UNITIV

COMPENSATIONPLAN

Compensation is a tool used by management for a variety of purpose to further

theexistence of the company. It is a remuneration that an employee receives in return for
hisor her contribution in the organisation. So, the employee compensation programs
aredesigned to attract capable employees to the organisation, to motivate them
towardssuperiorperformanceandto retaintheirservicesover an extendedperiodoftime.
The word compensation may be defined as money received in the performance of
work,plus the many kinds of benefits and services that organization provides their
employee. Itrefers to wide range of financial and non-financial rewards to employee for
their servicerendered to the organization. It is paid in the form of wages, salaries , special
allowanceand employee benefits such as paid vacation, insurance, maternity leaves, free
travelfacility,retirement benefits etc.
According to Wendell French, Compensation is a comprehensive term which
includeswages, salaries and all other allowance and benefits. Wages are the remuneration
paid forskilled, semi-skilled and unskilled operative workforce. Salary is the
remuneration ofthose employees who provides mental labour to the employer such as
supervisor, officestaff, executive etc wages are paid on daily or hourly basis where as
salary is paid onmonthlybasis.
Compensation is a tool used by management for a variety of purposes to further
theexistence of the company. Compensation may be adjusted according the the
businessneeds,goals, andavailable resources.

Compensation maybeused to:

 Recruitandretainqualifiedemployees.
 Increaseormaintainmorale/satisfaction.
 Rewardand encouragepeakperformance.
 Achieveinternalandexternalequity.
 Reduceturnoverand encourage companyloyalty.

OBJECTIVESOFCOMPENSATION PLANNING:

The basic purpose or objective of establishing sound compensation is to establish

andmaintainanequitablerewardssystem.Theotheraimistheestablishmentandmaintenanceofa
nequitablecompensationstructurei.eanoptimalbalancingofconflicting personnel interest so
that the satisfaction of employees and employers ismaximised and conflicts minimized,
the compensation management is concerned with thefinancialaspect of employees need,
motivationand rewards.

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Asoundcompensationstructuretriesto achievetheseobjectives:

 Toattractmanpowerinacompetitivemarket.
 To control wages and salaries and labour costs by determining rate change
andfrequencyofincrement.
 To maintain satisfaction of employees by exhibiting that remuneration is
fairadequate and equitable.
 Toinduceandimprovedperformance, moneyisaneffectivemotivator.
 ToEmployees:
 Employees are paid according to requirement of their jobs i.e highly skilled
jobsarepaid morecompensation thanlow skilled jobs.This eliminatesinequalities.
 Thechances of favouritism areminimised.
 Jobssequenceandlinesofpromotionareestablishedwherevertheyareapplicable.
Employee„s moral and motivation are increased because of the
soundcompensationstructure.
 ToEmployers:
 Theycansystematicallyplanforandcontrol theturnoverin theorganization.
 Asoundcompensationstructurereducesthelikelihoodoffrictionandgrievanceoverrem
unerations.
 Itenhanceanemployeemoraleandmotivationbecauseadequateandfairlyadministrativ
eincentivesarebasis tohis wants and need.
 Itattractsqualifiedemployeesbyensuringandadequatepayment forallthejobs.
 Indealingwithatradeunion,theycanexplainthebasisoftheirwagesprogramme
because it is based upon a systematic analysis of jobs and wagesfacts.

VARIOUSMODESOFCOMPENSATION

 WagesandSalary-Wagesrepresenthourly ratesof pay andsalary refers tomonthly

rate of pay irrespective of the number of hours worked. They are subjectto
annualincrements. They differ from employee to employee and depend uponthe
natureof jobs, seniorityand merit.
 Incentives-Thesearealsoknownaspaymentbyresults.Thesearepaidinaddition to
wages and salaries. Incentive depends upon productivity, sales, profitorcost
reduction efforts.Incentivescheme areoftwo types:
 Individualincentiveschemes.
 Groupincentiveschemes.
 Fringe Benefits- These are given to employees in the form of benefits such
asprovidentfund,gratuity,medicalcare,hospitalization,accidentrelief,healthinsuran
ce,canteen, uniform etc.
 Non- Monetary Benefits- They include challenging job
responsibilities,recognition of merit,growth prospects, competent s
supervision, comfortableworkingcondition, job sharingand flexitime.

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INCENTIVES

Incentivesaremonetarybenefitspaidtoworkmeninlieuoftheiroutstandingperformance.
Incentives vary from individual to individual and from period to period
forthesameindividual.Theyareuniversalandarepaidineverysector.Itworksasmotivationalfor
cetoworkfortheirperformanceasincentiveformstheparttotalremuneration. Incentives when
added to salary increase the earning thus increase thestandard of living. The advantage
ofincentive payment are reduced supervision,
betterutilisationofequipment,reducedscrap,reducedlosttime,reducedabsenteeismandturnov
er &increased output.
KindsofIncentives
Incentivescanbe classifiedunderthefollowingcategories:
 Individual and Organizational Incentives- Individual incentives are the
extracompensation paid to an individual for all production over a specified
magnitudewhich stems from his exercise of more than normal skill, effort or
concentrationwhenaccomplishedinapredeterminedway involving standard
tools,facilitiesandmaterials.Organizationalorgroupincentiveinvolvecooperationam
ongemployees, management and union and purport to accomplish broader
objectivessuchasanorganization-
widereductioninlabour,materialandsupplycosts,strengtheningofemployeeloyaltyto
company,harmoniousmanagementanddecreasedturnover andabsenteeism
 FinancialandNon-financialIncentives-Individual or group performance canbe
measured in financial terms. It means that their performance is rewarded
inmoneyorcashasithasagreatimpactonmotivationasasymbolofaccomplishment.
These incentives form visible and tangible rewards provided
inrecognitionofaccomplishment.Financialincentivesincludesalary,premium,reward
, dividend, income on investment etc. On the other hand, non-financialincentives
are that social and psychological attraction which encourages people todo the
work efficiently and effectively. Non-financial incentive can be
delegationofresponsibility,lackoffear,worker„sarticipation,titleorpromotion,constr
uctiveattitude, securityof service,good leadership etc
 Positive and Negative Incentives- Positive incentives are those agreeable
factorsrelatedtoworksituationwhichpromptanindividualtoattainorexcelthestandards
orobjectivessetforhim,whereasnegativeincentivesarethosedisagreeable factors in a
work situation which an individual wants to avoid andstrives to accomplish the
standards required on his or her part. Positive incentivemay include expected
promotion, worker„s preference, competition with
fellowworkersandownrecordetc.Negativeincentivesincludefearoflayoff,discharge,r
eduction ofsalary, disapprovalbyemployeretc.

FRINGEBENEFITS

Employees are paid several benefits in addition to wages, salary, allowances and
bonus.These benefits and services are called fringe benefits„because these are offered by
theemployer as a fringe. Employees of the organization are provided several benefits
andservicesbytheemployertomaintainandpromoteemployee„sfavorableattitudetowards

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theworkandworkenvironment.Itnotonlyincreasestheirmoralebutalsomotivatethem. These
provided benefits and services forms the part of salary and are generallyreferredas
fringebenefits.

KindsofFringeBenefits
ThevariousorganizationsinIndia offersfringebenefitsthat maybecategorized
asfollows:
 OldAgeandRetirementBenefits-theseincludeprovidentfundschemes,pension
schemes, gratuity and medical benefits which are provided to employeeaftertheir
retirement and duringoldageasa sense ofsecurityabout theirold age.
 Workman’s Compensation - these benefits are provided to employee if they
aregot ignored or die under the working conditions and the sole responsibility is
oftheemployer.
 Employee Security- Regular wage and salary is given to employee that gives
afeeling of security. Other than thiscompensation isalso given if there is lay-
offorretrenchment in an organization.
 Payment for Time Not Worked – Under this category of benefits, a worker
isprovided payment for the work that has been performed by him during
holidaysand also for the work done during odd shifts.Compensatory holidaysfor
thesame number in the same month are given if the worker has not availed
weeklyholidays.
 Safety and Health – Under thisbenefit workers are provided conditions
andrequirements regarding working condition with a view to provide safe
workingenvironment.Safety andHealthmeasuresarealsotakencareof inorder
toprotecttheemployeesagainst unhealthyworkingconditions andaccidents.
 Health Benefits – Employees are also provided medical services like
hospitalfacility,clinical facilitybythe organization.

