Motivational Theories in Business Management

Human Resource Management

• Aims to recruit capable, flexible, and committed employees, managing and training them, and rewarding them accordingly
• HRM significantly impacts efficiency, flexibility, and motivation

Purpose and Roles of HRM

• Recruit and train workers to maximize productivity
• HRM roles historically involved bureaucracy and inflexible approaches, focusing solely on recruitment/selection rather than development/training
• Modern HRM roles include workforce planning (identifying future needs), recruitment and selection, developing employees, employment contracts, ensuring HRM operates across the business, employee morale/welfare, and monitoring/dismissal

Recruitment

• Necessary when a business expands or employees leave
• Job analysis: identifies vacant positions and understands their roles/responsibilities.
• Job description: complete picture of a job's roles, rights, responsibilities.
• Person specification: analyses qualities, skills, and characteristics needed for a job.
• Job advertisement: details requirements and qualities for a position, displayed internally or externally (e.g., online job boards, newspapers, agencies).
• Types of recruitment:
  • External: seeking applicants from outside the organization
  • Internal: seeking applicants from within the organization

Selection Process

• Shortlisting applicants from applications.
• Selecting candidates via interviews, aptitude tests, psychometric tests, or trial work.
• Using a seven-point assessment plan for candidates (achievement, intelligence, skills, interests, personal manner, physical appearance, and personal circumstances).

Employment Contracts

• Legally binding documents outlining employer and employee responsibilities, working hours, holidays, wages, and appraisal process.

Labour Turnover

• Measures employee departure rate.
• Labour Turnover Rate = (Number of Employees Leaving in 1 Year) ÷ (Average Number of Employees) × 100
• High and increasing turnover indicates low morale and employee dissatisfaction.
• Potential advantages of turnover may include the replacement of low-skilled workers with productive ones or the introduction of new ideas.
• May be associated with cost increases (recruitment, selection, training of new staff).

Training and Development of Employees

• Includes induction training (familiarization with organization), on-the-job training (instructions at workplace), and off-the-job training (instructions away from workplace through experts).
• HRM aims at increasing employee efficacy and productivity by training them.
• Development involves continuous challenges and opportunities to grow, helping employees to achieve self-actualisation and fulfillment.
• Appraisals assess employee performance against pre-set goals and are a continuous process in staff development.

Discipline and Dismissal of Employees

• Procedures for dealing with employee misconduct/failure to meet obligations.
• Potential for unfair dismissal allegations. These require demonstrating proper steps were taken to prevent it.

Redundancies

• Occurs when a job is no longer needed due to factors like decreasing demand, advanced technologies, or business rationalization.
• It is crucial to communicate and handle redundancy effectively to minimize negative impacts on affected employees' morale and job security.

Employee Morale and Welfare

• HR departments provide advice, guidance, and counseling.
• Increasing morale and loyalty is important for the company.

Work-Life Balance

• Balance between work and personal time.
• Effective HR management addresses potential work-life imbalances.

Policies for Diversity and Equality

• Ensure all employees are treated fairly and equitably to increase efficiency, morale, the ability to recruit talent, capture a bigger market, and be more creative.

Encouraging Intrapreneurship through Employee Development

• Fostering independent thought and innovation within an organization.
• Providing opportunities to collaborate across departments.
• Empowering employees with autonomy and resources for innovation.
• Removing the fear of failure in exploring new ideas.

Benefits of Corporation between Management and Workforce

• Overall improvement in business efficacy and productivity.

Trade Unions

• Employee organizations representing their rights in negotiations with employers

Collective Bargaining and Its Benefits

• A group of workers (usually a union) negotiate with employers to improve wages and working conditions
• Benefits include handling employee issues and workforce problems, communication between employees and management, and preventing hasty, disruptive industrial action.

Motivation

• Internal and external factors driving people toward achieving goals.

F.W. Taylor's Scientific Management/Theory of an Economic Man

• Emphasizes employee motivation through monetary incentives.
• Focuses on efficiency and productivity improvements through close supervision and training.

