A case reference to Petroleum Development Oman (PDO)
In today’s liberalized era where competitive trade practice is the bottom line of any organization to survive, it is absolutely mandatory for any organization to nurture its workforce or human resource which is the basic capital of an organization. Same applies in case of the progressive business organization, PDO which naturally, also comprises of a set of intellectual and skilled individuals in its workforce. The universal equation of relativity between the progression factor of an organization and the workforce implies that both are directly proportional to each other, mutually dependent and success of one depends on the other. With a view to foster the productivity level of the organization, it is essential to boost the capability, morale and working spirit of its human resource for which the concept of Organizational Behaviour (OB) has been brought into existence by the management experts. OB is a field of study that investigates the impact that individuals, groups and structure have on behaviour within organizations for the purpose of applying such knowledge towards improving on organization’s effectiveness (Stephen Robbins, 2003). Among the broad scope of core topics of OB, motivation is a crucial one. After the employees are hired and trained, it is important to motivate them to get the desired efforts from them to achieve the organizational objectives. Hence, ‘job satisfaction’ of the workforce and ‘organizational commitment’ are to be equated to reap the desired result.
Concept of Motivation :-
Motivation is a dynamic HR process and there cannot be any greatest organization specific motivation tool. Motivation can be defined as a process, which begins with physiological or psychological need, or deficiency, which triggers behaviour or a drive that is aimed at a goal or an incentive. (Fred luthans, 2005). Motivation is a phenomenon by which ‘Motives’ based on ‘Needs’ will condition individual’s behaviour. Therefore, motivation refers to the way in which wages, drives, desires, aspiration, strivings, or needs, controls or explains human behaviour (Mc Farland1974). Motivation is the core of management (Likert 1961). Motive is an inner state that energizes, activates, or moves and that directs human behavior towards goals (Berelson, 1964). A motive is restless, a lack, a force. Once in the grip of a motive, the organism does something to reduce the restlessness to remedy the lack, to mitigate the force. (Fillmore 1970). The subject of employee’s attitudes relating to ‘job satisfaction’ and ‘organizational commitment’ are of major interest to the field of organizational behaviour and Human resource management. This is because of the fact that only a satisfied employee can have organizational commitment. ‘Organizational commitment’ is an attitude of an individual with a strong desire to remain a member of a particular organization with willingness to exert high levels of effort on behalf of the organization, accepting the values and goals of the organization. Incidentally, Organizational commitment can be expected only from a satisfied worker and a satisfied worker is always a motivated worker. Motivational perceptions of all types of employees throughout the world are fast changing in response to a number of key variables. The elements of motivation vary with time and space. Research proves that a motivated and productive employee experiences meaningfulness of the work done, experiences responsibility for the outcome of the work done and has high levels of knowledge of the results of the work performed (Hackman, 1976). If there is no conflict between group goals and personal goals of a member in a group, i.e. goals of an employee and an organization in which he/she works are complementary and not contradictory, then the employee is motivated to work for the goals of the company, because, by doing so, he will be achieving his own personal goals.
Objectives of Motivation :
A Ensures productive use of resources (physical, financial and HR) towards fulfillment of organizational goals.
A Increased efficiency of people contributing to overall cost reduction.
A Strengthens quality objectives of an organization.
A Promotes goal oriented behaviour among the employees
A Ensures organizational stability by reducing employee turnover and absenteeism.
A Creating an work environment of creativity and growth transforming an organization into an enabling one.
The Process of Motivation:
Motivation can be broadly classified as intrinsic motivation and extrinsic motivation. Intrinsic motivation is largely influenced by motivational tools like job enlargement, Job enrichment, job simplification, job rotation and working conditions. Extrinsic motivation is largely influenced by management techniques such as performance incentives and participative management strategies. According to Psychology, all conscious behaviour of Human beings is motivated. Every individual tends to have some motivational factors known as motivational drives.Thus, motivation is the key factor for individual job satisfaction and the job satisfaction of individuals leads to ‘organizational commitment’ and ultimately the success of an individual and the organization (McClelland, 1971). Supportive organizational climate offers the workers a sense of personal importance and responsibility, thus maximizing Organizational commitment of the employees. Here, the employee are motivated and hence, ensure success for themselves and assures success for the organization. Psychological analysis point to “Human needs” as an important factor for motivation and thus, job satisfaction.
Critical Examination of the theories of Motivation:
Various theories explain this complex process from several points of view. The salient theories which are discussed underneath may be classified into two groups, namely, Content theories and Process theories.