REWARD

RewardManagementisconcernedwiththeformulationandimplementationofstrategiesand
policies that aim to reward people fairly, equitably and consistently in
accordancewiththeir value to the organization

ObjectivesofRewardManagement

Supporttheorganisation„sstrategy
 Recruit&retain
 Motivateemployees
 Internal &externalequity
 Strengthenpsychologicalcontract
 Financiallysustainable
 Complywith legislation
 Efficientlyadministered

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ROLEOFCOMPENSATION AND REWARD INORGANISATION

CompensationandRewardsystemplaysvitalroleinabusinessorganization.Since,amongfour
Ms,i.eMen,Material,MachineandMoney,Menhasbeenmostimportantfactor,itisimpossiblet
oimagineabusinessprocesswithoutMen.Land,Labor,CapitalandOrganizationarefourmajorf
actorsofproduction.Everyfactorcontributestotheprocessofproduction/
business.ItexpectsreturnfromthebusinessprocesssuchasRentisthereturnexpectedbytheLand
lord.SimilarlyCapitalistexpectsInterestandOrganizersi.eEntrepreneurexpectsprofits.Thela
bourexpectswagesfromtheprocess.Itisevidentthatotherfactorsarein-
humanfactorsandassuchlabourplaysvitalroleinbringingabouttheprocessofproduction/
businessinmotion.Theotherfactorsbeinghuman,
hasexpectations,emotions,ambitionsandegos.Labour thereforeexpectstohavefairsharein
thebusiness/production process.

BASICTYPESOFREWARD

Extrinsicrewards:Concreterewardsthatemployeereceive.
 Bonuses:Usuallyannually,Bonusesmotivatestheemployeetoputinallendeavoursan
deffortsduringtheyeartoachievemorethanasatisfactoryappraisal that increases the
chance of earning several salaries as lump sum. Thescheme of bonuses varies
within organizations; some organizations ensure fixedbonuses whileother
organizations deal with bonuses in terms of performancewhich is subjective and
may develop some sort of bias which may discourageemployees and create
setback. Therefore, managers must be extra cautious andunbiased.
 Salary raise: Is achieved after hard work and effort of employees, attaining
andacquiringnewskillsoracademiccertificatesandasappreciationforemployees‟duty
(yearlyincrements)inanorganization.Thistypeofrewardisbeneficialforthereasonthati
tmotivatesemployeesindevelopingtheirskillsandcompetencewhich is also an
investment for the organization due to increased productivity andperformance.
 Gifts:Theyareconsideredshort-term.Mainlypresentedasatokenofappreciation for
an achievement or obtaining an organizations desired goal. Anyemployee would
appreciate a tangible matter that boosts their self-esteem for thereason of
recognitionand appreciation from the management. This type of rewardbasically
provides a clearvision of the employee„s correct path and motivatesemployee
 Promotion: Quite similar to the former type of reward. Promotions tend to
effectthelong-
termsatisfactionofemployees.Thiscanbedonebyelevatingtheemployee to a higher
stage and offering a title with increased accountability andresponsibility due to
employee efforts, behaviour and period serving a specificorganization.

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IntrinsicRewards
Thiskindofrewardstend togive personalsatisfactiontoindividualInformation/feedback.
This type of rewards offers guidance to employees whether positive or
negativeThisalsocreatesabondandaddsvaluetothe relationshipofmanagersandemployees.
 Recognition:Recognition:Isrecognizinganemployee„sperformancebyverbalappr
eciation. This type of reward may take the presence of being formal for
examplemeeting or informal such as a ―pat on the back‖ to boost employees self-
esteem andhappinesswhich will result into additionalcontributingefforts.
Trust/empowerment:In any society or organization, trust is a vital aspect betweenliving
individuals in order to add value to any relationship. This form of reliance isessential in
order to complete tasks successfully. Also, takes place in empowerment whenmanagers
delegate tasks to employees. This adds importance to an employee where hisdecisions
and actions are reflected.Intrinsic rewards makes theemployee feel better inthe
organization, while Extrinsic rewards focus on the performance and activities of
theemployee in order to attain a certain outcome. The principal difficulty is to find a
balancebetweenemployees'performance(extrinsic)andhappiness.

COMPONENTSOFACOMPENSATIONSYSTEM

Compensation will be perceived by employees as fair if based on systematic

components.Variouscompensationsystems havedevelopedto
determinethevalueofpositions.Thesesystems utilize many similar components including
job descriptions, salaryranges/structures,and written procedures.

Thecomponentsof acompensation systeminclude

 JobDescriptionsAcriticalcomponentofbothcompensationandselectionsystems,job
descriptionsdefineinwritingtheresponsibilities,requirements,functions, duties,
location, environment, conditions, and other aspects of
jobs.Descriptionsmaybedeveloped forjobs individuallyor for entirejob families.
 JobAnalysisThe process of analyzing jobs from which job descriptions
aredeveloped. Job analysis techniques include the use of interviews,
questionnaires,andobservation.
 Job EvaluationA system for comparing jobs for the purpose of
determiningappropriatecompensationlevelsforindividualjobsorjobelements.Therea
refourmaintechniques:Ranking,Classification,FactorComparison,andPointMethod.
 PayStructuresUsefulforstandardizingcompensationpractices.Mostpaystructuresin
cludeseveralgradeswitheachgradecontainingaminimumsalary/
wageandeitherstepincrementsorgraderange.Stepincrementsarecommonwithunionp
ositionswherethepayforeachjobispre-determinedthroughcollectivebargaining.
 SalarySurveysCollectionsofsalaryandmarketdata.May includeaveragesalaries,
inflation indicators, costof living indicators, salary budget averages.Companies
may purchase results of surveys conducted by survey vendors or mayconducttheir
own salarysurveys.

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What is Motivation?
Motivation is a psychological process through which a person acts or behaves towards a
particular task or activity from start to completion. Motivation drives or pushes a person to behave in a
particular way at that point in time. When the motivation is positive, a person is happy, energetic,
enthusiastic & self-driven to perform the work and when it is negative motivation, person is
demoralized, sad, lethargic & pessimistic leading to drop in productivity and performance.
Importance of Motivation
It is an important psychological factor for any individual as it defines the work, ambition and
drive of that person to do any work. A person with high levels of motivation is motivated to do good
quality work, help others, spread their energy and focus on achieving goals. On the contrary, a person
with low levels of motivation, demotivates others, works shabbily and creates a negative atmosphere.
It is an important human factor in an individual’s personal as well as professional life. Positive
motivation for people is required in every field like business, sports, politics, entrepreneurship etc.
It is the desire of an individual to work towards a motive, which is a certain task. In business, good
motivation helps employees learn important managerial skills like leadership, team management, time
management, decision making, communication etc.
4 Types of Motivation

It is driven by several factors which influences the behavior and attitude of an individual. Based on the
different factors and the kind of impact it has on a person, there are different types of motivation. The
different types of motivation in people are:
1. Intrinsic Motivation
This type comes from within a person to do a task or achieve a particular goal. It is a feeling of being
self-driven and achieving objectives for oneself. Intrinsic motivation is driven by motives like social
acceptance, eating food, desires to achieve goals, biological needs etc.
2. Extrinsic Motivation
This type drives an individual due to external forces or parameters. Some other person or organization
motivates the individual to work hard to achieve certain goals or tasks. Extrinsic motivation is driven by
motives like financial bonus, rewards, appreciation, promotion, punishment, demotion etc.
3. Positive Motivation
This type drives an individual by offering positive accolades and rewards for performing a task. In this
type of motivation, the individual is rewarded by monetary benefits, promotions etc. which drives an
individual to work hard.
4. Negative Motivation
This is where fear and threat are used as a parameter to get the work done. In this type of motivation,
individuals are threatened with things like demotion, reducing benefits, withdrawing merits etc.
For every individual, all the types are interlinked based on which he or she takes an action. The
resultant behavior of any person is basis the motivation types he or she has been influenced by.

