Effective Performance Of Public Sector Business Essay Example
Effective Performance Of Public Sector Business Essay Example

Effective Performance Of Public Sector Business Essay Example

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  • Pages: 15 (3957 words)
  • Published: September 6, 2017
  • Type: Case Study
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It is essential for most underdeveloped countries to effectively present the public sector.

Despite the active involvement of employees, the public sectors are often perceived as unproductive and inflexible due to significant issues with management development. These sectors suffer from inadequate structures, typically with insufficient managers, and a lack of consistent policies for progress. The prevailing belief that government employees can acquire necessary skills based on job requirements is being challenged, as it is now recognized that specific guidance is needed to enable the acquisition of skills and behaviors that enhance their efficiency. This was evident in a study conducted in Malaysia.

The findings indicate that organizational factors, such as the availability of equipment, communication, and the involvement of all stakeholders, have significant and positive effects on productivity performance (Ramli, B.R. 2005). However, despite being well-equipped, many public organizations still struggle wi

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th low employee productivity. A key Human Resource practice in organizations today is the implementation of effective rewarding and recognition programs.

According to Manzoor (2012: 6), Maurer (2001) highlighted that rewards and recognition are important factors in improving employee job satisfaction, work motivation, and organizational success. Khan, Farooq, and Ullah (2010: 45) conducted a study in Pakistani commercial banks to examine the relationship between rewards and employee motivation. They specifically focused on four types of rewards, one of which was recognition. Through Pearson correlation analysis, they found a significant correlation (0.65) between recognition and employee work motivation.

The use of wages and recognition direction offers a step-by-step approach to designing a salary that takes into account job requirements, employee knowledge and skills, and performance-based incentives that connect individuals, teams, work units, and organizational performance. Non-monetary rewards set an

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organization apart in terms of employment offerings. It is the intangible aspects (those that cannot be physically seen) that distinguish employers in the labor market and earn employee dedication (Zingheim and Schuster, 1997).

According to Casio, a complete organizational reward system consists of both financial and non-financial rewards. Financial rewards encompass direct and indirect payments. Non-financial rewards refer to any elements in the work environment that boost an employee's self-esteem and self-worth. These rewards are typically seen as non-salary, but can have monetary value or incur costs for the company.

Employees are provided with various non-financial rewards and acknowledgments, such as appreciation, paid vacations, remote work options, companywide benefits, yearly bonuses, incentive programs, sales incentives, housing loans, life insurance, training and education opportunities. These rewards assist employees in fulfilling their personal and family requirements while also enhancing their well-being and significance within the organization. Furthermore, rewarding and acknowledging employees leads to increased loyalty and productivity for the organization. The organization also caters to the needs of employees' families by providing vacation time, paid hospital stays, and educational opportunities.

On the other hand, the organization itself benefits from these rewards and recognition systems. These systems help organizations achieve multiple goals such as attracting and retaining individuals, as well as motivating them to perform more effectively. These non-financial rewards and recognition are also known as relational forms of rewarding employees. They include acknowledgment and status, working with a great team or colleagues, job security, challenging work, and opportunities for learning or development. All of these factors contribute to the personal satisfaction of the employee.

Therefore, wages are not only about money or cash (extrinsic rewards), but also include non-financial rewards that

provide intrinsic satisfaction in doing the work itself.

Definition Of Terms

According to Farkiya, rewards are the 'things given or received in compensation for worthy behavior'. They encompass all the tools available to the employer to attract, motivate, and retain employees. Total rewards include everything that the employee considers to be of significant importance resulting from the employment relationship. Recognition, as defined by Farkiya, is 'a term used to describe an ability to identify things based on prior knowledge'. Jack Zigon also defines rewards as 'something that increases the frequency of an employee action' (1998).

Sherry Ryan (2006) states that rewards and acknowledgment play a significant role in enhancing employee motivation and performance. Although these terms are frequently interchanged, they actually represent distinct systems. Organizations typically establish programs for rewards and acknowledgment as means of recognizing and incentivizing employees' achievements.

The Concept of Non-Monetary Rewards and Recognition

Non-monetary rewards and recognition refer to acknowledging and rewarding individual employees or teams through channels that do not involve money. The key aspect of this definition is the term 'non-currency.' It is important to note that non-financial rewards and recognition do not mean they should have no financial value; it simply means that the rewards should not only be monetary. While money is certainly valued, its impact on intrinsic motivation is limited. This method of showing appreciation is likely to be much more memorable than a cash award that is simply added to an employee's salary.

