Basic Theories Of Motivation And Talent Retention Approaches Management Essay

3.2.1.1. Hierarchy of needs One of the more recognizable motivation theories in the Western world is Abraham Maslow's ―Hierarchy of Needs'. It is depicted as a pyramid consisting of five levels, which signifies needs are predetermined in order of importance. While after the satisfaction of the basic needs in lower level, people are seeking physiological needs, they need to feel safety, need to be loved, to be respected and they want to achieve some sort of reputations or social class. The theory argues that employees must be fully satisfied by lower-level needs before they can move to high-order ones (Maslow, 1954). However, this theory has its limitations when they are applied to Chinese work organizations because it is quite America-dominated. Maslow's motivational theory has been criticized as reflecting a particular individualist view of the world with the ―self-actualization' being at the top of the need hierarchy. It is proposed that there exists a fundamental difference between Maslow's classic formulation of Western culture's hierarchy of needs and a Chinese hierarchy of needs based on Eastern culture (Hong, 2000). For example, Chinese employees put the family issues on the quite high positions of their life while Western firms always ignore this cultural message in the Chinese market (Jansson, 2007). 3.2.1.2. Existence-Relatedness-Growth (ERG) By contrast, Alderfer's ―Existence-Relatedness-Growth' (ERG) argues that people can have more than one level of needs at any given time and there is no orderly progression through level of needs. Employees can pursue personal development while existence and relatedness have not been fully satisfied. It means that companies are able to motivate workers on multiple areas in the same time. It is acknowledged that workers can remain on one level of needs: when they feel dissatisfied with the higher order of needs, they can return to the lower one (Alderfer, 1972). 3.2.1.3. Acquired Needs Theory In David McClelland's ―Acquired Needs Theory', individual's higher order needs are divided into three categories: achievement, affiliation, or power. He argues that people are not born with, but acquire these three reasons for working. Application of these three factors in talent management is able to help companies effectively motivate employees across different kinds of boundaries, both geographical and cultural (McClelland, 1962). 3.2.1.4. Equity theory

Adam's ―Equity Theory' asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and Wenzhu Cai and Ulyana Klyushina 23

outcomes of others. People value fair treatment which causes them to be motivated to keep the fairness maintained within the relationships of their co-workers and the organization. Individuals become distressed when finding themselves participating in inequitable relationships. The person who gets too much may feel guilt or shame. The person who gets too little may feel angry or humiliated (Adams, 1965). 3.2.1.5. Theory X and Y Douglas McGregor's Theory X and Theory Y represent two very different attitudes towards workforce motivation and figures out that companies followed either one or the other approach. In theory X, which many managers practice, management assumes employees are inherently lazy and will avoid work if they can. Workers need to be closely supervised and comprehensive systems of controls developed. In theory Y, management assumes employees may be ambitious and self-motivated and exercise self-control. They believe that, given the right conditions, most people will want to do well at work (McGregor, 1960). A cross-cultural comparison of managerial styles shows that Theory X is more applicable in a Chinese context, whereas Theory Y in the West (Evans, Hau, & Sculli, 1989). 3.2.1.6. Cultural model and Chinese cultural messages As observed above, Child (1994), Henley (1990) and Nevis (1983) indicate basic motivation theories have limitations when they are applied in Chinese work organizations because they are based on Western values. To overcome theses inappropriateness, D'Andrade and Strauss develop a cognitive anthropological approach and claims that motivation depends on cultural messages and is realized in social interaction. It is argued that cultural models can have motivational force because these models not only label and describe the world but also set forth goals (both conscious and unconscious) and elicit or include desires (D'Andrade, 1990; Strauss, 1992). Hong (2000) reckons cultural model as the most useful theory applied in the Chinese context.