Intrinsic Motivation Extrinsic Motivation

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Intrinsic motivation is when you feel inspired or
Extrinsic motivation is when you perform a task or
energised to complete a task because it is personally
responsibility to get a reward.
rewarding.
In intrinsic motivation, the behaviour itself is the In extrinsic motivation, the behaviour itself is for the
reward. reward or because of the fear of punishment.
Intrinsic motivation is effective in the long run. It
Extrinsic motivation is helpful in specific situations and
encourages you to perform tasks and achieve goals in
does not last long.
a way that makes you feel fulfilled.
Some examples of extrinsic motivation are reading a
Some examples of intrinsic motivation are reading a book to get good grades in school, cleaning the house
book, cleaning your house, and playing a game. so your roommate does not reprimand you, and
playing a sport on your parents’ insistence..

Top Factors Influencing Motivation

Keeping employees motivated is the biggest challenge for companies for ensuring that they
give a high productive output at work and help in achieving company goals. A positive motivation
amongst employees helps drive the business positively & enhances creativity. On the other hand, a
demotivated employee will not contribute efficiently and slowdown progress at workplace. The key
elements & top factors which influence employees in business or people in general are as follows:
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1. Salary
Monetary compensation & benefits like gross salary, perks, performance bonuses etc. are the biggest
motivation factors. The better the salary and monetary benefits, the higher is the motivation level &
passion of a person towards a job.
2. Recognition
Rewards, recognition, accolades etc. are important for ensuring high enthusiasm levels for an
employee. If the hard work of an individual is appreciated, it keeps them motivated to perform better.
3. Work Ethics
Ethical working environment, honesty etc. are important factors for any individual. Good work ethics in
a company helps keep employees motivated at work place.
On the other hand, if the work environment is not ethical, then the workforce might be demotivated.
4. Transparency with Leadership
The leadership in an organization helps in employee motivation if there are transparent discussion and
flatter hierarchies. The senior management has to ensure that all subordinates are happy, focused &
motivated.
5. Culture at Work
A good, vibrant, positive culture at workplace is always an important factor.
People from different backgrounds, religions, countries etc. working together helps create a social
bond at workplace.
6. Learning and Development
Another factor influencing is the training and development opportunities that a person gets. L&D helps
individuals develop more skills and have better opportunities in their professional career.
7. Work Life Balance
Having a good quality of work life (QWL) helps in the motivation of people. A good work life balance
ensures that a person can give quality time to both office work as well as family.
8. Career Growth Opportunities
Career development opportunities have a positive influence on the motivation of any person. If a
person knows their future & career path is secure, they tend to work with more passion.
9. Health Benefits
Health benefits, insurance & other incentives act as a source of motivation for people. If the medical
bills, hospitalization charges etc. are taken care of by the company, it helps build a strong trust.
10. Communication
A positive & transparent communication between managers and subordinates gives a sense of
belonging and adds to the employee’s motivation. Discussion related to work as well as personal life
help make a friendly bond at workplace.
There are not finite factors influencing positive attitude of an employee. These keep on changing
depending upon the type of environment, job responsibility, experience in life etc. Hygiene Factors of
motivation are also given by the Hygiene Theory.

Advantages of Motivation
There are several advantages of an employee being motivated at work. Some of the main benefits of
motivation for employees and companies are as follows:
1. Feeling of belongingness and self-respect.
2. A motivated employee is excited to learn and contribute more.
3. Higher productive output due to positive motivation.
4. Reduced absenteeism and lower attrition.
5. Employees high on motivation help reduce costs & improve profits.
6. Reduce stress & anxiety at workplace.

Disadvantages of Motivation
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Despite several advantages, there are some probable drawbacks as well. Some of them are:
1. It is a relative feeling and hence there is no way of ensuring that everyone would feel the same way.
2. Motivating employees in a company requires additional efforts, money and time on employee
related activities.
3. It among people is mostly a short-term feeling. Afterwards a person become demotivated or even
uninterested about a particular task.
Examples of Motivation
Motivation is relevant in every field of life for any individual. There can be many examples based on
type, situation, field of work etc. Some examples are as follows.
1. Consider a person who has joined a university. After a lot of hard work, he or she gets admission in
their preferred course. Hence the intrinsic motivation for the individual would be perform well in
academics, get a good score, learn new skills and get a job opportunity with a good company. Since this
is an internal feeling, the driving motives are achieving a personal goal.
2. An example of extrinsic motivation can be seen from a footballer, cricketer or any other
sportsperson. Any sportsperson wants to excel in their sport not only for themselves but to also
become a crowd favorite and get their attention. Hence, he or she gets highly motivated by this
external factor which drives them to perform better in their sport.

Motivation Theories
Motivation is a state of mind, filled with energy and enthusiasm, which
drives a person to work in a certain way to achieve desired goals.
Motivation is a force that pushes people to work with a high level of
commitment and focus, even if things are going against them. Motivation
translates into a certain kind of human behavior. In short, motivation is the
driving force behind human actions.
There are many different forces that guide and direct our motivations.
It is important to ensure that every team member in an organization is
motivated and meets the best project management course bottom line.
Various psychologists have studied human behavior and have formalized
their findings in the form of various motivational theories. These
motivational theories provide insights into the way people behave and what
motivates them.
Motivation theory is a way of looking at the motivation of a person and how
this influences their behavior, whether for personal or professional reasons.
It's important to every aspect of society but is especially relevant to
business and management. Motivation is the key to more profitable
employees, as a motivated employee is more productive.

What are the 5 Theories of Motivation?

Motivation is a huge field of study. Psychologists have
proposed many different theories of motivation. Some of the most famous
motivational theories include the following:
1. Maslow’s Theory of Hierarchical Needs
Abraham Maslow postulated that a person will be motivated when all his
needs are fulfilled. People do not work for security or money, but they work
to contribute and to use their skills. He demonstrated this by creating a
pyramid to show how people are motivated and mentioned that ONE
CANNOT ASCEND TO THE NEXT LEVEL UNLESS LOWER-LEVEL NEEDS ARE

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FULFILLED. The lowest level needs in the pyramid are basic needs and
unless these lower-level needs are satisfied people do not look at working
toward satisfying the upper-level needs.
Below is the hierarchy of needs:
Physiological needs: are basic needs for survival such as air, sleep, food,
water, clothing, sex, and shelter.
Safety needs: Protection from threats, deprivation, and other dangers
(e.g., health, secure employment, and property)
Social (belongingness and love) needs: The need for association,
affiliation, friendship, and so on.
Self-esteem needs: The need for respect and recognition.
Self-actualization needs: The opportunity for personal development,
learning, and fun/creative/challenging work. Self-actualization is the
highest-level need to which a human being can aspire.

The leader will have to understand at what level the team members are
currently, and seek out to help them to satisfy those specific needs and
accordingly work to help fulfill those needs. This will help the team
members perform better and move ahead with the project. A PMP
certification will help you better understand this concept. Also, as their
needs get fulfilled, the team members will start performing, till the time
they start thinking of fulfilling the next upper level of need as mentioned in
the pyramid.
2. Hertzberg’s two-factor Theory
Hertzberg classified the needs into two broad categories; namely
hygiene factors and motivating factors:
poor hygiene factors may destroy motivation but improving them under
most circumstances will not improve team motivation
hygiene factors only are not sufficient to motivate people, but motivator
factors are also required
Herzberg’s two-factor principles
Influenced by Hygiene Factors Improving motivator factors Influenced by motivato
(Dis-satisfiers) increases job satisfaction factors (Satisfiers)
 Achievements
 Working condition
 Recognition
 Coworker relations Improving the hygiene factors
 Responsibility
 Policies & rules decreases job dissatisfaction
 Work itself
 Supervisor quality
 Personal growth
3. McClelland’s Theory of Needs
McClelland affirms that we all have three motivating drivers, which do
not depend on our gender or age. One of these drives will be dominant in
our behavior. The dominant drive depends on our life experiences.
The three motivators are:
Achievement: a need to accomplish and demonstrate own
competence. People with a high need for achievement prefer tasks that

