Application of motivation concepts in a modern organization

Safety needs represent the second level of Need hierarchy. Feeling comfortable always makes people work with better performance. Adidas Company gives reward to their employees in a form of medical insurance for employees and discounts for 2 their relatives (parents, children or spouse) for managerial part of the staff. Medical insurance is not provided for non managerial staff.

The third type of motivation direction is incentives provided for non-managerial staff (in the stores) group competitions. Leaders, often at the CIS level, bring a staff information about the organization of the contest which is focused on teamwork. Competitions are held several times a year and aiming to raise team spirit and mutual support and mutual assistance.

Another type of incentive that fits to the “belongingness and love need” is stimulation of love to adidas, Reebok, and rockport brands. This stimulation is done by providing a 30% discount to all employees of the company. Only amount of money affordable for this discount depends on the category and grade which position belongs to. The company is considered to be that feel a part of it can only be falling in love with each of its components. In this case it is proposed to begin with the clothing that can form employee commitment.

Two last steps of the hierarchy can be united in one due to its interaction and interchangeability within the “adidas Group” Kazakhstan. Esteem need and self actualization are proposed as possibility for young people make a brilliant career for short period of time. Adidas has a program of fast career growth in the brand stores. The staff occupying lowest trading positions in the store motivated by the example of the director of the same store, because the directors of the store were brought up in the company and started as simple shop assistants or cashiers. A carrier ladder for store or non managerial staff is represented in Figure 5.

This system of promotion works from the adidas Group appearance on the Kazakhstan market and Store Directors are usually employees who started from retail positions. It was mentioned previously that it gives possibility to grow fast. The normal period between moving from one position to another is less than 6 months.

This fast moving promotion is available through SHINE Retail program. In 2010, “adidas Group Global” introduced SHINE, a Human Resources people strategy, to leverage existing best practices and create a single global standard for the field organization. This ensures a set of broad and deep vertical retail and commercial skills to develop staff globally. Basing on this program store workers have special training every week in accordance with position they occupy. These training and webinars are targeted on people to get new knowledge and practical skills to be promoted to the next step of individual career path. Trainings are divided into two categories. First part is called “Fit for Today” and the second part is “Fit for Tomorrow”. “Fit for Today” is exactly that one which is used for promotion. “Fit for Tomorrow” is represented by talent selection during interviews and their development within the company. This category of training is on the stage of development and adaptation for Kazakhstan people mentality.

 

Figure 5. Retail field career ladder in adidas Group Kazakhstan

 

In other words to reach their personal best, “adidas Group’s” employees are offered training to build on their strengths, improve their skills and overcome their own challenges. In this process, joining individual aspirations of organizational needs is the highest priority. Company focus efforts on three key success drivers: performance management, Talent management and Succession management.

Adidas Group Kazakhstan is fairly young company in Kazakhstan market. International experience is one of the most successful and Adidas AG is in the top 50 of the best employers in the world. Today, the main task is the development of staff within the company and search for talents.

A negative side of motivation implementation in “adidas Group” Kazakhstan could be represented by Herzberg’s motivator-hygiene theory, in terms of “Working Conditions” and “Supervision” factors.

Working condition factor is very important for employees in a modern organization and that do not give positive satisfaction, though dissatisfaction results from their absence. The office of “adidas Group” Kazakhstan does not represent satisfying enough conditions. Office itself, consist of big room unifying about 40 people and 6 small rooms of Top managers located along the perimeter of the office, bordered by glass walls. Due to the fact that 40 people work in one area during whole working day main room is very stuffy, the staff is talking to each other and creates an annoying noise, from continuously working computers a headache appears. All these factors demotivate employees who have to leave their working places for some minutes to breathe fresh air, rest and relax.

Another factor was represented by supervision. As it was mentioned previously, employees of all departments unite in one area and only Top managers bordered by glass wall that create feeling of constant supervision. This kind of experience is often demotivate employees, restrict their freedom and hesitate towards movement, creates a sense of discomfort and inconvenience.