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China is one of the unique countries managed to save its traditional core values along four thousands years of history, in spite of hundreds ethnic groups have existed within the country, among them Confucianism and Daoism are most famous and far-reaching. A major characteristic of relationships within the social network is ―face' behavior, which is the major expression of the shame culture. In the shame culture, everyone keep ―face', and this means that values such as dignity, self-respect, and prestige are central factors in a relationships. As for the expression of initiatives, the employer prefers to agree with the senior manager, in order to prevent himself or Wenzhu Cai and Ulyana Klyushina 24

this manager to lose ―face' and to save harmonic relationships. On the other hand, ―face' is also considered as an informal sanction mechanism or custom (Jansson, Johanson and Ramström, 2007).The Chinese culture is also characterized by harmonization of contrasts, namely middle way. Harmonious cooperation, willing to compromise, not contest, is typical of Chinese (Zinzius, 2004). Interpersonal relationships (Guanxi) are still important in the informal Chinese social networks, based on individual trustworthiness. 3.2.2 Talent Retention tools Only through appropriate tools companies can apply basic motivation theories to strategies about talent retention. Vaiman and Vance (2008) define two classifications of retention tool to suffice employees' expectation: extrinsic and intrinsic incentives (See Figure 2). Extrinsic incentives includes different sorts of monetary rewards which can satisfy employees' physiological needs, while intrinsic incentives refer to non-monetary rewards that can fulfill employees' psychological needs. The monetary reward is admitted as an essential tool to retaining talent (Vaiman and Vance, 2008). Maslow's ―Hierarchy of Needs' argues the physiological needs have to be satisfied before concerning with the higher order needs. This theory can explain why there are still a lot of people believe that money is the best reward. Facility is another extrinsic motivation. Maslow also addresses the responsibility of employers to provide a workplace environment that encourages and enables employees to fulfill their unique potential (Vaiman and Vance, 2008). Wenzhu Cai and Ulyana Klyushina 25

Figure 2. Intrinsic incentive is an indispensible retention tool to satisfy employees' higher order of needs, such as the needs for achievement, affiliation and power (McClelland, 1962). Current employees like challenges and opportunity for development, work in a great company with great leaders and involve an open, trusting and performance-oriented culture (Angelis, 2004). Also Janet Chew (2004) categories the retention tools into HR (human resource) factors and organizational factors (see Figure 3).

Performance-related payment

Stock options

Retirement provisions

Facilities

Training& Development

Career opportunities

Work-life Balance

Mentoring

Job tailoring

Job rotation

Corporate culture

Employer Branding

Feedback&Supervise

Retention tools

Intrinsic incentive

Extrinsic incentives

Figure 3.

Retention tools

Organizational factors

HR factors

Person organizational fit

Remuneration

Teamwork relationship

Leadership behavior

Training&Development

Career opportunities

Company culture

Work environment

Communication

In terms of human resource factors influencing retention, person-organization fit is considered is a good predictor of intention to staying. It emphasizes match between people's value and the Wenzhu Cai and Ulyana Klyushina 26

value of the organization, because value are conceived of as fundamental and relatively enduring (Kristof, 1996 and Van Vianen, 2000). Besides, employees need to be stimulated with training, development and career opportunities for personal growth and self-actualization unless they will have greater intentions to leave the organization. On the other hand, organizational factors largely influence talent retention. Admittedly leadership behavior has positive influence on retention. It seems that ―people do not leave their company but leave their bosses (Conrey, 2007, P102). Retention tools like culture, communication and teamwork relationships are able to suffice employees' needs for affiliation. In the Chinese case, the leadership behavior is one of most important tools to motivate employees to keep in the organizations. Leadership styles and skill levels in China are very much a reflection of Chinese culture itself; thus, culture might have implications for how leaders will fare in a fast-growing business environment (Bernthal, Bondra and Wang, 2008). These studies above are just a few examples regarding the appropriateness of these retention tools when applied in the Chinese context. When these retention tools are applied to Chinese workers, foreign firms have to rank all the tools in order of importance, and then focus on several areas for motivation and retention talent (Vaiman and Vance, 2008). 3.3. The approaches to talent development in Chinese context One of the solutions for the filling gap of talent shortage in China can be talent development, made by MNC operating in Chinese market (T.Woodland, 2007). Further we would observe the approaches to talent development and the waysto apply them to Chinese employees. 3.3.1. Talent Development tools in China As for MNC established in China, the main problem is shortage of qualified and multi-skilled workforce with understanding of multinational business environment, ―thus foreign enterprises must take the time to understand what it takes to make employees more productive, more satisfied with their jobs, more likely to want to stay and grow with the company in order to have the type of highly skilled, motivated and stable workforce to do battle with the new competition' (J. Zhang and D.Carter, 2009). Not only MNCs have high requirements for their employees, but also employees are waiting from their managers to be well -awarded and get the opportunities to learn and develop.

