This report was
compiled to inform the staff of Rostel on the theories and concepts
of organisational policies and goals.
are descriptions of the main theories and their applications to
in researching this report were:
Management Practice by Michael Armstrong
Contemporary Approach by Deode Keuning
Strategy and Business Planning by Roger Bennet
If we consider
the fact that we live in a society of organisations and that this is
such an integral feature of our lives, it is surprising that we
rarely consider what organisations are, their goals and how they are
(be it a industrial company, private or government controlled firm;
large, medium-sized or small company, national or multi-national
company, charity, union, political group etc.), is a group of people
who work together and co-operate in order to reach a specific set of
goals. Organisations by working together can accomplish goals that an
individual would be otherwise unable to reach.
owners/managers of the organisation must decide on what the company s
purpose is; its goals and aims, what policies to adopt to achieve
these gaols and the resources available to do so. The planning of
these strategies is known as strategic management. G A Cole in his
book Strategic Management defines it as follows:
Management is a process, directed by top management, to determine the
fundamental aims or goals of the organisation and ensure a range of
decisions which will allow for the achievement of those aims or goals
in the long-term, whilst providing for adaptive responses in the
A company must
have a clear statement of its objectives and areas of activity that
will provide the vision and direction for it to operate over the next
several years. This mission statement of the company must ask the
What do we want
What is our
business? What will our business be?
Who are our
customers? One which customer groups do we want to focus?
In which way do
we want to offer a distinguishing and lasting value to our customer?
may seem straightforward, but the answers must be well thought out
and considered, as it will have a huge influence on the plans and
operations of the company.
Fragrances mission statement declares that the company wants to be
influential in the promotion of beauty and health products and create
a climate of healthy living through the use of beauty care;
fragrances and cosmetics, vitamins and other health products. More
recently Rostel is considering expanding into the health and leisure
centre market, a move consistent with Rostel s overall mission.
groups that Rostel have decided to focus on are young people (the
under 30 s); not only do young people have more disposable income to
spend but they are the customers of the future, and the over 50 s.
This group of consumers is living longer and is becoming, in general,
wealthier and more health conscious. Rostel has also stated its aims
to make their products more appealing to men, a group previously
largely ignored by the fragrance and cosmetic market. While the above
mentioned groups are the focus of Rostel s products the mission
statement also declares that its products should appeal to the widest
variety of customers as possible, as to exclude any group from its
marketing plans would be disadvantageous.
decided that to distinguish its products from its competitors, they
would produce the highest quality products made using cruelty free
processes and which would in some way reflect the locale i.e. there
would be a strong Scottish and Caithness in particular, theme in the
products. Rostel have felt that using cruelty free and
environmentally friendly products are the way of the future and that
any company not doing so will be felt behind.
For a company to
set in motion the mission that it has chosen it must formulate a
strategic plan. A strategic plan can be defined as a broad program
for defining an organisation s objectives. It creates a guideline for
decision making and channels the organisation s member s thinking so
that it is consistent with the objectives. In simpler terms the
strategic plan embraces the overall mission statement and formulates
them into a series of aims and goals that the organisation can
implement. In essence it answers the question of how do we do that?
answered the question of how it accomplishes its mission statement of
promoting healthy living by producing a range of cosmetics,
fragrances, vitamins and health care products designed for customer
groups, such as the elderly and the young wage earners. The company
has also targeted new groups such as men who not normally considered
as potential customers for fragrances and cosmetic products. However
the company has not forgotten that it still must attempt to appeal to
a more widespread market not confining itself to niche markets alone.
The tactical or
operational plan states the methods and resources that will be needed
if the company s goals and strategic plans are to be implemented.
This describes the objectives that need to be obtained, the
measurements for obtaining these objectives, the allocation of
personnel and resources required and finally they state in which time
span the set objectives will have to be obtained.
area and department of the company will be given an action plan that
will set out a specific objective or target, which is both achievable
and realistic in terms of resources, capabilities and time. It will
also detail how the progress and eventual success or failure of the
plan will be measured. This tactical plan gives the department a
clear objective to follow, outlining the critical core tasks that
must be achieved and the management systems used to fulfil them.