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provide for personal responsibility and results based on their own efforts.
They also prefer quick acknowledgment of their progress.
Affiliation: a need for love, belonging and social acceptance. People with a
high need for affiliation are motivated by being liked and accepted by
others. They tend to participate in social gatherings and may be
uncomfortable with conflict.
Power: a need for controlling own work or the work of others. People with a
high need for power desire situations in which they exercise power and
influence over others. They aspire for positions with status and authority
and tend to be more concerned about their level of influence than about
effective work performance.
4. Vroom’s Theory of Expectancy
Vroom’s expectancy theory of motivation says that an individual’s
motivation is affected by their expectations about the future. In his view, an
individual’s motivation is affected by –
Expectancy: Here the belief is that increased effort will lead to increased
performance i.e., if I work harder then it will be better. This is affected by
things such as:
Having the appropriate resources available (e.g., raw materials, time)
Having the appropriate management skills to do the job
Having the required support to get the job done (e.g., supervisor support, or
correct information on the job)
Instrumentality: Here the belief is that if you perform well, then the
outcome will be a valuable one for me. i.e., if I do a good job, there is
something in it for me. This is affected by things such as:
A clear understanding of the relationship between performance and
outcomes – e.g., the rules of the reward ‘game’
Trust in the people who will take the decisions on who gets what outcome
Transparency in the process decides who gets what outcome
Valence: is how much importance the individual places upon the expected
outcome. For example, if someone is motivated by money, he or she might
not value offers of additional time off.
Motivation = V * I * E
The three elements are important when choosing one element over another
because they are clearly defined:
E>P expectancy: our assessment of the probability that our efforts will
lead to the required performance level.
P>O expectancy: our assessment of the probability that our successful
performance will lead to certain outcomes.
5. McGregor’s Theory X and Theory Y
Theory X and Theory Y were first explained by McGregor in his book,
"The Human Side of Enterprise," and they refer to two styles of
management – authoritarian (Theory X) and participative (Theory Y).
Theory X: Managers who accept this theory believe that if you feel that
your team members dislike their work, have little motivation, need to be
watched every minute, and are incapable of being accountable for their
work, avoid responsibility and avoid work whenever possible, then you are
likely to use an authoritarian style of management. According to McGregor,
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this approach is very "hands-on" and usually involves micromanaging
people's work to ensure that it gets done properly.
Theory Y: Managers who accept this theory believe that if people are
willing to work without supervision, take pride in their work, see it as a
challenge, and want to achieve more, they can direct their own efforts, take
ownership of their work and do it effectively by themselves. These
managers use a decentralized, participative management style.
6. Alderfer’s ERG Theory
C. P. Alderfer, an American psychologist, developed Maslow’s
hierarchy of needs into a theory of his own.
His theory suggests that there are three groups of core needs: existence
(E), relatedness (R), and growth (G). These groups are aligned with
Maslow’s levels of physiological needs, social needs, and self-actualization
needs, respectively.
Existence needs concern our basic material requirements for living, which
include what Maslow categorized as physiological needs such as air, sleep,
food, water, clothing, sex and shelter and safety-related needs such as
health, secure employment, and property.
Relatedness needs have to do with the importance of maintaining
interpersonal relationships. These needs are based on social interactions
with others and are aligned with Maslow’s levels of love/belonging-related
needs such as friendship, family, and sexual intimacy and esteem-related
needs such as gaining the respect of others.
Growth needs describe our intrinsic desire for personal development.
These needs are aligned with the other part of Maslow’s esteem-related
needs such as self-esteem, self-confidence, and achievement, and self-
actualization needs such as morality, creativity, problem-solving, and
discovery.
Alderfer is of the opinion that when a certain category of needs is
not being met, people will redouble their efforts to fulfill needs in a lower
category.
Maslow’s theory is very rigid and it assumes that the needs follow a specific
and orderly hierarchy and unless a lower-level need is satisfied, an
individual cannot proceed to the higher-level need i.e., an individual
remains at a particular need level until that need is satisfied.
Whereas, according to Alderfer’s theory, if a higher-level need is
aggravated, an individual may revert to increasing the satisfaction of a
lower-level need. This is called the frustration-regression aspect of ERG
theory. ERG theory is very flexible as Alderfer perceived the needs as a
range/variety instead of perceiving them as a hierarchy i.e., an individual
can work on growth needs even if his existence or relatedness needs
remain unsatisfied.
For e.g., when growth needs aggravate, then an individual might be
motivated to accomplish the relatedness need and if there are issues in
accomplishing relatedness needs, then he might be motivated by the
existence needs. Hence in this manner, frustration or aggravation can result
in regression to a lower-level need.

13
Another example could be, if someone’s self-esteem is suffering, he or she
will invest more effort in the relatedness category of needs.
Implications of the ERG Theory
All managers must understand that an employee has various needs that
must be satisfied at the same time. According to the ERG theory, if the
manager focuses solely on one need at a time, then this will not effectively
motivate the employee. The frustration-regression aspect of ERG Theory
has an added effect on workplace motivation. For e.g., if an employee is not
provided with growth and advancement opportunities in an organization,
then he or she might revert to related needs such as socializing needs

CAREERMANAGEMENT

Career planning is the continuous process of: thinking about your interests, values,
skillsand preferences; exploring the life, work and learning options available to an individual
andensuringthat thework fits withpersonal circumstances of theindividual.

A career is the sum total of paid and unpaid work, learning and life roles you
undertakethroughout your life. The term 'career' was traditionally associated with paid
employment andreferred to a single occupation.In today's world of work the term 'career'
isseen as acontinuousprocess of learninganddevelopment.

CAREERPLANNING–STAGES:

Five career stages are identified that most people will go through during their adult
years,regardless of the type of work they do.
These stages are exploration, establishment, mid-career,latecareer and decline.

 EXPLORATIONSTAGE:

Many of the critical choices individuals make about their careers are made prior to
enteringthe workforce on a paid basis. The careers ofparents, their aspirations for their
children
14
andtheirfinancialsourcesarecrucialfactorsindeterminingtheperceptionofindividualsregarding
what careers are open to them. Exploration period ends for mostly inmid-twentiesas
onemakes the transition from college to work. From an organisational standpoint
thisstagehas little relevancesinceit occurs prior toemployment.

However, this period is not irrelevant because it is a time when a number of

expectationsabout one’s career are developed, many of which are unrealistic. Such
expectations may liedormantforyearsand thenpopup
latertofrustrateboththeemployeeandtheemployer.
 ESTABLISHMENTSTAGE:

The establishment period begins with the search for workand includes First job,
beingaccepted bypeers, learning the job and gaining the first tangible evidence of success
orfailure in the real world. It is a time which begins with uncertainties, anxieties and risks. It
isalsomarkedbymakingmistakesandlearningfromthesemistakesandthegradualassumption of
increased responsibilities. However, the individual in this stage hasyet toreachhis peak
productivityand rarelygets thejob that carries greatpower or high status.

 MIDCAREERSTAGE:

Most people do not face their first severe dilemmas until they reach their mid-career
stage.This is a time when individuals may continue their prior improvements in performance
orbegintodeteriorate.Atthispointinacareer,oneisexpectedtohavemovedbeyondapprenticeship
to worker-status.Those who make a successful transition assume greaterresponsibilities and
get rewards. For others, it may be a time for reassessment, job
changes,adjustmentofpriorities or thepursuit ofalternativelifestyles.

 LATECAREERSTAGE:

Thelatecareerusuallyisapleasanttimewhenoneisallowedtheluxurytorelaxabit.Itisthe time when

one can enjoy the respect given to him by younger employees. During the
latecareer,individualsarenolongerlearning,theyteachothersonthebasisoftheknowledgethey
have gained. To those who have stagnated during the previous stage, the late careerbrings the
reality that they cannot change the world as they had once thought. It is a timewhen
individuals have decreased work mobility and may be locked into their current job.
Onestartslookingforwardtoretirementand the opportunities ofdoingsomethingdifferent.

 DECLINESTAGE:

The final stage in one’scareer is difficult for everyone but it is hardest for those who
havehadcontinuedsuccessesintheearlierstages.Afterseveraldecadesofcontinuousachievements
and high levels of performance, the time has come for retirement. Managersshould be more
concerned with the match for new employees and those just beginning theiremployment
careers. Successful placement at this stage should provide significant advantagesto both the
organisation and the individual. Many employees lack proper information aboutcareer
options. As managers identify career-paths that successful employees follow within
theorganisation, they should publish this information. To provide information to all
employeesabout job openings, managers can use job posting. Job posting provides a channel
15
by whichthe organizations help employees know what jobs are available and what
requirements theywill haveto fulfill to achievethepromotions to which theymayaspire.

