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Issue - stimulus for improving productivity. Please evaluate

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Joined: 20 Dec 2010
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Location: India
Concentration: Strategy, General Management
GMAT 1: 760 Q50 V42
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Issue - stimulus for improving productivity. Please evaluate [#permalink] New post 16 Mar 2011, 06:17
“Monetary compensation is the most powerful stimulus for improving employee productivity.”

Discuss the extent to which you agree or disagree with the position stated above. Support your viewpoint using reasons and examples from your own experience, observations, or reading.


Some people think that monetary compensation is the most powerful stimulus for improving employee productivity whereas others believe that there are several factors that contribute to employee productivity and monetary compensation is just one of them. This appears to be a very controversial issue but closer examination reveals that employee productivity is in fact impacted by several factors with monetary compensation being one of them.

Firstly, however considerable the compensation be, if the work place does not appeal to the employee he or she cannot be productive. For instance, let's take the case of a work place where there is lot of politics with every one trying to pull the other person down and there is a clear lack of co-operation to achieve a common goal. An employee who does not want to get involved in all this will automatically get frustrated and demoralized either due to way he is being treated or due to the way his colleagues are being treated. This will surely affect his productivity.

Another point to be considered is that an employer who gives his employee the feeling of being part of a family will succeed in earning the employee's good will and loyalty. To illustrate, we can consider the case of Infosys Technologies Ltd., one of the leading Information Technology service providers in India. They are considered as one of the leaders not only in terms of revenue or profit but also in terms of employee satisfaction. The point to be noted here is that Infosys is not one of the best pay masters in India. So how do they achieve this? The recent GALUP survey has revealed that much of the employee satisfaction is due to the feeling of being part of an organisation that treats them as people, as family. Infosys takes care of this aspect by conducting several extra curricular activities all through the year and these activities vary from one location to another based on the composition of its employee strength and prevailing culture in that location. An employees happiness naturally translates to a higher productivity at work place. Hence we can conclude that its not just monetary compensation that helps in improving employee productivity.

Perhaps the best reason to believe that employee productivity does not just depend on monetary compensation is the fact that employers who take care of their employees health care needs have a happier and more productive set of employees. The best example for this will be the case of Google. They provide health facilities at each of their centres. This not only means that employees are happy because of the availability of these facilities at workplace but also that they do not need to go in search of similar facilities anywhere else thus getting to spend more productive time at office. Google is truly a market leader and could not have done so without a satisfied and productive group of employees. Clearly, monetary compensation is not everything for a person.

In summary, there is support for both sides of the issue but the above mentioned factors tilts the balance clearly in favor of the fact that monetary compensation is just one of the many stimuli for improving employee productivity. Granted that monetary compensation is an important factor for any employee but undoubtedly it is not the only one.
Issue - stimulus for improving productivity. Please evaluate   [#permalink] 16 Mar 2011, 06:17
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Issue - stimulus for improving productivity. Please evaluate

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