The subject of the present study is the way organizational behavior is influenced by the issue of payment and what role payment plays in the whole motivation scheme of an employee. The question is discussed on the example of the company Norsk Petroleum that faced a problem of mass resignations. In the given part of the story one of the employees justified her resignation by the expanded responsibilities and scope of activities; another one states it was more comfortable for him to get to the new place of work. Even offers that seemed to be attractive for them did not make anyone stay. The human resources management Lisa Bohm began thinking about the prevention measures to stop the outflow of specialists, together with understanding what caused it in fact at the very beginning.
As one can see from the case, the employees were firm in their decision to leave Norsk Petroleum, so the conclusion is evident – the work became not attractive for them and they lost their motivation. In the situation with high class specialists it is understandable that additional motivation is necessary to make them stay, as they constitute significant profit for the company. In their turn, employees should be more interested in working for a large, prestigious company that may offer them more stability, guarantees and perspectives compared to small, developing companies that are still uncompetitive.
Nevertheless, the situation turned in such a way that the company lost its best employees who did not hesitate to leave – the mistake was initially in the presupposition that employees work only for financial profit. As Arnolds and Boshoff (2002) showed in their empirical research on the subject of job performance and need satisfaction of employees, self-esteem and recognition variables were highly significant for employees, at times even more significant than payment. This is why even Lisa’s offer to raise salary did not produce the least impression on Elizabeth, the leading petroleum engineer. The matter was in the motivation dominants for Elizabeth – a 5% salary raise might have been a good incentive to stay; however, boundless opportunities for self-realization and work performance were a much better incentive to leave.
From the point of view of Jeffrey Pfeffer (1998) the main reason for the accustomed attitude to workers thinking rationally basing their choice on the salary amount is the economic model ascribing the regular behavior to them:
According to this model, people take jobs and decide how much effort to expend in those jobs based on their expected financial return. If pay is not contingent on performance, the theory goes, individuals will not devote sufficient attention and energy to their jobs.
The described theory, as it was proved by Pfeffer, is absolutely wrong about employees’ motivation on which they base their choice of place of work – in the recent decades employees have been looking for a place where they would be recognized, encouraged, appreciated and stimulated. For the overwhelming majority of employees nowadays a sound working atmosphere and humane attitude to their personality have become the guiding factors shaping their choice almost solely.
One of the core values at each company is fun. When a colleague and I wrote a business school case on Southwest, we asked some of the employees, a number of whom had been offered much more money to work elsewhere, why they stayed. The answer we heard repeatedly was that they knew what the other environments were like, and they would rather be at a place, as one employee put it, where work is not a four-letter word (Pfeffer 1998: 6).
The debate over what is stronger in the employee – external reward or intrinsic motivation – has been held for many years, and still there is no clear answer. However, studying the offered case it becomes clear that for the two people to who Lisa offered some benefits in exchange for their stay chose their inner motivation – one person appreciated recognizing her inner potential to take over more work; another one liked the individual approach and taking into consideration his personal time in contrast to the company that did not think about that.
Another significant factor, summarizing everything that has been said on the issue of the case before, is the organizational culture that becomes a part of everyone’s life and motivates, encourages and urges employees to succeed on the everyday basis to contribute to its flourishing. As one can see from the situation with Norsk Petroleum, the company had no culture but the seeming reliability due to its size and reputation. Nothing else would be offered but the sense of security and being a part of a large whole.
Returning to Alderfer’s theory of motivation described by Arnolds and Boshoff, one may trace the hierarchy of employers once more – Alderfer states that the meaningful components are existence, relatedness and growth (Alderfer’s ERG Theory 2009). As it is clearly seen from the lost, financial reward is not mentioned; thus, it becomes clear that something more than a salary rise should be offered to employees to encourage them to stay.
Existence is a basic need, the primary one sustained by the means of work in general – in order to survive people have to work and earn money, thus providing for their living. However, as soon as the person is able to sustain his or her well-being and earn enough money not to think about survival, the demands evolve and become more sophisticated. The person needs the feeling of relatedness – it is a powerful source for everyone as it encourages an employee to be not just a part but a meaningful and inseparable part of the company.
Nevertheless, if someone stops at the point of the second need, the interchange remains unilateral – the employee gives everything to the company, while the company gives nothing to him/her. Here the growth factor is involved – employees want to witness appreciation of their effort and receive the reward by means of growth and personal recognition. This is what Norsk Petroleum was unable to give to its employees in comparison with small, personality-oriented companies.
For every employee it should be important to estimate the scale of individual preferences that suit his/her requirements the best. The top of the scale should be occupied by purely individual characteristics – opportunities for development, working conditions and status, recognition of success. The personal interest to job and opportunities for advancement should be given high priority as well. Then should go the inner relations: relationship with colleagues, opportunity to be creative, collaborative/independent working. Autonomy, security and financial rewards are also meaningful, but not as significantly as the personal characteristics. Level of responsibility and travel as well as organizational attitudes matter much in the process of work, but not at the moment of the choice of work.
Summing the observations up, it is necessary to say that inner motivation has acquired the dominant importance in the context of job choice and job performance, which has to be taken into consideration by the employers wishing to sustain high productivity rates and ensure employee satisfaction.
Alderfer’s ERG Theory (2009). Web.
Arnolds, C.A and Boshoff, C (2002). Compensation, esteem valence and job performance: an empirical assessment of Alderfer’s ERG theory. International Journal of Human Resource Management, 13 (4), pg 679-719
Pfeffer, J (1998). Six dangerous myths about pay. Harvard Business Review, 10 pp.