5.1 DEVELOPMENT OFMENTORPROTÉGÉRELATIONSHIPS

Mentoring is a time-honored method for learning in graduate education and professional
development.Mentoring is a symbiotic relationship between a mentor - protégé pair who assist each
other to meetmutual career objectives. Close mentor-protégé relationships often play a critical role in
the lives
ofsuccessfulindividualsinacademiaandbusiness.Effectivementoringisanintentionalactivityrequiringco
nsciouseffort.Mentorsteach,sponsor,encourage,counsel,andbefriendtheirprotégés.
Fourdistinctperiodsexistinmostmentor-
protégérelationshipsovertime.Mentorsaretypically15to20 years olderthan the protégé.

Mentoring is among the primary meansby which adults gain new knowledge and skills.
Mentoringhas held a time-honored and important role in human learning, particularly in graduate
education,professional training, and business. Business leaders often speak of someone who was
particularlyinfluentialintheirprofessionaldevelopment.Asthecomplexitiesoftheworkplaceandhigheredu
cation have increased, there is growing recognition that formal mentoring programs are needed
toenable adults to be successful throughout their careers. Surveys of business executives,
lawyers,chemists, and university faculty demonstrate a strong correlation between the presence of a
mentoringrelationshipand self-perceived career satisfactionandsuccess.

The relationshipbetweenanexperiencedemployer anda junior employee

inwhichtheexperiencedpersonhelpsthejuniorpersonwitheffectivesocializationbysharinginform
ationgained through experiencewith theorganization.

REQUIREMENTSFOREFFECTIVEMENTOR-PROTÉGÉRELATIONSHIP:

 TheStatus&CharacteristicsOfTheMentor:
Mentorsshouldbeseniorsinstatus,experience,age,skills,knowledge.
Protégé:Junioremployeesshouldhavethezealtolearnfromtheirsenioremployeesregardingt
heircareer, social and psychologicalaspect.
 Therelationship:It isbasedonmutualdependence &mutualtrust.
 Theactivities:
 Developingthe potentials oftheprotégé.
 Improvingprotégésperformance
 Interlinkingformallearning&practices
 Guide,support,providingfeedback
 Developinghigherskills:
It should encourage their juniors towards high task performance by
reducingweakness&strength ofthe protégés.
 Responseof theprotégé:
Protegesshouldlearncarefullyregardingcareeropportunities,personal goals.

MentorQualities

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  Stronginterpersonalskills
 Technicalcompetence/expertise
 Knowledgeoforganizationandprofession
 Status/prestigewithintheorganizationandprofession
 Willingnesstoberesponsibleforsomeoneelse’sgrowthanddevelopment
 Abilitytoshare creditPatience
ProtégéQualities

 Self-perceivedgrowthneeds
 Arecord ofseeking/acceptingchallengingassignments
 Receptivityto feedback and coaching
 Willingnesstoassumeresponsibilityforown growth anddevelopment
 Abilityto perform in morethan oneskill area

RelationshipQualitiesVoluntaryMutualbenefitsperceivedandderivedfromtherelations
hip
 Noconflictsofinterest/competitionbetweenmentorandprotégé
 Notconfinedto merelyprofessionalor businessinterests

BENEFITS:
Mentor

 Enhancedself-esteem
 Revitalizedinterestinwork
 Advancedstandinginorganizationorprofession
 Fulfillowndevelopmentalneeds
 Increasedjobsatisfaction
 Enhancedqualityoflifethroughclosepersonal relationships
 Leavealegacy
Protégé

 Easetransitionfromschoolintoprofession
 Increasedawarenessofprofessionandorganization
 Acceleratedassimilationintotheprofessionalandorganizationalculture
 Higherearnings
 Increasedjobsatisfaction
 Increasedlikelihoodofsuccess

POTENTIALPITFALLS:

Mentor

 Lackoftime
 Protégélacks requisiteskills tomeaning-fullycontribute
 Protégé doesnot takecoachingor feedbackseriously
 Protégé“plays”mentoragainstsupervisor,boss, orassociates
 Protégébecomesresentful
Protégé

17
  Unrealisticexpectationsaboutadvancementorpromotion
 Jealousyandgossip
 Mentortakes creditforprotégé’swork
 Mentordoesnotkeepcommitments
 Mentorbecomespossessiveoftheprotégé’stime
 Mentorwon’t“letgo” whenprotégéisreadyforindependence

Job Satisfaction
Job satisfaction is a subjective evaluation that an individual makes regarding their job, and it is
influenced by various factors such as the nature of work, compensation, workplace culture,
relationships with colleagues, opportunities for growth and development, and the overall work
environment. It is an important aspect of human resource management that refers to an
employee's positive emotional and mental state regarding their job. It Satisfied employees tend
to be more engaged in their work, perform better, and are more likely to remain with the
organization. On the other hand, dissatisfied employees are likely to have lower levels of
engagement and productivity, which can lead to turnover and absenteeism.
Job Satisfaction Meaning
Job satisfaction means the level of contentment and fulfillment that an individual experiences in
their job or work environment. It refers to the positive emotional and mental state that
employees have towards their job and work experience. It is a subjective evaluation that an
individual makes about their job and is influenced by various factors such as the nature of work,
compensation, workplace culture, relationships with colleagues, opportunities for growth and
development, and the overall work environment.

Job Satisfaction Definition

Job satisfaction plays a significant role in employee engagement, productivity, and turnover.
Employees who are satisfied with their jobs tend to be more engaged in their work, perform
better, and are more likely to remain with the organization. On the other hand, dissatisfied
employees are likely to have lower levels of engagement and productivity, which can lead to
turnover and absenteeism.
Organizations that prioritize employee job satisfaction tend to have higher levels of employee
engagement, productivity, and overall organizational performance. Thus, it is essential for
organizations to invest in strategies that enhance employee job satisfaction, such as providing
opportunities for growth and development, promoting work-life balance, and creating a positive
work culture.
Job Satisfaction Definition by 5 different Authors
Please find below the definition of job satisfaction given by some of the eminent authors / HR
experts:
Edwin A. Locke defines "Job satisfaction refers to the extent to which people like or dislike
their jobs, as well as their overall attitudes toward their jobs".
Keith Davis says "Job satisfaction is an individual's emotional response to his or her work
environment".
Gary Dessler defined "Job satisfaction is the extent to which employees feel fulfilled and
satisfied in their jobs and the degree to which their expectations are met”.
Richard M. Steers “Job satisfaction is an individual's evaluation of their job and work
experience, including their emotions, feelings, and attitudes toward their work".

18
Michael Armstrong “Job satisfaction is the overall feeling of happiness or contentment that an
individual experiences in their job, which can be influenced by a variety of factors such as pay,
working conditions, and job security".

Job satisfaction in HRM

Job satisfaction is an important concept in HRM. According to leading organizations, job
satisfaction is defined as a positive emotional response an employee experiences while doing
their job or when they are present at work. Employee satisfaction is a broad term used by
the HR industry to describe how satisfied or content employees are with elements like their
jobs, their employee experience, and the organizations they work for. It is one key metric that
can help determine the overall health of an organization. In 2020, overall job satisfaction
remained historically high, despite the pandemic, economic crisis, mass layoffs, and the
increase in the unemployment rate. A satisfied employee can have a positive impact on the
organization, and there are several ways to improve employee satisfaction in an organization,
such as researching what employees want and asking those what resources, tools, and benefits
matter most to them.
Organizations can enhance job satisfaction through various strategies, including providing
competitive compensation packages, offering opportunities for training and development,
promoting work-life balance, creating a positive work culture, and providing opportunities for
employees to participate in decision-making processes.
Job satisfaction is a crucial factor in employee retention and performance management, as
satisfied employees are more likely to remain with the organization and contribute to its
success. Organizations that prioritize employee job satisfaction tend to have higher levels of
employee engagement, productivity, and overall organizational performance.
Components of Job Satisfaction
Job satisfaction is an essential factor that affects employee performance and well-being in the
workplace. It is a feeling of contentment that an individual experiences with their job and is
influenced by various factors. There are some important components of job satisfaction that can
contribute in creating a positive work environment and improving employee performance. Lets
discuss this one by one:
Pay and Benefits
Compensation is a significant factor that determines job satisfaction. Employees who feel that
they are adequately compensated tend to be more satisfied with their jobs. Employers can
improve job satisfaction by offering competitive salaries, benefits packages, and performance-
based bonuses.
Job Security
The level of job security an employee enjoys is another critical component of job satisfaction.
Employees who feel that their job is secure tend to be more committed and satisfied with their
job. Employers can improve job security by providing clear job descriptions, offering long-term
contracts, and implementing fair termination policies.
Working Conditions
The work environment and physical conditions in which an employee works influence their job
satisfaction. A clean, safe, and comfortable working environment enhances job satisfaction.
Employers can improve working conditions by providing ergonomic workstations, adequate
lighting, and proper ventilation.
Work-Life Balance
Employees who can balance their work and personal life tend to be more satisfied with their
jobs. Employers who offer flexible work schedules, time-off policies, and supportive work

