The role of the motivation system in the strategic development of an enterprise

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The role of the motivation system in the strategic development of an enterprise

Taranych Oksana

PhD, Associate Professor

Management and Behavioral Economics Department

Vasyl' Stus Donetsk National University

Vyshnivska Anna

Administrator, Commercial Department

MAKOSH MINERAL LLC

Abstract

The article is dedicated to the exploration of the role of the motivation system in the strategic development of a company and the formulation of practical recommendations for its sustainable growth through the combination of formal and informal motivational methods. It provides an overview of the concept, key functions, and methods of motivation within a company. It is noted that the motivation system in the strategic development of a company constitutes a set of interconnected elements and consists of external and internal motivation, which should be balanced. Employee motivation methods are grouped into four stimulating categories: economic incentives, goal-oriented management, job enrichment, and participation systems. The article forms a conception of an effective motivation system in the contemporary business environment. It identifies a close connection between the personnel motivation system and the corporate culture of the company, which shapes the management philosophy, mission, values, vision, career advancement policies, and the reserve of future leaders supporting a healthy socio-psychological climate within the team, preventing emotional burnout among workers. The necessity of forming a program of personnel changes for the development of highly qualified leaders, ready to solve complex tasks, and actively participate in the strategic development of the company is emphasized. The conclusion is drawn that the effectiveness of the motivation system depends on the specificity of the company, the atmosphere within the team, and the psychological portrait of the employees. According to global experience, the combination of material and non-material motivation methods yields the best results. The motivation system, like the corporate strategy of balanced development, is an essential tool for the strategic development of a company.

Keywords: management system, strategic development, personnel development program, work motivation, incentives, motivation system, corporate culture, socio-psychological climate, management style, company philosophy, mission, values, vision.

Роль системи мотивації у стратегічному розвитку підприємства

Таранич Оксана Вікторівна

Донецький національний університет імені Василя Стуса

Вишнівська Анна Олегівна ТОВ «МАКОШ МІНЕРАЛ»

Анотація

Стаття присвячена дослідженню ролі системи мотивації у стратегічному розвитку підприємства та формуванню практичних рекомендацій щодо його стійкого зростання на підставі поєднання формальних і неформальних мотиваційних методів. Динамізм розвитку світової економіки під впливом криз і науково-технологічних досягнень вимагають від підприємств стійкого бачення їх стратегічного розвитку, в якому наявність системи мотивації відіграє актуальну роль. В роботі було використано загальноекономічні положення теорії менеджменту, операційного та стратегічного менеджменту, пов'язані з управлінням стратегічним розвитком підприємств, формуванням корпоративної культури та системи мотивації персоналу. Для аналізу літературних джерел було використано методи порівняння й опису даних; для визначення способів впливу системи стратегічних цілей і корпоративної культури підприємства на співробітників було використано методи узагальнення та систематизації; табличний та графічний методи для наочної презентації ролі системи мотивації серед методів управління й ідентифікаторів корпоративної культури підприємства. Надано характеристику поняття, основних функцій та методів мотивації на підприємстві. Визначено, що система мотивації в стратегічному розвитку підприємства являє собою сукупність взаємопов'язаних елементів та складається із зовнішньої і внутрішньої мотивації, які повинні бути збалансованими. Згруповано методи мотивації персоналу підприємства в чотири стимулюючи види, такі як: економічні, управління за цілями, збагачення праці, система участі. Сформовано уявлення про ефективну систему мотивації в сучасному середовищі підприємства. Визначено тісний зв'язок системи мотивації персоналу з корпоративною культурою підприємства, яка формує філософію управління, місію, цінності, бачення, політику кар'єрного зростання працівників і кадровий резерв майбутніх лідерів, які будуть підтримувати здоровий соціально-психологічний клімат у колективі, не припускаючи емоційного вигорання робітників. Визначено необхідність формування програми кадрових змін для розвитку лідерів з високою кваліфікацією, готових розв'язувати складні завдання, та приймати активну участь у стратегічному розвитку підприємства. Практична цінність статті визначається висновками, що ефективність системи мотивації залежить від специфіки компанії, атмосфери в колективі, психологічного портрета працівників. Практичне впровадження результатів роботи полягає у поєднанні матеріальних і нематеріальних методів мотивації; у розбудові такої системи мотивації, яка разом із корпоративною стратегією збалансованого розвитку, буде важливим інструментом стратегічного розвитку підприємства.