Content theories of Motivation: When a machine malfunctions, managers find the “definite causes” of breakdown in an analytical manner based on its operational needs. Likewise, when a machine operator malfunctions, it is important for a manager to understand the “definite causes” based on his operational needs. Hence, theories pertaining to “Motivation based on Human Needs” have a great influence on the understanding of various aspects of organizational behavior. These theories hold Motivation based on “Human needs” as the key factor for the career success of an individual and the organization. Human needs can be classified into Primary needs: These are physical needs like food, water, sleep, sex, air and comfortable temperature and hence, universal; Secondary needs: These are social and psychological which pertain to self-esteem, sense of duty, self-assertion, competitiveness and receiving affection. These secondary needs are the one that complicates the motivational aspects. Various theories have evolved on motivation based on human needs of which, three major theories are of great importance.
Maslow’s Hierarchy of needs: Abraham Maslow in 1943 classified needs as Deficiency needs and Growth needs. Deficiency needs include physiological needs (food, water, air, clothing, shelter etc), safety needs (job security, degree of continuity, order, structure and predictability), love/social needs, esteem needs, cognitive needs and aesthetic needs. Growth needs include self-esteem and self-actualization. The sequence followed is Physiological needs 8 Safety needs 8 Love/social/belongingness needs 8 Self-esteem 8 self actualization. The essence of Maslow’s theory can be summarized as :
· Unsatisfied wants and desires of human being influence their behaviour.
· Needs of the people are arranged in order of their perceived priority of hierarchy, which vary from person to person.
· People advance from one level of need hierarch to another, only when their preceding need factors are satisfied.
· The more people advance to higher order needs, the more they display their satisfaction and motivation to work.
Critical Evaluation of Maslow’s Theory :-
ê The theory has no empirical support. Maslow did not intend to relate his theory to work motivation.
ê Needs can no be put in strict defined level. In fact hierarchy of need is misnomer. An employee who is motivated by self-actualization need may still have lower order needs like food and shelter.
ê Theory cannot hold good for heterogeneous work groups.
ê Maslow’s existential philosophy is questioned as people may like to remain content with the satisfaction of their lower order needs.
ê Diagnosing need deficiency for employees, following Maslow’s approach is time consuming. Even after such diagnosis, it may not help an organization to develop a tailor-made model for employee motivation.
Herzberg’s two-factor model: Frederick Herzberg in the 1950s (Fredrick Herzberg, 1959) developed a ‘two factor model of motivation on the basis of research with employees and organizations. He studied 200 accountants and engineers in firms in and around Pittsburgh, Pennsylvania, using “The critical incident method” of obtaining data for analysis. Herzberg used two questions for obtaining data:
When did you feel particularly good about your job-what turned you’ on’?
When did you feel exceptionally bad about your job-what turned you ‘off’?
Based on his studies, Herzberg concluded that two separate sets of factors influenced motivation of the workers in an organization leading to ‘organizational commitment’ and ultimately the success of an individual and the organization namely Hygiene or Maintenance factors and Motivational factors. Motivation factors are 6 in numbers, namely, Recognition, Advancement, Responsibility, Achievement, Possibility of growth and Job content or work itself. Presence of these factors in the job creates a motivating environment but its absence does not cause dissatisfaction. The Hygiene/maintenance Factors are 10 in numbers, namely, Company Policy and administration, technical supervision, interpersonal relations with subordinates, Salary, Job Security, Personal Life, Working Conditions, Status, Interpersonal relations with supervisors, Interpersonal relations with peers. These factors are context factors. Their existence just creates an environment for doing work. But factors by itself cannot motivate people to work. In Herzberg’s words, their absence can dissatisfy people but their presence per se cannot satisfy people.
Critical Evaluation of Herzberg’s Theory :
ê It is limited by its methodology, when things go well people tend to take credit for themselves. Contrarily, they attribute failures to the external environment.
ê Theory is method bound. Using other methods, we can no get similar results.
ê Herzberg’s model talks more about job satisfaction than on job motivation.
ê The theory ignores situational variables as it is not backed by adequate research in different work environments.
ê Even though the theory assumes a relationship between job satisfaction and productivity, the methodology applied by Herzberg limits its focus only on job satisfaction and not on productivity.
McClleland’s Three Needs theory (nACH, nAFF, nPOW) or Achievement Motivation Theory: David C. McClleland (1976) through his 20 year study at Harvard University documented difference in needs of the people in three important areas as under :
1. Achievement Need (nAch):-People in this category do not get motivated by money. They feel more motivated with a sense of accomplishment and achievement.
