Term Papers on “Is Financial Compensation Beneficial Or Detrimental In An Empowerment Program ?

Term Paper Title	“Is Financial Compensation Beneficial Or Detrimental In An Empowerment Program ?
# of Words	1401
# of Pages (250 words per page double spaced)	5.6

“Is Financial Compensation Beneficial Or Detrimental In An Empowerment Program ?”

Introduction
What is an Empowerment ?   Basically empowerment means giving the employee the ability to do their work, i.e. through the right training, the right environment, the right information, the right tools and the authority that they need.

It is thought that by giving the employee increased power and responsibility that the employee will have increased motivation.

Organisations have developed a number of new programs in which it is hoped that employees will have empowerment and so increased motivation.

What is an Empowerment Program ?  There are six different forms of empowerment programs.

i.     Pay for Performance.  This gives employees rewards in relation to their performance on the job.
ii.     Gain Sharing.  Employees are rewarded when performance targets are met.
iii.     Employee Stock Ownership Plan (ESOP).  Employees are given shares in the company and so co-own the company which allow them to share in the improved profit performance.
iv.     Lump-Sum Bonuses.  Rewards are given to employees in a lump sum based on performance.
v.     Pay for Knowledge.  When employees learn new skills they are rewarded. This leads employees to learn new skills and so become more flexable within a company.
vi.     Flexible Work Schedules.  Workers can set their own working times.

Motivation
Motivation is a force which pushes a person to take a particular course of action, i.e. being motivated to go to school, to get something out of it, be it, to learn new things or just to get a good job out of it at the end which will bring high earnings.

A basic model of motivation is shown below:

NEED                    BEHAVIOR                    REWARD

This shows motivation in action, from the previous example we can show that the need is the desire to learn or to get a good job, the behavior is to go to college or university and then the reward is gaining knowledge or a good job.

There are two different types of reward ; intrinsic rewards and extrinsic rewards.  Intrinsic are rewards gained in performing an action, i.e. feeling of accomplishment, and extrinsic are rewards given by another person, i.e. Money.  In most cases extrinsic rewards are the reason that people go to work and so it can be said at this stage that financial rewards are beneficial in an empowerment program.

Motivation Theories
Maslow’s Hierarchy of Needs:  This theory shows that humans are motivated by a series of needs which are in an hierarchical order, i.e.

1.Self Actualisation
Needs
2.Esteem Needs
3.Social Needs
4.Safety Needs
5.Physiological Needs

1.     Self Actualisation is basically the feeling of self fulfilment, i.e. reaching your ambitions.
2.     Esteem Needs is the respect of friends, family and people around you.
3.     Social Needs are having friends and family around you.
4.     Safety Needs.  This is the feeling of having a safe environment around you, i.e. no threat of war, pollution, violence, etc.
5.     Physiological Needs are having basic survival needs such as food, water, clothing and shelter.

Maslow states to progress to each level you must fulfil the levels below it and that the lower levels take priority.

McGregors Theory.  This is the theory that there are two different types of worker, Theory X and Theory Y.
Theory X’s characteristics are that of a dislike for work, unambitious and works only for money.
Theory Y’s characteristics are that they enjoy their work, looks for promotions and is generally ambitious.
Financial compensation in an empowerment program works here for both workers because the Theory X workers that work only for money will work harder and become more motivated by the financial compensation.  Theory Y workers will be motivated by the empowerment that they are given and will have the feeling of increased responsibility. The financial compensation here for Theory Y will be a bonus.

Taylor’s theory is that “People are like donkeys – put a carrot in front of a donkey and it walks, ...

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