The following ―typical development strategies' can be used for narrowing gaps between the current competencies of employee and desirable in future: Wenzhu Cai and Ulyana Klyushina 27

· Coaching

· Special job assignments

· Action learning

· Job rotation

· University -based programs

(Rothwell, W.J. ,2001) Further we will consider all these tools in Chinese environment. 3.3.1.1. Mentoring and coaching in China The effective mentoring and coaching can be a proper solution for retention of current employees and the growing of new-comers to productive managers (HR focus, 2001). Some specialists claim these terms imply for the same issue, but most of sources represent the difference. It is not that easy to distinguish the coaching from mentoring by definition, but in practice these differences are more recognizable (Wright, 2005). In HR Management journal is claimed that mentor transfers his knowledge and skills to protégé, while coacher helps the client to achieve objectives without directing. 3.3.1.1.1. Mentoring Mentoring refers to intensive developmental relationship between the mentor - the one who implements mentoring, and the protégé -the one who receives direct benefits from mentoring processes. These relationships allow protégés to get guidance in ―developing skills, networks, and organizational savvy necessary to survey in turbulent times' (Restifo, V&Yoder, K., 2004). Mentoring can be formal and informal. The formal mentoring is organized by the company, which want to develop certain capabilities and skills. The informal mentoring can evolve spontaneously and is not regulated by the organization (N.Thomas and S. Saslow, 2007). Informal mentoring is supposed to be more effective, because the role of mentor can vary in number and specificity, in the same time being less effective for organization's specific goals (Rothwell, Jakson, Knight, Lindholm, 2005).

With respect to mentoring in Chinese environment, we would like to emphasize the fact that Confucian philosophy gives mentoring an important role in social relationships in China. As Confucius theory claims that the relationships should be mutual and obligatory between senior and junior member of group, in which senior person have to provide the advice and Wenzhu Cai and Ulyana Klyushina 28

consideration. So mentoring is more often met in Chinese culture than in any Western (Int. J. of Human Resource Management, 2006). 3.3.1.1.2. Coaching. According the International Coach Federation, ―Professional coaches provide an ongoing partnership designed to help clients produce fulfilling results in their personal and professional lives. Coachers help people improve their performances and enhance the quality of their life. They seek to elicit solutions and strategies from the client; they believe the client is naturally creative and resourceful. The coach's job is to provide support to enhance the skills, resources, and creativity that the client already has.'The coaching aims to empower people to create and help them to discover their potential abilities and talents, instead of focusing on what they can't do. Coachers believe that in this way the overall mental health and quality of personal and professional life are improved dramatically. Wright believes that coaching is a powerful strategy for the 21st century workplace, as the determinant of the successful company would be their clear sense of individual values of all employees in the company and the alignment of these goals with the values of the company (Wright, 2005).

The success of coaching processes is heavily dependent on the trustful relationships between coacher and employees. Thus, while using coaching methods, Western employer needs to realize that Chinese employees are more trustful to Chinese managers, than overseas. Thus, local coachers and managers need to be educated and include coaching into the talent development strategies (Wright, Philip; Szeto, W.F.; Cheng, Louis T.W, 2002) Appraisal talks can be considered like a separate tool for employee development as well as like a part of coaching method. Appraisal dialogue or performance appraisal interview implies to strategic interviews between the employee of senior position in the organization and his subordinate that focus on employee development and performance (Asmuss B., 2008). According to Woodland, the following learning skills are important especially for China: learning to ask questions, becoming self-correcting, and getting and giving feedbacks (Woodland, 2007). The appraisal dialogue can improve these skills rapidly. The appraisal talk gives a constructive feedback on what was wrong and enhances employee to think how to improve their performance in future. Appraisal talks help employees to use their skills more effectively and to be more committed to their work (Kirkby, 2002). Wenzhu Cai and Ulyana Klyushina 29

