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What is meant by material motivation?
Financial motivation is the amount of money paid by an employer to an employee.
Material motivation refers exclusively to monetary compensation, which is paid in cash or by bank transfer:
- basic salary (salary),
- bonuses, allowances, payment overtime, percentage of sales.
What privileges are not related to material motivation?
- Social guarantees (sick leave pay, vacation pay, etc.).
- Provision or compensation with money of a social package (travel, mobile communications, gym, food, etc.).
- Compensation for unused vacation, travel allowances.
How to estimate the amount of financial compensation?
Material compensation is the factor that makes the employing company look more attractive in the eyes of job seekers and candidates. This is the price at which the employer “sells” himself, and the employee, accordingly, evaluates himself.
The first assessment of the attractiveness of an employer depending on the material compensation it offers to a future employee begins during the job search process. However, the employer does not always indicate the amount of future financial compensation in a vacancy advertisement.
Almost every third vacancy for personnel search does not contain information about wages. Moreover, the “transparency” of advertisements directly depends on the professional field.
1) If they are looking for workers or qualified specialists, then, as a rule, 87% of publications indicate a specific salary or its range.
2) 42% of employers prefer to indicate a salary range (from and to) if they are looking for middle managers and line personnel. This is due to the desire and readiness of the employer to vary the level of the offered salary depending on the knowledge, skills, experience and competence of the applicant.
3) The most “closed” positions are managers of all levels and other administrative personnel. As a rule, the higher the applicant's position, the candidate will learn about the size wages directly at the interview. First of all, such “secrecy” is associated with the sincere conviction of the employer that salary should not be a priority in choosing a place of work. According to employers, a candidate should be interested in a vacancy if he is sure that he meets the specified requirements, or if he likes this company and position.
4) There is still a small circle of employers (about 13%) who do not indicate the amount of wages at all, regardless of the vacancy, subsequently hoping to offer the minimum possible.
Financial compensation is a broad concept
If the employer nevertheless indicates the exact amount of remuneration, then this information should not be considered final and should not be understood unambiguously.
1) About 60% of employers indicate the salary before income tax.
2) Only 40% of employers indicate the amount of salary that the employee will receive in person “net”.
3) As mentioned above, material compensation is not only wages (salary). The size and regularity of payments of the above-mentioned bonuses and allowances are not indicated in the advertisements at all, although salary increases are at least 50% of the salary, regardless of the position.
As a result, even on
Chapter 1. Theoretical and methodological aspects of material motivation of personnel.................................................. ........................................................ .......................... …..6
1.1. The concept and essence of motivation. Theories of motivation............................. …..6
1.2. Material motivation as a way to increase work motivation…….11
1.3 Ways to improve the system of material motivation…………….17
Chapter 2. Study of the financial motivation system of Phoenix LLC… ..24
2.1. general characteristics enterprises........................................................ .... ...24
2.2. Characteristic organizational structure..................................... …26
2.3. General characteristics of the personnel of Phoenix LLC.....................................32
2.4 Study of the system of material motivation at Phoenix LLC..... …34
2.5. Identification of problems in the system of material motivation.........38
Conclusion................................................. ........................................................ ....44
List of used literature......................................................... ............... ...46
Applications........................................................ ........................................................ …48
INTRODUCTION
Increasing work efficiency and high employee motivation is one of the main tasks of any company.
“The ability to manage people is a commodity that can be bought in the same way as we buy sugar or coffee. And I will pay more for such a skill than for anything else in the world,” said one of the greatest managers of the past, John Rockefeller.
The world has not yet come up with a better mechanism for personnel management than methods of material motivation. But it is not easy to create a system of material incentives with the help of which it would be possible to effectively guide the actions of employees, inspire them to work achievements and motivate them to be active, and at the same time, so that it does not destroy the moral climate of the company and the psychology of people.
