ZAGREB SCHOOL OF ECONOMICS AND MANAGEMENT Academic year 2010./2011.

Motivation in MPG d.o.o.

Seminar in Principles of management

Mentor: Mirna Korian, MBA, MA in Psychology

Authors: Gabriel Crocherie Kevin Judkiewich Luka Mihelj Tanja Igi Vanja aa Vedrana Bogdan

Zagreb, 2010.

Table of contents

1. Introduction. 2 2. Motivation... 2 2.1. Definition. 2 2.2. Motivation theories.. 3 2.2.1. Early motivation theories.. 3 2.2.1.1. Maslows hierarchy of needs. 3 2.2.1.2. Theory X and theory Y.. 4 2.2.1.3. Two-factor theory.. 4 2.2.2. Modern motivation theories..... 5 2.2.2.1. McClellands theory of needs....... 5 2.2.2.2. Cognitive evaluation theory.. 5 2.2.2.3. Goal setting theory... 6 2.2.2.4. Reinforcement theory... 6 2.2.2.5. Expectancy theory.... 7 3. MPG d.o.o..... 7 3.1. Company profile......... 8 3.2. Jasna poljarevi- special project manager... 10 3.3. Motivation strategies in MPG.... 11 4. Conclusion 12 5. Literature.. 14 6. Appendix.. 15

1. Introduction
Motivation is one of the most important topics when discussing employees behavior within a company. Also, we can interpret motivation as the driving force which causes us to achieve goals. These are our two main reasons, why, when thinking about the topic, we have chosen motivation. There are many theories that explain, but also confirm motivation in detail. Although explanation of motivation has changed over the years, we should be familiar with the early theories because they represent the foundation from which contemporary motivation theories were developed. On the other side, modern motivation theories differ a lot from the early ones and all of them are adopted in todays contemporary and modern workforce. In the last three years, two of our group members have been working for the same company, called MPG d.o.o. MPG is known as the first specialized promotion agency in Croatia that was established primarily because of the market need for such an agency. Having them two as the employees of the very same company, made us certain about the high quality of their services and the excellent motivation tactics they are using. For them, this was a very special experience. This is why we wanted to know more about their motivation strategies.

2. Motivation
2.1. Definition Motivation is the part of the inner state of an individual that causes to behave in a way that ensures the accomplishment of some goal.1 It can be either intrinsic or extrinsic, meaning that motivation can be driven either by an interest and enjoyment in the task itself and exist within the individual or it comes from outside of the individual. Intrinsic and extrinsic motivations are incorporated in the term overjustification. This term relates these two types of motivation in the way that if a person is intrinsically motivated, each extrinsic motivator can lead to the reduction in intrinsic motivation. We can consider
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Certo, Samuel; Certo, Travis (2007). Modern Management (10th ed.). USA: Prentice Hall

achievement and enjoyment caused by achievement typical intrinsic motivators. On the other hand, extrinsic motivators include threats and rewards, such as money and a good grade for a well done job or a punishment for doing something wrong. 2.2. Motivation theories Motivation was a subject of many discussions in the history, but also nowadays. Thats why we have so many motivation theories. All of them were presented to explain workers motivation and sometimes, lack of such motivation. Theories of motivation can be divided into two main groups: early theories of motivation and modern motivation theories. 2.2.1. Early motivation theories Three early motivation theories were formed around 1950s. These are: Maslows hierarchy of needs, Theory X and Theory Y and Two-factor theory. The value of these theories is unquestionable. They represent the foundation for all the modern theories and some managers still use them when explaining employees motivation. 2.2.1.1. Maslows hierarchy of needs First and the most famous motivation theory is the Abraham Maslows hierarchy of needs which reflects sequence of satisfaction of needs. We can classify them in five groups, starting with physiological needs, through security, social and esteem needs and finishing with self-actualization needs. Physiological needs are hunger, sex and thirst; security needs are protection against physical and emotional harm; social needs are love, friendship and belonging; esteem needs are self respect, autonomy, status and acknowledgement; and self-actualization needs include growth and achievement of self potential. Maslow has divided five previously listed needs into two groups and these are: lower-order needs and higher order needs. The difference between the groups is that lower-order needs are being satisfied from outside of the individual, whereas higher-order needs need to be satisfied from the inside. In general, when each of these needs has been

satisfied, the next one is becoming dominant and the person is climbing on the next level of the hierarchy.