Consideration of hygiene factors above shows negative sense. The bad office conditions could be related to the Existence needs of Clayton Alderfer’s ERG theory of motivation. This theory is the most suitable one motivational system for description of “adidas Group” Kazakhstan. As ERG Theory states that at a given point of time, more than one need may be operational /3, p.51/. Therefore, “adidas Group” employees skip the first category of needs and are motivated by relatedness and grow the needs that are more developed in company’s policy of motivation.

Next theory that could be applied is Expectancy theory. This type of theory is applicable for store employees, whose benefits and salaries directly depend on efforts and forces put. Employees believe that a high level of performance will result high outcomes level. These could be proven by amount of bonuses got by stuff that is even greater than salary itself. Employees put all their effort to fulfill the plan and they expect to be given a reward. Expectancy theory holds valid for trading personnel and meets their motivational needs.

Motivational system of the “adidas Group” Kazakhstan was considered from different sides with accordance to Maslow Hierarchy of Needs, Herzberg’s motivator-hygiene theory, Alderfer’s ERG, and Expectancy theory of motivation.  Positive and negative factors, their influence and consequences were elicited.

Presence of negative factors is supposed to be possible because “adidas Group” Ltd. is company that operates on Kazakhstan market for short period of time and motivation system used worldwide need time to be adopted for employees mentality and perception.

Employees of the company despite the absence of strong motivation program show a high level of intrinsic motivation. This is evident through the work of the staff from the foundation of the company, unpaid overtime office hours, dedication, pride of the fact that you work for Adidas and other.

However, system should be improved and several steps should be taken in order to implement new modified program of motivation. Motivation program and way of its implementation will be proposed in Chapter 3.

 

 

 

 

 

 

 

 

CHAPTER 3. DEVELOPMENT OF MOTIVATIONAL PROGRAM FOR “ADIDAS GROUP” LTD KAZAKHSTAN

 

3.1 Design of employee motivational program

 

The  significance  of  employee  motivation,  influencing  the behaviors  of  their  employees  to  behave  in  certain  ways,  can ultimately  decide  the  success  or  failure  of  an  organization.

Successfully motivating employees can result in improved morale, reduced turnover, and an increase in production and profits.  The problem is that motivation does not come in a “one size fits all” package.  Different people are motivated by different things.  In other words, what motivates Top management will not necessarily motivate first line employees.  So, in order to be a successful motivator, company need to know their employees.  Learn what their interests are, and what is important to them. 

“adidas Group” Kazakhstan motivation program described in Chapter 2 and has its advantages and disadvantages. In order to develop the program company should organize a survey that will show how international “adidas Group” motivational program fits to Kazakhstan people and whether their needs and values are similar.

There are some motivators that employees value more and give priorities. These motivators could be represented by work conditions, monetary and non-monetary incentives, perks, etc.

In Chapter 2, work conditions were criticized, and the need of its improvement is obvious. Employees are bound to be much more productive, when they work in a positive, supportive environment, good office room, fresh air and conditions without noise and stimulus.

The program of employee motivation could be arbitrary, however, in order to be more effective it should be based on some motivational theories. Table 3 shows that motivational programs are divided in two major categories, intrinsic and extrinsic rewards,  and  each  reward  is  composed  of  three  programs  that are compatible with the concepts of each rewards. Additionally, some  specific  examples  of  each  program  are  identified,  and  the relevant theories in the last column were included to link it to its pertinent  programs. Managers  should  be  aware  that  more  than one theory can be identified with the appropriate programs, and understanding and studying of theories prior to learn particular programs can be sufficient enough as long as managers are be able to identify these theories to useful and related programs.

In terms  of  intrinsic  rewards,  employee  recognition  programs focus  on  encouraging  employees’  specific  types  of  behavior,  so appropriate  behaviors  can  be  maintained  and  repeated. The examples  of  acknowledging  and  recognizing  employees’ desired behaviors  are  a  simple  thank  you  note,  certificates  of appreciation,  or  just  saying  “job  well-done”  or  “thank  you.” “adidas Group” Kazakhstan does not use such kind of motivational tool in practice, and this could be very useful and increase employee motivation, loyalty and commitment. Another way could be conducted by placing a clear Mason jar on every employee's desk or workspace and let them decorate the jars. Managers can drop anonymous thank-you notes in the jars to reward a job well done. Also, employees can leave notes to thank someone else for helping them accomplish a task, assist a customer or even troubleshoot a computer problem. This type of incentive provides a more personal reward that can inspire employees to help each other and recognize the importance of working together as a team. 