3.3.1.3. Learning by doing 3.3.1.3.1. Special job assignments、 Special job assignment can imply for (1) ―researching a problem or issue; (2) developing a solution or recommendation for dealing with special problem or issue; (3) assuming responsibility for the project' (Rothwell W.J., Kazanas H.M., 2003). Special job assignments are structured and planned by an organization superior, and helps an employee to build own competencies and responsibility. These assignments prepare employees for getting more broad and high responsibilities. The leaders in China need to transform themselves in order to help the organizations to become what they need to be in future, not just sustain current success. The transformational development of Chinese manager towards the new competencies required, can be stimulated by giving them special new tasks are in new environment. For instance, for improving certain skills of employees many companies are sending them on overseas assignments and give them tough problems that they need to solve with completely new group of people (Teresa Woodland, 2007). 3.3.1.3. 2. Action learning

Action learning initially is a different approach to special job assignments. This approach was initially used for the development of executive by teaming up them together and enhancing to share the experiences within the team (Rothwell W.J., Kazanas H.M., 2003). Revans defines action learning like ―a means of development, intellectual, emotional or physical that requires its subjects, through responsible involvement in some real, complex and stressful problem, to achieve intended change to improve his observable behavior henceforth in the problem field.' (O'Neil, J., 2007). Action learning combines true work tasks with learning components and becoming more popular in big corporations like Siemens, Johnson &Johnson, Boeing etc. (Udo Dierk, 2005). Action learning includes the real business tasks, the participants have to work in groups, bring their special skills and competences. Discussions and reflections have the important role in the action learning method. According to the research conducted by Boston college, the colleagues of participants in action learning pointed out that they developed their ―increasingly questioned behavior, especially at the strategic level; they developed a renewed openness to new experiences; they demonstrated greater sensitivity to others; and greater intellectual curiosity was stimulated in them' (Smith, Peter A.C., Peters, V. John, 1997). This approach can help employees to develop their competences and get the leaders who can take vacant leading positions in company. Wenzhu Cai and Ulyana Klyushina 30

3.3.1.4. Job rotation Job rotation is associated with providing an opportunity for employees to change their jobs in order to develop additional competencies and develop themselves. The job rotation can support better relations between managers and employees, also is less costly, than recruitment the person from outside. The employees in China, especially in cities like Beijing, Shanghai, Guangzhou and other locations have high expectations of their employers. Thus company can retain and motivate personnel their by organizing processes for job rotation and making accessible new careers opportunities for existing employees (J. Zhang, D. Carter, 2009). 3.3.1.. University-based programs In spite of the huge governmental investments in the Chinese education system the Chinese university graduates cannot obtain required skill set for MNC. Thus, many big multinationals prefer to grow their own talents n China. The successful companies use to build the network with the best universities and identify talents on a very early stage. These companies donate to the universities in China, sponsor some lectures, recruit the students for summer and support governmental development programs. We addressed here the most typical strategies to the talent development, and further would represent other approaches, that can together build learning organization in China and provide the company with critical competitive advantage there. 3.3.2. Other approaches to talent development in Chinese context 3.3.2.1. Integration of succession planning and career planning The companies which succeeded in emerging markets contribute heavy investments in employee career development of different ranks (Ready, Douglas A., Hill, Linda A., Conger, Jay A., 2008). The authors of the articles devoted to Chinese talent development emphasize the importance of clear understanding of the talent skills and competences required in China. (Lane & Pollner, 2008; J.Chen). Lane emphasizes the importance of realizing, which functional capabilities will be required and which kind of leaders will be needed in future. Chen points out the importance of the cultural set of skills identification, which is required for each position. For some positions the global background and experience would be critical, and for other the person with only Western or local experience would perfectly fit in. Wenzhu Cai and Ulyana Klyushina 31

