Communication in Employees Motivation and Remuneration System Warsaw University of Life Sciences Abstract This article refers to the significance of the communication process for the HR management system on the example of motivating and remunerating employees. Communication combines all the HR actions, complementing and supporting the implementation of particular tasks carried out within the adopted HR policy. In the article, the author emphasises the motivating function of all the remuneration components and the way in which the employees define remuneration. The author presents the results of her own survey carried out among the students of several Warsaw universities, which help her to answer the question of what remuneration is for young people, how they perceive it and what considerations they include in the remuneration received from a company. Key words: Communication, employee s motivation, remuneration, remuneration components. Remuneration is one of the basic components of the personal function, at the same time being the main tool for motivating employees. Every remuneration component may be used by the organisation as one of a number of incentives. This refers both to the financial and to the non-financial remuneration components. However, for a specific remuneration component to become a successful incentive, it must not only be accepted and anticipated by the employees, but most of all the organisation members should know the components constituting the incentive system and the remuneration system directly related thereto. The communication 1 process takes an important position in this respect, as the efficient flow of information will influence the 1 See: M. Podkowińska, Ciele a funkcie sociálnej komunikácie, in: Zborník Religionistických a Sociologických štúdií, 1/2011, Prešovská univerzita v Prešove Gréckokatolická teologická fakulta, Prešov 2011.
148 success of the organisation in the field of HR management, including effective motivation and remuneration of employees. However, to be able to understand employees and learn their expectations and opinions, we need to make effective use of the communication means available to us the ability to write and speak alone is not enough, we also have to employ this ability in an effective manner that will result in understanding. Such skillful communication of our needs, expectations, dreams or problems may and always helps us. It influences positively ties which we create with the others 2. It is also worth paying attention to the personal information system, defined by Z. Pawlak as The body of personal information, senders and receivers of that information, information channels and technical measures for information transmission and processing 3. The efficiency of this system influences the efficient and effective management of the company s most valuable resource, that is, the people. It is worth remembering that the processes of communication and HR management are inseparable, and what is more the communication, its forms and types, influence HR management, but on the other hand, the personal policy model assumed shapes both the communication and the organisational culture. This means that communication and HR management are interrelated at every stage of the personal function implementation 4. In this article the author would like to emphasise the significance of the information exchange processes for constructing an effective employee s remuneration and motivation system, and in a broader perspective of an efficient HR management system. Prepared and utilised correctly, the formal information flow meets the basic needs of the employees related to recognition, need to possess information and motivation. It should be stressed that, in order for the motivating tools to bring about the anticipated results, they should be adjusted to the employees needs and expectations and, on the other hand, the employees should possess sufficient and exhaustive information thereon. Therefore, it is worth asking whether the employees are aware of the components constituting their remuneration and, consequently, of the incentives used by the organisation they work for. To answer these questions 5, in October and November 2011 I asked 100 students 6 from several Warsaw universities to 2 M. Podkowińska, Listening as a basic effective communication, in: Memoria Tyrnaviae 6, Trnavská univerzita v Trnave, Filozofcká fakulta Centrum komunikácie, Trnava 2010, p. 96. 3 Z. Pawlak, Personalna funkcja firmy, Poltext Warszawa 2003, p. 346. 4 M. Podkowińska, Procesy komunikowania w zarządzaniu zasobami ludzkimi, MAX-DRUK Drukarnia medyczna, Warszawa, 2009, p. 8. 5 Opinion poll, October and November 2011. 6 A full-time and a part-time student.
Communication in Employees Motivationand Remuneration System 149 define the term remuneration and to indicate its components. Their responses provided information on what remuneration means for the contemporary employee and whether she is aware that it is a very broad idea. At the same time, it should be stressed that the students did not participate in any classes devoted to the problems discussed herein, and so their answers were based on their professional experience gathered while working. Remuneration as the basic component of the personal function Remuneration is one of the major components of any efficient HR management system. There are numerous definitions of this term in reference works. Remuneration can be described as any considerations paid by the company for the employee s benefit. Those considerations can therefore include those of a financial and a non-financial character, including intangible ones. Z. Pawlak provides the broader definition of this term, describing it as: any considerations provided by the company for its employees 7. S. Borkowska, however, claims that remuneration is the payment for the subordinate work, provided for the employer s benefit 8. According to Z. Pawlak this is a narrow approach to the concept of remuneration, as in his opinion in the narrower meaning the term remuneration is provided with the additional determiner for work, while in the broader meaning this determiner is not present 9. In the narrower approach, the remuneration pertains solely to the consideration received by the employee for the work performed, and consequently the benefits payable to the employee in the period where no work is performed, e.g. during a maternity leave, are not included in the remuneration. That is why S. Borkowska notes that under appropriate regulations a part of the remuneration is the payment for the time when the employee does not perform any work. [ ] The employee is also entitled to the remuneration for the sick leave in the amount and for the period determined by the applicable provisions of the law, for the time of involuntary downtime, for the time when the employee has been elected to perform social functions, etc. 10 Henceforth, we can assume that the employee s remuneration refers to any considerations 7 Z. Pawlak, Personalna funkcja, op.cit, p. 238. 8 S. Borkowska, Wynagradzanie, in: Zarządzanie zasobami ludzkimi, Eds. H. Król, A. Ludwiczyński, PWN, Warszawa, 2007, p. 354. 9 Z. Pawlak, Personalna funkcja op. cit., p. 237. 10 S. Borkowska, Wynagradzanie op. cit., p. 354.