In our country, the problems of material motivation are most acute in small and medium-sized enterprises, where almost all employees are “multi-machine operators,” that is, they sometimes perform several functions of different nature and are responsible for solving several problems at once.
Typically, workers are dissatisfied not so much with the amount of wages as with their injustice, the lack of connection with the results of their work, the chaos in the ratio of salaries of specialists in different departments, and the sharp difference in the salaries of similar specialists at enterprises in the same region. Hence - staff turnover, instability of teams, losses of the enterprise in training constantly renewed personnel, etc.
The traditional wage system, which we inherited from the planned economy, is the only one that has not undergone any fundamental changes since the 1930s. Russia and other post-Soviet states are unique countries in the sense that at the national level we are developing inter-industry salary schedules and hourly tariff rates, which do not take into account the individual requests of a particular company.
Some people set rates based on the capabilities of their enterprise, others pay depending on the market price of manufactured products, and some try to adhere to the tariff schedules recommended for budgetary organizations in remuneration.
In many countries Western Europe, as well as in the USA, the motivational aspects of personnel management of companies and firms have acquired great importance. These methods and experience can be transferred - and are successfully transferred - to domestic soil.
Now, along with the processes of economic growth and relative stabilization in the economies of post-Soviet countries, we have also seen a significant turning point in this area.
In recent years, financial incentive programs have become quite complex systems that take into account many factors, patterns and variables.
New approaches to incentives involve the abandonment of traditional time systems or payment according to the complexity coefficient, etc., as well as their replacement with remuneration consisting of two components: a base rate and additional incentive payments depending on individual results and/or work efficiency divisions/companies.
The relevance of the topic of this work is determined by the fact that effective program material incentives depend not only on increasing the social and creative activity of specific employees, but also on the final results of the activities of enterprises of various forms of ownership and fields of activity.
Purpose of the work: to study the material motivation management system and search for ways to improve it.
To achieve this goal, a number of tasks were set:
1. Consider the essence and significance of labor motivation.
2. Characterize the forms and system of labor motivation in a market economy;
3. Conduct an analysis of the forms of material motivation used in Phoenix LLC, the wage system, and other types of employee motivation.
4. Identify problems in the system of material motivation of the organization under study.
The purpose of analyzing the personnel remuneration system of Phoenix LLC is to create an understanding of its essence and shortcomings, and thus, the possibility of further targeted correction and holistic formation - from developing a motivation policy to determining methods of individual bonuses for specific employees.
Research methods: statistical, systemic, analytical, synthesis, questioning.
Chapter 1. Theoretical and practical aspects of material motivation of personnel
1.1 The concept and essence of motivation. Theories of motivation
Various sources provide a variety of definitions of motivation. In the textbook I.V., Mishurova, P.V. Kutelev “Staff Motivation Management” the following is said about motivation: “motivation - it is the process of motivating employees to act to achieve the goals of the organization."
V.R. Vesnin, in his book “Fundamentals of Management,” is of the opinion that “motivation is the process of creating conditions that influence human behavior and make it possible to direct him in the direction necessary for the organization, to interest him in active and conscientious work, and diligence in performing the tasks assigned to him.” . Such conditions are called “motives” (“motive” - French - motivating reason, reason for one or another action).
The motive has a “personal” character and depends on many factors external and internal to the person, as well as on the action of other motives that arise in parallel with it. Motive not only motivates a person to action, but also determines what needs to be done and how this action will be carried out. A person can influence his motives, dampening their action or even eliminating them from his motivational complex.
There is enough a large number of various theories trying to explain such a phenomenon as motivation. Existing theories of motivation are usually divided into two large groups. The first group consists of theories that concentrate on identifying and analyzing the content of motivation factors, the second - theories of motivation, the point of concentration of which is the dynamics of the interaction of various motives, i.e. how human behavior is initiated and directed. The first group of theories are theories of the content of motivation, the second group are theories of the motivation process.