Ключові слова: система управління, стратегічний розвиток, програма розвитку персоналу, мотивація праці, стимулювання, система мотивації, корпоративна культура, соціально-психологічний клімат, стиль управління, філософія компанії, місія, цінності, бачення.

Formulation of the problem

motivation strategic enterprise

In the current stage of economic development for organization of high-quality and effective work on strategic development, it is necessary to efficiently utilize a personnel motivation system for optimal performance. Modern management requires the establishment of a comprehensive incentive system for talent and a focus on overall efficiency and the strategic development of the enterprise.

Contemporary enterprises are keen on attracting top-notch professionals. In their pursuit of qualified personnel, they seek ways to stand out from competitors and gain an advantage over recruiters. Additionally, retaining and satisfying existing employees is crucial. The more engaged and interested employees are in the company, the better they will perform and perceive their workplace as an excellent business. This positive perception, in turn, contributes to building a favorable brand reputation beyond the workplace and in the job market, making it easier to attract qualified personnel in a shorter timeframe [10].

In the context of the impact of motivation on the strategic development of the enterprise, the consideration of the concept of corporate culture is noteworthy. Some companies take measures to change corporate culture so that it contributes to the implementation of the chosen strategy, complementing it. Currently, a small number of Ukrainian enterprises are developing specialized services for the formation and implementation of corporate culture. Their leaders acknowledge the need for time to recognize its significance in corporate development as a fundamental motivation system, as an intangible basis for competitiveness, and as a component of the company's success in the market.

In the modern world, the issue of management utilizing corporate culture in the processes of business development and fostering a corresponding corporate spirit among employees has gained particular significance. This is particularly related to the fact that a high level of corporate culture is a key factor in shaping the long-term effectiveness of business through its influence on employees, their motivation, and the enhancement of productivity and efficiency in their professional competencies.

When studying the question of the role of the motivation system, it should be considered that issues dedicated to determining the role of incentive systems in the development of strategy are inadequately researched. Therefore, the development and establishment of an effective motivation management system remain extremely crucial. This is further underscored by the increasing talent deficit, a need that becomes increasingly real in strategic conditions.

Analysis of research and publications

Researchers, both domestic and international, have explored the role of motivation in the strategic development of enterprises, among whom are: P. Armstrong, J. Atkinson, G. Becker, J. Bruner, V. Vilyunas, F. Herzberg, R. Gardner, J. Davis, G. Emerson, A. Maslow, D. McGregor, Y Minser, M. Albert, F. Hedouri, T. Schultz, O. Bandurka, N. Bazaliyska, L. Balabanova, D. Boginya, A. Bovtruk, V. Vitlinsky, V. Voytko, O. Gerasymenko, V. Gerasymchuk, S. Goncharenko, G. Grachov, O. Hrishnova, O. Hutsan, V. Djedzhula, O. Dovhal, V. Denysenko, H. Zavinovska, L. Zastavnyuk, M. Kazanovska, A. Kalinichenko, A. Klymchuk, A. Kolot, A. Korytsky, O. Krushelnytska, T. Lypovetska, D. Melnychuk, A. Mykhailov, S. Nakonechnyi, O. Sardak, S. Tsimbalyuk, V. Khramov, etc.

