Compensation issue report

Compensation issue report

For any organization to work effectively there needs to be cohesion among the workers and between the administration and the employees too. The working environment as well as the other factors   has a great role in determining the performance and working of the employees. However, there are some issues that are not working well for most of the organizations in the various sectors, especially the production industry (Hollyforde & Whiddett, 2002). One such issue is the motivation of employees. Employees need more than just a pay hike for them to deliver accordingly.

The issue at hand is common among most organizations. The causes of de-motivation among the workers are quite diverse but rather simple to understand. These factors include overexploitation of the employees (Madura, 2007). Every individual has a limit to how much work they can take within a given time frame. Overloading your employees leads to demoralization of the worker. This in turn leads to less output from the employee.

Another cause of employee loss of motivation is the issue of skills. Most organizations are subject to change as technology advancement progresses to more complex forms (Caruth & Handlogten, 2001). If an employee feels that their skill is inadequate to tackle the task at hand, they may tend to be reluctant in doing the work given to them. The employee looses confidence and hence reduces the likelihood of motivation towards success (Graham, Roth & Dugan, 2008).

In addition, the role of the employees in organizations in setting of goals is also important (Bhatia, 2003). An employee needs to feel that they actually belong and that they are part of the organization. Hence flawed goals in the work place cause one to be disgruntled. Moreover, if there are issues of broken chain of communication, the workers may become dissatisfied with the miscommunication in the organization hence becoming less concerned with their tasks (Ellig, 2002).

Moreover, and most important is the factor of lack of appreciation and rewarding of the workers. Every individual in this world needs to be and feel appreciated in whatever small activity they take place in. for the employees, appreciation comes in different forms, and these may be an increment of the salaries, a promotion in the place of work, a sponsored trip or even just a vacation break (Graham et al., 2008). Once the employee feels that their work efforts are not being rewarded, they may lose morale to work hence becoming more de-motivated.

The issues at hand mainly involve the employees and the administration directly. The employees as any other human beings need to feel motivated to work and thus luck of such conducive environment for working directly affects their ability to input their best into the organization. The other party involved in the issue is the administration or the employer (Madura, 2007). The inability of the supervising authority to see eye to eye with the needs of the employee leaves them at risk of having disagreements (Ellig, 2002). The administration should realize that it is not working with machines that do not tire or do not have emotions. The administration is also greatly affected by the issue since if the employees are not at their best to deliver, then the organization may not be able to achieve its target and goals. It is important however to note that the issue is not strictly a problem of the organization (Hollyforde & Whiddett, 2002). The employees have a share of blame to take as well. But the most responsible is the organization in question. This is because the organization is the one that sets the environment for work (Madura, 2007). But employees may also come with their own problems hence leading to the dissatisfaction among themselves with the organization.

The organization’s view of the issue of lack of motivation is that it is not fair for the employee to ask for motivation while the result of work they are doing has not yet been seeing. The administration thinks that rewards should come after work. The employees on the other side view the issue as being unjust to them. The workers want a push, something to keep them going, to encourage them to deliver accordingly in their respective capacities at work (Frost, 2003). This shift of blame from one to the other side is not good for the running of the organization (Davis & Edge, 2004).

The issue of motivation arises from within the employees and thus it is based on problems that are within the person (Podmoroff, 2005). Thus the rewards are mainly extrinsic. The employee has the most to gain from these rewards. However the organization also gains since with increased motivation for the employee, they will tend to deliver more hence the company getting the gains too.

Employee lack of motivation could have a wide base of argument. However, the most basic and prevalent reason revolves around performance pay (Podmoroff, 2005).  The basic way of appreciating the employee is through a pay hike as has been the custom in most organizations. The motivation of employee is not actually a direct pay issue since it has other ways of responding to the problem rather than just adding cash to the workers (Frost, 2003). Therefore it is an indirect pay issue.

Motivated workers deliver quality input into the organization. Lack of motivation causes more physical harm to the organization (Müller, 2011). This is because the organization may fail to achieve its target goals hence suffering loss. This loss if too big may have a direct impact on the workers as well since if the company cannot pay them. They may be retrenched or discharged from work. The harm caused thus also translates into mental harm too. A demoralized worker may have difficulties in making decisions and taking initiative in the organizations’ work. With time, as the condition becomes critical, the issue may have mental effect on the workers (Davis & Edge, 2004).