The first theory discussed is called Maslow's hierarchy of needs, formulated by him in the 1940s. and subsequently refined by psychologist G. Murray. In accordance with Maslow's theory, all needs can be divided into five groups and arranged in the form of a strict hierarchical structure: physiological needs necessary for human survival: food, water, rest, etc.; safety and security needs; social needs (for communication, etc.); needs for respect and recognition; needs for self-expression.
The first two groups of needs are primary (without their satisfaction normal life activity is impossible), and the next three are secondary. According to Maslow, the motivation mechanism operates in such a way that until the needs of the lower level are satisfied (although not necessarily completely), the needs of the higher level high level either inactive or do not act as motivators strongly enough.
In practical terms, the following conclusions can be drawn from this theory.
1.To influence human behavior, you must first find out what the need for this moment the main thing for him. The employee should then be shown the organization's ability to meet this need. So, for example, if you determine that one of your employees strives to become a foreman (the need for self-affirmation), then use this behavioral incentive by saying: “If you complete the assigned task well, I will recommend you for this position as soon as it becomes available.” "
2. It should be remembered that the employee's orientation can quickly switch from one need to another. For example, a worker whose main need for self-affirmation in the morning may become the main need for security in the afternoon, because there is a rumor about an upcoming mass layoff. Therefore, if you are interested in this employee, you need to change the form of his motivation.
3. The structure of a person’s needs is determined by his place in the social structure or previously acquired experience. Consequently, there are many differences between people regarding the needs that are important to them. What is more important is that there are many ways and means to satisfy a particular type of need. Therefore, a manager must have a large arsenal of various techniques and methods of motivation.
Every step we take is the fruit of motivation. It’s raining outside, the weather is nasty and, as they say, a good owner won’t let his dog go for a walk. But you get up and go to the store, or not - it all depends on how much you need what is in the store. That is, how much stronger your weather conditions are.
There are three types of motivation:
- material;
- moral;
- administrative.
The goal of any kind of motivation is to create conditions for earning more money, so that work also brings pleasure.
Let's be honest, the material type of motivation is the most effective and fastest way to get a person to work.
Factors of material motivationMaterial motivation is realized in several ways:
- wage system (ratio of contribution to labor and money received);
- performance tracking system (how much your salary will change if you increase productivity);
- the opportunity to sell the funds received (what you can buy for the reward received);
- additional motivation (payment transport costs, subsidies for lunch, company-paid medical care, issue of branded cards with discounts at sports clubs, etc.).
In addition to material motivation, moral motivation is also considered effective. That is, if material motivation can be characterized as: “if you work better, you get more,” then moral motivation is: “if you work better, you achieve success, become a role model, an authority, a leader.”
One company came up with the following type of moral motivation. An employee who has reached special success at his workplace, gets his own office and the opportunity to personally choose a secretary. All this without promotion or salary increase. It turns out that this became a huge incentive for many “hard workers”.
Examples of material motivationThe easiest way is to engage in material motivation of employees based on the results of completed work. Every position has at least one performance indicator. For sellers this is the volume of sales, for manufacturers - the volume of production, its reduction in price and improvement in quality.
Here are examples of the most common methods of material motivation in sales.
So, on average, a seller sells 40–60 units of goods per month, the premium for each unit sold is 1 USD. This means that his monthly bonus is 40–60 USD.
But he did a miracle and sold not 60, but 70 units. As a result, he will receive not the usual 60, but as much as 70 USD. Will there be a difference of 10 USD? especially encourage him to work extra hard next month? Hardly.
Second option. Since the average sales volume is 50 units, the manager sets the monthly sales target at 50 units. Only after reaching this milestone will he receive 1 USD. for each unit. This means that if he sells 49, he will receive nothing. In this case, the employee will bend over backwards to complete the plan. There is no point in exceeding it and there is no moral strength, because as a result, you will receive the same 1 USD. for a unit.
