Index

EXECUTIVE SUMMARY …………………...…………………………….…

INTRODUCTION ……………………………………………………..…..…

MOTIVATION ……………………………..…………………………..…

IMPORTANCE OF MOTIVATION ……………………………………

HISTORY OF MOTIVATION ……………………………………

MOTIVATION CONCEPTS ……………………………………………

THEORIES OF MOTIVATION ……………………………………

RECESSION ……………………………………………………………………

WHAT IS RECESSION ……………………………………………

LINKING MOTIVATION TO RECESSION ………………………. …. …. …

MOTIVATION IN CURRENT SCENARIO ……………………………………

RESEARCH METHODOLOGY ……………………………………………

AIMS, OBJECTIVES, HYPOTHESIS ……………………………

RESEARCH DESIGN, SAMPLE DESIGN …………………………….

SCORES & ANALYSIS ……………………………………………

CONCLUSION ……………………………………………………………

LIMITATIONS ……………………………………………………………

BIBLIOGRAPHY ……………………………………………………………

APPENDIX ……………………………………………………… … …….

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Executive Summary

The project is an attempt to study the motivational levels on employees during

recessionary times. The study focuses on the level of motivation of employees

during the downturn and also how companies are responding to this situation.

Research was conducted through survey wherein a questionnaire was administered

on target population. The target population was students of a premiere Business

School undergoing their part time MBA courses. These students are working in

different companies across varied sectors in the Middle Level of Management.

The response was sorted based on the below mentioned categories and their linkage

to motivation.

Role Clarity/Responsibility

Facilities / Support System

Recognition/Reward

Team Work

Training & Development

57% respondents ranked Compensation/Salary as most important factor for

motivation. Recognition / Promotion was considered the second best motivating

factor as per the survey. Job profile / Responsibility was the 3rd best preferred

motivating factor.

Another focus of the research was to know whether people are really affected with

recession. An alarming 70% of respondents said that they have been impacted due

to recession. Some have lost on perks and did not receive any promotion/increment

in the last year. The motivational level has remained same post recession. 50%

respondents also said that there had been layoff’s in their organization.

It was also noted that currently organizations are undertaking the following

initiatives during the downturn

o Cost Cutting with respect to travel

Video-conferencing facility used

Travel only by economy class and only if urgent

o Centralizing most operations

o Cutting down on incentives

o Training

o Restructuring of operations

The survey highlighted the fact that most of the Organization’s are really

considering human capital as the most important factor and are undertaking several

measures to motivate them for better performance during the downturn.

Introduction

Since the beginning of mankind, leaders have risen to take charge of societies and

make decisions.

These decisions often meant the difference between having food and going hungry,

having shelter or being left outside, and sometimes the difference between life and

death.

As society has progressed, we have seen great technological advances such as

television, computers, cars, and space travel. Despite such advancements, the basic

needs of mankind still remain the same.

Business is the means by which people make the money to acquire their needs, and

managers today are the leaders who rise to make decisions and ensure the survival

of the business. The success of a business is largely dependent upon the ability of

mangers to motivate workers to achieve the highest results.

Motivation

What is Motivation

Motivation is the activation or energization of goal-oriented behavior. Motivation

may be internal or external. The term is generally used for humans but,

theoretically, it can also be used to describe the causes for animal behavior as well.

According to various theories, motivation may be rooted in the basic need to

minimize physical pain and maximize pleasure, or it may include specific needs

such as eating and resting, or a desired object, hobby, goal, state of being, ideal, or

it may be attributed to less-apparent reasons such as altruism, morality, or avoiding

mortality.

Motivation is a six phased process beginning from the inner state or need

deficiency and ending with need fulfillment. The motivation level is explained

below

(1) Need Deficiency

(2) Search & Choice of Strategy

(3) Goal directed behaviour

(6) Reevaluation of needs

(5) Reward or Punishment

(4) Evaluation of performance

Importance of Motivation

Probably, no concept of organisational behaviour receives as much attention of

academics, researchers and practising manaers as motivation. The increased

attention towards motivation is justified by several reasons

Motivated employees are always looking for better ways to do a job

Motivated employee generally is more quality oriented

Highly motivated workers are more productive than apathetic workers

Every organisation requires human resources, in addition to the need for

financial and physical resources for its function. Three behavioural

dimensions of human resources are significant to the organisation

o People must be attracted not only to join the organisation but also

remain in it

o People must peform the tasks for which they are hired, and must do

so in a dependable manner

o People must go beyond this dependable role performance and

engage in some form of creative, spontaneous and innovative

behaviour at work

Motivation as a concept represents a highly complex phenomenon that

affects and is affected by a multitude of factors in the organisatonal milieu.

History of Motivation

Thousands of years before the word motivation entered the manager's vocabulary,

people realized the importance of influencing workers to accomplish tasks for an

organization. The oldest technique used to motivate others is known today as the

Carrot and Stick method. The name evolved from the stubbornness of donkeys who

could only be moved by taunting them with a carrot. Early managers regularly

offered economic "carrots" to entice people to work harder. This technique was

passed on from generation to generation and was a deeply rooted part of society for

hundreds of years. This theory created a misconception that money always

motivated a person to work harder. To counter this argument, The awakening field

of psychology was looking for new ways to motivate people.