Research on the role of corporate culture in the processes of business development is part of the scientific traditions of C. Barnard, M. Weber, H. Moltke, K. Levin, T. Parsons, and H. Simon. Subsequently, this issue is actively developed by foreign researchers such as R. Ackoff, M. Burtz, T. Dale, A. Kennedy, L. Rosenstiel, R. Ruettinger, S. Handy, R. Hofstede, K. Shultz, as well as domestic researchers: I. Alekseev, A. Kuzmin, I. Mazhur, T. Landin, V. Pavlov, N. Chukhray. Significant contributions to the classification of types of corporate culture have been made by S. Yoshimura (Japanese typology), V. Neumann (American typology), R. Lewis (relation to its development over time), K. Cameron and R. Quinn (competing values), and J. Zonenfeld (company's potential for success).

Formulation of research goals

The purpose of the work is to determine the role of the motivation system in the strategic development of the enterprise and to formulate practical recommendations for its sustainable growth based on a combination of formal and informal motivational methods.

Outline of the main research material

One of the most significant challenges facing the management of any company in today's market conditions is the identification and effective utilization of organizational resources. This process becomes particularly crucial against the backdrop of the external environment's instability, demanding continuous enhancement of the organization's competitiveness and flexibility in adapting to internal and external changes.

The path to effective human management lies through understanding their motivation. In contemporary management, motivational aspects are gaining increasing importance, as the modern personnel management system is based on the premise that people are the most critical economic resource of the enterprise, a source of its profits, competitiveness, and prosperity.

In modern economic development conditions, employee motivation is one of the key factors in organizational management, as the personnel of the enterprise are the direct performers of specific tasks. Motivation management is a comprehensive approach to personnel management aimed at creating compelling incentives, the purpose of which is the productive performance of employees in their duties [2].

An effective motivation mechanism contributes not only to the increase in employee satisfaction but also to their financial well-being. Furthermore, it enhances the overall efficiency and effectiveness of the company's operations.

Properly selected motivation contributes to the comprehensive resolution of issues related to the strategic development of the enterprise: cultivating a positive atmosphere and corporate culture within the team; minimizing conflicts in the workplaces; reducing staff turnover and maintaining a stable team; decreasing the level of emotional burnout, ensuring that employees perform their professional duties not out of obligation but with satisfaction; establishing realistic long-term goals and planning timelines for achieving results, relying on a stable team of like-minded individuals.

As of today, there are numerous approaches to understanding the essence of motivation, with the key ones outlined in Table 1.

In the "Ukrainian Pedagogical Dictionary," S. Honcharenko defines motivation as a system of motives (stimuli) that drive a person toward specific forms of behavior or activity [3].

Motivation methods are managerial techniques aimed at encouraging employees to achieve goals, fulfill tasks, and perform specific actions [7].

Motivation methods are based on interests, perceptions of values, conscious or unconscious needs, and constitute a set of internal incentives for professional activity. They form a combination of processes that encourage the workforce to engage in activities aimed at achieving personal or organizational goals.

Motivation, on one hand, is one of the leading and specific functions of management; on the other hand, it is organically woven into the fabric of the entire management process, from goal setting and decision-making to achieving the final result, and serves as the primary means of ensuring optimal utilization of resources and mobilizing the available personnel potential. The main goal of the motivation process is to achieve maximum returns from the use of available labor resources, thereby increasing overall efficiency and profitability of the enterprise.

Motivation is the process of inducing a person to take action in order to achieve goals. Additionally, motivation can be defined as the structure, the system of motives guiding the activity and behavior of the subject. The goal is the desired outcome of one's actions.

Table 1. The interpretation of the concept of «motivation»

Source: compiled by authors from [1; 4; 7; 9]

The impact of motivation on human behavior depends on numerous factors; it is highly individual and can change under the influence of motives and feedback from a person's activities. The key aspect of motivation is its inseparable connection with human needs. Motivation makes a person's behavior purposeful. In this context, the main functions of motivation should be highlighted as follows: 1) prompting to action; 2) directing activity; 3) control and adherence to behavior [2].

The central link in the motivation system of an organization is a well-established motivational mechanism, representing a set of motives used in achieving the organization's strategic goals.