Table 3 - Types of Motivational Programs, Examples, and Linked Theories.

Types of rewards	Programs	Examples of activities	Related theories of motivation
Intrinsic (self-satisfaction)	Employee Recognition	Thank you notes, Certificates of appreciation	Reinforcement Theory
	Employee Involvement	Participative management, Quality Circles, Employee Stock ownership	ERG Theory, Motivation
	Job Redesign & Scheduling	Job sharing, rotation, enlargement, & enrichment, flextime, telecommuting	Two-Factor Theory
Extrinsic (rewards given by others)	Variable Pay	Piece-rate pay plan, gain sharing & profit sharing plans, bonuses	Expectancy Theory
	Skill-Based Pay	Skill, competence, knowledge based pay	ERG Theory, Maslow
	Flexible Benefits	Modular plans, core-plus plans, flexible spending plans	Expectancy Theory

 

Employee  involvement  programs  are  designed  to  increase employee  participation  in  the  organizational  decision-making process and their commitment to the organization’s success. The first example of employee involvement programs is participative management, which emphasizes joint decision-making. Representative participation is when elected or nominated employees represent themselves as all employees. Quality circles are  generally  composed  of  less  than  ten  employees  and supervisors  who  meet  regularly  to  discuss  quality  programs. Employee stock ownership plans could be created to increase employee commitment to accomplish organizational activities. Participative management could be the best one for practice in “adidas Group” in order to improve communication and decision-making process of office managerial staff and stores administrators who do not participate usually. Store managers and administrators only follow strategies and goals of Top managers who do not deal with customers and not so closely acquainted with stores work environment. Therefore decisions will be done more objectively and employees’ motivation towards work will increase.

Finally, job redesign programs are focused on reshaping jobs in a way that employees do not feel boredom or repetition for a specific task.  Examples of these programs are job rotation, job enlargement, and job enrichment. Job scheduling programs could be designed  to  allow  employees  some  discretion  over  their  work hours  or  schedules.  For  example,  flextime  allow  employees  to decide when to arrive and leave work, job sharing allows two or more individuals to split one permanent job, and telecommuting allows employees to perform their work from home at least two or three days a week. Flex time schedule could save time for “adidas Group” office employees due to time difference with Russia and Germany. Workers have overwork hours because video conferences and negotiations are scheduled by the main office in Russia. Job rotation could have positive influence on store managerial and nonmanagerial staff. People could be moving from one store to another in order to make work less monotonous and more interesting.

The variable pay programs are the first programs identified in the extrinsic rewards segment, and it can be differentiated from the traditional compensation programs where an employee’s pay is based on some organizational/individual measure of performance. The examples are a piece-rate plan based on each unit  of  production  completed,  a  gain-sharing  plan  which  is  a formula-based group incentive plan, and profit-sharing plans are organization-wide programs that distribute the company’s profit. “adidas Group” could implement piece-rate plan for store personnel that will be based on pieces sold during one month. Pieces sold could be represented by different clothes and shoes every month in order to make job more interesting and to stimulate sale of products that are not so popular.

Skill-based pay generally sets pay levels based on how many skills employees have or how many jobs they can do, also called competency-based or knowledge-based pay. These types of pay could be adopted for office stuff and store stuff as well as based on the fact of managerial and non-managerial positions.

Flexible benefits allow employees to pick benefit packages that individually tailor to their own needs and situations.  The most popular type of benefits are modular plans; pre-designed modules that meet needs of a specific group of employees. Next, core plus plans consist of a core of essential benefits plus other benefits  that  employees  can  add  to  the  core,  and  flexible spending  plans  allow  employees to  set  aside  up  to  the  dollar amount offered in the plan to pay for particular services. Flexibility is very important and promotion of flexible benefits could be very useful for “adidas Group” employees, where everyone could choose best for him package.