It was not until 1923 when Elton Mayo made clear the inadequacy of the pure

carrot-and-stick motivation that psychological theory began to trickle into

management. Performing an experiment in a Philadelphia textile mill, Mayo

concluded that the reason for the low productivity was that spinners had few

opportunities to communicate with one another. Financial incentives failed to

increase productivity. Mayo felt that the solution to this productivity problem was

to change the atmosphere of the workplace. The introduction of 2 ten-minute

breaks for the spinners produced immediate and dramatic results. Morale improved

and output increased tremendously . The spinner experiment confirmed Mayo's

belief that it was important for managers to take into account the psychology and

well being of the worker. A new era of partnership between managers and

psychology was now underway.

Motivation Theory is based upon needs. The models for needs start at the most

basic such as food and shelter and work their way up to social interaction and

success. The paycheck is usually the means by which managers motivate people to

have a job in the first place. Simply offering more money will motivate people to

some degree, but it is far more effective to focus on other needs. By offering

rewards which satisfy other needs such as responsibility and recognition the

manager can better motivate people to achieve results. This may be especially

important if money is tight in a business and increasing salaries is not an option for

improving motivation. A strong knowledge of motivation theory will help

managers to get the most out of people, without always dangling a carrot in their

face.

Motivation Concepts

Intrinsic Motivation & Extrinsic Motivation

Intrinsic motivation comes from rewards inherent to a task or activity itself - the

enjoyment of a puzzle or the love of playing. This form of motivation has been

studied by social and educational psychologists since the early 1970s. Research has

found that it is usually associated with high educational achievement and

enjoyment by students. Intrinsic motivation has been explained by Fritz Heider's

attribution theory, Bandura's work on self-efficacy, and Ryan and Deci's cognitive

evaluation theory. Students are likely to be intrinsically motivated if they:

attribute their educational results to internal factors that they can control

(e.g. the amount of effort they put in),

believe they can be effective agents in reaching desired goals (i.e. the results

are not determined by luck),

are interested in mastering a topic, rather than just rote-learning to achieve

good grades.

Extrinsic motivation comes from outside of the performer. Money is the most

obvious example, but coercion and threat of punishment are also common extrinsic

motivations.

In sports, the crowd may cheer on the performer, which may motivate him or her to

do well. Trophies are also extrinsic incentives. Competition is in general extrinsic

because it encourages the performer to win and beat others, not to enjoy the

intrinsic rewards of the activity.

Social psychological research has indicated that extrinsic rewards can lead to over

justification and a subsequent reduction in intrinsic motivation.

Extrinsic incentives sometimes can weaken the motivation as well. In one classic

study done by Green & Lepper, children who were lavishly rewarded for drawing

with felt-tip pens later showed little interest in playing with the pens again.

Self Control

The self-control of motivation is increasingly understood as a subset of emotional

intelligence; a person may be highly intelligent according to a more conservative

definition (as measured by many intelligence tests), yet unmotivated to dedicate

this intelligence to certain tasks. Yale School of Management Professor Victor

Vroom's "expectancy theory" provides an account of when people will decide

whether to exert self control to pursue a particular goal.

Drives and desires can be described as a deficiency or need that activates behavior

that is aimed at a goal or an incentive. These are thought to originate within the

individual and may not require external stimuli to encourage the behavior. Basic

drives could be sparked by deficiencies such as hunger, which motivates a person

to seek food; whereas more subtle drives might be the desire for praise and

approval, which motivates a person to behave in a manner pleasing to others.

By contrast, the role of extrinsic rewards and stimuli can be seen in the example of

training animals by giving them treats when they perform a trick correctly. The

treat motivates the animals to perform the trick consistently, even later when the

treat is removed from the process.

Theories on Motivation

Motivational theories can be classified in two categories: content theories and

process theories. Content theories revolve around the identification of inward

needs, whereas process theories revolve primarily around why people behave as

they do; incorporating such factors as perception and learning.

To understand content and process theories, one must first understand the meaning

of two concepts fundamental to both: needs and rewards. Psychologists say a

person has a need when that individual perceives a physiological or psychological

deficiency. Although a person may not be conscience of perceiving that need at a

particular time, it will still affect them. Content theories represent efforts to classify

these common needs with specific categories. Most psychologists agree that needs

can generally be classified as either primary of secondary.

Primary needs are physiological in nature and generally inborn. Examples include

the need for food, water, air sleep, and sex. Secondary needs are socio-

psychological in nature. Examples are the need for achievement, esteem, affection,

power, and belonging. Primary needs are genetically determined whearas

secondary needs are usually learned through experience. Because individuals have

different learned experiences, secondary needs vary among people to a greater

extent than primary needs.

Three famous psychologists who have developed models to illustrate the needs of

people are Maslow, Alderfer, and Herzberg. Maslow and Alderfer focus on the

internal needs while Herzberg focuses more on differences in job context and

content which could provide satisfaction. All three states that before a manager

tries to give a reward, it is very important to first figure out the needs of the

employee.