Motivation is designed to inspire employees to perform assigned tasks according to the plan. To motivate employees and allow them to satisfy their needs in exchange for effective work, it is necessary to know what holds the greatest significance for them. Upon detailed analysis, numerous ways of motivating employees in work activities can be observed. Firstly, it is essential to define a system for distributing various benefits among hired workers in the country, taking into account the objective situation in the economy. This includes the mechanism of supply and demand within the labor market, providing various guarantees in wage payment, adopting protective measures against negative market trends, the tax regulation system in wage payment, determining the share of an employee's salary in the GDP, and many others.

The motivational mechanism should be based on the peculiarities of the enterprise personnel, encompassing the needs, interests, attitudes, and value orientations of its employees. It should also consider the existing personnel management structure of the organization, factors influencing the organization internally and externally, traditions, and historical work experience that has developed within the enterprise.

Therefore, motivation is a type of managerial activity that ensures the process of inspiring oneself and other employees to engage in activities aimed at achieving both personal goals and the goals of the organization.

The motivation system at the enterprise level is based on specific requirements, namely: equal opportunities for occupying positions and advancement based on work performance; correspondence of wage payments with results and recognition of personal contributions to overall success. This involves a fair distribution of income based on the degree of increased labor productivity; creating conditions at the enterprise for the protection of health, occupational safety, and well-being of all employees, in accordance with existing legislation; providing conditions for the growth of professional competence and realization of employees' abilities, including the implementation of programs for training, retraining, and education at the enterprise; fostering an atmosphere of trust within the team, striving to achieve a common goal, and enabling two-way communication between management and workers [8].

All methods of motivation can be categorized into specific types:

Economic Incentives - encompass all forms of remuneration, including contractual payments, bonuses, allowances, insurance, and interest-free loans. Their success or failure depends on how well the collective understands the principles of the system, perceives them as fair, and adheres to the inevitability of reward and punishment.

Management by Objectives - facilitates the achievement of the company's main objectives, be it reaching specific quantitative or qualitative levels, or developing personnel. Involves setting individual or group goals, with the attainment of each goal automatically leading to increased wages or other incentives.

Job Enrichment - non-economic methods providing people with more meaningful and perspective-rich work, flexible work schedules, and significant autonomy in resource utilization. Emphasizes enhancing the social status of employees.

Participation Systems - exist in various forms, ranging from widespread involvement of the collective in decision-making on key production and management issues to participation in ownership through the acquisition of company shares on preferential terms. Domestic companies are currently developing individual methods and systems for motivating and stimulating employees within these frameworks [6].

As mentioned earlier, motivation is a key tool for enhancing the efficiency of utilizing intellectual potential in enterprises. Motivation helps ensure the formation of competent professionals and their optimal engagement in work. At the same time, it is worth noting that salary remains the dominant condition of employment at the enterprise.

Material incentive makes work motivation effective only under the condition that it functions as a system based on fundamental principles: two-way communication between employees and administration regarding the general principles of the motivation system; a justified system for evaluating completed tasks and determining their scope; well-thought-out and justified criteria for measuring and assessing work; balanced norms, their control, systematic and periodic reviews; clear alignment of incentives with the performance of activities; rewards, especially additional ones, for a high level of quality work [7]. These principles form the basis for organizing wage payment in an enterprise, carried out according to the developed regulations for assessing individual labor contributions to overall business results and calculating wages based on it.

Material motivation includes only wage payment. Hourly or piece-rate payment systems are often used in enterprises for all categories of workers, where the worker's salary is calculated not only for the time worked but also for the acquisition of certain skills or qualities [9].

The salary consists of the main and auxiliary parts. The main salary is considered the development of labor standards. It includes hourly wages for workers and position salaries for specialists and managers.