Rostel has set
its departments several operational plans based on the overall
strategic plan envisioned for the company. One of the present plans
concerns the Christmas gift market. Marketing has predicted that
there will be increased demand for Rostel products, especially
fragrances as gifts. Due to recent publicity and an effective
advertising campaign the Christmas sales of fragrances are expected
to almost double. The result is an operational plan to increase the
production and distribution of fragrances.
Production Department has had to increase it production twofold.
There is now a night shift in operation, which has involved the
temporary transfer of employees from other production lines to
achieve this level of production. Management has had to work out new
employee rotas, working hours and reward schemes.
materials have been ordered from suppliers and due to a cash flow
crisis resources have had to be diverted from the other production
lines. Management has had to develop a new structure and management
system to plan and control the increased production. Above all there
is a definite time scale that must be adhered too.
Department has had to hire temporary staff and vehicles to get the
products into the shops in time for the Christmas market whilst at
the same time trying to keep its costs down.
departments within Rostel each have their own operational plans
detailing the personnel, resources and management systems necessary
to meet the Christmas rush for Rostel s fragrances.
A company will
usually state in its strategic plans one or several goals which gives
the employees a focus for and direction for their work. These goals
provide the framework in which employees can operate knowing that
they are working towards the company s overall plans and mission. A
company can have different goals for each department depending on its
There are four
general types of goals:
in general the company puts the customer first. Customer satisfaction
is paramount, the company concentrating on customer service and the
methods necessary to achieve this. The employees of the company know
that their primary role is in providing the customer with a good
the company concentrates on the product (or a service); to produce
the highest quality or best value or just the cheapest product. This
may also be another aspect such as distribution, packaging,
marketing, etc. The company concentrates on those aspects of
producing the product, the product itself and getting the product to
Goals are of a more tactical nature in that they set out the specific
targets to be achieved. This may be production targets (level of
production), customer service targets (number of satisfied customers
etc.) or for instance, in the case of distribution, delivery times.
are stepping-stones on the way to achieving a primary or main goal.
For example, a company s primary goal may be to achieve one hundred
per cent customer satisfaction and it has set several secondary goals
to achieve this. The company has secondary goals of having all its
employees trained in customer care, product knowledge and empowerment
to make their own on-the-spot decisions concerning the customer. When
the company has achieved these secondary goals it will know that it
is well on the way to fulfilling its primary goal of customer
Fragrances Ltd has an overall product goal, that is to produce the
highest quality fragrances, cosmetics and health care products on the
market. However the departments within the company each have
different, more specific goals. The production department has several
operational goals depending on the actual production line. In general
this sets out not only the output targets, but also the quality
standards and levels of rejects acceptable. The distribution
department an operational goal that details delivery times and
In contrast the
Retail Outlets have a consumer goal in mind in their operations, as
they are very much concerned with customer service and the image of
the company rather than volume of sales.
Department has operational goals with set sales targets to reach per
month. They also have secondary goals in that they have to achieve
set targets in obtaining new business and increasing sales in
existing customers, both of which if achieved will go a long way to
fulfilling their primary operational goal.
When a company
sets out its mission statement and formulates its strategic and
operational plans, it must take into account the fact that the
company must operate in the real world and that there are a multitude
of factors that can be an influence on the company and its plans.
company must be able to predict and recognise the constant state of
change in the environment and have a strategic plan that not only
takes this into account, but also be flexible enough to react to any
change quickly enough to take advantage before its competitors. A
company which ignores the outside world and its changing
circumstances and attitudes will not survive for very long.
its plans a company should consider the influences that can affect
it. This is known as a PEST analysis, which identifies four areas of
effect on an organisation. They are the:
A company must
follow the legislation as set down by the government. Legislation
consumers from business. Examples such as the Consumer Protection Act
1987, the Trade Descriptions Act and the General Product Safety
Regulations 1994 set out the regulations and standards that companies
must adhere to in dealing with consumers.
as a whole from business. Legislation such as the Fair Trading Act
1873, the Companies Act 1989 and the Competition Commission impose
limitations and regulations on the manner in which companies can
Companies from each other. As well as the legislation mentioned
above, the Patent Office through Patents, Trademarks and the
Copyright Act 1999 protects a company s intellectual property (this
includes such things as a company s innovations, trading secrets
includes self-regulatory bodies such as the Advertising Standards
Authority, The British Association of Travel Agents and the
Association of British Healthcare Industries all of who have their
own standards which member companies must follow.