Motivation Theories

Early Theories Contemporary Theories

Scientific Management Human Relations Model

Content Theories Process theories Reinforcement

1. Maslow’s Need Hierarchy Theory

2. Herzberg’s Two factor theory

3. Alderfer’s ERG Theory

4. Achievement Motivation Theory

5. Manifest Needs Theory

1. Vroom’s Expectancy Model

2. Adam’s equity Theory

3. Porter’s Performance Satisfaction

The Incentive Theory of Motivation

A reward, tangible or intangible, is presented after the occurrence of an action (i.e.

behavior) with the intent to cause the behavior to occur again. This is done by

associating positive meaning to the behavior. Studies show that if the person

receives the reward immediately, the effect would be greater, and decreases as

duration lengthens. Repetitive action-reward combination can cause the action to

become habit. Motivation comes from two sources: oneself, and other people.

These two sources are called intrinsic motivation and extrinsic motivation,

respectively.

Applying proper motivational techniques can be much harder than it seems. Steven

Kerr notes that when creating a reward system, it can be easy to reward A, while

hoping for B, and in the process, reap harmful effects that can jeopardize your

goals.

A reinforcer is different from reward, in that reinforcement is intended to create a

measured increase in the rate of a desirable behavior following the addition of

something to the environment.

Drive-reduction Theories

There are a number of drive theories. The Drive Reduction Theory grows out of the

concept that we have certain biological drives, such as hunger. As time passes the

strength of the drive increases if it is not satisfied (in this case by eating). Upon

satisfying a drive the drive's strength is reduced. The theory is based on diverse

ideas from the theories of Freud to the ideas of feedback control systems, such as a

thermostat.

Drive theory has some intuitive or folk validity. For instance when preparing food,

the drive model appears to be compatible with sensations of rising hunger as the

food is prepared, and, after the food has been consumed, a decrease in subjective

hunger. There are several problems, however, that leave the validity of drive

reduction open for debate. The first problem is that it does not explain how

secondary reinforcers reduce drive. For example, money satisfies no biological or

psychological needs, but a pay check appears to reduce drive through second-order

conditioning. Secondly, a drive, such as hunger, is viewed as having a "desire" to

eat, making the drive a homuncular being - a feature criticized as simply moving

the fundamental problem behind this "small man" and his desires.

In addition, it is clear that drive reduction theory cannot be a complete theory of

behavior, or a hungry human could not prepare a meal without eating the food

before they finished cooking it. The ability of drive theory to cope with all kinds of

behavior, from not satisfying a drive (by adding on other traits such as restraint), or

adding additional drives for "tasty" food, which combine with drives for "food" in

order to explain cooking render it hard to test.

Cognitive dissonance Theory

Suggested by Leon Festinger, this occurs when an individual experiences some

degree of discomfort resulting from an incompatibility between two cognitions. For

example, a consumer may seek to reassure himself regarding a purchase, feeling, in

retrospect, that another decision may have been preferable.

Another example of cognitive dissonance is when a belief and a behavior are in

conflict. A person may wish to be healthy, believes smoking is bad for one's health,

and yet continues to smoke.

Need hierarchy Theory

Abraham Maslow's theory is one of the most widely discussed theories of

motivation.

The theory can be summarized as follows:

Human beings have wants and desires which influence their behavior. Only

unsatisfied needs influence behavior, satisfied needs do not.

Since needs are many, they are arranged in order of importance, from the

basic to the complex.

The person advances to the next level of needs only after the lower level

need is at least minimally satisfied.

The further the progress up the hierarchy, the more individuality,

humanness and psychological health a person will show.

The needs, listed from basic (lowest-earliest) to most complex (highest-

latest) are as follows:

o Safety

o Physiology

o Self-esteem

o Belongingness

o Self actualization

Herzberg’s two-factor Theory

Frederick Herzberg's two-factor theory, aka intrinsic/extrinsic motivation,

concludes that certain factors in the workplace result in job satisfaction, but if

absent, lead to dissatisfaction.

The factors that motivate people can change over their lifetime, but "respect for me

as a person" is one of the top motivating factors at any stage of life.

He distinguished between:

Motivators ; (e.g. challenging work, recognition, responsibility) which give

positive satisfaction, and

Hygiene factors ; (e.g. status, job security, salary and fringe benefits) that do

not motivate if present, but, if absent, result in demotivation.

The name Hygiene factors is used because, like hygiene, the presence will not

make you healthier, but absence can cause health deterioration.

The theory is sometimes called the "Motivator-Hygiene Theory."

Alderfer’s ERG Theory

Clayton Alderfer, expanding on Maslow's hierarchy of needs, created the ERG

theory (existence, relatedness and growth). Physiological and safety, the lower

order needs, are placed in the existence category, while love and self esteem needs

are placed in the relatedness category. The growth category contains our self-

actualization and self-esteem needs.

Self-determination Theory

Self-determination theory, developed by Edward Deci and Richard Ryan, focuses

on the importance of intrinsic motivation in driving human behavior. Like

Maslow's hierarchical theory and others that built on it, SDT posits a natural

tendency toward growth and development. Unlike these other theories, however,

SDT does not include any sort of "autopilot" for achievement, but instead requires

active encouragement from the environment. The primary factors that encourage

motivation and development are autonomy, competence feedback, and relatedness.