Additional wages in enterprises include: extra payment for the work of an employee who was temporarily absent; payment related to salary indexation; additional payment for work during evening or night hours, for unworked time. Additional payment for work during the evening is intended for employees working in workshops, shops, and plants from 6 p.m. to 10 p.m. and amounts to 20% of their salary. Additionally, for work from 10 p.m. to 6 a.m., it amounts to 35% of their salary; bonus for workers for compliance with internal work rules, job instructions, and duties. Bonus for specialists and managers for achievements at work.

Thus, it can be argued that motivation systems include motivation aimed at enhancing intellectual potential, motivation for effective communication, motivation for increasing competence, and motivation for improving labor productivity.

Motivation aimed at enhancing intellectual potential encompasses stimuli such as participation in management, morale, career growth, and pattern recognition. Incentives for career and competency development include reimbursement of education expenses, a clear understanding of career prospects, and systematic professional development.

Moral incentives involve competition in professional spheres, systematic recognition of outstanding employees with honorary awards, and participation in honorary committees. Involvement in joint ownership and management can occur through profit-sharing, participation in shareholder capital, and independent control over department budgets [7].

Means of motivation can include additional social and medical insurance, short-term or long-term disability payments, paid leave, and medical services for employees. Motivation for effective communication also involves organizational forms of encouragement, such as providing employees with workwear and footwear, effective information support programs, systems for storing, transmitting, and exchanging information, as well as the creation of trade unions to address specific issues.

A clear system of staff motivation will enhance operational efficiency and ensure the strategic development of the enterprise.

Incentives play the role of so-called levers and can either activate or deactivate specific human motives. They are effective only when the employee responds to them. The motivation to work can form in an employee only if work is their primary, and most often, the only opportunity to satisfy their needs and obtain various benefits. In this case, these benefits become the stimulus for the person to engage in work activity. All methods of personnel motivation are commonly divided into three main groups:

economic (salary, bonuses, fines, allowances, bonuses (percentage of sales));

socio-psychological (sanatorium vouchers, transportation payment, company car, mobile phone expenses, certificates, awards, company employee benefits, vacation vouchers, gifts for holidays, company payment for a fitness club membership, housing rentals, etc.);

administrative-organizational (orders, directives, instructions).

In addition to wages, motivational impact on employees includes various forms of monetary compensation: tariff payment, allowances and bonuses, performance-based bonuses, and incentives.

Employee work stimulation is a set of measures aimed at creating comfortable working conditions that contribute to more effective and productive performance of duties.

Therefore, internal motivational factors influence job satisfaction, while external motivational factors are directed towards obtaining tangible objects and conditions. An effective system of motivation and work stimulation should ensure a balance between external and internal factors.

The features of the personnel motivation system consist of a set of measures to create comfortable working conditions that contribute to more effective and productive fulfillment of job responsibilities. Obtaining information about opportunities for career growth and utilizing a personalized approach to job advancement are essential factors in increasing motivation and interest in work.

Next, let's examine the connection between corporate culture and the motivation system, its role in effectively influencing personnel and the organization as a whole. Coordinated efforts and individual contributions of each employee are crucial for achieving a harmonious end result. An ideal corporate culture exists when the entire organization's personnel know what needs to be done, demonstrate professional training, and possess the necessary skills to achieve the set goal. Corporate culture serves as a means of managing various aspects within the enterprise: motivation of employees and the quality of their work; productivity and efficiency of labor activity; a favorable image of the company as an employer, reducing staff turnover; moral spirit of employees and their business reputation; quality of personal and professional relationships within the team; subordinates' attitude towards work; creative potential of employees.

Corporate culture defines the personnel strategy and development policy of the enterprise, influencing the business style, management approach, and the philosophy of the company: its mission, values, vision, which shape the corporate brand and its identity as an employer.

Corporate culture is deliberately created from the top-down, determining the impact of the motivation system in accordance with the organizational management structure of the enterprise. It encompasses elements of human relationships among employees, managers, and subordinates. The management system of corporate culture forms the organizational core of the enterprise, the center of motivational directions, focused on the internal environment of the company. Such a system shapes the socio-psychological climate within the enterprise, defines the nature of interaction among its organizational components (motivation to achieve goals between subsidiaries, departments, individual employees), and serves as a starting point in the development of the corporate social responsibility strategy.

