This article throws light upon the top six techniques used to motivate employees. The techniques are: 1. Management by Objectives 2. Employee Recognition Programme 3. Employee Involvement Programs 4. Variable Pay Programs 5. Skilled Based Pay 6. Flexible Benefits.

Technique # 1. Management by Objectives:

Management by Objectives or MBO as it is known, as is a program that encompasses specific goals, participatively set, for an explicit time period, with feedback on goal progress.

The concept of MBO is not a new idea. It fact, it was originally conceived about 50 years ago as a means of using goals to motivate people rather than to control them. The basic appeal of an MBO program lies in its emphasis on converting overall organizational objectives into specific objectives for organizational units and individual members.

Thus the basic constituting MBO are:


a) Goal Specification:

The objectives must be concise statements of expected accomplishments like cutting departmental cost by 7% etc.

b) Participative Decision Making:

The manager and the employee jointly choose the goals and agree on how they will be measured.


c) Explicit Time Period:

Each objective has to have a specific time period in which it is to be completed like say 6 months etc.

d) Performance Feedback:

MBO seeks to give continuous feedback and progress towards goals.

Technique # 2. Employee Recognition Programme:


In today s world, organizations are increasingly realizing that recognition can be potent motivation.

An Employee Recognition Program or ERP serve the fundamental purpose by paying attention to what the employees are doing and giving the credit to them where it is due. ERP may take numerous forms but the best ones use multiple sources and recognize both group and individual achievements.

ERPs may include, at the individual level, things like “Best Employee of the Month” Award, recognition for such categories like risk-taking, innovation, cost cutting and overall customer services. On the other hand, at the departmental level, recognition takes the form of team or department T-shirts, Coffee Mugs, banners or pictures etc.

Technique # 3. Employee Involvement Programs:

Employee Involvement is basically a participative process that uses the entire capacity of employees and is designed to encourage increased commitment to the organization’s success.


The underlying logic is that by involving workers in these decisions that affect them and by increasing their autonomy and control over their work lives; employees will become more motivated, more committed to the organization, more productive, and more satisfied with their jobs.

The four forms of EIP are:

Participative Management:

A process by which subordinates share a significant degree of decision­-making power with their immediate supervisors.


a) Representative Participation:

Workers participate in Organization decision-making through a small group of representative employees.

b) Quality Circle:

A work group of employees who meet regularly to discuss quality problems, investigate causes, recommend solutions and take corrective actions.


c) Employee Stock Ownership Plans:

A company established benefit plan in which employees acquire stock as part of their benefits.

Technique # 4. Variable Pay Programs:

An idea fast catching on because of its popularity is the variable pay program where a portion of an employee’s pay is based on some individual and/or organizational measure of performance.

Thus, your earnings are neither constant nor confirmed; instead they fluctuate up and down with the measure of performance. So, over a period of time, low performers find that their salaries are fluctuating while the people who perform will enjoy pay increases commensurate with their contribution.


Some examples of variable pay programs are:

a) Piece-Rate Wages:

Here the workers are paid a fixed sum of each unit produced.

b) Profit Sharing Plans:

Organization wise programs that distribute compensation based on some established formula designed around a company’s profitability.

c) Gain Sharing:


An incentive plan in which improvements in-group productivity determines the total; of money that is allocated.

Technique # 5. Skilled Based Pay:

Under this pay, levels are based on how many skills employees have or how many jobs they can do. In today’s world, of downsizing and cut-throat competition, organizations require more generalist and fewer specialists. This is because filling staff needs are easier to do when employee skills are interchangeable because people gain a better understanding of other’s jobs.

However skill based programs may have problem when the skills become outdated or if the skills are not being used to the fullest by the company.

Technique # 6. Flexible Benefits:

This is a program whereby employees tailor their benefit program to meet their personal needs by picking and choosing from a menu of benefit option. Thus, it replaces the traditional “One-benefit-plan-fits-all” programs that have dominated organizations for more than fifty years.


The advantage of such programs is that while the employees have the flexibility to tailor their benefits and levels of coverage to their own needs, the organisation often ends up saving money too.