Organizational Behavior 3-5 PAGE PAPER APA FORMAT

Organizational Behavior

Akia Carter

MGMT 311

American Military University

12 December 2013

Introduction

In today’s competitive business environment, more business executives are focusing on quality improvement while reducing costs. In the meantime, a strong economy has lead to a tight job market. Hence, while small and big business yearn to derive more from their employees, their workforces are looking for more out of them. Programs such as employee reward and recognition are among the methods of motivating employees to change work attitude and key behaviors to benefit businesses. Productivity measures across global economies have captured the attention of policy makers as well as executives. Eventually, although, the source of productivity results from the individual knowledge employee who gets things done right every day, it is evident that employees perform better when they are happier (Ali & Ahmed, 2009).

Modern companies are continually finding new techniques and strategies to recruit expert, retain top professionals, and derive innovative ways to motivate their workforce for maximum output (London & Higgot, 1997). The concept behind how top managers can effectively motivate and reward employees takes us back to the century. New contemporary companies are inventing methods to do that. Wholefoods Inc. The company is leading in restructuring its management, so that its employees can rationalize creative novels that can produce Chartbuster new products. The company is rewarding its employees with recognition and rewarding programs such as bonuses, variable pay, profit sharing, and stock options. Moreover, this company provides ample environments where group thinking and teamwork is elevated and invent the new product that could bring change to the next generation. The company has improved the employee of the month, by raising the bar on ways to provide real results by rewarding employees. The amazing thing with this company is its intrinsic rewards and how it provides liberty to employees to operate with respect, enabling them to have control on their time.

Types of reward and Recognitions programs

There are several kinds of different reward programs that Wholefoods Inc target at both individual, departmental team, and company performance.

Profit Sharing

Profit sharing programs refer to the plan of creating a money pool to be distributed to employees by extracting a certain percentage of the company’s profits. The award to the employee is usually equal to a percentage of the employee’s salary, and is given out after the closure of books at the end of the year. The benefits to a company providing this kind of reward is that it keeps fixed cost low (Ali & Ahmed, 2009).

Moreover, the rationale behind this profit sharing is to recompense employees for their contribution towards the company’s attained profit objectives. It motivates employees to stay since it is structured to reward employees who remain with the company (Norsworthy & Zabala, 1990).

Bonuses

Many businesses have utilized bonus programs for some time. They normally reward individual’s achievements, and are habitually used in the sales department to motivate salespeople to generate higher profits. Wholefoods Inc has switched from individual bonus programs to one that reward gifts to corporate, performance at a departmental or company levels. According to Daniel, (2012), some businesses concerned in long-term contributions should perhaps consider another form of reward. Bonus programs are generally suitable for short term motivators (Townsend, 1995).

Stock Options

This method has become more popular in larger companies in recent years for both mature and young companies. Employee’s stock programs permit the employee’s right to purchase a specific number of company’s shares at a set price for a particular period of time (typically around 12 years). The employees are permitted by the company’s board of directors and are approved by its shareholders.

Similar to profits sharing, the stock options normally reward employees for sticking with the company and serving as a long-term motivator. When an employee remains in the company for a certain period of time (usually around five years), he is entirely vested in the program. Once the employee becomes vested in the program, he is allowed to purchase from the company a certain number of stocks shares at the fixed price agreed upon. This form of purchase is referred to as exercising stock options. Eventually the employee can decide to either retain or sell the shares in the open market at a different price making him earn some profits (London & Higgot, 1997).

One of the profits for providing stock options is the company’s ability to take deductions for the compensation expense when it provides shares to employees who are partakers of this option. Another advantage of offering stock options is that although it is considered a portion of compensation, the current accounting methods do not demand the business to indicate options as an expense on their books of accounts. This makes a company to realize a lot of profit hence productivity.

Recognition program can take several forms. Planed programs can incorporate regular recognition events such as employee of the month, banquets, annual report book that features the employee’s accomplishment as well as department or company recognition boards. Additionally, spontaneous or informal recognition can entail privileges such as long lunch breaks, starting leaving early/late or working at home. A well accomplished task can also be recognized by providing extra support or empowering employees in such ways as promoting the employee to senior level, increased authority. Others such as symbolic recognition like coffee mugs with inscriptions can be effective, so long as they provide appreciation for hard work. All these programs expressing gratitude however are by far more likely to be welcomed positively, if they come from small scale businesses with limited financial resources. Nonetheless, employees end to look less kind on such rewards, especially if they come from thriving companies who utilize cheap items as their reward programs (Norsworthy, & Zabala, 1990).

Conclusion

Both recognition and reward programs are welcomed in any business setting. Owners of companies should first of all determine the appropriate employee behaviors, accomplishment, and skills that will enhance their business objectives. By giving rewards and recognition to outstanding performers, entrepreneurs will possess an edge in a competitive environment

References

Ali, R., & Ahmed, M. S. (2009). The Impact of Reward and Recognition Programs on Employee’s Motivation and Satisfaction: an empirical study. International Review of Business Research Papers, 5(4), 270-279.

Daniel, W. W. (2012). 2 Understanding Employee Behaviour in its Context: Illustrations from Productivity Bargaining. Man and Organization (Routledge Revivals): The Search for Explanation and Social Relevance, 39.

London, C., & Higgot, K. (1997). An employee reward and recognition process. The TQM Magazine, 9(5), 328-335.

Norsworthy, J. R., & Zabala, C. A. (1990). Worker attitudes and the cost of production: Hypothesis tests in an equilibrium model. Economic Inquiry, 28(1), 57-78.

Townsend, H. (1995). Foundations of business economics: markets and prices. Routledge.