According to Silverman (2004:3), Arul, P. highlights the significance of non-monetary rewards and recognition in work units and organizations for attracting and retaining employees. Arul describes these rewards as small daily gestures that make employees feel appreciated and

valued, which ultimately boosts morale in the workplace. The primary objective is to provide psychological rewards that are not linked to financial assistance (2009).

The text discusses the importance of maintaining a disparity in wages and acknowledgment systems for top management interested in motivating staff while minimizing costs. According to Rose, non-monetary rewards and recognition can be seen as non-cash awards given for high levels of achievement or performance, such as customer care or support to colleagues. These rewards depend on meeting predetermined goals. Silverman cites Maslow, Deci, and Herzberg as influential motivational thinkers who highlight the existence of two distinct motivational subsystems - intrinsic and extrinsic motivation (Farkiya, 2011:1; Silverman, 2004:3).

The concept of intrinsic motivation refers to internal thoughts or emotions that drive one's desire to accomplish, perform, and engage in activities. Intrinsic motivation is driven by the inherent need for competence and self-esteem and can be exhibited without any apparent external stimuli. In contrast, external motivation arises from the work environment outside of the task and is typically influenced by external rewards (1954, 1975, 1966 cited in 2004:2). While financial rewards clearly impact extrinsic motivation, they have minimal effect on intrinsic motivation.

The text highlights the importance of wages and recognition in increasing intrinsic motivation. According to Pfeffer, using wages as the primary form of compensation may encourage employees to join and remain in their respective organizations, but this may dilute the effect of intrinsic motivation. Pfeffer emphasizes that people work not only for money but also for meaning in their lives. Companies that disregard this fact are essentially harming their employees and will face a lack of loyalty and commitment (Pfeffer, 1998:112). Carrel refers

to extrinsic rewards as salary and benefits, while intrinsic rewards include achieving personal goals, independence, and more challenging job opportunities (2007:56).

According to Ajila (1997 cited in Akanbi, P.A. n.d:2), an intrinsically motivated individual is dedicated to their job because they find satisfaction in the tasks, while an extrinsically motivated person is committed because they can receive external rewards for their work. Ajila also emphasizes the importance of need for motivation in the workplace and the perception of being rewarded. If the reward is inherent to the job, the motivation is intrinsic, but if the reward is external, the motivation is extrinsic (Ajila, 1997: Akanbi, P.A n.d:2).

In addition, various forms of non-monetary rewards and recognition have been found to be highly effective. Bob Nelson, a recognition consultant, discusses in his article 'Everything you thought you knew about recognition is wrong' the type of recognition that employees value most - being directly acknowledged by their employers.

According to him, 78% of employees believe it is highly important to be recognized by their employers when they put in significant effort into a project (2004). Allen and Helms' research also confirms the significance of regular expressions of appreciation from top management to motivate employees towards achieving goals (2002 cited in Mackay and Whitson 2009:8). Monetary rewards, specifically, are still utilized by managers. However, this method of improving employee productivity levels has been found to be less than fully effective, as perceived.

According to Chlo, a Japanese study published in a journal has shown that similar effects are generated when someone is paid money and offered a compliment, and the brain area that responds to compliments partly overlaps with the area that

responds to monetary rewards. What is most important to employees is how their managers interact with them on a daily basis (Chlo, 2009). Silverman's paper "Non-Financial Recognition" refers to this as the obvious benefit of compliments not costing anything (2004:5). Chlo also mentions Nelson, a motivational speaker and author of "1001 Ways to Reward Employees," who emphasizes the value of recognition through rewards and the idea that money is not the ultimate motivator. According to Nelson, the highest-achieving managers actively seek opportunities to recognize their employees' good work on a daily basis and advocate regular and genuine recognition as a great way to inspire employees to take action (2004 cited in 2009).

According to The Forum, directors find non-monetary rewards and recognition systems more effective in achieving eight out of ten organizational goals. These include reinforcing values, improving teamwork, motivating behavior, facilitating communication, and more. Monetary compensation systems are primarily focused on increasing sales and improving customer acquisition through bonuses (Scofidio, B. 2006). Oosthuizen suggests that improved productivity relies on positive employee motivation, emphasizing the importance of implementing proper reward and recognition systems (2001). Therefore, it is crucial for organizations and directors to understand what motivates employees and how to motivate them to perform better (Amos et al.).