Broad Theories

The latest approach in Achievement Motivation is an integrative perspective as

lined out in the "Onion-Ring-Model of Achievement Motivation" by Heinz

Schuler, George C. Thornton III, Andreas Frintrup and Rose Mueller-Hanson. It is

based on the premise that performance motivation results from way broad

components of personality are directed towards performance. As a result, it

includes a range of dimensions that are relevant to success at work but which are

not conventionally regarded as being part of performance motivation. Especially it

integrates formerly separated approaches as Need for Achievement with e.g. social

motives like Dominance. The Achievement Motivation Inventory AMI (Schuler,

Thornton, Frintrup & Mueller-Hanson, 2003) is based on this theory and assesses

three factors (17 separated scales) relevant to vocational and professional success.

Recession

What is Recession

In economics, a recession is a general slowdown in economic activity over a long

period of time, or a business cycle contraction. During recessions, many

macroeconomic indicators vary in a similar way. Production as measured by Gross

Domestic Product (GDP), employment, investment spending, capacity utilization,

household incomes and business profits all fall during recessions.

Governments usually respond to recessions by adopting expansionary

macroeconomic policies, such as increasing money supply, increasing government

spending and decreasing taxation.

A recession has many attributes that can occur simultaneously and includes

declines in coincident measures of activity such as employment, investment, and

corporate profits.

A severe (GDP down by 10%) or prolonged (three or four years) recession is

referred to as an economic depression, although some argue that their causes and

cures can be different. As an informal shorthand, economists sometimes refer to

different recession shapes, such as V-shaped, U-shaped, L-shaped and W-shaped

recessions.

Linking Motivation to Recession

As we hear more predictions of an economy showing signs of weakening,

managers around the country are asking a couple of key questions: Are we prepared

for a recession reminiscent of the early 1990s? Did we learn enough from

experiences nearly a decade ago to improve how we perform in 2001? The answer:

probably.

While the financial experts monitor and project the extent of an economic

slowdown, little doubt remains that the early years of this decade will likely feature

layoffs and restructuring across every industry. These staff reductions, or even the

anticipation of them, can have a dramatic influence on employee motivation and

productivity. Recognizing the warning signs of declining motivation and overall

morale can allow managers to respond quickly with intervention strategies aimed at

propping up declining productivity.

According to Brian Dailey, a business consultant to the staffing industry in

Oklahoma City, there are many warning signs of declining employee motivation

that can be expected during recessionary economic times. Some of these include:

increased sick days as employees interview for other jobs, increased employee use

of Internet time to surf job boards and send out resumes, fewer requests for long

vacations, and greater interest among employees regarding company sales or

financial strength.

Dailey suggests that while employee motivation may lag for a time, some

incidental benefits to employers may include less tardiness and improved work

habits as employees position themselves to survive potential staff reductions. Few

employees will want to be perceived as marginal performers if the possibility of

recession and restructuring looms in the near future.

The real challenge for managers is to develop strategies aimed at protecting

employee motivation, despite the fear and concern normally attributed to tough

economic times. Dr. Larry Craft, developer of the Craft Personality Questionnaire

-- a tool that measures personality and motivation for pre-employment selection

systems, understands the impact of uncertainty on employee productivity.

According to Dr. Craft, companies looking to reduce expenses by slashing

personnel need to take a hard look at the impact on current and future employees

before choosing a course of action. "Future employees will tend to look for

companies that offer consistency and will likely shy away from jobs in the long run

where the potential for turnover is the highest." A company that receives media

attention for staff reductions may find that candidates are few and far between

when economic times allow for hiring increases.

Dr. Craft agrees however that most companies find it difficult to consider the

impact on hiring it will undertake after a recession when the numbers suggest the

need for staff reduction in the near term. His best advice is to understand the unique

personalities of current employees and open the lines of communication early to

avoid many of the problems associated with rumors and false claims.

Thousands of companies have used Dr. Craft's various testing services to do just

that in the last two decades, and many find that the resulting productivity requires

fewer staff reductions during tougher economic times. Rick Daughtrey, a consultant

with CraftSystems(800.228.5866) of Bradenton, Florida, suggests that "it's really a

matter of investing the time and resources on the right people and then cultivating

them along the way, therefore reducing the need for cutbacks because the right

people can typically pay for themselves over the long run."

Managers must learn to assess how they respond to good and bad economic times.

Too many companies over-hire in good times and quickly look to downsizing as a

temporary fix to slowing demand for their services. It has long been acknowledged

that employees are a company's most valuable assets, but many are slow to

recognize the full impact of these tough decisions on the motivation of surviving

employees. A carefully thought out plan can go a long way in preventing the

potential nightmare associated with cutting expenses while attempting to maintain

productivity.

Finally, the biggest threat to employee motivation may be a shift in focus to self-

preservation rather than team performance. What once was a finely tuned machine

may break down as the individual parts become more concerned with whether they

can meet their own goals, while failing to recognize that the team's performance

may be their greatest hope for individual survival. The lessons learned from the

early 1990s are simple: seek expert advice in selecting the right employees for jobs,

teach managers to incorporate an understanding of personality and motivation into

their communication, develop a game plan that utilizes cross-training to add

flexibility to existing staff, and if you must downsize, do it wisely and do it rarely.