19
environments tend to have more satisfied employees. Employers can also provide
telecommuting options, childcare facilities, and wellness programs to promote work-life
balance.
Opportunities for Growth and Advancement
When employees feel that they have opportunities for growth and advancement within the
organization, they tend to be more satisfied with their jobs. Employers can improve job
satisfaction by offering training and development programs, job rotations, and promotions
based on merit.
Job Design
Employees who have jobs that match their skills and interests tend to be more satisfied with
their jobs. Employers can improve job satisfaction by job design that offers challenges,
opportunities to learn, and autonomy. Job enrichment, job enlargement, and job crafting are
some of the strategies that employers can use to design jobs that promote job satisfaction.
Work Relationships
The relationships employees have with their colleagues and supervisors can affect their job
satisfaction. Positive work relationships promote job satisfaction, while negative relationships
decrease it. Employers can promote positive work relationships by encouraging teamwork,
providing opportunities for social interaction, and implementing conflict resolution strategies.
Job satisfaction is a critical aspect of employee well-being and performance in the workplace.
Employers can improve job satisfaction by addressing the components discussed in this article.
By creating a positive work environment, employers can improve employee retention,
productivity, and performance.
Importance and benefits of Job satisfaction
Job satisfaction refers to the level of contentment an employee has with their job and work
environment. It is an essential aspect of organizational behavior as it influences an employee's
motivation, productivity, and commitment to their work. Here are some key points on the
importance and benefits of job satisfaction:
Improved motivation, increased productivity and performance: Employees who are
satisfied with their jobs are more motivated to perform better, which leads to increased
productivity and better results for the organization.
Lower turnover rates &increased retention: Satisfied employees are less likely to leave their
jobs, which reduces turnover costs and helps organizations retain valuable talent.
Positive work environment: Job satisfaction creates a positive workplace environment, which
can lead to better relationships among employees, increased collaboration, improving overall
morale and reducing conflict and create more positive organizational culture.
Better customer service leads Improved customer satisfaction: Satisfied employees tend to
provide better customer service, which can improve customer satisfaction, loyalty, and
retention, leading to improved customer satisfaction
Healthier employees: Job satisfaction has been linked to better physical and mental health for
employees, reducing absenteeism and improving overall job performance.
Increased creativity: Satisfied employees are more likely to be creative and innovative,
bringing new ideas and solutions to the organization.
Improved work-life balance: Job satisfaction can lead to a better work-life balance, which can
reduce stress and increase employee satisfaction and well-being.
Increased job security: Satisfied employees are less likely to fear job loss, which can improve
job security and reduce anxiety.

20
Improved reputation: A satisfied workforce can improve an organization's reputation as a
desirable place to work, attracting top talent and increasing the organization's competitiveness
in the job market.
Better mental health: Job satisfaction is linked to better mental health in the workplace,
including lower rates of depression and anxiety.
Increased employee loyalty: Satisfied employees are more loyal to their employers, leading to
longer tenure and reduced recruitment costs.
Personal fulfillment: Job satisfaction can provide a sense of personal fulfillment and
achievement, contributing to overall life satisfaction.
Overall, job satisfaction is critical for both individual employees. It is essential for employee
well-being and organizational success. It is critical to understand the factors that contribute to
job satisfaction and to take steps to improve it in the workplace. Doing so can lead to numerous
benefits for both employees and the organization.

Employee Engagement
Employee engagement is defined as employees’ emotional investment in their work – in terms
of the passion they put into their work and the motivation they feel to do their job well.
Simon Sinek, the author of “Start With Why,” describes employee engagement in the simplest
of terms: “When people are financially invested, they want a return. When people are
emotionally invested, they want to contribute.”

Fig 1. Employee traits based on the three types of engagement in an organization

The concept of employee engagement was first introduced in 1990 by Dr. William Kahn. He
suggested that people are involved in their work at three levels – physically, cognitively, and

21
emotionally. However, employees may be engaged at fewer levels, or even disengaged or
actively disengaged.
We spoke to Jim McCoyOpens a new window , chief revenue officer and general
manager at Scout Exchange, an AI-powered recruitment marketplace, who shared some of the
character traits engaged employees exhibit. He says, “Highly engaged employees are typically
high energy people that have close relationships with their colleagues, including their direct
manager or supervisor. They have a clear sense of commitment to their organization. They are
excited to take on new challenges, embrace change, and welcome solving tough problems. They
also tend to be curious by nature, continually learning, and regularly seeking new ways to
broaden their existing skill sets. They effectively are ambassadors for the organization,
continually looking for ways to promote the organization and further the organizational
mission.”
As opposed to engaged employees, disengaged employees simply put in their specified
hours at work and leave. They do not involve themselves in activities beyond their regular jobs,
and they value the job just enough to ensure that they get their paycheck at the end of the
month.
A level above disengaged employees are actively disengaged employees. Such employees are
not only unproductive, but they also undermine the work engaged employees do. Their negative
attitude may create a toxic workplace, and they essentially become a burden on the business.
Why is employee engagement important for business?
A Gallup study states that “the behaviors of highly engaged business units result in 21% greater
profitability.” Also, employees appreciate a work culture that enables engagement. This means
organizations that prioritize engagement are more likely to attract and retain talent.
Who is responsible for employee engagement?
The onus of planning engagement activities and executing them is not on HR alone anymore.
HR plays an active role in implementing employee engagement strategies, but the planning and
execution require involvement from leaders and managers in the organization as well. The
success of an employee engagement program depends on employees’ receptivity to it.
Employee engagement, then, is an organization-wide collaborative function.
At what point does employee engagement begin?
Engagement begins at the beginning of the employee lifecycle, from the candidate
experienceOpens a new window , the recruitment process, continuing through onboarding,
career planning, learning and development, leadership and succession, and retirement or exit
from the organization.
However, employee engagement is a two-way street. Even if organizations follow the best
practices in employee engagement, there is a specific personality that employees must either
possess or inculcate in themselves to be an excellent cultural fit for the organization.
Individuals who display optimism, hard work, and positivity are more likely to be engaged in
their work than those who don’t.

What Are the Drivers of Employee Engagement?

Engagement initiatives in the following areas, spanning the entire employee lifecycle,
can prevent the attrition of high-value and high-potential employees. Earlier, presentations and
other handouts did the trick in communicating with employees and trying to engage them. This
has now changed, with employees needing much more than just one-way communication to be
engaged. Here are the eight drivers of employee engagement.

22
Fig 2. The 8 factors that drive employee engagement

1. Seamless onboarding
Employee engagement truly begins when the employee is recruited and begins the onboarding
process. However, even before being hired, a candidate gets a glimpse of the organization’s
communication culture.
Once hired, the onboarding process gives employees an idea of whether they want to continue
in the organization for the long term. One way to ensure employee engagement during
onboarding is to give employees enough time to master their job before they hit the floor.
This means that when they do, they will be ready to take on the job with confidence and build a
lasting career in the organization.
2. Positive work culture
Work culture is a broad term, but specific factors contribute to keeping employees engaged.
Transparency: Engaged employees care about the organization. Employees tend to care when
organizations:
Share company goals and values with employees.
Tell employees exactly what is expected of them and how to achieve it.
Give them regular updates about the progress of the company and where it stands in the global
marketplace.
Communicate how employees’ effort benefits the organization and contributes to the bigger
picture.