, 2008:173). Pei (2007:158) shares the same view, stating that directors must prioritize fulfilling and retaining employees since they are a company's most valuable resource. Employees who receive recognition for their efforts have a better perception of their work, workplace, and employers (Shore; A; Shore 1995:164). Buchanan supports this notion, stating that recognizing employees' contributions to the organization positively affects their commitment to the organization and its goals (1974:536).

Additionally, creating people-friendly systems and a conducive environment serves as a form of rewards and recognition that appeals to employees, motivating them to perform more effectively (Viedge 2003: 52).

It can be inferred that incentives, whether monetary or non-monetary, serve the purpose of motivating employees. By providing motivation to workers, organizations can benefit from their high performance and positive work attitudes achieved through incentives. Latham and Budworth (2004) conducted a study on work motivation in the twentieth century which revealed that initially, motivation was solely associated with money during the early 1900s. However, it became evident throughout the 20th century that there were additional factors apart from money that could act as motivational tools for employees. The researcher fully supports this notion as employees believe that their satisfaction with their respective jobs is essential for enhancing job performance. In other words, happy employees are productive.

According to Ernest and Latham (2006), the impact of motive on employee attitude and well-being is significant. They argue that for individuals to feel motivated, they need satisfaction. If satisfaction is lacking, it can lead to a decline in self-esteem and self-realization, resulting in a lack of interest in personal and professional growth. While these definitions remain valid at a basic level, they must be adapted considering organizational factors.

The authors propose that employees' attempts to perform their best can sometimes be misguided. Therefore, motivation should address both organizational goals and individual needs. It is crucial for directors to prioritize employee motivation as a policy aimed at improving effective job management within organizations.

Motivation plays a vital role in organizations by motivating and inspiring employees to carry out their duties effectively. It is a

major challenge for organizations to encourage employees to perform at their highest level, particularly in challenging situations (Manzoor, 2012: 3). Various types of motivation exist within an organizational context. Employee motivation can be classified as either 'intrinsic' or 'extrinsic'. Extrinsic motivation occurs when behavior is influenced by external rewards, while intrinsic motivation stems from an inherent internal drive that impacts behavior (Yavuz, 2004:15).

According to Mtazu, there are two types of motivation in the workplace: extrinsic and intrinsic. Extrinsic rewards are influenced by factors in the work environment, such as financial rewards, developmental opportunities, and societal benefits (2009:23). An example of extrinsic motivation is an employee who shows up on time every day in order to receive a monetary reward for punctuality. However, this type of motivation has a short-term and unreliable impact on employees.

Intrinsic motivation, on the other hand, is driven by job-related and social factors. These include having an interesting and challenging job, receiving feedback, having a variety of tasks, and having autonomy. Other intrinsic motivators include recognition for good work, opportunities for development, being faced with challenges, acquiring skills, participating in decision-making, and feeling cared for.

A typical example is an employee who is willing to work long hours because they feel a sense of accomplishment from completing a demanding task. In this case,the individual takes action because they value the expected outcome.

According to Yavuz (2004:15), intrinsic incentives have a more profound and lasting impact as they come naturally from individuals. Intrinsic motivation, which comes from within a person or activity, positively influences behavior, performance, and assistance. On the other hand, extrinsic motivation is associated with tangible incentives like rewards, benefits, cash bonuses, and

some security (Ryan ; Deci, 2000). It is evident that relying on extrinsic incentives, particularly monetary ones, to motivate employees can create a situation where the incentives need to be constantly increased in order to achieve desired results. In contrast, intrinsic incentives that naturally exist in everyday situations such as challenging tasks, independence, recognition, time off, and greetings are of greater value than artificial (extrinsic) rewards. This paper refers to these intrinsic incentives as non-monetary rewards and recognition offered to employees.

Examples Of Non Monetary Rewards And Recognition

Some examples of non-monetary rewards and recognition include:

Personal Communication:

Communication with employees is an important form of recognition. It involves the informal sharing of meaningful and timely information among organizational members.