The third option is the choice of wise superiors. If a seller sells 50 units, he receives 1 USD each. per piece, if 70 - 1.5 USD. for a unit. So, he has two options: get 50 USD. or 105 – the difference is noticeable.
As a result, management ensures that one salesperson works for two.
In addition, it is necessary to use material methods of motivation 
not only with monthly, but also with six-month and annual overfulfillment of the plan. After all, if an employee fails the plan in a certain month, he will be able to recoup the money by exceeding the six-month target.
All this works great, but still, there is a little room left for the moral motivation of work.
A good job is not where you pay a lot, but where you enjoy your work. Moral motivation is much more complex than material motivation, because here there is an interweaving of ambitions, healthy competition between employees, opportunity, praise from the manager, recognition among colleagues.
After reading this article, you will find out
- Why financial motivation of personnel still plays an important role in the stable operation of the company
- Three tasks that need to be solved before implementing the provision on material motivation of personnel
- Examples of material motivation of personnel
- How to give bonuses for good work
Material motivation of personnel is an important component in the work of companies with their staff. There are many pressing questions and nuances here - what salary and bonuses should I offer? Will this be enough for a worthy employee? Perhaps if I should have offered less, I would have still agreed? And when trying to answer each question, the number of nuances and doubts only increases. This is a completely normal situation in business, so we will pay special attention to this issue.
The motivation statement is one of the main documents for the company, indicating the list of employees, the amount of salaries and what they are paid for. However, this is not the only reason. With the competent and careful development of this document, appropriate remuneration and bonuses can be formed when employees are interested in the most rational use of their working time, motivated to improve the quality of work, identify defects, reduce costs and improve their skills.
Three tasks that need to be solved before drawing up regulations on staff motivation
First task. You will need to monitor the salaries of your employees to understand the appropriate salaries for such employees.
Second task. It is necessary to clarify what the employer expects from its employees, and how well the employees meet such requirements and expectations.
Third task. Formation of tools that help retain employees and achieve the company's goals.
When solving the first problem, it will be possible to understand whether the salary of employees in the company really corresponds to the level of the labor market. If the company's salaries are lower compared to the market, it may be difficult to retain its employees. To prevent such a situation from happening, you should communicate with management and draw up a schedule for harmonizing payments for employees. Coming collaboration with accounting and finance departments. Thanks to this interaction, it will be possible to maintain the company’s activities within its budget, and it is possible to identify subtleties and various nuances that need to be taken into account.
The solution to the second problem is to understand what the employer wants to receive from employees. Dealing with this is actually not difficult. To do this, you need to talk with the heads of your company, line managers, studying the financial statements of the organization for several recent years. You need to understand the effectiveness of your staff. If there are problems, you should ask yourself what should be done to eliminate the problems by motivating staff.
In particular, when communicating with line managers, a problem may be identified - a lot of employees’ working time is aimed at their personal goals. The General Director noted that the company's workforce is expanding, but the company's profits are not growing proportionately. It is likely that the problem lies in insufficient motivation of employees to work more efficiently and productively.
Case Study
The new HR director of Paritet JSC carefully studied the financial statements of her enterprise over the past several years. In the period 2008-2010, the company received revenue from the sale of products in the amount of 45 million rubles more compared to 2007, with an increase in net profit by 15.7 million rubles - 2 times. It was decided to expand the staff by 15 people, but labor productivity only decreased by 2.1%. The organization operates a standard remuneration system - through regular fixed salaries. According to the study, it was found that only 20% of employees can be motivated by such a payment system. Therefore, there was a need to switch to another payment system - salary along with a bonus. A point system for assessing the work of employees was formed, and a relationship was established between the points received and the size of the bonus received. Based on the results of the year, it was possible to confirm an increase in personnel productivity by an additional 3 million rubles.
