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Companies & dominant

Companies are dominant examples of an organization. Harold Levitt sets out a basic framework emphasizing four major components for understanding an organization. These four components are task, people, technology and structure (Nelson and Quick, 9). Nelson and Quick defines task as an organization’s purpose, mission and goal for existing (8). People refer to the human resources; technology, the wide range of tools, knowledge, and/ or techniques used to transform the inputs into outputs.

The structure is how work is designed at the micro level, as well as how departments, divisions and overall organization are designed at the macro level (8-9). The paper focuses on the people component of an organization. Companies no longer question how they will succeed, rather, how they can stay successful (Pande, et al. , 3). Because of ever-changing technology, human resources are the only competitive edge an organization can have over its competitors (Mara-Tjingaete, par. 2). The need tap the human potential and to learn how to keep it is of utmost importance.

The workforce is a dynamic entity in the organization. Each individual have different needs which may or may not be compensated by their jobs. The work that an individual does gets a corresponding reward. Rewards may come in monetary form which is the usual expected salary or wages. Reward may also come in non-monetary incentive or motivation. What is the best way for an organization to keep its employees? Is monetary payment enough? This paper seeks to find out if the only motivator for an individual to be productive is cash incentive, or there are other factors to consider as well.

To be able to answer these questions, this paper will first define performance and productivity. It will also discuss the motivation factors to understand the workforce. This paper also compares the Japanese and British prerequisites and compensation levels, including benefits and holidays observed as part of the employee package. II. LABOUR PRODUCTIVITY The people or the workforce is an important factor for an organization. Each person brings with him his skills and ablilities, personality, values attitudes and ethics that contribute to his performance within the organization.

Performance is task accomplishment resulting in the company reaching its goals. Every year, companies come out with annual reports where they outline their performance based on their earnings and losses. Based on these figures, they come out with a plan to improve their performance for the coming year, keeping in mind that their main goal is profitability, which is usually achieved by demanding an increase in productivity. They do this by planning on ways to maximize their resources in order to come out with the best products or services.

Productivity is an issue that concerns almost every branch of a company, from administration, to finance, from marketing to manufacturing. This is inevitable due to the variance in the performance of enterprises, especially those who are engaged in competitive industries. An organization expresses its demands on its workforce in the form of goals, job expectations and performance objectives. This is measured through an employees’ performance measurement system, which enables managers to ensure that the performance of their employees are along the lines of the company’s objectives (Mara-Tjingaete, par.

3). In a productive organization, profits are increased. Customers receives better services, staff members are satisfied, and shareholders are happy (Mara-Tjingaete, par. 5) The organization is not the only one making demands. The individual has needs to be satisfied as well. Studies show how an organization motivates the individual to ensure increase in quality, not just quantity, of work or performance. Motivation is the process of arousing and sustaining goal-directed behavior (Nelson and Quick. 146). The American Society for Training and Development listed possible motivational factors.

An individual may rank them according to what each individual would consider as most important. These are: • job security • full appreciation of work done • promotion and growth in the organization • good wages • interesting work • good working conditions • tactful discipline • sympathetic help with personal problems • personal loyalty to employees • a feeling of being in on things What drives an employee to perform? Again, reward is major motivation in an individual’s performance and productivity, and satisfaction.

Fact is, employees who receive valued rewards are more satisfied. The higher their performance, the higher their rewards. As such, employees tend to perform better. Rewards are definitely valued by employees and are tied directly to productivity. The correlation between motivation factors and productivity can be understood through several theories. Management scientists have for decades studied organizations and have tried to come out with an idea of how to increase productivity. One group of management scientists formulated what is collectively known as the Needs Theory.

People such as David McClelland, Abraham Maslow, Frederick Herzberg, and Douglas McGregor, all formulated theories, the main idea of which are that compensation and incentives are linked to individuals’ performance and appeals to people’s need to achieve. (Haasen and Shea, 8-9). In fact, McGregor’s Theory X suggests that individuals should be managed based on whether they are motivated by lower order needs , such as psychological and safety needs , as opposed to Theory Y where individuals are managed based on higher order needs, such as social, esteem and self-actualizaiton.

Theory Y is similar to that of Maslow’s “Hierarchy of Needs” where motivation is based on the needs of an individual to belong and to be accepted. In the workplace, the hierarchy of needs is fulfilled when a company focuses its values on trust, respect, and loyalty. Herzberg’s book Motivation to Work, records his findings as he studied the environment where people worked and pointed out which factors affects the individual’s satisfaction and dissatisfaction. His motivation-hygiene theory enumerated achievement, recognition, growth, etc as factors leading to satisfaction.