Technology as a Tool to navigate through Recession

Recession also helps companies to develop new ideas, techniques and innovate.

Amidst the pain of an economic downturn, comes an overlooked competitive

opportunity for companies: during recessions, only major innovations pass the test

of success. These are the kinds of innovations that can sweep away older business

models, creating a foundation for major growth that will endure long after the

downturn has passed

The history of recession is also the story of technology advances that overturned

the existing competitive order. Digital computers were born during the Great

Depression, the Ethernet during the 1970s oil crisis, the IBM personal computer in

the early 1980s recession, and the World Wide Web, which emerged from the

recession of the early 1990s. And it was during the last recession, in the early

2000s, that innovative companies began staking out new leadership positions via

the Internet. Apple, for instance, changed the business model in the music industry

when it launched its popular iPod music player, synched to its online iTunes music

store. Amazon.com pioneered commercial “cloud computing” by selling Web

services that tapped its huge in-house base of servers and other IT infrastructure.

Google, meanwhile, became an online industry leader by linking its search engine

to advertising.

Many of these technology building blocks also are helping companies navigate

through the current downturn: video conferencing is reducing travel costs, the Web

is furthering collaborative efforts and increasing the effectiveness of workers, and

many companies are mining and analyzing their unused data to find new customers

and better serve existing ones. To be sure, these are critical survival tools for tough

times. But it is by thinking through the recession that business leaders will discover

how technology will once again enable the successful business models of

tomorrow.

Low Morale after Layoffs

These days, with layoffs rampant and companies slashing budgets across the board

to weather the economic downturn, motivating employees has become harder than

ever. According to a survey of nearly 80,000 employees by the Corporate

Executive Board, one in every five employees now consider themselves disengaged

from their job, compared with one out of ten last summer. What's more, two out of

three companies surveyed in late 2008 by market research firm Quantum

Workplace had lower overall employee engagement scores compared with a year

earlier.

Some managers may feel that unmotivated employees are not a huge problem.

After all, where are they going to go in this crummy job market? But such an

attitude is short-sighted. The best employees are still in high demand, so if their

organization is not motivating them, they will move. The challenge, then, is not

only to get them to stay, but to shine.

Motivation in the current scenario

Engage Employees for better performance

Intellectual capital being the most valuable resource of an organization, corporates

are increasingly seeking new ways and means to keep employees connected with

the organization.

A recent McKinsey survey rightly suggests employee engagement as an important

aspect of organisational wellbeing. Only an engaged employee is bound

intellectually and emotionally with the organisation, feels passionately about its

goals and is committed towards its value.

Studies show that employees who are ‘engaged’ tend to be more committed to the

organisation’s future goals, are more productive and experience higher job

satisfaction. In the long term, it can also help retain employees. 

Deloitte recently announced the findings of its report ‘Employee engagement in

recessionary times’, a survey of companies across industries in India on how they

are managing employee engagement in today’s turbulent economy. Companies are

heavily investing in building a strong leadership pipeline — identifying, engaging

and developing high-performing employees from within the organisation.

As part of designing and delivering solutions, Four Soft Ltd interacts lot with their

customers and employees are encouraged to do this directly. Employees get to talk

to customers both in person and through electronic support, in terms of

understanding customers’ requirements, involving them for getting to test the

solutions built and also do joint- project management.”

At Cisco, employees are offered EAP (Employee Assistance Program) which

provides free confidential professional advice, counselling and referral services for

them and their families. This enables the employees to receive guidance and help

before it impacts their morale, health and performance at work

Invest in people

Employee engagement can happen in various forms, but whichever be the form, it

has to be slowly built into the DNA of the organisation over time. “The people best

suited to flag problems and suggest improvements are those actually doing the job.

If the management thinks that only a few can think for the rest and also make

improvements on behalf of the rest, then the organisation is said to be having no

employee engagement programme or structure in place.

Some companies have suggestion schemes run at their office. The Toyota

Corporation in-house suggestion scheme generates over 2 million ideas a year.

Over 95 per cent of the workforce contributes suggestions; that works out to over

30 suggestions per worker per year. The most remarkable statistic from Toyota is

that over 90 per cent of the suggestions are implemented.  Employers are going the

extra mile to bring the best to their employees, to build a nurturing, symbiotic

relationship with them. Like never before, employers are more sympathetic to their

wards’ needs — and many have instituted an entire department to foster this very

culture.

Companies need to understand that the today, the best places to work are the ones

that identify, encourage and celebrate individual potential. It is important to create

a learning curve for the employees and there are numerous opportunities specially

created for them to contribute not only in their regular work but other areas of

interest as well.”

Kansai Nerolac Paints has a dialogue process with the employees termed as HR

Connect. This ensures a clear two way communication with the employees and

also helps the management in understanding their perspective

Some companies also facilitate interest groups like culture club, reading club, quiz,

technical lectures, knowledge sharing sessions etc. which goes a long way in

engaging the employees. Some also organize wellness sessions and camps to Yoga

sessions for the employees.

Whether it is providing opportunities for self-development and learning, financial

compensation or a fair and rewarding work environment, organisations are

increasingly becoming sensitive to what employees actually want.