The third task is to develop tools of material motivation, in accordance with which the interests of employees and their company are combined. We need to proceed from the understanding that it is not necessary to increase the salary, for example, the fixed part. You might consider providing additional payments for achieving certain results and achieving goals. In fact, the mechanism of bonuses and allowances is actively used. Thanks to this, the attitude of employees towards their job responsibilities will be more motivated.
Components of proper material motivation of personnel
First of all, you should understand that competent material motivation of personnel is formed from several elements. Including a fixed salary (for his established work time), variable part (paid depending on the fulfillment of goals or the number of sales), bonuses, bonuses, various compensations. Let's look at each of these points in more detail:
- Fixed (fix) salary. This category includes a fixed part of payments, which is established for employees. For these fixed payments, the employee undertakes to do the specified work. It is important to understand that a fixed salary forces a person to do his duties, but is not able to guarantee his desire to do this.
- Flex– flexible part. It consists of paying wages based on the percentage of work completed. In particular, interest may be paid on the company’s income or sales.
- Bonuses and bonuses for employees are usually at the end of the month. Bonuses are paid for certain achievements, fulfillment of set goals, etc.
The main condition is that a transparent variable part is needed, the principle of its formation will be clear to employees. The best option is when it becomes clear to an employee from the first days in the workplace that his total income will depend on his actions and the company’s achievement of certain goals.
How is the situation in practice? In my practice, situations often arose when managers initially promised one percent of sales, but in reality replaced it with another. It is unlikely that this method will promote motivation - it simply kills it, destroys the trust of employees in their managers. The situation becomes even worse when the company has an extremely complex remuneration system, which even the managers themselves often do not understand.
It is necessary to understand that the opacity of the payment system causes distrust on the part of employees. If a person does not understand the principle of formation and calculation of his salary, one can hardly count on serious motivation on his part. Employees need to see that they are cared for and that the payment system is transparent.
How to rank staff when using material motivation
First level of employees– on which sales do not depend in any way. They are simply paid a salary for the work done.
Second level- employees service personnel. This category represented by customer service, support service, etc. For these employees, you can provide a small percentage of the profit, since their work also to a certain extent affects customer loyalty.
Third level- people involved in sales. They are engaged in direct sales, achieving profit for the company. They can set the average percentage of payments - about 8-10% of the company’s profit.
Fourth level– heads of sales departments. They receive a relatively low salary, but expect a large percentage. Although the percentage may be set less than that of salespeople - for example, 5%. But the manager is subordinate to not one sales person, but 5 or more employees - their results will be summed up. Therefore, a percentage of the total sales of your department is taken.
Financial motivation: bonuses with which you will eliminate problems with personnel
Employees often do not go to work due to illness. For a business, this factor leads to serious financial losses. To solve the problem, you can approve an award “For the ability to value working time.” In this case, in last days of the outgoing year, periodic bonuses are paid for employees who did not go on sick leave or missed minimal amount working days.
Case Study
According to calculations at the plant, it was established that temporary disability in 2010 led to the loss of about 400 thousand man-days at the enterprise. The HR director took the initiative to introduce a bonus for employees who practically did not go on sick leave. This approach has significantly reduced the level of sick leave. As a result, people began to pay more attention to their health and were more motivated to go to work.
Significant staff turnover. The provision on material motivation can be supplemented with the award “For Loyalty to the Enterprise.” It is not necessary that such a premium be high. The size of the bonus should be tied to the employee’s length of service in your company. In particular, for those who have worked in the company for a year, 0.5% of the salary will be provided, 2 years - 0.8%, 10 years - 5%. However, this bonus should not be set for long-term employees. Otherwise, such material motivation of staff will not affect young people or newcomers. The payment frequency is one year.
Employees do not feel the connection between the company’s results and their salary. In particular, a prize “For financial indicators company" - it may simply be symbolic. Payments are made once a year or quarterly, depending on the profit of your company. If there is no profit, workers do not receive profit. Since bonuses do not relate to guaranteed payments (Article 191 of the Labor Code).