Picture 1: Maslow's hierarcy of needs

2.2.1.2. Theory X and theory Y Probably, the second most famous motivation theory is the Douglas McGregors Theory X and Theory Y. Theory X represents negative characteristics of human beings and claims that employees dislike work and are trying to avoid it whenever they can. Managers led by theory X have to control their workers constantly and punish them, if needed. On the contrary, theory Y assumes that people like to work, they are striving for responsibility and are focused and led by their goals. We can relate this theory to the Maslows hierarchy of needs in the way that Theory X assumes that the dominant needs are lower-order needs, contrasted by Theory Y and the higher-order needs related to it. Even though, most consider Theory Y as more reliable, unfortunately, there is no sound evidence about validity of these theories. 2.2.1.3. Two-factor theory The two-factor theory was introduced by psychologist Frederick Herzberg. The theory was made after the comprehensive research on the population sample. The purpose of the survey was to find out which situations at work make people feel really good and which make them feel bad. Through the research results, he concluded that

intrinsic motivators are most probably positively and extrinsic ones negatively related with the job satisfaction. Opposite to a common belief, he proposed that job dissatisfaction is not opposite to the job satisfaction. He introduced a idea of satisfaction - lack of satisfaction and the opposite term of dissatisfaction - lack of dissatisfaction. Things that cause the lack of dissatisfaction he calls hygiene factors and an example of this is salary, working conditions, job security or relationship with peers and superiors. Those factors will release people from dissatisfaction but wont make them satisfied either. What really satisfies people are opportunities for achievement and recognition, responsibility and personal growth. Unfortunately, this theory is also not scientifically approved but in some cases and for some managers, in the real life it can function really well. 2.2.2. Modern motivation theories Unlike early motivation theories, most of the modern motivation theories have been scientifically approved, which shows their great value. The adjective modern standing in front of the name of these theories doesnt mean that they have been developed recently, but that they represent current belief when it comes to motivation of workers. 2.2.2.1. McClellands theory of needs In his theory, David McClelland introduced three new types of needs and those are: need for achievement, need for power and need for affiliation. The first one, need for achievement is characterized by high excellence urge and tendency towards the accomplishment. Need for power is the second need that McClelland was talking about and we can recognize it in the behavior of making other people do the things in the way they wouldnt normally do. The last one, the need for affiliation is the desire to keep friendly relations with people around you. 2.2.2.2. Cognitive evaluation theory The cognitive evaluation theory is very much related to the term of overjustification. As well as overjustification, this theory proposes that extrinsic motivators for intrinsically motivated behavior, cause the decrease in intrinsic motivation. 6

This relation between intrinsic motivation and extrinsic motivators has been approved many times, but lately a more relevant conclusion has been made. It is said that extrinsic motivators such as a compliment or approval causes the raise of intrinsic motivation. On the other hand, it seems that tangible extrinsic motivators such as money, cause the downfall of intrinsic motivation. Led by this conclusion, it is very important to find the best way to motivate your workers and the most suitable combination of extrinsic motivators to fit the intrinsic motivation of each worker. 2.2.2.3. Goal setting theory Edwin Locke, the founder of the goal setting theory was the first one to discuss the effect of the goals, challenges and feedback on the motivation and performance. Some evidence prove that specific and difficult goals, as well as, regular feedback, positively influence the performance. In order to reach our goals, they need to be clear and understandable, challenging and achievable. Another factors that influence the relation between motivation and performance are devotion to the achievement, characteristics of the task and national culture. When discussing the devotion towards the goal achievement, it is supposed that the devotion is the highest when the goal is set by the very same person responsible for the achievement and when the person has an internal locus of control. Basically, setting specific and challenging goals to the workers is the first step that a manager should take when trying to increase the performance. 2.2.2.4. Reinforcement theory The reinforcement theory uses behavioral approach when explaining motivation. It considers the consequences of a certain action the only relevant explanation of motivation at work. Even though, it is well known that variables such as feelings, attitudes, and expectations influence the behavior, it is very hard to completely reject the reinforcement theory. Consequences of a specific action certainly have a huge impact on future performance and motivation, as well.