Infosys believes that employees are their core assets and when then work towards

adopting best practices, it provides great encouragement and motivation to them. It

also helps them to foster a sense of ownership and belongingness with the

employees thereby establishing strong connect.

An employee who is intellectually and emotionally connected feels strongly about

the quality of the products and services that the company offers, resulting into

superior quality delivery and operational excellence. Such employees are also more

likely to continue with the organisation for a longer time.

The impact of an engaged employee is best experienced in customer facing roles,

where such people are much more likely to treat customers in a way that ensures

longevity of the account, better collaboration and improved profitability.

Create a Win-win situation

It helps the employee in achieving a sense of belonging to the company, helps them

perform better and encourage an open transparent culture. There is a sense of

increased interaction among members of different teams. Engaging with employees

helps create a high level of transparency and ownership.  Employees better receive

organisation decisions and strategies and employees start demonstrating more

ownership in everything they do.  The level of trust within the organisation also

improves significantly. All of this has a very high positive impact on employee

morale and retention. Employees feel they are part of a larger family and part of the

decision making process. They get the opportunity to connect with managers more

openly, proactively participate in organisational initiatives and share their ideas.

Employees see this as an avenue to a well-rounded career.  There is clear and

mounting evidence that high levels of employee engagement keenly correlates to

individual, group and corporate performance in areas such as retention, turnover,

productivity, customer service and loyalty.

Organisations are looking more intently at the unique behaviours that drive

organisational performance that in turn requires a high performing and engaged

environment.  “The changes in trends can be attributed to the change in times,

workforce and economic growth. Organisations are also looking at global best

practices that drive business performance and link engagement to business metrics

such as profitability, long-term share holder value and others, to understand the

impact of the organisation’s engagement to these business metrics and create

specific strategies to improve engagement

Proper and Clear communication

If there is no proper communication to all employees during the layoff process, it is

possible that some employees whom the company wants to retain will leave the

company. The communication should also emphasise tothose people who are left

out as to how they would move forward. It is very important when companies are

laying off people during recessionary times, those left behind have to be more

engaged than ever to pull the company out of it. That’s the time when some

companies use formal recognition programs to keep employees engaged.

Who should take the lead

It is very important to understand that the ‘CEO’ does not stand for Chief

engagement officer. He or she is too busy figuring out how to keep the company

afloat to do much more than transmit a companywide e-mail or Webcast. Middle

Managers have to taken up the responsibility by their words and actions. This will

have a very positive impact on employee engagement. Thus to be very effective,

the Line Manager has to shoulder the responsibility to address the concerns

amongst employees.

This is not an each task. To motivate others, Managers needs to be motivated

themselves. Body language is very critical. You cannot just emails or hide in the

office and send inspirational messages to all employees. The manager has to come

out in the open and address all employees face-to-face

Personalize Recognition systems

Every company will not be in a position to make a huge equity grant at the

moment. Small gestures can go a lon way during difficult times. It is very

important to recognise your high performance employees and keep them motivated.

Some companies like Globoforce, which designs recognition programs for

companies like P&G & Dow Chemicals, allow employees to choose a reward they

want rather than co-workers or managers making the choice for them. A music

lover in accounts receivable, for example, might choose tickets to a concert, while a

food lover would get restaurant vouchers. Such freedom of choice can be much

more effective than the scattershot, ad hoc recognition (parties, celebrations) that

normally takes place in corporations.

Such programs are more valuable than ever in a recession, according to a study

conducted last fall by Towers Perrin that polled more than 10,000 respondents in

13 countries. (Globoforce, whose U.S. headquarters is in Boston, has closed several

deals in the first quarter of 2009 with clients like Celestica and The Hartford.)

Nearly half (49%) of U.S. companies have recognition programs, according to a

May 2008, study from Watson Wyatt. But those programs only target 10% of

employees in the U.S., compared with 36% at European firms, the survey found, so

there's an opportunity to enlarge their scope and effectiveness.

There are also risks associated with rewards. When managers dangle monetary

rewards, employee motivation can actually suffer says Charles Jacobs, author of

Management Rewired. It all has to do with how our brains are wired, When we're

focused on the work we're doing now, an area of the brain called the nucleus

accumbens releases dopamine, which pumps us up and gets the brain working

quickly. Focusing on an extrinsic reward, though, rather than work can be

counterproductive, according to Jacobs, as it diverts the brain's bandwidth from the

task at hand. "We like rewards and they work," Jacobs says. "But rewards can

distract us."

Research Methodology

Aim of the Study

Understanding the effects on motivational levels of employees during recession.

Objectives of the Study

The study is conducted to check whether there is any change in the motivational

levels of employees during recessionary times. The study tries to guage whether

motivational levels increase, decrease or remain constant during recession. It also

tries to understand what Organisation is doing to motivate employees during the

downturn.

Hypothesis

1) Motivational levels of employees decrease during the recessionary times

2) Organisations conduct various activities to motivate employees during

the downturn

Research Design

Survey was done on the target population through a questionnaire. The

questionnaire consisted of 20 questions and it was administered on 30 participants

Sample Design

The questionnaire was intended to study the motivational levels of employees

working in sectors like BPO, Aviation etc which was badly affected due to

recession. As the companies in these sectors were not very keen on providing

information with respect to the survey (Refer to Limitations on page 54), the

questionnaire was administered on 30 part time MBA students from a reputed

Business School. The respondents belonged to varied sectors viz BPO, FMCG, IT,

Banking etc.