2. Affiliation need (nAff) :-People in this category identify themselves with the organization, they always prefer to foster a friendly work culture and try to meet their needs through friendly relations.
3. Power Need (nPow) :- People in this group always try to get satisfaction by controlling others. This need emerges from the drive of superiority and this kind of people look for leadership positions in an organization.
Critical Evaluation of McClleland’s Three Needs theory:
ê McClleland contends that sense of achievement can be inculcated among the individuals, which is not tenable in psychological literature.
ê McClleland contends needs can be changed through education and training. But, psychologists contend needs are permanently acquired.
The Cognitive or Process theories of Motivation: The Process theories on employee motivation on the other hand, emphasize on the idea that people take conscious decisions about their job behaviour. Therefore, to motivate organizations must understand how an individual takes decisions and what efforts he puts in the job. Some of the salient process theories are detailed below :
Vroom’s Expectancy theory: Vroom’s expectancy model is a process theory of motivation, which is a widely accepted approach to motivation. It emphasizes that people feel increasing motivated, if they perceive that : (a) their effort will resulting successful performance and (b) successful performance will ensure desired results. According to Vroom, motivation is a product of three factors; Valence = how much one wants a reward; Expectancy = One’s estimate of the probability that effort will result in successful performance and Instrumentality = One’s estimate that performance will result in receiving the reward. Thus, Motivation, according to Vroom = Valence x Expectancy x Instrumentality. Valence refers to the strength of a person’s preference for receiving a reward. It is the expression of the amount of one’s desire to reach a goal (Davis, 2002). In contrast to the need-based models of motivation, where conclusions are based on a group of employees, the expectancy model conclusions are based on individual employee preferences and their changes. According to Vroom, valence is thus, the strength of an individual’s preference for a particular out-come. In order to have a positive valence value, the person must prefer to attain the outcome against not attaining it. Expectancy is the strength of belief that one’s work related effort will result in completion of a task. Expectancies are also called probabilities of the employee’s estimate of the degree to which performance will be determined by the amount of effort put in. Psychologists agree that expectancies are cognitive in nature. Instrumentality is the employee’s belief that a reward will be achieved on completion of the task.
Critical Analysis of Vroom’s Expectancy theory:
ê It needs to be adequately tested in different work environments.
ê Employees may always not take conscious decisions and later try to rationalize the action with their own logic.
ê Linkages between efforts performance and performance-rewards may not be linear. Organizational policies may further complicate the process.
ê The theory is complex. In real life situation managers may have time and resource constraints to implement it.
Equity Theory :- This theory owes its origin to several contributors like Festinger, Heider, Homans, Jacques, Patchen, Weick etc. The theory proposes that in the work environment, motivation is influenced by one’s perception of how equitably he or she is treated compared to others. This theory is also known as social comparison or ‘inequity theory’. An individual accounts for the amount of work he puts in and corresponding rewards he gets for the same and then he compares the efforts and rewards of a similarly placed person in the organization. If equity exists, individuals feel ok. Incase of inequity it propels him into action to create a condition of equity. While doing do, individuals may choose to change or alter inputs, alter outcomes, distort inputs & outcomes, distort inputs and outcomes of others, select a different referent (to compare) or withdraw from the field.
Critical Evaluation of Equity Theory
ê It is complex and difficult in application
ê Perceptions are difficult to measure or assess.
ê Choosing a ‘comparison other’ may not be always correct.
ê A given factor may be an input as well as an outcome.
ê The study is based on laboratory experiments rather than in real life situations in organizations.
Goal Setting Theory :-Edwin Locke(1968) considered two cognitive determinants of behaviour, values and intentions (goals). Emotions and desires represent the form of values and value judgements. Intentions are goals to satisfy desires or emotions (values). This results in consequences, feedback and reinforcement. The study suggests that individuals are wiling to work hard when they know what is required from them. Setting specific attainable goals is related to high level performance.
Critical Evaluation of Goal Setting Theory :
ê It may not be true always, because all the people may not have similar mind frames and perceptions.
ê A particular form of goal setting may not be acceptable to all the concerned employees.
Weiner’s attribution theory: Weiner uses attribution theory to help explain achievement motivation and to predict subsequent changes in performance and how employees feel about themselves. According to Weiner, a stability (fixed or variable) dimension should be recognized in performance study. Experienced employees, according to him, will have stable internal attribution about the capabilities but an unstable internal attribution concerning effort; similarly, these employees may have a stable external attribution about task difficulties but an unstable external attribution about luck. According to Weiner, when employees attribute their success to internal rather than external factors, they have higher expectations for future success, and have a greater desire for achievement with high performance goals.