2.2.2.5. Expectancy theory The expectancy theory of Victor Vroom is recently the most accepted theory. Despite criticism, most researches approve this theory. The theory supposes that the motivation depends on the expectations of each individual about the outcome. If an employee is sure that his effort will lead to the achievement of great results and thus to a higher salary, bonuses or promotion, he will be highly motivated in accomplishing the task. Knowing this, we can conclude that motivation is a combination of valance or the value of the perceived outcome; instrumentality or the belief that if the action is completed, the outcome will be achieved; and the expectancy or the belief in ability of completing the action. As a result of a low percentage of people realizing the relation between performance and acknowledgement, some people say that this theory is too idealistic. It would be more realistic if firms would relate awards more to the performance than to the qualification and difficulty of the job. This difference between the expectancy theory and the real life might be a good reason why most workers are still not satisfied with the job and are not paying enough attention to their obligations at work.

Picture 2: Vroom's expectancy theory of motivation in equation form

3. MPG
Marketing and Promotions Group MPG was established as the first specialized promotions agency in Croatia. MPG has offered promotion, sampling, merchandising and event marketing services to Croatias leading domestic and international clients for over 10 years, utilizing proven marketing techniques developed in North America and adapted to suit the needs of the region. 8

3.1. Company profile MPG was established on March 17th, 1997 in Zagreb, by two Croatian marketing professionals Josip Bai and Mario ukman. The foundation of the company found its purpose in the market need for such an agency. The headquarter of the company is Zagreb, but it has subsidiaries in another 4 capitals: Ljubljana, Belgrade, Sarajevo and Skopje. Company is privately owned and independent, having about 100 full time employees and over 2500 temporary staff. In Croatia, MPG has the leading position on the market when it comes to services that they are offering. Their main competitors are 5D agency and Promo Plus. When it comes to hierarchy in MPG, on the top of the pyramid are the founders Josip Bai and Mario ukman, followed by client service director, who is coordinating the rest of managers in the company. Those managers are divided into two groups: those who take care of a certain client and those who take care of a certain service offered. Each has its own department, such as Sonny Ericsson, special events, in-store promotion, P&G etc. departments. Services that they offer to their numerous clients are: in-store promotions, merchandising, event management and sampling. Main clients and firms that use such services are P&G, Nestle, Philip Morris, Zagrebaka banka and Sonny Erricson. The last activity added to the companys portfolio of activities is mystery shopping.

Picture 3: Specialities

The core values of the company guide every decision they make and is going to continue to drive their success in the future. Those 7 guiding principles are: 1. Honesty and integrity- first and foremost the foundation for the continued success. 2. Innovation- persistent pursuit of best in class solutions to the ever-changing need of the marketplace. 3. Knowledge and experience- having extensive industry experience to provide knowledge, add value and contribute to the business of their clients. 4. Uniqueness- commitment to delivering intelligent consumer promotion programs that are strategically realistic and executable. 5. Continuous improvement- never content with the status quo, always raising standards. 6. Accountability- always accountable to the clients and each other without expectation. 7. Excellence- bringing an amazing level of passion, energy and commitment to excellence. Whether they are working offline, online, but generally below the line, in MPG company it is an imperative that each event, promotion and program they implement is handled as a priority and their last. It is their goal to become a close partner with each client by fully understanding the goals and objectives required to achieve quantifiable positive results. They also strive to implement all clearly defined objectives in a professional, responsible and controlled manner. The standards are set high, accepting no compromises and striving to always be the best and proudly be the first.

