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The following appeared in a memorandum from the head of a human resources department at a major automobile manufacturing company to the company's managers: “Studies have found that employees of not-for-profit organizations and charities are often more highly motivated than employees of for-profit corporations to perform well at work when their performance is not being monitored or evaluated. Interviews with employees of not-for-profit organizations suggest that the reason for their greater motivation is the belief that their work helps to improve society. Because they believe in the importance of their work, they have personal reasons to perform well, even when no financial reward is present. Thus, if our corporation began donating a significant portion of its profits to humanitarian causes, our employees’ motivation and productivity would increase substantially and our overall profits would increase as well.”
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The HR head, in the memorandum issued to company’s managers, claims that in order to improve employee productivity and overall profits, the company should start donating a portion of its profits to humanitarian causes. He draws this conclusion based on a parallel drawn from NGOs, claiming that NGO employees feel connected to the social causes and hence work with high motivation levels despite limited financial rewards. However, on deeper analysis, it becomes apparent that multiple relevant aspects have not been taken into consideration leading to a number of mistaken assumptions and logical flaws.
The first such flaw is the assumption that NGO employees are highly motivated only because they believe in the social impact of their despite low financial incentives. It would not be right to draw a parallel between and NGO and a for-profit firm. Many people, who work in charities, not-for-profit organizations, do it on a voluntary basis and have regular means of income to support them. The financial incentive in an NGO, therefore, becomes secondary to the involvement in a social cause (presumably, the sample set interviewed belongs to this category). Infact, the admin/ support team in these NGOs is paid like a regular employee in any for-profit firm. Multiple research studies link employee motivation in a workplace setting to a multitude of factors such as – salary, ability to provide for own family / loved ones, team, connection to work, application of skills/education, working conditions etc. The head of HR should first consider running an internal employee engagement survey to find out the current engagement levels and causes behind poor employee motivation levels (if scores indicate so) in the automobile company.
Moreover, the HR head also goes on to conclude that the company’s productivity and profit will improve if the company starts making donations from its profit to social causes. There is no evidence provided to suggest that donating money will impact productivity and hence improve profit. People’s involvement in direct social causes because they believe in them is different from a company choosing on their behalf a cause to donate to - it will not have the same impact. There is a huge difference in doing something directly i.e. giving your time, energy and focus vs someone donating money on your behalf. If the HR head believes that the social impact of the firm will boost employee motivation he should consider highlighting how the automobile company’s work and by extension the work of every employee will make a difference to society. For e.g. are they making electric vehicles which will help arrest carbon emissions, reduce pollution, and ultimately make the world a better place? Ampflifying these messgaes may help more that making donations.
Finally, the HR head also states that employees working in NGOs are performing well even even when their performance is not being evaluated or monitored. This premise suggests that there is no benchmark available to assess the productivity of NGO employees and hence no conclusion should be drawn on how they perform.There is no evidence provided to indicate the performance levels of NGO employees and why it should be any different when the performance is measured. Employee performance is dependent on multiple factors and a healthy competition tends to drive the performance up. Infact this claim weakens his argument of drawing out any learnings from NGOs.
After closer examination of the passage presented, it is apparent that there are several flaws. Recommendations in the essay show how the argument maybe strengthened.