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Importance of having and communicating organizational values in company

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Christian Fernsby |
Organizational values
Companies   If organizations focus on motivating their employees, performance will follow

All organizations want motivated employees, but how can management practices contribute to employee motivation?

A recent ie university study points to the importance of organizational values and training opportunities to facilitate intrinsic motivation of employees, and the role of performance measurement to enhance extrinsic motivation.

Furthermore, the findings suggest that if organizations focus on motivating their employees, performance will follow.

In some contexts, worker motivation is generally neglected as an objective, despite the fact that greater motivation leads to better performance.

"In our publication in the European Accounting Review, we study employees working in 105 public administration departments in the Netherlands, examining in particular the relation between management practices, employee motivation and performance.

"We analyzed four types of management practices that can have an impact on employee motivation: personnel, cultural, action, and results controls.

"Personnel controls include training of personnel and hiring the right people, while cultural controls work through norms and values shared by employees.

"Action controls specify rules and monitor tasks that need to be carried out, whereas results controls such as performance measurement practices focus on examining the desired and achieved results.

"The current focus on studying employee motivation within organizations is driven by a desire to identify what motivates employees to do their jobs well.

"We examined, for instance, how performance measurement practices relate to motivation, and we found that focusing attention on results can have a positive effect on the extrinsic motivation of employees.

"Although performance measurement practices are not always appropriate and can lead to negative effects in some settings (see “Can Performance Metrics Harm Performance?”), in the context of public administration departments with repetitive and measurable tasks performance measurement yields positive effects on employee motivation.

"Action controls play a fundamental role in compliance with rules and procedures, and are in the departments that were studied strongly related with performance.

"This is the case because the process of issuing passports in public administration departments must be done in accordance with international norms so as to avoid serious consequences such as identity theft.

"Performance is in this context thus highly dependent on compliance with the rules.

"It should also be noted that each department has its own peculiarities and that the relations between management practices and employee motivation can depend on the types of tasks that employees have to carry out and the measurability of the output of their output.

"In our study, the management practices focused on results and rules did not have an effect on workers’ intrinsic motivation.

"However, we found that another type of management—namely, cultural control—did facilitate the intrinsic motivation of employees.

"In the private sector as well as in the public sector, intrinsic motivation is generally regarded as an important type of motivation that is related enjoying a task for its own sake.

"Cultural control—far removed from budgeting systems and monetary incentives—has to do with trying to influence the organization’s culture, for instance by exemplary behavior of senior managers and the communication of organizational values.

"Paying attention to this aspect and creating a favorable work environment for employees has a direct relation with intrinsic motivation.

"Lastly, we found that both types of motivation—intrinsic and extrinsic—are positively associated with performance.

"Of course, each workplace is different and there are limitations to the generalizability of our study.

"Also, we only focused in this study on the relation of management practices with motivation, and we did not take into account other potentially important psychological factors that may also be affected by these management practices, such as stress, self efficacy or work satisfaction.

"Nevertheless, our study points to the importance of having and communicating organizational values to which employees can relate, and offering training and coaching possibilities to employees so that they can further develop themselves, as these practices can facilitate their intrinsic motivation.

"Not only managers, but also human resources departments, play a crucial role in creating a work atmosphere in which employees can develop their potential.

"And, as shown in our analyses, a motivated workforce positively contributes to organizational performance."


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