A company must
take into account a multitude of economic factors such as changes in
consumer income, the present and future interest rates, taxes,
inflation, exchange rates, costs of production and the general feel
good factor ; the country may be in a recession or coming out of one.
The company should look at the effect this will have on their short
and long-term plans and adjust them as necessary.
also look at the global economic environment regardless of whether
they export or import, as this will have an affect on there
operations in some way. For example, within the next 30 years East
Asian countries will increase their share of world production from 15
to 25 per cent. British companies must take account of this, and what
it will mean to their long-term strategies. In the short-term bad
harvests, the political and economic situation in other counties,
international competition and many other factors that exist all can
affect the operations and plans of a company.
factors can be divided into the demographic and cultural factors.
However it is important to appreciate that they cannot be so readily
the demographic factors a company should look at the growth, size and
composition of the population. Changes in these factors will have an
affect on a company s future plans.
growth in the population as an example, a decrease in the birth rate,
for example, will not only mean that there will be less potential
consumers, but this will have a more immediate effect on baby food
producers such Nestl . For employers this means that there will be
less labour available in the future.
age of the population and lowering of the retirement age will mean a
great deal for companies in healthcare and medicine, the leisure
industry and financial services; especially insurance and pension
companies who will have to pay more pensions and for longer.
spending power and general trends of the various age groups are of
prime importance. The fact that there is a trend for people to move
out of larger cities into smaller towns is important for store-chains
in that they can follow the consumers and maintain their market
share. Identifying those groups with surplus income, such as wage
earners in their early twenties with few commitments such as families
and mortgages, or the retired provide potential marketing
opportunities. Analysing the size of a group and their buying habits
is vital to determine if there is a large enough market to be viable.
factors are of equal importance to a company as the changing
attitudes, values and concerns of the population can have a profound
affect. Recent trends such as individualisation, assertiveness and
consumerism; concern for health and the environment; decrease in the
total number of working years; a desire for more comfort; increased
role and importance of women in the labour market; redistribution of
social roles between couples; safe sex; higher levels of education
resulting in fewer people being prepared to undertake unskilled
labour and an increasing bias to employ younger people are just some
of the factors that a company must take into consideration when
formulating its strategy.
feature of the twentieth century has been technological progress.
Some would argue there has been a new industrial revolution, which
has left few industries unaffected.
These changes in
technology have resulted in two important consequences for industry,
that is the modification of production processes and the development
of innovative new products which affect a company both with its own
business and other related businesses.
In general, new
technology, automation in particular, has resulted in increased
production with reduced labour costs. The development of the
microchip and consequent computerisation has led to the explosion in
the Communications industry. The down side can be seen in the
increasing downsizing of organisations and a rise in the unemployment
figures. The printing industry for example, has suffered due to the
fact that even the smallest one-man business can now, with a simple
PC produce its own brochures, leaflets, labels and stationary.
Fragrances in formulating its strategic plans must look at the
present legislation and how it will affect its operations. The
company must ensure that all its products are within the standards as
set by the Cosmetic Products (Safety) Regulations and that in
labelling and retailing the products they observe the Trade
Descriptions Act. For example the fragrance Bloom of Heather does
indeed have extracts or the essence of heather contained within. As a
member of the Cosmetic, Toiletry and Perfumery Association, Rostel
must also apply the standards as set by the Association to their
The company has
identified that due to the fact that people are living longer; the
population as a whole has become older . People are living longer,
retiring younger, have more disposable income and an increased
awareness of health and fitness. The latest figures from the research
organisation MORI indicate that over twenty per cent of the
population is over sixty and control eighty per cent of the country s
wealth. The over fifties have a gross income of 457 per week as
against the national average of 397. They are becoming more health
conscious and enjoy more free time to devote to social and leisure
activities. This trend is set to continue and Rostel has invested in
research into healthcare products designed for the older (over fifty)
consumer. In the short term it has repackaged some products that had
reached their market peak and re-marketed them specifically for the
older customer. Rostel also intends to apply this to the proposed
Health and Leisure Centre in having facilities, attendants and
leisure services for the old and the retired.
