With reference to motivation theory, analyse the impact of Javed’s proposed changes on employee m...

1. What are the proposed changes?

1.1. Zoya - Delaying a planned pay rise, paying less to the business' owners and reducing expenditure on marketing MM's services in order to reduce costs and combat the finance problem. The only change that would possibly affect employee motivation (aside from the owners) is delaying a planned pay rise.

1.2. Ismail- 1) Delay a planned pay rise for employees. 2) Reduce the high payments made to the owners. 3) Reduce expenditure on marketing MM's services.

1.3. Hamza- Delay in the planned pay rise for the employees in the business. Owners will receive a reduced salary. MM will reduce their expenditure on marketing services

2. Motivational theories that are relevant here with links to the case study

2.1. Zoya - delaying a pay rise is reference to Taylor's Theory that states employees are motivated by money. Delaying a planned pay rise may also fail to fulfil the lowest of Maslow's Hierarchy of Needs (physiological/basic) as employees may not be satisfied with their pay. Also, Herzberg's theory as a lack of recognition/assurance/appreciation reflected by the delayed pay rise may demotivate employees.

3. Negative impacts

3.1. Zoya - with reference to Taylor's theory, by delaying a pay rise some employees may be less motivated as they are motivated by non-financial factors, such as achievement or recognition (Herzberg's Theory). By not giving this planned pay rise, some employees may not feel appreciated and therefore would lose motivation (those who are not motivated by financial factors). Although this would help MM reduce their costs, they may face lower output and productivity levels as a result and therefore may generate less revenue.

3.2. Ismail- MM is facing finance problems. Their costs are increasing and Javed suggested that they delay a planned pay rise for employees. Taylor's motivational theory believes that workers are motivated by money. A delayed pay rise for employees may demotivate employees. This is because employees at MM will no longer be responsive and fast towards their customers which may hinder MM's brand image as they are known for their 'rapid response to customers'. Additionally, a delayed pay rise may lead to an increase in labour turnover and abseentism. An increase in labor turnover may hinder the growth of MM and costs will begin to rise in the long run. Furthermore, Javed's proposed changes may hinder employee motivation and may lead to a lack of honesty between MM and their employees. This is because the firm will be challenging their ethical objectives as they are not treating their employee fairly. This may lead to employees going on strikes which will hinder MM's corporate image. Negative publicity may lead to decreased sales revenue and profits in the long run.

4. Positive impacts

4.1. Zoya- Taylor's theory states that employees are motivated by money, and therefore a delayed pay rise would motivate the employees to work harder/increase output in order to get this pay rise. This would allow the employees to increase productivity if output was related to pay.

5. Evaluation/conclusion

5.1. Mrs Hultum- Which changes if any would you suggest they do or don't do?

5.2. Zoya - it may be beneficial for MM to look into external sources of finance instead of cutting costs in areas that generate revenue, as Rachel suggested. This would help keep the employees motivated. However, if they wish to increase revenue as a result of an increase in productivity, this can be done by motivating employees. They may wish to adopt the ideas of Herzberg's theory, and use the idea that psychological factors would improve motivation. This can be done through job enlargement, job enrichment and job empowerment, whilst also ensuring that employees have a sense of recognition and responsibility to lead to job satisfaction. Greater job satisfaction would lead to higher motivation, an increase in productivity and therefore greater revenues for MM.