The concept of communication has been defined by several authors, including Jirk, Beckard, Pritchard, April, Ford, and Ford, as the frequency of interaction and information exchange to improve employee productivity. Studies have demonstrated that a lack of communication is a significant obstacle in motivating employees (Khan et al. 2010:50). The importance of communication lies in its ability to prepare individuals for both the positive and negative effects of change and enhance their understanding and commitment to change.

In summary, the organization's efforts to improve communication among its employees primarily aim to enhance the organization's efficiency. Communication serves as a helpful tool in problem-solving and fosters respect between employees and employers. It also provides a platform for employees to express their opinions on various issues.

Companywide Benefits:

According to Henderson (2003), these benefits encompass non-monetary compensation and exclude cash payment of stock options. Generally, they include retirement benefits provided by all organizations, medical and dental coverage for both the employee and

their family, transportation services to and from work, occasional recreational facilities, and sometimes life insurance coverage in smaller businesses.

According to Farkiya (2011:2), other forms of Non-monetary rewards and recognitions include Assignment of more satisfying job responsibilities, Opportunities for training, Increased role in decision making, Flexible work schedules, Paid holidays, sick leaves and vacations, Public appreciation at a departmental function, Receiving an extra day off, Personnel items and clothing such as hats, shirts, sweatshirts, and other tools such as electronic devices and sports equipment. Yavuz (2004:2) also confirms that Non-monetary rewards do not necessarily imply direct cash and can be tangible or intangible. Examples she mentioned include employee encouragement, assigning challenging tasks, acknowledging employees' good work through letters, gifts, plaques etc.

Improving working conditions, establishing services for employees, and organizing societal activities are some ways to enhance employee satisfaction and productivity. However, in today's rapidly changing world driven by technology and innovation, companies need to reconsider how they interact with both employees and clients. This includes reevaluating management styles, implementing new systems and procedures, and prioritizing ongoing improvements in the workplace. According to a survey conducted by TJinsite, the research and knowledge arm of TimeJobs, over 35% of employees identified a lack of recognition as the primary obstacle to their productivity (TJinsite, Timejobs The economic times 2012).

According to the Economic Times (2012), rewards and acknowledgment aimed at achieving goals in various workplaces serve as a boost in morale, resulting in increased productivity. Many companies have found that implementing non-monetary rewards and acknowledgment systems can greatly improve relationships with employees and ultimately lead to higher returns (Giftcertificates, 2012). GiftCertificates has adopted a strategy to attract and retain employees,

as well as motivate them to work to their fullest potential. This approach has proven to enhance job satisfaction, reduce absenteeism and lost time, increase productivity, effectively educate and inform employees, and save money (GiftCertificates, 2012). In his article on the impact of recognition, Bob Nelson also highlights the benefits of recognition, such as improved communication, increased cooperation from employees, reduced absenteeism and turnover, higher job satisfaction, and loyalty.

A client of Irvin of HR.com has reported that their one-year employee study in 2011 showed that acknowledgment has increased the productivity of over 90% of their employees. They believe that achieving these results in improved efficiency and performance is possible by establishing a true culture of acknowledgment, where it becomes a tradition for all employees at every level to temporarily stop, acknowledge, and appreciate the efforts and achievements of those around them (Irvin, HR.com 2012). Chiang ; Birtch (2012) have observed that rewards offered in non-monetary terms, such as vacations and family benefits, impact an employee's perception of their workplace as a supportive and caring organization. In other words, providing employees with as much non-monetary recognition and rewards as possible makes them more purposeful and efficient, leading to increased accuracy in their work.

The idea that employees will embrace the values and behaviors that their organization rewards and values is supported by a researcher. Conversely, if employees realize that their efforts are not being recognized or rewarded, their attitudes may completely change.

Theories Supporting Employee Recognition and Rewards

Understanding human nature is necessary, although it is also quite complicated. Understanding this is an asset in providing effective employee motivation in the workplace. Motivation explains why employees behave the way

they do, and it can either help or hinder an organization's ability to achieve its goals. Maintaining employee motivation is crucial for an organization's success, as it determines whether individuals will contribute to the inputs needed to make the organization effective.

