Is Financial Compensation Beneficial Or Detrimental In An Empowerment

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What is an Empowerment ? Basically empowerment means giving the employee the ability to do their work, i.e. through the right training, the right environment, the right information, the right tools and the authority that they need.

It is thought that by giving the employee increased power and responsibility that the employee will have increased motivation.

Organisations have developed a number of new programs in which it is hoped that employees will have empowerment and so increased motivation.

What is an Empowerment Program ? There are six different forms of empowerment programs.

i.     Pay for Performance. This gives employees rewards in relation to their performance on the job.
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Motivation Theories
Maslow’s Hierarchy of Needs: This theory shows that humans are motivated by a series of needs which are in an hierarchical order, i.e.

1.Self Actualisation
2.Esteem Needs
3.Social Needs
4.Safety Needs
5.Physiological Needs

1.     Self Actualisation is basically the feeling of self fulfilment, i.e. reaching your ambitions.
2.     Esteem Needs is the respect of friends, family and people around you.
3.     Social Needs are having friends and family around you.
4.     Safety Needs. This is the feeling of having a safe environment around you, i.e. no threat of war, pollution, violence, etc.
5.     Physiological Needs are having basic survival needs such as food, water, clothing and shelter.

Maslow states to progress to each level you must fulfil the levels below it and that the lower levels take priority.

McGregors Theory. This is the theory that there are two different types of worker, Theory X and Theory Y.
Theory X’s characteristics are that of a dislike for work, unambitious and works only for money.
Theory Y’s characteristics are that they enjoy their work, looks for promotions and is generally ambitious.
Financial compensation in an empowerment program works
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