Extrinsic motivation also could be represented by non-direct payment and has various forms and ways of implementation. It could be presented by Gift Basket as example. An incentive program can reward employees who exceed sales goals or have outstanding accomplishments. Gift baskets might be filled with popcorn, candy and a gift certificate to the movies, or with placed an inexpensive bottle of wine into a gift basket with a gift card to a local restaurant. It can also be considered giving gift baskets filled with candy and lottery tickets to employees for birthdays, including a voucher to leave work two hours early one day that month.

Free vacation will be perceived by employees positively. In tough economic times, it may be hard for employers to offer continual raises to every employee. Instead, consideration of holding a contest for employees where the winner receives a free vacation will be affordable. Company should consult a travel agency ahead of time to find good deals on plane tickets and hotels. The incentive to win the contest will increase employee productivity, which provides a return on investment in the prize.

Employee parking also could be a really influential motivational tool especially because Almaty is overcrowded by cars and it is very hard to find parking near the office. Creation of simple and free employee incentive by designating a VIP parking space in the parking lot company will be useful. Choose a spot close to the building's entrance and label the spot as reserved. It can be assigned a different employee to this reserved parking spot each month on a rotating basis. Besides being of no cost to company, this type of incentive rewards every employee, not just the overachievers. The VIP parking space assures every employee that they are valuable to the company and makes sure nobody gets overlooked.

All tools and methods proposed above could be very useful for “adidas Group” Kazakhstan and support already existing employee motivation program. These methods should be modified to be more appropriate for company’s staff needs.

Excellent motivation plan, program, tools and methods seriously depend on the way of its implementation. Employee motivation program should be supported by special requirements of its implementation.

 

3.2 Implementation of employee motivational program

 

An Excellent plan the program of employee motivation cannot guarantee 100% success. Correctly implement a program can be even more difficult than its development. Several factors and tactics should be used in “adidas Group” in order to make employees feel comfortable and decrease their resistance. The most important key elements for successful implementation of incentive schemes are the following:

• Vision
• Innovation and Risk Taking
• Fixed Duration
• Decentralized Design
• Separation from Base Pay

Vision

“adidas Group” Kazakhstan can increase the probability of success by taking the time to plan and prepare properly for the implementation of modification of the incentive scheme that will be appropriate for Kazakhstan mentality and will correspond to CIS motivation policies.

Top management must ensure that the scheme is designed to fit the strategy and culture of “adidas Group” Kazakhstan, not only “adidas” CIS; involve people in the design process; and, in doing so, secure "buy in" among the opinion leaders on staff.

In addition, leaders must chose measures that are - or are closely related to - business metrics; and include baselines for each measure in vision.

This will put Managers in a position to define the intended outcome of incentive programs and to track its performance. That is, it gives a way of holding HR people accountable for business results.

Innovation and Risk Taking

Implementers of “adidas Group” must be daring for their incentive programs to succeed. If rewards are treated as a cost center, like water or electricity - something to be used, but sparingly and not wasted - it is doomed before start.

Company must be prepared to pay significantly over the odds for peak performance. Risk-taking in this respect encourages others to take the risk of innovating - and standing a chance of achieving unbeatable results in the process.

Fixed Duration

The most successful incentive programs are those that have a fixed (and short) duration. Peak performance demands peak effort and this requires the kind of intense focus that can often not be sustained in the long term, year in and year out.

Decentralized Design

Traditionally, organizations centralize reward system design, for reasons of parity, perceived fairness and control. Unfortunately however "one size doesn’t fit all" in incentive design.

Different business units have to be allowed to design their own incentive programs and, if necessary, to implement designs that are different from each other.

Allowing decentralization to “adidas Group” Kazakhstan in this way does not equate to losing control and accountability by “adidas Group” CIS. Company should still require the business units to use the same design principles and protocols.

“adidas Group” Kazakhstan should still be expected to monitor and evaluate their incentive programs against outcomes and objectives agreed in advance; and they should still report on the bottom line impact of implementation of the scheme to “adidas Group” CIS.

Separation from Base Pay

Incentive pay should always be separated from base pay as “adidas Group” Kazakhstan tries to implement it. Because incentive pay is not part of base pay, it must be re-earned every year (or other accounting period). This achieves two ends, namely:

• It enhances the motivational value of incentive pay by underlining its connection to performance.
• It prevents base pay from becoming an impossibly high fixed cost.