Self-motivation requires constant reinforcement through rewards and acknowledgment, both financial and non-financial. Several researchers have conducted studies on personality and motivation, particularly in the workplace, to explain and understand the relationship between motivation and rewards. There are various theories that attempt to explain human nature and work motivation. One of these theories is the Expectancy Theory, which suggests that work behavior is influenced by individual expectations. According to Shields (2007:78), this theory focuses on how workers make decisions about which specific behaviors to engage in and how much effort to exert. In other words, it examines how workers choose among different behaviors and levels of effort.

According to Bagraim (2007:90), anticipation theory has been extensively researched and is considered the most advanced motive theory. This theory highlights the significance of employees believing that they can improve their efforts, which will result in enhanced performance. Such improved performance will then be recognized and rewarded according to the employees' desires. Expectancy theory provides a model for understanding motivation through a rewards system and emphasizes certain requirements for this process, including clear alignment of performance (instrumentality), creating rewards that meet individuals' needs (valency), and developing employees to be more efficient while removing any barriers to performance (anticipation) (Mtazu 2009:42). Essentially, this theory explains that motivation is achieved when employers ensure that workers understand the rewards that will result from high effort, these rewards are desirable to the workers, supervisors

and managers clarify the required effort, and employees have confidence in having the necessary resources and abilities to achieve the desired results.

Where these components are failing, there is a high likelihood that the effort to motivate will fail.

Implications of the Expectancy Theory

Managers can effectively utilize expectancy theory in creating their own motivation programs. It is important for managers to focus on employee expectations in order to achieve success. Managers should assign tasks and rewards to facilitate the creation of realistic challenges within jobs. Managers must actively determine which second-level results are important to their employees. Once again, the researcher believes that managers who understand what subordinates prefer can aim to provide highly valued outcomes to them.

The design of incentive and recognition programs should be flexible enough to address individual preferences, as people have different motivations and desires for results.

Need Theory:

Need theories of motivation identify the needs that employees are motivated to fulfill in their jobs. Two important need theories are Abraham Maslow's Hierarchy of Needs and Clayton Alderfer's ERG Theories, which are worth mentioning here.

Maslow's Needs Hierarchy

Bagraim (2007:74), Shields (2006:68), and Swanepoel et. Al (2003:325) have further explained Abraham Maslow's developed theory of human motivation in terms of work motivation. According to this theory, human beings have five universal needs that they seek to fulfill: physiological needs, safety needs, belongingness needs (social), esteem needs, and self-actualization needs. Maslow based his theory on the following assumptions:

  • Human beings are motivated by unsatisfied needs.
  • These needs are organized in a hierarchy of importance, from basic to complex.
  • Certain lower-level needs must be satisfied before higher-level needs

can be fulfilled.

  • Needs are presented in a hierarchy, categorized from low to high levels of demand.
  • The Maslow theory of motivation states that once we are motivated to satisfy our basic needs, we strive towards personal growth and self-actualization.

    Satisfying a demand is important because demands are powerful and greatly influence our actions. Additionally, demands can vary among individuals. As one desire is fulfilled, a higher demand emerges to take its place and be satisfied. According to Duah (2011: 32), human needs are organized in a hierarchical order, where satisfying lower level needs comes first. Once a level of need is satisfied, a person is motivated to fulfill the next level up the hierarchy, progressing through the order.

    • The hierarchy is as follows:

    Physical Needs: These include basic and primary needs such as air, water, food, sleep, shelter, relief from pain, and others. They may also encompass desires for better pay and benefits, vacations, retirement plans, breaks, and comfortable working conditions.


    Safety Needs

    : Safety needs refer to the need for stability and consistency. Once basic needs are met, individuals begin to have psychological needs. These psychological needs include the desire for protection from harm, threats, injury, danger, loss, or lack. In organizational settings, safety needs include job security, safe working conditions, fair wages and benefits, retirement plans, and severance pay.

    Belongingness Needs

    : Belongingness needs involve the desire for love and connection. This is the next level on the hierarchy of needs, where individuals seek companionship and strive to fulfill this need for social interaction. People want to belong to work

    groups and establish positive relationships with colleagues. They also desire involvement in activities that promote collaboration within the organization and among different groups.

    Esteem Needs: There are two forms of esteem needs that pertain to people's regard or self-importance demands. The first form is the need for self-esteem, which can be satisfied through feelings of accomplishment, competency, or mastery of a task, as well as through maturity and independence. The second form involves the desire for attention and recognition from others, and this aspect is centered around others' perceptions and acknowledgments.

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