Reducing Individual Bonuses on Motivation and Engagement of Employees

                                        Case Study Question: Potential Impact of Reducing Individual Bonuses on The Motivation and Engagement of Employees Name The Name of the Class (Course) Professor (Tutor) The Name of the School (University) The City and State where it is located The Date                         Case Study Question: Potential Impact of Reducing Individual Bonuses on The Motivation and Engagement of Employees  Introduction             Motivation is defined as a person’s desire to achieve something beyond expectations that depend on internal factors as well as the need for continuous improvement. In the workplace, motivation is a psychological process. It results from how an employee interacts with their work environment. According to scholars, motivation must have some level of willingness. The motive is not possible if workers do not have a willingness to increase their effort to achieve what they desire. Motivation is made up of three main factors: what a person is trying to accomplish (the direction), how hard a person is trying to achieve what they want to achieve (effort), and how long a person is willing to keep trying until they succeed (persistence) Theories of motivation attempt to explain the reason why people are willing to put consistent effort to accomplish what they desire. It is at times challenging to improve engagement levels from workers in a small independent financial services company, and a number of factors have been identified to play a role in determining the motivation and engagement levels of employees in workplaces. This paper examines the impact of reducing individual bonuses on the motivation and engagement of employees within the case study.              When employees have low levels of motivation, engaging them becomes problematic, and this is called work demotivation. Demotivation happens when employees lose their willingness to take action or inspiration (Burton et al., 2015, p.185). For the HR team in the case study, this is a disastrous scenario because workers are already demotivated at a time when the company is considering implementing cost-cutting measures (Geiger & Cooper, 2010, p.253). These are measures that may translate to lower rewards to an already demotivated workforce. Failure to tackle this issue properly and soonest could bring the HR’s fears to reality, the possibility of their top workers searching for better opportunities and rewards elsewhere. Nevertheless, this is not the only consequence of the company’s employee demotivation problem. The company only reports demotivation from its sales force. However, disengagement from lack of motivation is something very contagious in an organization (Yeheyis et al., 2016, p.865). The few demotivated workers in the sales department can easily and quickly demotivate the rest of the workforce. Other negative consequences include dissatisfied clients, low productivity, a poor business performance, and poor quality of work.             Numerous theories exist regarding improving employees engagement levels through motivating them. Rebooting the morale of their employees will be a long-term process that should start by shifting the organization’s management style. For example, the organization can adopt a participative and inclusive management style tailored to the motivational needs of its employees (Ernst, 2015, p.538). If the workers feel a sense of connection with the mission of the organization, disengagement would be low because they would understand current organizational challenges. In the example of its sales team, they would feel that working harder to achieve more could, in turn, translate to increased sales. When the organization that they think they are a part off is doing well, it may translate to higher levels of motivation because they will feel they are growing something they feel deeply connected to (Averbeck, 2010, p.361). Given that the company is considering cutting costs, making its employees feel connected to its mission by involving them when making managerial decisions that directly affect them is a form of reward in itself. However, the management of rewards and incentives is not as simple as it sounds especially in today’s highly complex HR world (Dodge & Ramsey, 2008, p.45). Pay is the easiest way that employers motivate their workers for performing a service or task. Without pay, individuals are unlikely to go out and work. As an incentive and reward, pay can also work to demotivate workers in powerful ways (Biberman, Baril & Kopelman, 2012, p.229). If workers are not happy and satisfied with the reward package offered by the company, it will be difficult for the management to engage them. Worse, they could seek greener pastures elsewhere.             According to the expectancy theory, a person is likely to pursue behaviors that have the most significant motivational force. In short, if there is nothing about a goal that motivates a person from taking action, that person will not take any action to achieve that goal. Originally invented by Victor Vroom, the theory equates motivational force to expectancy, times valence, times instrumentality. Expectancy is defined as the perceived probability that a person’s effort shall result in a performance level that the person desires. Valence is the value that a person believes will arise from getting a certain reward . Instrumentality, on the other hand, is the likelihood that a person will get a specific reward if they perform at a certain level (Biberman, Baril & Kopelman, 2012, p.231). The expectancy theory is the most appropriate for this case study for a variety of reasons. To begin with, it offers the HR department with a framework that they can use to think about how the company’s sales team thinks about the current rewards they get, and how they are likely to respond if these rewards are reduced (Klingle, 2008, p.285). The biggest problem here is if the workers do not believe in the company’s rewards. For this reason, this theory needs to work with other management styles such as including the workers when making managerial decisions that affect them. Scholars advocating the use of expectancy theory note that incentives are the best way to rewarding behavior and effort that the organization wants to encourage. However, the organization is approaching this challenge from the wrong perspective. First, the management of the organization is only using one form of reward, good bonuses for good targets achieved. This approach is wrong for several reasons. First, by only focusing on one form of compensation, the management ignores that not all employees are motivated by monetary rewards. Financial incentives alone can have a negative impact on the general performance of workers in the organization according to a study (Jurburg et al., 2016, p.1473). The first step is for the organization needs to do is conduct interviews with its employees that identify the expectancy of its sales force. For example, it could be that the sales team puts a lot of effort into finding new clients, but they may experience problems closing sales because of factors beyon...