Rostel has determined that there is a general air of optimism and a
feel good factor that will continue for several years. The effect is
that people have more income and they are prepared to spend this on
luxuries, such as fragrances and cosmetics. The increasing cultural
awareness of the environment and use of cruelty free products, is not
only the way that Rostel should research and manufacture its
products, but that this should become a major marketing feature;
informing customers about the natural and environmentally friendly
products the company produces.
Rostel has been
observing the trends in other markets and has noted the increased
sales for fast-dry nail polish. Currently, fast-dry nail polish is
estimated to have grown to a significant 25 percent of the entire
nail polish market. This important innovation has been responsible
for a pronounced rebound in the US nail care industry. The market, a
combination of nail varnish and nail polish remover, grew from a
value of $498 million in 1994 to a value of $633 million 1998 at an
annual growth rate of 6.2 percent. At present the UK fast-dry nail
polish market is small and there is a possibility of Rostel moving
into this area. However, Rostel will be moving from its currently
successful policy of operating in niche markets into the larger
general market. This would mean competing directly with the major
cosmetic producers and, even though the present economic factors such
as interest rates and inflation are favourable, this would be too big
a step to take. If this move were taken it would divert resources
from the Health and Leisure Centre, which Rostel considers a safer
though potentially less profitable venture.
Rostel has made
full use of the latest improvements and innovations in research and
laboratory equipment when it set up its research department. The
company has reduced waste disposal costs, while at the same time
furthering its aim of being environmentally friendly by installing a
waste recycling plant. It has managed to reduce production costs by
purchasing the latest bottle-labelling machine. The company s two
second-hand vans have been replaced with new vehicles fitted with
The role of
group or organisation with an interest in and potential to influence
a company can be termed a stakeholder. These stakeholders are
affected by and can in return affect a company. Ignoring these
stakeholder groups can have a negative impact on an organisation.
be broken down into two groups, direct stakeholders and indirect
stakeholders (i.e. those that deal directly with a company) include
groups such as:
companies) or taxpayers (for public companies)
as banks and finance companies)
can be considered dependent stakeholders)
stakeholders (i.e. those not directly involved with but are affected
or can affect a company) can include such groups as:
groups/public opinion (at the local, regional, national and
actions and policies of competitors can have a significant affect on
(London Stock exchange as well as foreign stock markets)
The media (a
negative public image can be devastating to a company s success)
organisations (such as the various professional bodies, trade bodies
and trade unions)
can have both a direct and indirect affect on a company. Use of
legislation can directly affect a company, whereas the economic
policies adopted by the government can have an indirect affect.
stakeholders and their possible influence on Rostel Fragrances Ltd
from the directors down to the shop floor workers all have a vested
interest in the success of the company to secure their job and
present standard of living. Employees have a direct influence on the
company as their work performance can greatly affect the production
and effectiveness of the company.
Sutherland Enterprise, is a government organisation which promotes
and provides finance for businesses in the north. They have an
interest in Rostel as the company provides employment and creates
wealth in the county. CASE has provided support, both in expertise
and finance to Rostel in the past especially when it came to the
company s location in the Caithness Enterprise Park in Thurso where
it receives much reduced rent and rates charges.
The Local Banks
have not only a direct interest in Rostel, providing loans and other
bank services, but also an indirect interest in that all of Rostel s
employees have accounts with them. So the growth and prosperity of
Rostel and its employees means business for the Banks.
both local and national have an interest in Rostel as the company
provides a market for their product and services. This not only
includes suppliers of raw materials such the makers of plastic
bottles and containers, but local services such as window cleaners,
gardeners, electricians and many other local businesses, all of whom
are very dependent on Rostel for their business.