23
All these steps create a sense of belonging and naturally encourage employees to do more to
drive better results.
Openness: An open work culture is essential to make employees feel respected and cared for.
In an open work culture, employees should be able to:
Receive important communication regularly through a unified channel from the organization,
their managers, and colleagues.
Freely communicate with their managers about any task/issue.
Provide anonymous feedback about issues they are having with their managers.
Report workplace misconduct anonymously.
Autonomy: Micro-management is rarely well-received by employees. They need a certain
degree of independence to be productive. An organization can ensure employees have this
autonomy by answering these questions:
Do employees have the freedom to decide how they go about their daily tasks?
Do they have the freedom to plan their career path in the organization?
Are they included in making critical decisions that may affect them directly?
Respectful Treatment: Employees rate respectful treatment and empathy as high as
compensation when it comes to job satisfaction and engagement. When treated with the same
level of respect as a company’s most loyal customers, employees will be more invested in
achieving business outcomes.
3. Access to productivity and time management tools
A slew of unplanned activities, meetings, and workplace distractions can reduce the overall
productive time in a day for an employee. Time management is an inherent skill, but in a
dynamic work environment, even the most efficient employees need time management tools.
Supporting time management can directly result in improved productivity.
Tools that enable employee engagement include time management and collaboration tools such
as Slack, Wunderlist, and Trello to break down and time deadline-oriented tasks. Even with
frequent interruptions, to some extent, these tools can improve employee output.
4. Learning and development opportunities
Organizations that provide structured learning and development opportunities to their
employees notice higher levels of engagement. This visible interest in employee growth elicits a
feeling of reciprocation from employees – they are more likely to be interested in the
organization’s growth.
In a generation that is on the go, this learning is mainly delivered through learning experience
platforms via m-learning (mobile learning) and microlearning. Additionally, gamifying the
learning process can get even less engaged employees to participate and open up greater
opportunities for themselves.
5. Effective leadership and succession planning
Employees are more likely to demonstrate the traits of engagemenOpens a new
window icles/employee-engagement/the-secret-behind-engaged-employees/" rel="nofollow
noopener" title="Opens a new window" target="_blank">t when they are made aware of the
growth opportunities that lie in store for them. Closely tied to learning and development,
leadership and succession planning is a key driver of engagement, especially among the
millennial and younger workforce. In this area, HR teams and leaders of the organizations work
together to identify key positions to be filled and the available talent to fill these positions.
Applying technology to an organization’s succession planning strategy can make it a more
streamlined process. Machine learning-powered analytics solutions such as Ascendify can help
identify potential talent, link them with the skills and qualifications required for a specific

24
leadership position, and enable HR to tailor learning and development plans for that talent. This
level of personalization can significantly improve engagement levels.
6. Workplace wellness initiatives
Stress is a more common problem in the workplace than is visible. Combined with the physical
inactivity of most office jobs, a cocktail of health issues emerges that can easily be attributed to
the workplace. Workplace wellness initiatives can go a long way in showing employees that
employers care.
Organizations are now investing in wearable technologies to help employees stay fit. These
include fitness bands and smart footwear. Some of these wearables are even equipped to
monitor blood pressure and general health. Given the sensitive nature of this data, HR teams
need to adhere to strict compliance rules when receiving and using this data. Also, employees
need to be able to opt out of workplace wellness programs if they are uncomfortable sharing
their health data with their employers.
7. Flexibility
In a studyOpens a new window conducted in 2014, 13% of those surveyed said they had quit a
job due to lack of flexibility. In 2018, this number was 31%. The arrival of the gig economy
and the increasing demand for workplace flexibility has made it one of the most critical drivers
of employee engagement. Any organization that allows employees to enjoy a certain amount of
flexibility in where they work is more likely to experience higher levels of engagement. There
are two reasons for this:
Organizations show that they trust employees to do their job no matter where they are.
Employees tend to perform better without the stress of commuting and when they are in their
own comfortable space.
Collaboration tools like Slack and Skype enable seamless conversations not only within
organizations but also across remote teams. With the advent of unified HCM platforms, all the
benefits that are offered to in-house employees can be provided to mobile workers as well.
8. Rewards and recognition
Employees appreciate meaningful recognition for their work. Regular feedback and checking in
on employees are positive drivers of engagement. This feedback should be designed to
communicate how the employees’ efforts are helping the organization.
Through employee recognition platforms, leaders can shout out to a specific employee or group
of employees to recognize their achievements. These platforms allow for instant recognition
among peers and senior leaders – delivering said recognition and rewards when they are due,
not months later, during the performance appraisal. These platforms even allow employees to
choose their own rewards, when eligible.
Companies are also resorting to social media to boost engagement by publicly recognizing their
employees. This can be a great way to engage them in becoming brand ambassadors for the
organization by demonstrating their own recognition and achievements to the world.

How Is Employee Engagement Measured?

25
Fig 3. 5 useful tools to measure employee engagement
Employee engagement is measured in two parts. First, the data is collected through
various channels. Then, this data is analyzed against key metrics that quantify the engagement
levels of the whole organization.
The following tools and methodologies can be used to measure employee engagement:
1. Pulse surveys
While surveys are the most common way of measuring employee engagement, they should be
supplemented with measurable data that can be verified independently. Consider a survey
question that asks, “Do you think that having X number of meetings in a day hampers your
productivity?” This survey should be supplemented with data on how many meetings occur per
day, the amount of time employees spend unfocused before and after the meeting, and what
their productive output for the day is. This data, along with the survey responses, can then be
used to identify what the actual effect of having a certain number of meetings every day is.
Experts now recommend ditching annual surveys and administering pulse surveys instead.
Pulse surveys offer insights frequently into the state of engagement in an organization. This
means there will be fewer instances of overhauling employee engagement strategy and more
cases of merely tweaking it.
However, frequent surveys can cause feedback fatigue if employees have to take time out often
to answer them. To prevent this fatigue, pulse surveys can now be administered through AI-
powered chatbots. As they can be answered instantly and even on the go, these surveys are
more likely to yield honest responses from employees.
2. Sentiment analysis

26
 Sentiment analysis, a method of extracting information from subjective data, can help
identify the general sentiment found in the language employees use in their online
conversations. By combing through email and chat data, sentiment analysis tools enable the
identification of toxic workplace behaviors in a single team, for example, or across teams. All
the data collected is kept anonymous. Sentiment analysis can provide real insights into whether
employees honestly answer surveys.
3. Employee net promoter score (eNPS)
Employee net promoter score is a metric used to measure employee loyalty by asking how
willing employees are to promote the organization as a place to work. For eNPS to be a valid
measure of employee engagement, it must:
Be administered at regular intervals – monthly or quarterly.
Collect anonymous responses.
Be combined with data received from surveys and other sources.
4. One-on-one meetings (monthly)
No technology can replace the human touch of one-on-one meetings. Employees feel heard
when they are given the opportunity to have a real conversation to express their thoughts.
Anonymous feedback can help voice the broader issues. For more specific, personal issues,
one-on-one meetings are an excellent way for managers to identify the general mood of
employees.
5. Stay/Exit interviews
Sometimes it is difficult to get employees to stay in a company. But conducting an exit
interview can give HR teams a valuable trove of information, which they can use to enhance the
engagement levels of existing employees. These interviews often reveal how important it is to
continuously engage with employees to prevent such instances, starting from the onboarding
process and setting the tone in that crucial 90-day period to define a culture that even new
employees can feel engaged in.
Once data is obtained from these methods, employee engagement analytics can come to your
aid to offer actionable insights. Analytics platforms empowered with predictive technologies
can provide insights that can help develop robust employee engagement strategies or simply
modify existing strategies to meet engagement goals, improve engagement, and even sustain
engagement.
Examples of Employee Engagement in Action
Focusing on employee engagement is no longer an option. It is a requirement.
Companies that still don’t prioritize it will most likely lose top talent who will find greener
pastures where they are available. No matter the scale of your organization, there is something
to learn from the employee engagement strategies of any organization. Here are a few real-life
examples of employee engagement for your inspiration.
1. CB Insights and its effort toward continuing education
A young company with 300 employees, CB Insights offers a host of benefitsOpens a new
window to its employees. But some of them worth noting are the stipend of $1,000 they
provide employees to pursue continuing education. They also have diversity initiatives that
include unconscious bias training as well as a gender pay gap below 10%. Employers who
focus on the career development of their employees are more likely to have an engaged
workforce.
2. L’Oréal and its effort to welcome new employees in style
In a unique initiative, in 2017, L’Oréal built an employee onboarding appOpens a new
window that is only devoted to helping new recruits understand and embrace their company

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culture. By introducing gamification and delivering key information in small, retainable chunks,
L’Oréal has made it clear that engagement begins at the start of the employee lifecycle.
3. Hireology and its effort toward inclusivity of its remotest employees
Hireology ensures first that it allows for remote workOpens a new window where necessary,
and that it equips colleagues sitting miles away to communicate with these remote employees
easily. They facilitate this with high-end videoconferencing gear in each room. Their effort
toward including their remote employees also includes flying them into their offices for face
time with the rest of the team twice a year! Getting remote workers to feel engaged is a
challenge, but Hireology has ensured that they overcome this challenge with care.