Critical Evaluation of Attribution Theory :
ê As the perceived causes are the determinants of work behaviour and the perception differs, people behave differently in a given situation. The theory may not stand uniform always.
Motivation: A case reference to Petroleum Development Oman (PDO)
PDO is the leading hydrocarbon exploration and production company in the Sultanate of Oman. Since the 1970’s, PDO has maintained its production and replaced its reserves. Significant oil discoveries that have contributed to the growth of the company include Ghaba North, Saih Nihayda, Saih Rawl, Qarn Alam and Habur. Enhanced oil recovery techniques like the application of heat, chemicals or gas solvents to alter the way oil or injected water flows in a reservoir have substantially contributed to the sustained growth of the company. An analysis of the intrinsic and external factors that contribute towards the development of an individual in terms of career in PDO gives a fine clarity on the much-debated problem of employee motivation in a successful business organization.
PDO mission statement declares that the mission of the company is to employ cream candidates from various diverse backgrounds, equipping them with the avenues to develop new skills and capabilities, retaining them by giving interesting and challenging assignments and rewarding them for exceptional performance. Thus, the goals and strategies of the organization are accordingly chalked out as to meet the mission statement.
Quality of Work-life (QWL) at PDO : PDO is committed to high standards of corporate governance. The PDO Sustainability Policy includes topics such as regulatory compliance, safety, security, health and the environment, product safety and relationships with employees, customers, suppliers and the wider community. PDO portfolio has been changing since the objectives set in 1990. By a series of safety, security, health and environment programmes. PDO has reduced the environmental impacts of businesses so that they are now a fraction of what they were in the early 1970s. (www.pdo.co.om) The Company’s new portfolio have been developed in 2000 though a combination of internal debate, external opinion leader research, and peer review discussion by a panel of three external experts, and have been implemented though the commitment from the business leaders and the dedication of the employees. The sustainability principles, based on longstanding employee values, with developing stakeholder interests, have been formalized in 2000. This goes beyond the impact of the manufacturing operations to encompass product stewardship across the supply chain, and the relationships with employees, suppliers, customers and the communities. The company monitors the progress and further hopes to develop the targets as the Challenge period progresses. Risks are evaluated at least annually as part of the Risk Management process of PDO. Business continuity and emergency planning and crisis management processes are integral parts of the Responsible Care Management System
The organization has a set of employment principles that govern and manage the employee relations. This includes Health and safety of employees, development of people, diversity, and respect for the individual, work-life balance, organizational changes, communication and consultation and reward for performance. PDO is committed to realize the full potential of the employees recognizing the fact that the employee’s development should be on a motivational basis. The company wants every employee to realize his personal strengths to grow and develop further on the lines of the needs of the organization. PDO declares that the respect for the individual is the foremost policy of the company. In compliances with the Herzberg’s Theory of Motivation.
Performance based pay as a motivator in PDO:
Pay systems are increasingly forming a part of human resource management initiatives to achieve enterprise level objectives and strategies, with more attention being paid to how they fit into the overall human resource management policies of enterprises. (Rensis Likert, 1961). The remuneration policy of PDO affirms its commitment to provide remuneration in a form and amount, which will attract, retain, motivate and reward high caliber individuals. The remuneration package is based on the principles that incentives should align the interests of the employees, reward the creation of long-term value and safeguard the interest of shareholders; Reward elements should be designed to reinforce the link between performance and reward; The total remuneration package for on-target performance shall be competitive in the relevant market with flexibility to meet critical resource needs. Remuneration packages of PDO comprises of five elements; Base salary, annual incentive plan, performance growth plan, share option scheme and post retirement benefit (www.pdo.co.om ). Most of the workers believe that those who work hard and produce more should be rewarded accordingly. The relationship between wage inflation and unemployment has been extensively investigated (Philips, 1958) and further elaborated (Lepsey, 1960). Performance based pay is determined based on the contribution to reach the overall objectives of the organization. Performance based pay has a potential influence on membership behavior. The entrepreneurial and achievement oriented people are more likely to get attracted to the performance related pay and the organization needs such people hence it makes sense for them to relate pay to performance. In compliance with the Expectancy theory of Motivation.