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Picture 4: MPG 360 fully integrated approach Vision of the firm is to become leading promotions agency in Southeast Europe by offering their clients proven marketing techniques that are well suited to the ever changing market. Complementary, mission is to become their clients most valued and trusted outsourced resource, by providing diversified sales solutions and techniques that create impact and generate positive, measurable and quantitative results. 3.2. Jasna poljarevi- special project manager Jasna poljarevi, the person who we have interviewed, is the special project manager in the company of MPG. This position was thought out when MPG started the project of S-Box. Her superiors are the bosses and the director and she is responsible for coordinators, regional offices and the call center. She started to work for the MPG in 2004 as the assistant in Procter & Gamble office. Afterwards, she left the MPG company, but came back again after few years, now taking the position of special project manager. When it comes to the education, she is a bachelor in journalism, from the beginning working in the field of marketing. Speaking about her job and the position in the company, she said that there is no private life in their company, their cell phones are always on, functioning in stressful conditions is their everyday life and a person working for this company has to be ready to react quickly and smartly in each and every moment. Her colleagues are very young people, full of life and very outgoing, what makes the work much easier for her. In the interview, we found out that most of the people working

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in the offices of MPG not only have good time at work, but they are also very close friends outside of the company. When speaking about the relationships inside of the company, she also doesnt hide that arguments and conflicts are their everyday life. In her opinion, they are inevitable in the situations where people are working together. Each person is different and has its own way and style of doing and accomplishing tasks. Taking into consideration all of the good and bad sides of her job in MPG, miss Jasna says that nothing would make her switch the company again. From her previous experience she learned that nothing motivates her better than the great people around her, friendly and relaxed atmosphere and excellent working conditions. That is also the way she describes MPG company as an employer. 3.3. Motivation strategies in MPG It is possible to achieve the leading position on the market only if you have more than adequate employees. In order to ensure loyalty and proactive behavior in the agency, superiors have the obligation to motivate their subordinates in the best possible way. Since most of the employees in this marketing company are employed due to their creativity, they usually voluntarily take part in organizing team-building activities for themselves and their colleagues. That is why every activity they plan isnt as ordinary as it is in other companies. Out-of-the-box solutions are implemented even when it comes to activities that are usually considered to be plain. Most of the team building activities are organized for all the employees, but some are only for the managers, and some for the people inside a certain department. It all depends on the need for such activities and the productivity of a chosen department. During the interview, miss Jasna told us that the last team-building activity they had was in Zagorje, where they went for Halloween. During the day they went on the castle tours, ate lunch and went for a drink with their colleagues, did shopping for souvenirs and enjoyed the beautiful landscape of small villages in Zagorje. At night, they had an organized Halloween party where they did all kinds of interesting activities in teams. The most interesting one was cutting pumpkins in pairs. When they had finished, they have lightened all the pumpkins with candles and had a whole-night party in a great

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surrounding and relaxed atmosphere. Due to the nature of their jobs that causes a lot of stress and takes great part of their free time, such activities are inevitable. Apart from the team building activities, there is also a wide range of different motivation strategies. Since every employee is perceived as an individual with its own needs and aspirations, it is obvious that they can not all be motivated in the same way. Some are motivated by money, but most of them require something more. Each employee gets its own stable salary and a bonus if the job was done extremely well. Miss Jasna thinks that in most cases bonuses do not motivate workers, but they consider them as a present and the sign that a company cares and appreciates them and their work. Very often, MPG motivates its workers with other tangible extrinsic motivators, such as special, limited edition of a product, produced by the company that is provided with MPG services, free massage or wellness pleasure or a day off. In many occasions, people are motivated by the chance that they will be promoted to a higher level in a hierarchy, or that they will have the opportunity to perform more complex tasks, in order to improve their skills and enrich their knowledge. The last and probably the most important are the intangible extrinsic motivators and constant performance feedback. MPG pays a lot of attention on the feelings of their employees and therefore is trying to compliment and congratulate them whenever the job was done correctly. Approximate feedback is given on the monthly basis in order to improve the performance if something went bad the month before. Each year, overall and comprehensive feedback is being presented to all the workers and public, including the objectives for the next man-year. The most motivating factor in MPG is the fact that the organizational culture is really strong, due to open and sincere relations among its employees. Everyone working for this company seems to feel free and comfortable to talk about their wants and requirements. Theres no fear of losing the job if they know they have done it properly. Due to the dynamic positions and fast reactions required in this job, mistakes are usual but the employees of MPG have no fear of losing job if they know they have done their task properly but unfortunately, unsuccessfully. It is really important, especially nowadays, when unemployment or underpaid jobs are expressions we hear about every day.

