is

in terms of motivation are not thesame, as well as the examples of practical results that were achieved among different companies, after motivating policy based on money was implemented.According to Rynes, et al (2004), the difference appears because of the different research methodology of the authors What people say about importance of the pay and what they do isdifferent, hence ranking surveys and behavioral analyses give different results It is very important to note that in some cases money/pay motivation policies wereimplemented combined with other motivators, and they were carefully and properly planned andselected, then well implemented and monitored This gives important guidance regarding howthe companies should perform, when it comes to money as motivator Not all companiessuccessfully dealt with this issue and not all circumstances and situations allow this motivator tobe used as factor to improve the employees’ performance

3.2 Location

The demand for work-life-balance solutions by employees and managers is

an increasingly hot topic in boardrooms of the companies and over the coming decade it will be one of the most important issues that executives and human resources professionals will be expected to manage (Bird, 2006) Improvements in HRMpractices, especially work location flexibility and work time flexibility, highly contribute to increased work-life balance of employees Work-life balance and work

location are important inorder to maintain focused, attentive, healthy and happy staff, andconsequently to maintain good employee performance In this section, someexamples of how the location of the company influences the employees’ behavior, and also, howthe management copes with the issues related to long distances between employees’ homes andwork stations will be presented More specifically, we will present some relatively new practices, such as telecommuting, implemented by companies in order to minimize the negativities of distant worklocations will be shown.

The Bus Buddies, also known as extreme commuters, are part of the growing group of work travelers in the US - people who rarely see their houses in daylight, leave homewhen their kids are still asleep, and drink coffee just to stay awake They spend at least a month of their lives each year traveling a minimum of

fastest-an hour-fastest-and-a-halfto work fastest-and back, vs the U.S average of 50 minutes fastest-and their number in US increased at surprising 95% since 1990 Being unable to find better jobs closer to their homes, these employees sacrifice their work-life balance for higher wages and choose to travel much longerthan the average They prefer to choose higher wages over closer location, but still, it wouldmean a lot if the traveling was shorter, since the costs of the commuting such asgas, traffic jam,pollution and chaosare high Commuting is associated with raised blood pressure,musculoskeletal disorders, increased anger and resentment at work, absenteeism, lateness, andinability to concentrate and perform to the same standards

as those who live in much closerproximity to the workplace Long commutes can also increase the risk of heart attacks, flu,depression, etc (Durham, 2010) In order

to eliminate these negativities, some of the companiesnowadays apply telecommuting It is a measurement and a new wave in the corporate world,which is being applied in companies and is also known as - the quiet revolution Telecommuting is also expected to become aworkplace of the futuresince more and more employees telecommute every day Many successful companies have improved theirprofitability by allowing a big portion of their employees to work

from home By applying thisnew model they managed to eliminate the negative effect of the long hours of traveling i.e thenegativities of the distant work locations

At Sun Microsystems, over 56% of employees work without an assigned office, which means they either work from home or use flexible office space The samestrategy is being used successfully by AT&T and IBM (40% of their workforce does not have aformal office) By these examples we can see that the work locationdoes matter, especially in countries where people even travel from one state

to another Theactual effect of work location on the employees’ motivation and performance is more evidentwhen the management successfully handles the problems related to long distance betweenemployees’ homes and their offices

3.3 Challenge

Interesting and challenging work is self-actualization factor according to Maslow’s Motivation Theory and intrinsic/motivating factor according to Herzberg’s Theory The motivation by challenge comes from the job itself and is a result of employees’ inner drives, and not because of external rewards Nowadays companies break difficult and complicated work into smaller tasks and enable organized groups of people to accomplish tasks that would otherwise be beyond their physical or mental capacities as individuals This process called division of labor in the industrial engineering world contributes to and significantly improves the organization’s profitability by building competitive advantage (Wagner and Hollenbeck, 2009) But it also createsoversimplified and unchallenging jobs, which for some employees have negative motivating effects Many employees are mostly motivated by having challenging, different and interesting tasks constantly Still, according to many authors, some managers overestimate the challenge as motivator (Robbins and Judge, 2009; Nguyen, 2010) Not all employees actually enjoy having different tasks every month or week Some of them like repetitive and routine work and resistance to changes occur when some news are being implemented Some accountants for example, do the same calculations, use same formulas and stay

accountants for years, while some of them get tired and prosper on higher ordifferent positions For some, more challenging might mean too difficult and disturbing which might bring more problems than benefits

Either demotivating for some or motivating for others, companies apply different management techniques in order to make the jobs more interesting Hence, job enrichment, job enlargement and job rotation as management tools in order to create more interesting jobs for the employees, relying on the Job Characteristics Model (JCM) of Hackman and Oldham (1980) are proposed Some companies have proved the positive effect of the JCM concept and the challenge as a very motivating factor and by implementing rotation, enlargement or enrichment improved their work and performance

For instance, Singapore Airlines is rated as highly desirable place to work, attracting more productive work force, and they accomplished that by simply rotating the baggage handlers and ticket agents (Robbins and Judge, 2009)

Even though there are opposed opinions regarding how the challenging work influences employees motivation, in practice, if the managers make the right decisions and use the correct models, such as JCM for example, the organizations can have large benefit and significantly improve their performance

3.4 Advancement opportunities

Advancement is one of the intrinsic motivators and is related to the employees’ inner drives Advancement means different things to different people and holds varying levels of applicability and appeal for different groups For some employees, advancement primarily means gaining new knowledge and developing new skills For other employees, who are on low wage scale, advancement means getting higher in the hierarchy of the organization and being more compensated There is also another group of people, for whom to advance means to build brilliant career and get on the top of the organizations eventually, as very important executive or board member Anyway, the advancement opportunities, either being a