There were 20 questions in all out of which 12 questions were objective types

categorized into 5 concepts viz

Role Clarity / Responsibility

Facilities / Support System

Recognition / Reward System

Team Work

Training & Development

The balance questions were to understand the effect on the respondent due to

recession and the initiatives undertaken by their companies to motivate the

employees.

The sample questionnaire is given as Appendix on page no 56.

Scores and Analysis

Sheet showing scores assigned to all Questions based on Concepts

Sheet showing scores assigned to all Questions based on Concepts

Goal Clarity / Responsibility

It is very important that all employees are very clear about their roles and

responsibilities in the organization. It helps them in discharging their duties as per

their capabilities and motivates them to perform better.

The individual’s goals are always related to the organization’s goal. Hence the

management should see to it that clear cut roles and responsibilities are assigned to

each and every individual in the company.

The employee should know as to what is expected from him at work and his roles

and responsibilities should be detailed in advance.

Below is the response from respondents for the questions based on Goal Clarity /

Responsibility. The scores assigned for the responses based on awareness of

job/Goal/Responsibility are:

Sr. No. Response given Points assigned1. Yes 22. No 13. Not Sure 0

Chart showing response and points assigned

Goal Clarity / Responsibility

Low , 3%

Medium, 30%

High, 67%

Low

Medium

High

Findings with respect to Goal Clarity / Responsibility

It was observed that 67% of respondents were very clear about their roles

and responsibility in the organization.

30% respondents felt that they were not that clear about their roles and

responsibilities

4% respondents were totally unaware about their roles and responsibilities

with respect to their job

Facilities / Support System

Proper facilities at the work place are very crucial for motivating employees and

thereby improving their morale and performance.

The company should provide basic facilities so that it improves the effectiveness of

the employees thereby enhancing the company’s overall performance and growth.

Advent of Technology has led to improvement in process and increase in efficiency

thus resulting in less wastage of time and resources.

Below is the response from respondents for the questions based on Facilities /

Support System. The scores assigned for the responses based on availability of

Facilities / Support System are:

Sr. No. Response given Points assigned1. Yes 22. No 13. Not Sure 0

Chart showing response and points assigned

Facilities / Support System

Low10%

Medium33%High

57%

Low

Medium

High

Findings with respect to Facilities / Support System

57% respondents felt that they had the adequate systems and support

facilities in discharging their duties in the organization.

33% respondents felt that there were not adequate support and system

facilities at their workplace.

10% respondents said that their organization lacked the basic system and

support facilities

Recognition / Reward System

A good recognition and reward system is very important for the success of any

organization. It recognizes and rewards potential employees who had performed

exceedingly well in their job.

Employees need to be recognized and rewarded for exceptional or good

performance. It motivates them for better performance. If there is no proper

recognition or reward system in organization it will lead to employee unrest or high

employee turnover.

Below is the response from the respondents for the questions based on

Recognition / Reward System. The scores assigned for the responses based on

proper recognition / Reward system at their work place are:

Sr. No. Response given Points assigned1. Yes 22. No 13. Not Sure 0

Chart showing response and points assigned

Recognition / Reward System

Low3%

Medium60%

High37%

Low

Medium

High

Findings with respect to Recognition / Reward System

It was observed that only 37% respondents felt that their organization had

proper reward and recognition system. Also most of them were recognized

or rewarded for their efforts and performance in the last 6 months

60% respondents felt that that they are not fully satisfied with the reward

and recognition system at their workplace.

30% respondents felt that there is no proper reward and recognition system

at their workplace

Team work

Team work fosters the achievement of departmental goals and also motivates

employees for higher performance.

Employees need to understand the importance of team in the context of

organization. If one member does not contribute properly, it affects the

performance of the team.

Below is the response from the respondents for the questions based on Team work.

The scores assigned for the responses based on Team work at their work place are:

Sr. No. Response given Points assigned1. Yes 22. No 13. Not Sure 0

Chart showing response and points assigned

Team Work

Low23%

Medium17%

High60%

Low

Medium

High

Findings with respect to Team Work

60% of respondents said that there is good team-work in the organization.

People support each other in their activities.

17% respondents felt that there is team-work in the organization but not

always.

23% respondents said that there is no team work in the organisation

Training & Development

It is very important that employees are trained properly as it helps them in

effectively discharging their duties towards the organization’s plans and goals.

Training helps in bridging the knowledge gap and provides the required skills and

expertise to the individual to perform his roles and responsibilities. It aids in the

development of the employee as well as the growth of the organization.

Below is the response from the respondents for the questions based on Training &

Development. The scores assigned for the responses based on Training &

Development at their work place are:

Sr. No. Response given Points assigned1. Yes 22. No 13. Not Sure 0

Chart showing response and points assigned

Training & Development

Low10%

Medium30%

High60%

Low

Medium

High

Findings with respect to Training & Development

60% respondents felt that their organization is conducting proper training

and developmental activities for its employees

30% respondents felt that the training and development activities are not

conducted regularly and its not that effective

10% respondents said that their organization is not conducting any training

and developmental activities.