The issue of lack of motivation is one common in a wide variety of industries and work places. Most organizations do not realize since unless the workers air their views of dissatisfaction, the authority may not be aware (Müller, 2011). It is not only similar to the production industries but also to other forms of industries and companies. The issue arises mainly from poor culture of the organization. If the organization does not have a clear cut organizational structure, the needs of the employees may not be well met hence the issue arises (Caruth & Handlogten, 2001).

The industry suffers a lot from the encroachment of this unprofessional behavior. The workers develop strategies that are retrogressive such as go slow at work or strike in dealing with the problem resulting in consequences that are dire. The consequences include issues such as poor performance. If there is no momentum for the workers to do their duties, the industry may not achieve its target (Bhatia, 2003). As a result, the company experiences a lower turnovers hence operating under loss. The work delivered by the employees is also of low quality since due to poor concentration at work the employee is makes mistakes. Another impact is that that the customer service level quality also goes down.

In dealing with the issue, there are a few constrains that are encountered by both the employees and the employer. The employees join in solidarity to form unions and may seek voice from the human rights commissions to try and solve the issue (Wertz & Bryant, 2001) Usually this draws into a stand-still battle especially if the employer is not willing to comply with the workers demands. It may not get to legal levels since it is not really a law recognized factor that every organization must have. The industry has tried to deal with the issue but it seems like a war that is not ending soon since it keeps creeping back time after time. The issue is worsened by the interference of the media, which more often than not portrays the industry as being oppressive and the administration as dictatorial (Bhatia, 2003). Thus the publicity of the problem of the industry is really not working for the good of either the workers or the employer.

The industry has realized the need to set up motivational plans so as to get the workers ready to do their jobs peacefully. As a result, it has decided to use a few theories of motivation in combating the issue. The first theory evident in the organization is that of management by objectives (MBO) (Lauby, 2005). In this, the administration realizes that workers are more motivated by targets they had a hand in setting.  Instead of issuing of instructions, the managers include the workers in considered decision-making as much as possible. However, the setback in this theory is that not all workers are concerned with setting of work associated goals (Hollyforde & Whiddett, 2002).

The other motivation theory the company has considered is that of expectancy theory (Lauby, 2005). This is a more committing motivation theory since it directly impacts the rewards received from the work. The theory that holds that workers are expected to input as much amount of work and commitment as they expect to gain in return. This commitment structure enables the employees to receive as much earning as they want depending on the completely on their work performance (Wertz & Bryant, 2001). Thus the more the worker works, the more they earn. Also in this theory, considerations are made for future promotions and pay rewards.

Thus the production industry is facing a key compensation issue that will determine its overall functioning and output as well as profits. However, it is important to note that compensation for motivation does not have only to be in form of pay rise but other factors contribute to a worker that is motivated to work.



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Caruth, D. L., & Handlogten, G. D. (2001). Managing compensation (and understanding it too): A handbook for the perplexed. Westport, CT: Quorum Books.

Davis, M. L., & Edge, J. T. (2004). Executive compensation: The professional’s guide to current    issues & practices. San Diego, CA: Windsor Professional Information.

Ellig, B. R. (2002). The complete guide to executive compensation. New York: McGraw-Hill.

Frost, P. J. (2003). Toxic emotions at work: How compassionate managers handle pain and           conflict. Boston, Mass: Harvard Business School Press.

Graham, M. D., Roth, T. A., & Dugan, D. (2008). Effective executive compensation: Creating a    total rewards strategy for executives. New York: AMACOM/American Management       Association.

Hollyforde, S., & Whiddett, S. (2002). The motivation handbook. London: Chartered Institute of             Personnel and Development.

Lauby, S. J. (2005). Motivating employees. Alexandria, Va: ASTD Press.

Madura, J. (2007). Introduction to business. Mason, OH: Thompson/South-Western.

Müller, C. (2011). Employee motivation and incentives at Apple: Do incentives really help to motivate employees?. München: GRIN Verlag GmbH.

Podmoroff, D. (2005). 365 ways to motivate and reward your employees every day– with little      or no money. Ocala, Fla: Atlantic Pub. Group.

Wertz, K. R., & Bryant, J. J. (2001). Managing workers’ compensation: A guide to injury   reduction and effective claim management. Boca Raton, Fla: Lewis Publishers.


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