One of the systems called to align the individual career plans and the strategic needs of the organization is the integrated model of succession planning and career development (Rothwell, Jakson, Knight, Lindholm, 2005). Integrating the strategic planning and talent planning is of vital importance, especially in China, where the company leader realizes that the talent can make a main input in the whole success of the company (K. Lane and F. Pollner, 2008). The research of highly successful companies shows that company can overcome problems in shortage of talents and other challenges ―by marrying the leadership development and succession planning processes' (Groves, Kevin S., 2007) . In order to understand the integrated model we will explain the succession planning and career planning approaches further. 3.3.2.1.1. Succession planning According to Palma M.G. ―succession planning is an evolving, strategic process that focuses on ensuring that there are suitable candidates available to fill key positions within an organization as they become available'(Palma, Michael G., PA Times, 2009). The most important in the succession planning should be developmental activities,' not a rigid list of high-potential employees and the slots they might fill' (Conger, J. and Fulmer R., 2003). Succession planning is a strong tool for assessment of current talents available in the company and company's ability to attract and develop new talents. Also succession plan gives a clear vision about the talents needed in the future and how talents should be developed within the organization, in order to satisfy the talent demands in talents in long perspective. 3.3.2.1.2. Career planning

Career development is an approach of an organization ensuring that people with the qualifications and experience are available when needed (Zheng A. Y., Kleiner B. H, 2001). Using career development approach employers can coach the employee in his individual career planning, and by realizing the plans of employees can plan the allocation of human resources. Thus, the career development is perceived like joint effort between the individual employee and the organization. Thus, integration of succession planning and career planning can be very important for MNC especially in China, where the shortage if talents and the need to develop them exist, as well as company's objective to reduce costs. Wenzhu Cai and Ulyana Klyushina 32

3.3.2.2. Self -directed learning Self-directed learning defines a process in which individuals realize their learning goals, identify the resources for learning, planning and implementing learning strategies, conducting self-assessments of results (Straka, Gerald A, 1999). Many organizations started to enhance the self-directed learning of their employees, as they have realized that the learning style of every employee is different, and every employee cannot be fully engaged in corporate face-to-face trainings. Asian education style differs from Western, in the way that Asian students are having special tasks and homework and constantly guided by teacher in their learning process. And like a sequence, they don't have to plan their own learning processes (Teresa Woodland, 2007). 3.3.2.3. E-learning E-learning started to be popular and even necessary in constantly changing environment of modernity. There are different ways to use Web for talent development. One of them- is the creation of the company's intranet site, which can provide the employee with his individual performance and development plan (Smith., B., 1997). E-learning makes development processes more interactive by using video images of different kind, audios, chats, whiteboard imitating tools. Also e-learning is an excellent way for the employee to learn, in case if he does not want to demonstrate the lack of skills or knowledge, as well is Internet can be accessed from home and empower the employee to devote extra time to self-development. The e-learning had a high-rate of adoption in Chinese companies, and expanded on the University education as well. Some companies in China launched e-learning programs in Mandarin language, so that learning was available for those who do not have enough skills in English language. Connectivity and bandwidth can be still a problem, but most of companies can provide employees with high-speed access to e-learning (Dam N.V., 2005). This tool can be a good decision for global MNCs, willing to transfer the knowledge around the globe synchronously and to reduce the travel cost, as well as cost of working time, spent by employee on his development. In line with strong advantages of e-learning, this approach can be associated with disadvantages like: relatively high price of intrabase learning software and support, the different computer-skills of employees, the need of some employees to get more special information or just their need to get interpersonal communications (Nick van Dam, 2005). Wenzhu Cai and Ulyana Klyushina 33

3.3.2.5.Talent development and training

Training is a mean by which the company can build new competencies that employee needs for new task implementations or for shifting to new position. According to studies the multinational companies in China which outperform rivals are the organizations providing training and developing programs for Chinese employees. The studying also revealed that the willingness of company to provide continuous training and development programs is associated with retention in the company, attract new talents to company, and these companies are associated with higher job and company satisfaction (2005, D. Farrell and A.J. Grant). Some companies are sponsoring their employees for getting advanced degrees such as management programs. Among the skills and competences that MNC companies need to develop by themselves in China are: English language skills, the ability y to understand global environment, managerial skills and ability to work in team (Farell D., Grant J.A., 2005). In this chapter we observed the retention tools and approaches to development and there appliance to Chinese environment. 3.4. Summary of theoretical findings