No interest in reducing production costs. To solve the problem, the award “For reducing costs and optimizing production” is suitable. Bonuses are paid based on the amount of savings achieved through the employee’s initiative.
Example
A special commission was formed at the detergent manufacturing plant. This commission accepts special proposals aimed at improving production and optimizing costs, reducing production costs and costs in the process. The amount of remuneration in this case was immediately announced - 1 thousand rubles, if the commission accepts the voiced proposal and decides to implement it. Moreover, after implementing the idea, the employee receives an additional 30% of his company’s savings. In total, 25 proposals were implemented during the year, allowing the company to achieve savings in the amount of 8.2 million rubles.
A large number of defective products. The provision on payments should be supplemented with a bonus “For identifying substandard products.” Such payments are made once a year or quarter. The basis for calculating the bonus is the volume of defective goods identified and the amount of financial losses that the company could face. For payments, a fixed or percentage amount per defect unit can be established. It is necessary to monitor that there is no increase in the level of defects after the introduction of this bonus. Employees should be interested in reducing the number of defects in production, and not in increasing the volume of identified defective products.
Employees are not interested in professional growth. A solution to the problem could be an award “For new skills and knowledge”, “For qualifications”, etc. Last option suitable if you plan to make regular rather than one-time additional payments. In this case, the Regulations on material motivation must contain information - to whom, in what amount and for what these payments will be made.
Bonuses for completing new projects. Initially, you need to determine the share of participation of an individual employee in the overall implementation of the project. Some employees became the initiators and worked out the project in detail, others were involved in its implementation, and still others were assigned a leadership role. For each group, the Regulations must specify who receives a certain bonus, in what amount and for what.
How the bonus is calculated:
Bonus=Sei · Xi · Kv:
- – the total amount of investment savings;
- Ksi – coefficient of the degree of project execution;
- Kv – remuneration coefficient.
The amount of investment savings is determined using the following formula:
Sei = Szp – Szf:
- – the amount of planned and actual expenses for the project. Szp, Szf
Formula for calculating the project completion rate coefficient:
Ksi = 1 – (Vf – Vp)/Vp, Where:
- – planned and actual duration of the project. Vp, Vf
The remuneration coefficient is set in advance - it depends on the amount of savings. If it was possible to achieve savings of up to 1 million rubles, the remuneration coefficient is set at 5%, up to 10 million - 3%, if more than this amount - 1.5%. The bonus system has proven itself as a effective means motivation of company employees.
Case Study
The construction company began implementing its new projects - 2 microdistricts. They were completely identical - using similar technologies, involving specialists of similar qualifications. However, bonuses were expected in one project, but they were abandoned in another. As a result, the first project was completed 3 months earlier, reducing losses by 2 times.
What else can be used as material motivation for staff?
Money is becoming the simplest means of motivating employees. Also great for this purpose:
- Providing gifts.
- Tickets to the theater and for going to various premieres.
- Attending various seminars and trainings (not necessarily in your specialty).
- Gifts related to personal hobbies.
- Payment for visits to fitness centers and foreign tours.
- Gifts for families (children, spouses - a fairly effective remedy).
In fact, this list can go on. It is enough to show your imagination and better understand your employees what will be interesting to them.
What are the advantages of such motivators? In this case, relationships with employees are not limited only to the financial component. When you give something or encourage an employee, he sees the attention and care of management towards his person. Often a small gift can even be much more effective than the financial equivalent.
If you now decide to experiment, caution is required, since the incorrect use of such techniques can lead to negative consequences.
Caution in this direction is important. And try not to limit yourself only to the material component; in parallel, you should develop the intangible part - it is this combination that will allow you to achieve maximum motivation of employees to ensure the loyalty and cohesion of the team.
- Motivation, Incentive, Remuneration, KPI, Benefits and Compensation