Community has an interest in Rostel as the company employs over a
hundred employees, all of whom spend a great deal of money in the
local shops and services. This stimulates the local economy providing
much needed wealth locally and creates even more jobs.
designed to motivate employees
It is important
for a company that aims for high levels of performance that it has a
properly motivated work force. A company has to first identify what
motivates an employee and then develop a strategy that utilises that
motivation for the benefit of the company. As individuals have
different motivations the strategies adopted must be tailored to suit
the individuals needs and wants.
To achieve a
high level of performance from an employee they must be properly
motivated. This means that the job and its rewards are appropriate to
the employee s needs and wants. Failure to do so will result in a
demotivated workforce and as a consequence poor working performance.
Identifying what motivates an employee and providing that motivation
is very important to the company for productivity and an employee s
There are many
theories about motivation and its applications in the workplace.
There is Taylor s Instrumentality theory, which states that people
work basically for money. To increase an employee s motivation
increase their pay. The problem with this theory is that this is a
short-term answer and to sustain or increase motivation further, more
money must be paid. The inherent flaw in Taylor s theory is that
people work for other reasons as well as money.
This fact is
recognised in the needs theory as proposed by Maslow, Alderfer and
McClelland. Maslow laid out a hierarchy of needs that an individual
would progress through to satisfy his needs. The first need is
physiological food, water and sex. When a person has secured this
need he will move to the next, which is safety protection and
security. Once these two have been satisfied the social needs are met
love and companionship, then ones esteem self-respect and the respect
of others, before the final stage of self-fulfilment growth and
development is reached. Maslow states that a person will secure his
needs on one level before moving to the next. This theory has been
very influential in the past but it is now generally accepted that
people have different priorities and therefore, do not in reality
operate within such a rigid hierarchy.
simplified this theory into three categories: Existence needs, which
are concerned with survival; Relatedness needs which stress the
importance of interpersonal and social relationships; and Growth
needs which are concerned with the individual s intrinsic desire for
adapted a similar theory for the motivation of managers which
identified three main needs: achievement in the form of competitive
success and excellence; affiliation, which is the need for human
relationships and finally power, which is the need to control and
two-factor model divides the wants of employees into two groups; the
first group revolves around employees need to grow and develop in
their job and the second, which is pivotal to the first group,
establishes the employees need to be treated fairly in regards to
working conditions, supervision, compensation and administrative
practices. Herzberg establishes that the first group provides the
motivation while the second only prevents job dissatisfaction. This
theory has recently come under heavy criticism due to its over
simplicity and limitations.
theory or cognitive theory conjectures that it is people s perception
of their working environment and the ways in which they interpret and
understand it, that determines their motivation. This theory has
gained in popularity as it is deemed to be more realistic and
practical. It states that there are four processes that motivate a
person. They are:
(expectancy theory), which state that a particular action will be
followed by a particular outcome and the certainty in this, will
motivate an individual. Change and uncertainty will demotivate a
(goal theory), when specific goals are set performance is higher
choice (reactance theory), which proposes that people can choose
their behaviour to satisfy their needs. If this freedom of choice is
threatened they will be demotivated.
(equity theory), which basically states that people will be more
highly motivated if they are treated fairly than if not.
strategy is designed to improve an employee s performance. To be
effective it must be relevant to the employee s needs, wants and
drives as established by the motivational theories described above.
motivational strategies used by organisations are:
quite simply, by paying an employee more money this will increase
performance. This is the basis for Taylor s Instrumentality theory
and while it will work in the short term eventually an employee s
performance will drop and another reward may be necessary. Not only
will this result in increasing labour costs but there is an inherent
weakness in this theory in that people are not solely motivated by
money. Rewards does not just include wages, but also various benefits
such as pensions, company car, sick pay, insurance cover etc. These
must be relevant to an employee s needs and wants to be effective.
