Novartis - Case
( I )
The concept of motivation has many facets, but if one were to frame the topic in terms of human resource management then a properly motivated employee would be a person who has a predisposition to behave in a manner as to achieve specific, unmet goals (Buford et al, 1995). A common, and now very antiquated method for improving employee motivation was solely to increase extrinsic benefits, a practice that was thought to yield positive results during times of greater scarcity and primarily because of the primitive understanding of the dynamics of overall job satisfaction. While simple increases in levels of extrinsic benefits may satisfy a workers most basic need according to Maslow’s hierarchy (1943), modern studies have shown that salary level has extremely low levels of correlation with job satisfaction and overall employee motivation. This is especially true when increases in extrinsic benefits are based on predetermined time intervals and workers need only maintain a minimum level of output to retain continued employment (Judge et al, 2010). According to Herzberg’s Two Factor Theory of Motivation, salary level alone can even act as an agent of demotivation when an employee derives no intrinsic rewards from their work and is merely performing a repetitive task for financial gain (Herzberg, 1968). A 2012 survey conducted by McKinsey Group Incorporated also showed that on average, employees placed higher value on nonfinancial incentives (See Appendix A). Today’s global marketplace is experiencing an influx of multifaceted, transnational corporations employing people in a vast array of job skills, qualifications, and duties. The ability to motivate them all through one system requires more than simply finding the right balance between the two arms of Herzberg’s theory, but instead to find a way to make them act as a function of each other and then link that result to the employee’s overall performance. It should be noted that this methodology could
The concept of motivation has many facets, but if one were to frame the topic in terms of human resource management then a properly motivated employee would be a person who has a predisposition to behave in a manner as to achieve specific, unmet goals (Buford et al, 1995). A common, and now very antiquated method for improving employee motivation was solely to increase extrinsic benefits, a practice that was thought to yield positive results during times of greater scarcity and primarily because of the primitive understanding of the dynamics of overall job satisfaction. While simple increases in levels of extrinsic benefits may satisfy a workers most basic need according to Maslow’s hierarchy (1943), modern studies have shown that salary level has extremely low levels of correlation with job satisfaction and overall employee motivation. This is especially true when increases in extrinsic benefits are based on predetermined time intervals and workers need only maintain a minimum level of output to retain continued employment (Judge et al, 2010). According to Herzberg’s Two Factor Theory of Motivation, salary level alone can even act as an agent of demotivation when an employee derives no intrinsic rewards from their work and is merely performing a repetitive task for financial gain (Herzberg, 1968). A 2012 survey conducted by McKinsey Group Incorporated also showed that on average, employees placed higher value on nonfinancial incentives (See Appendix A). Today’s global marketplace is experiencing an influx of multifaceted, transnational corporations employing people in a vast array of job skills, qualifications, and duties. The ability to motivate them all through one system requires more than simply finding the right balance between the two arms of Herzberg’s theory, but instead to find a way to make them act as a function of each other and then link that result to the employee’s overall performance. It should be noted that this methodology could