Preference ranked by respondents (1 being the highest and 8 being the lowest)

Summary with respect to the preference given by the respondents

Respondents were asked to rank their preference with respect to the following variables. (1 being the highest preferred and 8 the least preferred).

The variables were

Compensation / Salary

Recognition / Promotion

Job / Responsibility

Job Security

People (Co-workers / Superiors / Subordinates)

Facilities

Perks

Others

The summary of response to the preference were

57% respondents ranked Compensation/Salary as most important factor for

motivation

.

Recognition / Promotion was considered the second best motivating factor

as per the survey.

Job profile / Responsibility was the 3rd best preferred motivating factor

Summary of Response with respect to Recession and its impact

70% respondents said that they have been impacted due to recession. Some

have lost on perks and some respondents did not receive any

promotion/increment last year

Motivation level in almost 50% of cases has remained same post recession. In

30% cases, it was low and 20% respondents felt that the motivational level

increased

There has been lay-off’s in 50% of the cases

Some of the initiatives that companies are undertaking in this period are

o Cost Cutting with respect to travel

Video-conferencing facility used

Travel only by economy class and only if urgent

o Centralizing most operations

o Cutting down on incentives

o Training

o Restructuring of operations

Conclusion

Motivation represents the outcomes of several behavioral inputs such as perception,

attitude and learning and it is an important concept receiving considerable attention

from academics, researchers and practicing managers.

The hypothesis that motivational levels decrease during recessionary times were

found not true as almost 50% respondents felt that the motivational levels has

remained unchanged.

The second hypothesis that organizations’ conduct various activities to motivate

employees during the downturn seemed true. Inspite of some companies

announcing lay-off’s, most of the organizations have undertaken cost reduction

exercise and training.

Employees are the key for the survival of the company during recession. It is very

important for the organization to realize the importance of motivating employees

during the downturn.

Motivated employees will positively impact the top line and bottom line of the

company. It will help the company in negotiating the downturn crisis in the short

run and build a respectable and profitable organization in the long run.

Lay-off’s is certainly not a viable solution in recessionary times. Companies

should look at other viable alternatives so that the employees are motivated and put

in their best effort for the growth of the organization.

It can be concluded that during recession, most of the times, Motivational levels of

employees remain same as before.

Limitations

The sample population cannot be treated as the full population hence the

response gathered cannot be considered applicable to all companies in India.

The sample size does not cover all sectors in the Indian Industry

Most companies are reluctant to give any information with respect to the steps

undertaken by them to counter recession

Bibliography

1. www.wikipedia.org

2. Mckinsey&Company – Leadership lessons for hard times

3. Businessweek Magazine – Motivating without money

4. Businessweek Magazine – Motivating talent in the downturn

5. Harvard Business Review – How EMC maintained morale while cutting costs

6. Booze & Co. – Energizing employees in Recessionary times – Try Motivating not mandating

7. Outlook Business – Keep them in the fold

8. Economic Times (Corporate Dossier) – Dealing with the downturn

Appendix

SAMPLE QUESTIONNAIRE

Name

Company

Sector

Department

Designation

Years of work experience

Part time MBA course details : BatchSpecialization

Q.1 I know what is expected of me at work

Yes No Not Sure

Q.2 I have the materials and equipment that I need to do my work right

Yes No Not Sure

Q.3 At work, I have the opportunity to do what I can do best every day

Yes No Not Sure

Q.4. My good work is recognized and praised at office

Yes No Not Sure

Q.5 My Supervisor, or someone at work, seems to care about me as a person

Yes No Not Sure

Q.6 There is someone at work who encourages my development

Yes No Not Sure

Q.7 At work, my opinion seems to count

Yes No Not Sure

Q.8 The mission or purpose of my company makes me feel my job is important

Yes No Not Sure

Q.9 Along with me, my associates and fellow employees are committed to doing quality job

Yes No Not Sure

Q.10 I have a best friend at work

Yes No Not Sure

Q.11 In the last 6 months, someone at work has talked to me about my progress

Yes No Not Sure

Q.12 In the last 2 years, I have had opportunities at work to learn and grow

Yes No Not Sure

Q.13 What motivates you the most at your workplace?(Rank 1 being the highest and 8 being the lowest)Compensation / SalaryRecognition / PromotionJob / Responsibility Job SecurityPeople (Co-workers/Superiors/Subordinates)FacilitiesPerksOthers (Please specify)

Q.14 Has the recent recession affected your organization

Yes No Not Sure

Q.15 Have you been affected due to ongoing recession?

Yes No

If yes, please elaborate, _______________________________________________

Q.16 After recession, your motivation level has

Increased Remained constant Decreased

Q.17 Has there been any lay-off in your company

Yes No Not Sure

Q.18 Is your compensation structure linked to performance

Yes No Not Sure

Q.19 Can you specify a few initiatives which your company is undertaking to tackle recession?

a. ___________________________________________________b. ___________________________________________________c. ___________________________________________________d. ___________________________________________________e. ___________________________________________________

Q.20 Your consistent high level of performance has been rewarded with

a. ___________________________________________________b. ___________________________________________________c. ___________________________________________________d. ___________________________________________________e. ___________________________________________________

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