Rostel, in the
Christmas build-up offered its employees a handsome shift allowance
to work around the clock in unsociable hours. This was effective at
first, but after several weeks the employees became dissatisfied with
the long unsociable hours and many returned to normal hours. To
motivate employees to work the night shift Rostel increased the
allowance. However, this had little effect as employees have
satisfied their need for extra money at this time of the year. This
demonstrated where Taylor s theory breaks down and that other
theories, such as Alderfer s which established that once a persons
existence needs are met, further increases in money will not in
itself motivate an employee.
incentive schemes such as a commission based or performance related
strategy motivates an employee by the fact that the better their
performance the more they will earn. This would imply that under
Taylor s theory, the employee would be self motivated and work as
hard as possible to earn as much as possible. This is not the case
however. Applying Maslow s hierarchy of needs theory, an employee
will first of all satisfy his basic physiological and safety needs.
Financial incentives will provide the motivation to do this. However
once the physiological needs are met financial incentives will no
longer motivate an employee, instead they will be motivated by other
factors such as social needs, esteem and self-fulfilment.
In the past
Rostel motivated its Sales Department simply by commission, reasoning
that the more the salesman sold the more he earned for himself. At
the start this was effective, with high sales figures. However, very
soon the growth of sales started to fall as the Salesmen were now
earning enough to meet their basic needs. The salesmen were now
making a comfortable living and there was little incentive to work
harder to increase sales. Increasing the rate of commission was not
the answer, as this would simply mean more money for the same effort.
What Rostel did was to look at Maslow s hierarchy of needs and
realise that money would have little effect on motivation and that
they would have to look at the other levels of needs such as social
needs, esteem and self-fulfilment. With this in mind Rostel embarked
on a program of involving the salesmen more in the company. The aim
was to make them feel part of the team (fulfilling the social
aspect); providing recognition for their efforts (esteem) and finally
to provide them with the training and advancement necessary to fulfil
their need for self development.
strategies can motivate employees by the fact that as man is a social
animal people work better as part of a team. Maslow in his hierarchy
of needs states that there is a need for acceptance as part of a
group. Being part of a team satisfies this need for social
interaction. The benefits are that people perform better when sharing
a common task; the other team members providing comfort and
reassurance and also that a team can achieve more than its
constituent parts. The disadvantages are that group dynamics may
cause rifts that make the team ineffective and not only does it take
time for a team to develop but when a member is removed or missing
the team may suffer as a whole.
Production Department of Rostel the three production lines each
operate as a self contained team. They know each other and their
respective roles. Each has a knowledge and expectation that what they
and their team-mates do will have an expected result. There is
comfort in this that motivates the individual and the team (the
expectancy theory). The team can produce more as a unit than as
separate individuals. However if one of the team is sick and another
employee joins, there is uncertainty and a general demotivation of
the team as a whole until the new member is accepted.
strategies are those that recognise that it is not only extrinsic
factors (pay, praise, promotion etc,) which motivate people but also
intrinsic factors such as responsibility, freedom to act, empowerment
to make decisions, interest in the work, being challenged and having
the opportunity to develop. By designing job roles to provide these
factors the motivation of the employee will be increased. While this
can lead to a greater sense of job satisfaction and higher commitment
from the employees it can create problems with control and in
monitoring employees performance. Too much delegation to employees
can cause the company to lose unity and the employees can be working
at odds with one another.
In Rostel s
Sales and Marketing Department there was an attempt to motivate the
staff by empowerment. The employees were given greater authority to
make decisions, increased responsibilities and the freedom to act.
This did result in greater performance; sales figures were up and, in
the case of the Retail Outlets, customer service figures were at a
high. However, this led to the employees and their respective
departments to stop working together and to start operating as
individuals with their own objectives and standards. Coupled with the
lack of communications and other structural problems this led to the
recent chaos in the Sales and Marketing Department and subsequent
negative public image of Rostel.
strategies operate on the principle that motivation and consequently
performance are higher when an employee has a set goal or target to
achieve. Two things are vital for this concept to work. This is that
the goals and targets should be agreed between the management and
employees and that there is constant feedback to maintain the level
of motivation. The strength of this strategy is that the management
and employees have agreed on realistic goals and targets in which the
employee has the resources and motivation to achieve. There are
weaknesses, however, in that management can set targets that fail to
get the real support of the workforce, and provide little feedback so
that the employees have little knowledge of how they are actually
performing. Both these weaknesses can demotivate employees.