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4. Conclusion
If you want to make things happen, the ability to motivate yourself and others is a crucial skill. At work, home, and everywhere in between, people use motivation to get results. Motivation requires a delicate balance of communication, structure, and incentives. Alignment of aims, purpose and values between staff, teams and organization is the most fundamental aspect of motivation. The better the alignment and personal association with organizational aims, the better the platform for motivation. Where people find it difficult to align and associate with the organizational aims, then most motivational ideas and activities will have a reduced level of success. Motivation is a complex area. It's different for each person, from each different perspective. Motivation is influenced significantly by others rewards as well as by ones own rewards. Inequities created by overpayment do not seem to have a very significant impact on behavior. Most research has focused on pay, but employees seem to look for equity in the distribution of other rewards. That leads to the conclusion that there is no universal principle in motivating workers. Instead, if possible, each employee should be taken into consideration individually. Conversation with Jasna poljarevi, a special project manager in MPG was quite helpful. Apart from the motivation theories used in MPG, we learned that if you want to lead and influence employees you should be able to do that through motivation. Unfortunately, that is easier said than done! Motivation theory and practice are difficult subjects, touching on several disciplines. To understand motivation one must understand human nature itself. Human nature can be very simple yet very complex too. An understanding and appreciation is a prerequisite to effective employee motivation in the workplace and therefore effective management and leadership.

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Picture 5: Luka Mihelj, Vedrana Bogdan, Jasna poljarevi, Tanja Igi, Kevin Judkiewich and Gabriel Crocherie (from left to right)

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5. Literature
1. Certo, Samuel. Certo, Trevis. Moderni menadment. Zagreb: MATE, 2008. 2. Changing minds. URL: http://changingminds.org/explanations/theories/a_motivation.htm (27.11.2010.) 3. Goran Pivarski. Motivacija zaposlenika Nije sve u novcu, neto je i u URL: http://www.posao.hr/karijera/motivacija-zaposlenika-nije-sve-u-novcu-ima-nesto-iu/330/ (23.11.2010.) 4. Maslow, Abraham. Motivation and personality. New York: Harper & Row, 1954. 5. Moj posao. URL: http://www.moj-posao.net/jseeker_wiki.php?wikiName=PSMotivacija (9.11.2010.) 6. MPG d.o.o. URL: http://www.mpg.hr/naslovna/o-nama.aspx (23.11.2010.) 7. Robbins, Stephen; Judge, Tim. Organizacijsko ponaanje. Zagreb: MATE, 2009.

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6. Appendix
1. Interview questions: 1st part About MPG d.o.o. 1. Can you tell us something about beginning of MPG? How did you come up with the idea? Where and when? Who is the founder? 2. What is your current position on the market? Who are your main competitors? 3. How many full time employees do you have? Do you employ students? If yes, how many employed students do you currently have? 4. Where is the headquarter of the company? How many subsidiaries do you have and where are they located? 5. How many clients do you have? Could you name some. 6. What kind of services do you provide for your clients? 2nd part- about Jasna poljaervi-special project manager 1. What is your position in the company? What are your obligations and tasks? Who are your immediate subordinates and superiors? 2. How long have you been working for MPG? 3. Have you start working for MPG on this position or youve been promoted over time? 4. Are you satisfied with working conditions in the company and your colleagues? 5. Can you tell us something about education required for your position? 3rd part- Motivation in MPG d.o.o. 1. When it comes to motivation, who is the most difficult to motivate and who is essential to be motivated? 2. While motivating, which strategies do you use? Do you reward you employees for doing a good job and do you punish them when their efficiency is low? Are these the ways you motivate your employees?

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3. How do you delegate responsibility between employees for motivating their subordinates? How many people is every superior responsible for? 4. Do your employees attend courses about motivation? Have you ever tried any of teambuilding activities? If yes, name these activities and the results? 5. Do you consider satisfaction to have influence on the motivation and the motivation to have influence on productivity, as some experts claim?

2. Contact information of the person interviewed Name and last name: Jasna poljarevi Employee of: MPG d.o.o. Position in the company: Special project manager E-mail address: j.spoljarevic@mpg.hr

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