The crucial task when implementing a new motivation system is not to intimidate the staff but, conversely, to increase their interest in work, encourage them to perform their job instructions more qualitatively, for example, through unconventional methods of employee motivation. Unconventional methods can also yield excellent results in work encouragement. Some options for such motivation include: 1) Creating a comfortable relaxation area in an informal setting; 2) Friendly gifts for new members of the team; 3) Allowing employees to bring their pets to work; 4) Implementing a High-Potential Employee (HiPo) development program.

HiPo-employees are those with high potential, aspiring to take on more responsibility, interested in advancing their careers, occupying strategically important and managerial positions, and achieving success in them. They think quickly, show initiative, and possess strong communication skills. Companies typically groom HiPo-employees as the next generation of organizational leaders, preparing them for managerial roles while ensuring that their unique skills and aspirations are valued.

Employees with high potential can achieve impressive results for the business. Therefore, employers must make efforts to retain them by:

Assigning more responsibilities to high- potential employees, as they seek opportunities for growth and development.

Providing feedback to these employees, as they positively respond to feedback, striving for continuous improvement and acquiring new skills, often through mentoring.

Recognizing and acknowledging their personal motivation, as high-potential employees are aware that they surpass expectations and aspire to progress. Employers who recognize and support their development demonstrate their value.

Implementing a HiPo development program to provide a clear development plan for high-potential employees, giving them a roadmap for career advancement. Establishing such a program helps create a group of highly skilled, dedicated, and knowledgeable leaders ready to tackle complex tasks and act effectively in times of uncertainty.

Global experience shows that such a supportive approach to personnel positively impacts the overall atmosphere within the team, fosters unity around a common idea, and motivates employees to work for the benefit of the company.

Conclusions

Motivation systems in the strategic development of enterprises should encompass not only external motivation, but also conditions for internal staff motivation. Many companies overlook internal motivation when constructing their motivation systems, assuming that their employees already have internal motivation when they sign employment contracts even before being hired. However, even if they possess internal motivation at the time of hiring, without proper support, internal motivation can be lost. External motivation primarily focuses on payment and rewards for job performance. Motivation systems that solely concentrate on external motivation, such as rewards for performance, inevitably lead to a decrease in the quality of intellectual work.

To ensure strategic development, companies must pay attention to the continuous development of motivation systems to compete in the market. Internal motivation is geared towards creating, supporting, and developing the creative intellectual potential of company employees. Only internal motivation allows for the improvement of product quality and, thereby, the competitiveness of the company as a whole. In a modern enterprise's motivation system, internal and external motivation should be balanced. Therefore, a comprehensive motivation system that includes both internal and external motivation for employees to contribute and apply their expertise is an effective tool for enhancing strategic development.

The personnel motivation system is closely related to the corporate culture of the enterprise, shaping the management philosophy, mission, values, vision, career advancement policies, and the reserve of future leaders, who will maintain a healthy socio-psychological climate within the team, preventing emotional burnout of workers. The presence of a program for personnel changes will help identify and develop highly qualified leaders dedicated and knowledgeable about the corporate philosophy, ready to solve complex tasks, and actively participate in the strategic development of the enterprise.

The question of determining the most effective type of motivation remains relevant in the theory and practice of personnel management - how to motivate employees for more efficient work. We can conclude that the effectiveness of the motivation system depends on the specificity of the company, the atmosphere within the team, and the psychological portrait of the employees. According to global experience, the best results are achieved through a combination of material and non-material motivation methods, as recognizing employees only on the honor board without monetary incentives will gradually decrease motivation. However, high monetary recognition under condescending and dismissive management, if constantly felt by workers, will not contribute to their productivity. Therefore, the motivation system, like the corporate strategy of balanced development, is a crucial tool for the strategic development of the enterprise.

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