This was the
situation when Rostel added its vitamin production line to the
factory floor. The manufacturers of the vitamin plant had made claims
as to the output of the plant upon which Rostel set its output
targets. The employees could not hope to achieve these targets and
resigned themselves to not even trying. This demotivation led to the
output falling to fifty per cent of the target figures. The
management realised the problem and in consultation with the
employees set more realistic target figures which has resulted in
output of around eighty per cent of the plant s designed
decision making is a strategy that allows employees to have a say in
things that makes them feel more involved in the company. This
provides motivation for employees as it fulfils the two levels of
social acceptance and esteem in Maslow s hierarchy of need theory. By
being part of the decision making process an employee will have a
greater sense of involvement and in being part of the company, which
fulfils the social needs of the individual. Being able to make
decisions increases an employee s perceived respect and status, which
supplies the need for esteem. While this delegation of decision
making process is beneficial to motivation and employee commitment it
does have a few drawbacks. Controlling and monitoring the decisions
employees make can be difficult especially considering that, due to
their limited view of the company and its plans, employees can make
the wrong decisions. Also with many employees making many decisions a
manager will have to keep close control to ensure that the department
is working together towards a common goal in keeping with the company
One of the
problems with the Sales Department was that they were not properly
motivated. Once they had fulfilled their basic physiological and
security needs there was little or no motivation to increase sales.
According to Maslow s theory the next step to motivate the Sales
Department was to provide social acceptance and the need for
appreciation. Rostel implemented a strategy that involved the Sales
Department more in the Company s plans and decision making. The Sales
Department was empowered to make many of their own decisions
concerning the way in which they operated. The result was a more
motivated sales-team that felt they were not only working for
themselves but also for Rostel.
and performance in a strategy is very important. The link between
performance and reward must be clear and appropriate to an employee
to motivate them to higher performance. This can be seen in Porter
and Lawler s modification of Vrooms expectancy theory. To produce the
desired performance the effective effort that employees put into
their jobs are determined by two factors:
The rewards must
be pertinent and valued by the employee in respect to satisfying
their needs for security, social esteem, autonomy, and
The rewards and
the effort expended to gain the rewards are, according to the
employee s expectations, fair. The reward and effort are
This strategy is
very good at increasing an employee s motivation and performance.
However, unless the reward is something that the employee actually
values, it can have little motivational use and performance will not
be increased. It is also worth pointing out that mere effort is not
enough and that to increase performance it must be effective effort.
and considerations in motivational strategies
the various theories and the strategies based on them it is important
to take into account the following characteristics:
perceptions this is the means by which people interpret the sensory
information they receive and assign meaning too. A company must
ensure that their employees perceptions of the company s mission,
goals and plans, and the employees job role within the plans are in
line with what the company has stated.
expectations it is important for a company to know what employees
expect for their efforts and the degree to which they are motivated
by the fulfilment of these expectations.
Values and needs
a company must know an employees values; the basic convictions and
beliefs; and the needs that drive an employee. Understanding both
these factors and the various theories involved are vital to properly
motivate an employee.
flexibility any motivational strategy must be flexible in that it can
be modified to suit the individual and be able to adapt in accordance
with the change in an employees needs.
company must be aware of the use of improved technology and the
effect it has on motivations. New technology, in the drive for
efficiency and cost cutting, can redefine jobs. This can have both a
positive and negative influence on motivation. For example the
increased use of computer applications such as spreadsheets and
databases has revolutionised record keeping, making it easier and
more convenient. Trained employees are more motivated in their jobs
using such user-friendly applications. The negative side would be the
example of an employee who just presses a button on a production
line. Previously there were several tasks to perform and though the
employee may have an easier time now, but becomes demotivated due to
boredom and lack of interest.
systems a good production system can help to motivate employees by
eliminating blocks to achieving their goals. A good system for the
supply and conveyance of resources and raw materials, for instance,
will prevent frustration and help to motivate the employees.
culture a company can have a culture which encourages the motivation
of employees by giving them a sense of identity and unity of purpose,
generating commitment and providing clear guidelines on what is
expected of them.
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