Recruitment, Induction and Self-actualization at PDO :-
The staff recruitment statement of PDO promises satisfaction from competitive financial packages that stimulate career development for the right person and willing to contribute. That is to say, if an individual has the motivational drive to achieve with an organizational commitment then, PDO is the Challenge. The success of the Group, according to its annual statement 2005, is due to its multicultural, diverse, talented workforce. This equal opportunity employment policy applies to the recruitment, promotion, compensation, transfer, retention, training, benefits and other employment activities as well. Some of the schemes introduced by the company towards implementation of the diversity policy include Flexible working hours, job sharing, career breaks and mentoring programmes. In compliance with Equity theory and Performance Satisfaction Theory.
Learning ; Development at PDO:-Company has strong focus on innovation and experimentation. Training is taken very seriously at PDO (www.pdo.co.om ) .Tailored training programmes are provided at every level of the organization. The programme includes training programmes, on-the-job training and coaching, PC based training and team development activities. Simon Aldersley is a typical case study of Vroom’s Cognitive or thinking individual at PDO. A Master in Chemistry, He joined PDO in 2002.He says that he has been very impressed with PDO. He assesses the functioning of the PDO as a business organization while remaining an employee of the organization.. He opines that there is a sense of everyone working together towards a common goal. This is nothing but the concept of Organizational commitment discussed earlier in the analysis. He has a high valence factor in his quest for career advancement when he aims to be the Technical Manager in the near future, a high expectancy in his involvement in the increased responsibilities over the years and a high instrumentality in his belief that PDO has plenty of goals for him to aim for. Scope of Self Actualization as per Maslow’s theory.
Team ; Leadership at PDO :-The functional directors of PDO are setting the technical standards, the allocation of staff and their development in a particular discipline. They determine how the process is to work and are therefore the ‘Process Owners’. Supports McClleland’s Affiliation theory.
Communication at PDO :- PDO is committed to ensure that employees are kept informed about the issues and challenges in the business so that the employees are sensitive to the implications in business restructuring. This has been possible because of effective business consultation with the employees .The company understands that knowledgeable and well informed employees are important for the success of the organization. PDO is committed to create a productive and efficient workforce by supporting employees to manage their personal and family life successfully. Nurturing employees feeling of belongingness and self esteem as per Maslow’s Theory of Motivation.
Social Satisfaction : Employees of PDO being a part of such a reputed and progressive organization, as it is hold a factor of social satisfaction. Basics of Maslow’s theory of Motivation.
Barriers of motivation in PDO and recommendations:
Performance can be thus defined as a product of Motivation and Abilities of the employee, where, any reduction in motivation results in diminished end product, i.e. performance. This is in a way true in case of PDO where there has been some frequent employee changes in PDO. Only a dissatisfied worker changes jobs. Whereas in Europe, tenure averaged around 10.5 years during the period 1992-2002. This long-term employment relationship does seem not seem to exist although there is a marked increase in flexible forms of employment, especially part-time jobs in PDO and this can be attributed to the oil rich neighboring states offering better opportunities in terms of career growth and pay. This can be overcome by incorporating job enrichment strategies and awakening to globalization like other similar organizations that have taken enormous efforts to match the standards of global market and redefined their strategies. Concept of job rotation may be introduced with a view to provide exposure to the employees in different disciplines of work together with boosting their expertise in multi-tasking , self confidence and morale.
An Organization based on the principles of Organizational Behaviour by treating individuals with dignity, respecting their self-esteem and attributes is bound to motivate its employees by safe guarding employee interests and thus has maximum employee commitment in terms of motivation. Thus, success of an organization like PDO has been on account of the apt application of the various concepts of organizational behaviour like Motivation, Decision Making, Group Behavior, Communication, Power and Politics, Organizational Structure, Organizational Culture, Human Resources Practices and Change Management The challenges of Human Resource Management lies in identification of ways to gain sustainable competitive advantage through people in the growing influence of various factors like globalization and information technology keeping in view the impact of cost pressures on Human Resource policies. Industrialized countries have built their competitive advantage not around low wages, but around clusters of competitive industries in which high earnings and standards of living have been sustained through improved technology, productivity and quality. Many Oil and Gas producing countries now recognize that high technology; productivity and low earnings cannot be combined and sustained over a long period of time. Many Oil and Gas producing employers are now seeking to sustain their competitiveness through pay increases, which are more related to performance measures as a way of absorbing increased labor costs, while at the same time rewarding and motivating employees. Linking motivational theories and leadership concepts demonstrates that leader interactions with followers permit the establishment of highly motivational working environments. In such environments, individuals acquire the means to transcend their traditional roles of supervisor, manager, or follower, and realize their potentials as leaders.
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