What is organizational citizenship behavior?

Organizational citizenship behavior (OCB) is a term that’s used to describe all the
positive and constructive employee actions and behaviors that aren’t part of their formal job
description. It’s anything that employees do, out of their own free will, that supports their
colleagues and benefits the organization as a whole.
OCB is not something that’s required from employees to do their job and it’s not part of their
contractual tasks.
Organizational citizenship behavior was first defined by Dennis Organ in 1988 as “an
individual behavior which is not rewarded by a formal reward system… but that, when
combined with the same behavior in a group, results in effectiveness.”

Types of organizational citizenship behavior

The five most common organizational citizenship behaviors, according to Organ, are:
Altruism – Altruism in the workplace occurs when an employee helps or assists another
employee without expecting anything in return. A simple example of altruistic behavior at work
is when someone offers their assistance to a co-worker who is swamped by taking over (part of)
their tasks or volunteering to help clean up the canteen after an internal company event.
Altruism in the workplace can boost employee morale, productivity, and effectiveness.
Courtesy – Courtesy is polite and considerate behavior towards other people, in this case, other
employees. Examples of courtesy at work include saying good morning (!), asking a co-worker
how their holiday was, how their kids are doing, how a project they’re currently working on is
going; basically any question related to a (personal) subject someone has previously spoken
about that shows people you’ve listened to what they were saying.
Sportsmanship – Put simply, sportsmanship is about an employee’s ability to be a good loser.
It’s about being able to deal with situations that don’t go as planned – or negative surprises –
and to not demonstrate negative behavior when that happens.
An example of good sportsmanship in the workplace is an employee who is temporarily taking
over the tasks of a team member who broke his leg and will be on sick leave for a few weeks.
While this considerably increases this employee’s workload, she isn’t complaining about it to
her colleagues because she knows it’s a temporary situation and that she’s taking one for the
team (to stick with the sports jargon).
Conscientiousness – Conscientiousness is defined as behavior that involves a certain level of
self-control and discipline and that goes beyond the minimum requirements. In a work setting,
this means that employees don’t just show up on time and stick to deadlines, but that they, for
instance, also plan ahead before they go on holiday so that their colleagues won’t be drowning
in a big workload.
An example that’s related to a remote work set-up is having enough self-discipline to get up in
the morning and get the work done, even when there is no manager around to give you a nudge.

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Conscientiousness also means knowing that sometimes the job simply needs to get done, despite the
fact that it’s after hours.
Civic virtue – Civic virtue is about how well someone represents the organization they work for. It’s
about how an employee supports their company when they’re not in an official capacity. How do they
talk about the organization to their friends and family for instance?
Civic virtue can also be demonstrated by employees signing up for business events such as fundraisers,
or running a (semi) marathon for a charity with a team of co-workers. Civic virtue is a type of
organizational citizenship behavior that creates a sense of community and camaraderie within the
organization. This, in turn, leads to higher job satisfaction and better job performance.

Benefits of OCB
We’ve already mentioned a few benefits of organizational citizenship behavior above, but here is a
(non-exhaustive) overview:
OCB can boost employee morale
It increases people’s levels of work meaningfulness
It is good for employee performance and productivity; in fact, research shows that OCB positively
predicts performance
It creates better social interactions between employees
It reduces stress
It creates a sense of community among employees
It is good for your Employer Brand
Organizational citizenship behavior – 3 Best Practices
As we’ve seen in the previous section, OCB can have great benefits both for employees and
organizations. So how can HR encourage this kind of behavior? We’ve listed 3 best practices.
1. Hire right
There are certain things you can already include in your selection process to 1) show candidates the
kind of organizational citizenship behavior your company encourages and 2) take a potential ‘OCB fit’
into consideration when you hire people. Here are a few examples of what this could look like in
various parts of your hiring process:
Job description – Your job description can (should) reflect company values so candidates can decide
whether or not those values are in line with their own. If your values resonate with them, they’ll be
more likely to show, for instance, acts of civic virtue than when they don’t.
Realistic job preview – Using a realistic job preview enables you to show candidates an actual ‘day
in the life of’. This means you can show applicants how people treat each other in the company
(courtesy), how people work (conscientiousness), and collaborate (altruism), etc. In other words, a
realistic job preview is a great opportunity to demonstrate candidates the kind of organizational
citizenship behavior you would like to see in your organization. Here too, they can then decide for
themselves if working for your company suits them or not.
Pre-selection – Organizations that recruit high volumes of people often use a pre-employment
assessment tool. These tools can include a wide range of different assessments like cognitive testing,
job sample tests, a personality test – to measure people’s conscientiousness for instance! – but also
questions that determine whether or not there is a culture fit between the candidate and the company
culture.
Interview – During the interview phase, the hiring manager or anyone else who interviews the
candidates can highlight some examples of organizational citizenship behavior when they talk about
the company or the team. When they ask candidates questions, for instance using the STAR
method (STAR stands for Situation, Task, Action, Result), they’ll be able to gauge whether or not
someone is likely to engage in OCB.
2. Involve management
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Managers play an important role when it comes to encouraging organizational citizenship behavior.
First, as leaders, they need to set an example. If people see their manager being polite and
considerate, supporting team members where they can, be ‘good losers’, and participating in (charity)
events outside work, it will inspire them to do the same on their own level, at least to a certain extent.
Second, managers should praise the kind of OCB they’d like to see from their teams. An easy way to
give some well-deserved praise in public to employees who’ve engaged in organizational citizenship
behavior is during a weekly team meeting. But OCB should also be recognized on a company level, this
can be done for instance during a company-wide all-hands meeting.
Another great practice to have in place is something that’s called Cheers for Peers. This can take
different forms, for instance, that of an end of week celebration where people thank their peers and
colleagues to let them know they had a positive impact. Employees can send in their ‘Cheers’ by email
during the week and then these can be read in front of the whole company on Friday. Here are a few
examples:
“Cheers to James for staying late to help me meet that deadline. You worked super hard and it
really made a difference to the project. I owe you one!”
“Cheers Sophie for organizing the office party. Everyone had a great time and it was awesome
to celebrate all together. Looking forward to the next one!”
3. Rethink performance management
Some companies include their employees’ OCB in their performance management process and
appraisals as a way to formally encourage, measure, and reward this. How they do this can differ. A
few examples of how organizational citizenship behavior can be integrated into performance
management are:
Goals and objectives – as well as evaluation and rewards – are set in a way that encourages workers to
look out for the team
Someone’s altruism or other types of organizational citizenship behavior can result in a performance
rating of more than 100%
Criteria like ‘how people collaborate with other teams in the organization’ are part of the evaluation
The image below is based on a 2007 research that looked at both the positive and negative effects of
incorporating a formal way of dealing with OCB.

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 While there certainly is something to be said for gently trying to encourage OCB by
making it a part of the performance management process, there are a few things to keep in
mind here. First, organizational citizenship behavior is characterized by its voluntary nature.
OCB actions and behaviors aren’t part of an employee’s contractual obligations, they are an
added bonus, if you like. Evaluating and rewarding people based on something that isn’t part
of the official deal can seem unfair.
Second, taking into account people’s OCB can create stress for employees as they may feel
that they don’t have a choice. It may also create a feeling of injustice as not everyone will have
the same possibilities to engage in organizational citizenship behavior due to their personal
circumstances. For example, people who have a family with small children may not have time
to participate in external company events that take place outside office hours.
Third, managers and other people involved in the appraisal process may not always notice
their employees’ OCB. In fact, they will probably miss out on plenty of times when one of their
team members helps out a colleague with their workload or asks a co-worker how their sick
child is doing. While this is only human, it does cause an issue when people are assessed on
these behaviors.

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On a final note
While organizational citizenship behavior isn’t something every employee will engage
in, it can have tremendous benefits for both your workforce and the organization. As such, it’s
worth looking for ‘OCB potential’ in candidates during the hiring process, actively involving
managers in setting the right example, and rethinking your performance management to make
organizational citizenship behavior an intrinsic part of your company culture.

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