Mayo and Human Relations Theories

• Experiments at the Hawthorne plant revealed that financial incentives are not the sole motivators of workers.
• Factors like social interaction, group dynamics, and worker participation play important roles in productivity.

Abraham Maslow's Hierarchy of Human Needs

• Categorizes employee needs into five levels, from basic (physiological and safety) to higher-order (social, esteem, and self-actualization) needs.
• Addressing these needs is key for employee satisfaction and motivation

Vroom's Expectancy Theory

• Individuals choose behaviors based on potential rewards Individual desire for rewards (valence) is critical in influencing their motivation. The belief in the likelihood of achieving goals (expectancy) and in how those goals relate to rewards (instrumentality)

David McClelland's Motivational Needs Theory

• Identifies three key motivational needs:
• Achievement: desire to succeed, complete tasks effectively
• Power: desire to influence and control others
• Affiliation: desire for strong relationships and teamwork

Motivational Theories - Evaluation

• The theories offer frameworks for understanding motivation but need to consider individual differences and contexts.

Motivators - Financial Rewards

• Time-based wage, piece-rate, and salary are basic forms of financial compensation in organizations.
• Considerations include wage levels, the security of income, and the effect of pricing decisions on motivation.
• Job evaluation and wage structure need to be clearly developed.

Motivators - Non-Financial Rewards

• These include job redesign, training, quality circles, and teamwork.

Management and Leadership

• Functions of management include setting objectives, planning, organizing resources, directing/motivating staff, coordinating activities, and controlling/measuring performance.
• Management roles: interpersonal (figurehead, leader, liaison), informational (monitor, disseminator, spokesperson), and decisional (entrepreneur, disturbance handler, resource allocator, negotiator).
• Leadership styles: autocratic, democratic, paternalistic, laisse-faire.
• Importance of leadership positions (director, manager, supervisor, etc.).

Marketing

• Marketing is the management process of identifying anticipated consumer needs and satisfying them profitably.
• Related concepts include markets, needs and wants, value and satisfaction.
• Marketing objectives must align with business goals
• Marketing coordinates with other business departments (finance, HR, operations)
• Marketing must understand demand and supply relationships.
• Types of markets: local, national, international.
• Marketing segments their consumer groups.
• Strategies for marketing include B2B (business-to-business) and B2C (business-to-consumer).
• Companies use consumer and industrial purchasing characteristics as a basis for marketing.

Market Orientation

• Outward-looking approach prioritizing consumer needs as the central focus for product development and marketing decisions

Product Orientation

• Inward-looking approach focused on product development and innovation

Product Life Cycle (PLC)

• Stages a product goes through from introduction to decline (introduction, growth, maturity, decline).

Creating Value

• The difference between selling price and cost of raw materials.

Mass Marketing

• Selling standardized products to the entire market.

Market Size

• Total value or quantity of sales across a specified market.

Market Growth Rate

• Percentage change in market size over a period.

Market Share

• Percentage of a market's total sales a business earns.

Customer Relation Management (CRM)

• Strategies for fostering and maintaining customer relationships.

Market Research

• The process of gathering, recording, and analyzing data on consumers, competitors, and markets.

Types of Data (Qualitative and Quantitive)

• Qualitative: non-numerical (e.g., opinions, feelings)
• Quantitative: numerical data (e.g., sales figures, prices)

Primary Data Collection Methods

Secondary Data Collection Methods

Accuracy of Primary Research

Measurement of Quantitative Data: Arithmetic Mean, Mode, Median, Range.

Packaging

• Importance of packaging in creating a product's brand image and ensuring safety & information for consumers.

Branding

• The process of creating a unique identity for a product. (e.g., logos, names, colors)

Sales Promotion

• Activities to stimulate short term sales.

Personal Selling

• Involves having sales staff communicate and sell to individual customers directly.

Promotion Methods

• Includes advertising, telemarketing, direct mail, trade fairs, public relations, social media marketing, and online advertising.