This subchapter provides the theoretical framework for our thesis. We observed different kind of approaches to the retention of employees and their development. We provided some theoretical background concerning the questions of talent retention and development with the emphasis on China. We observed them and analyzed in order to solve our research questions. Sub-question 1: What motivate Chinese talents? For stimulating motivation of Chinese employees the MNCs can address their needs according to Western motivation theories, which are all about individual mind, based primarily on animal study, advocating a universal model for human motives.

How to retain Chinese talents in MNC?

¬€ According to "Hierarchy of needs", the MNCs can address the low level of needs of Chinese employees first, such as salary and basic benefit, and then satisfy their psychological needs, such as to be loved, to be respected and to achieve some sort of reputations or social class.

¬€ According to ERG theory the MNCs are suppose to motivate workers on multiple levels of need in the same time, for instance, monetary rewards plus non-monetary rewards.

Wenzhu Cai and Ulyana Klyushina 34

¬€ According to "Acquired Needs Theory" MNC can motivate employees by providing the opportunity to fulfill higher level of needs like attaining sense of achievement, affiliation and power

¬€ According to "Equity theory" the MNC can motivate Chinese employees by fair payments and equal opportunities for development.

¬€ For effective motivation of Chinese employees according to cultural model company should take in account cultural issues.

¬€ By considering the Chinese ethnic culture such as family values and face issues, the MNC can effectively motivate Chinese employees, because self-actualization is not at top of the need hierarchy in China.

¬€ By developing comprehensive systems of control to supervise Chinese employees, company can motivate them, because theory X is more applicable to Chinese workers.

Sub-question 2: Which tools can be applied for retention of Chinese talents? By using different kinds of retention tools, the MNCs can motivate and retain the Chinese workers in the organizations. We find following retention tools which are possible to apply to Chinese workers:

¬€ By compensation approach, the MNCs are able to provide monetary value (salary and wage) to employees in exchange for work performed, in order to suffice Chinese employees' basic needs.

¬€ Through benefits program, company can make employees realize that they are the most valuable asset for organization and increase commitment to the organization.

¬€ By providing comfortable infrastructures (Office facilities), the MNCs can satisfy physiological needs by providing an opportunity to fulfill employees' unique potential.

¬€ By caring about work-life balance, the MNCs can suffice the Chinese employees' psychological needs for release of pressures and harmony of life.

¬€ By training & development the MNC in China can address the employee needs for individual growth and self-actualization, as well as raise their working efficiency.

¬€ By feedback & supervision (Performance management), the MNCs can ensure that goals of organization are consistently being met by Chinese employees who feel motivated and work efficiently under the tight supervision.

Wenzhu Cai and Ulyana Klyushina 35

¬€ Referring leadership behavior & corporate culture, the MNCs can fulfill the Chinese employees' needs for affiliation and involvement through communication and commitment to organization.

These aspects summarize what the MNCs have to consider when they want to motivate and retain their Chinese employees within the organizations.

Sub-question 1: Which tools can be applied for the development of Chinese talents?

How to develop Chinese talents in MNC?

· By using mentoring MNC can transfer knowledge from more experienced employees to less-experienced.

· By implementing coaching strategy MNC will enhance the skills of employees, their performance and creativity, as well as alignment of these goals to the goals of company.

· By using special job assignments MNC can develop new competencies and responsibilities of Chinese employees, thus to prepare employees for getting more broad and high responsibilities in future.

· By using action learning MNC can help to develop the competences of its employees and get the leaders who can take vacant leading positions in company.

· By implementing job rotation strategy MNC can develop additional competencies of employees, improve relationships within the company, and save costs on the recruitment from outside.

· By being involved in university-based programs MNC can develop their own talents for long-term perspective.

· By integrating succession planning and career planning company can align the individual career plans