He named these motivators. He also found out that factors leading to dissatisfaction include company policy, supervision, relationship with boss, work condition, etc However, because management has the tendency of offering “external inducement and rewards”, these theories have become ineffective and short-lived. (Haasen and Shea 9). In fact, as Donald Roy puts it “incentive schemes based on work measurement can serve to hold down productivity. ” Indeed, several theorists such as Edward L. Deci, RM Ryan, Mihaly Csikszentmihalyi, etc, see motivation as something intrinsic, arising from challenges.

These ideas are further emphasized by the fact that many employees site the following reasons for leaving a job • the lack opportunity to grow and develop; • the lack of opportunity to learn new skills; and • the lack of opportunity to be in an environment where they are appreciated. In fact, the issue of pay ranks only 8th in the top 10 reasons for leaving (McCoy, 4). III. PAYMENT SYSTEMS AND THEIR EFFECTS ON LABOR PRODUCTIVITY If an organization wants good performance, then it must reward good performance. If it does not want bad performance, then it must not reward bad performance.

Rewarding performance usually come in the form of monetary compensation. We can not ignore the fact that money is one of the key motivators in the workplace. Compensation is important for maintaining balance of operating the company with its given budget and attracting and keeping existing employees. There are four kinds of compensation plans. A traditional compensation is job based. If a company wants to keep the labour budget costs to a minimum, this is the plan to use. This plan is merit based. The differences in compensation among employees are determined through an annual performance evaluation.

An incentive compensation operates outside the constraints of the merit increase budget, and is based on shared gains (McCoy, 9). Broad-based incentive compensation focuses on a company’s outward growth, competing not, for labour, but for customers. Companies with this kind of plan think that growth in the marketplace should come first, after that, they will share the benefits of the growth with those employees who made it happen (McCoy 9). The last is a behavior-based incentive compensation plan, which combines behavioral psychology’s motivational tools and incentive compensation’s reward mechanism.

(McCoy 9) Japanese Model In the large Japanese enterprises, quality products and productivity have for a long time been viewed as due to the companies’ “people-centred” approach as is reflected in their policies relating to recruitment, education and training, multiskilling, job groupings, merit rating, and pay systems. The Japanese employer also invests heavily on on-the-job training for his employees, as well as job rotation. Because of this, teamwork becomes the norm. There exists amongst the employees a support system.

Also, because of the skills that the employees have learned, it becomes easier to find other career opportunities within the company. Thus, employees tend to stay longer within the company. Japanese employee puts employment security on top of his list of motivators. He prefers to receive straight salaries as opposed to performance based ones. Earnings typically grow more rapidly with tenure for Japanese workers. Bonuses do not seem to be an incentive. It is unpopular to receive bonuses for individual performance. However, bonuses are still given based on the company’s overall performance.

To ensure job security, the Japan Productivity Centre reached an agreement with the national labour organization and employers on the following matters: a. In the long-term, productivity increases employment security. Therefore redundant workers should be relocated by the employer. b. Concrete measures to enhance productivity should be decided through labour management consultation which will be promoted. c. Productivity gains should be distributed fairly among management, employees and customers Everybody shares in the result of each individual’s productivity.

This is one major factor that differentiates Japan from other countries. The organization and workforce spend a great deal of time and effort, energy and money to maintain harmonious relations. As such, individuality performance is not measured, as opposed to the company’s overall performance. National health care and social-security, cost of which is split 50-50 by employer and employee are mere prerequisites from a Japanese employer. Companies also pay worker’ compensation insurance, unemployment insurance, and pension cost. Transportation allowance and lunch allowance are not unusual.

From middle manager onwards, representation expense is also shouldered by the company. Additional perks are company cars for executives, sometimes chauffer-driven for top three positions. Two weeks vacations time offs are mandated by law. However, this should only be taken a day or two at a time, and not in one sitting. There is an additional twenty legal holidays including New Year’s and August holidays during which the whole country shuts down. . UK Model A British employee would find it difficult to accept straight commission.

Most employees would prefer objects, such as mobile phones or pagers, as part of their compensation rather than cash because of high tax rates. Everybody expects Christmas bonus at the end of the year. Private medical insurance which complements health care is a must in British companies. Although pension plans are not as common. Additional perks for managers and salespeople are a company car. Three to five weeks of vacation time offs are usually given, but not mandated by law. There are eight legal holidays. Companies would generally give twelve days.