150 of the company for the benefit of the employee performing specific tasks for the company. Every component of the remuneration defined in this way can play the role of an incentive, provided it is a component anticipated by the employees and meeting the employees needs. Moreover, to ensure the effective performance of the motivating function of the employees remuneration, it must be directly connected with the communication system. The employees must know what components are included in their remuneration and the incentive system created in the company they work for. It is worth noting that the communication process should also, as it does in practice, have the motivating function, becoming one of a number of incentives of an intangible character. Actually, communication is not only a component of every motivating strategy, accompanying and supporting the adoption of any incentives of a pecuniary (financial) or of a non-financial nature, but is also a measure supporting every HR decision, and at the same time supporting the personal function performance of every organisation 11. Communication is therefore a factor influencing any HR actions. The effectiveness of this process is a prerequisite for the efficient and effective management of the most valuable resource of any organisation. What is more, communication supports other activity sectors of companies. In relation to the employee-incentive issues, it can be claimed that communication combines and enhances the influence of the incentives used in the company, shaping their efficiency to a significant degree 12. It is worth stressing that the communication process supports and complements any HR actions and reinforces the strength of the pecuniary and non-financial incentives. What can the force of the financial incentives, such as a bonus or a financial award, be if the employees are not familiar with the rules of their awarding, or the rules are not transparent and clear, or they vary from one employee to the other, even if they do the same job or work in the same department on parallel positions? 13 Special attention in this respect should be paid to interpersonal communication (direct), being an important component of the organisation communication system, as well as formal communication which can be used as one of the major incentives of an intangible nature. Given the above, it should be stressed that without an efficient information flow system, it will not be possible to manage the organisation successfully. J. Stankiewicz emphasises that communication is indispensable in any organisation, just as the blood flow is indispensable 11 M. Podkowińska, Komunikowanie jako narzędzie skutecznej motywacji pracowników, in: Komunikowanie w działalności przedsiębiorczej, Ed. K. Krzyżanowska, Wydawnictwo SGGW, Warszawa, 2008, p. 38. 12 Ibidem, p. 38. 13 Ibidem, p. 39.
Communication in Employees Motivationand Remuneration System 151 for a human being. Management perfection cannot be achieved unless the communication skills are constantly improved 14. It is also impossible to strive for perfection in the sphere of motivating employees unless the communication skills of their superiors are constantly improved. It must also be remembered that employee s remuneration based on an efficient communication system fulfils, besides the motivating function, other functions of crucial importance from the point of view of the organisational strategy and employees needs. The cost function may be seen as one of those functions. It should be kept in mind that remunerations are the organisation s cost. On the one hand, the remuneration may be used by organisations for efficient labour market competition, enabling them to attract the best employees who will not only build a positive corporate image with their work, experience and qualifications, but also enable to implement the strategic goals of the company 15, but on the other the remuneration performs the cost function as it is an important labour and general cost component related to the business activity 16. Z. Pawlak also incorporates the social function, the profit and consumption one, distributional and the one related to savings and capital accumulation into the remuneration functions 17. The remuneration amount will determine the individual s belonging to a given social group, shaping the prestige, recognition or social position. What is more, a remuneration system with an unfair and incorrect structure may bring about not only discontent, but also conflicts and misunderstandings, as excessively low remunerations or unfair distribution thereof lead to protests, strikes, social conflicts 18. That is why remuneration should be a tool used by companies to create a positive working atmosphere, while shaping the employees motivation and facilitating their integration with the company at the same time. Moreover, remuneration is the primary source of the employees income, allowing them to satisfy their basic needs, such as to buy food, chemicals, clothes etc. Z. Pawlak also stresses that part of the income earned can be saved and invested, that is, transformed into capital. In this way investment is a source of further income 19. It is also worth paying closer attention to the distributional function of remuneration. For 14 J. Stankiewicz, Komunikowanie się w organizacji, Astrum, Wrocław 2006, p. 14. 15 See: J. Truszkowska, Zasoby ludzkie a potrzeby pracodawców (wybrane problemy) in: Przedsiębiorstwo wobec współczesnych wyzwań w procesie zarządzania, Eds, I. Hajduk, L. Ciborowski, Tom II, Wydawnictwo AP, Siedlce 2005. 16 W. Golnau, Wynagradzanie pracowników, in: Zarządzanie zasobami ludzkimi, Eds. W. Golnau, M. Kalinowski, J. Litwin, CeDeWu, Warszawa, 2007, p. 252. 17 Z. Pawlak, Personalna funkcja op. cit., pp. 240 241. 18 Ibidem, p. 241. 19 Ibidem, p. 240.
152 the income obtained the employees can purchase specific goods and services. Moreover, certain services become a part of the employees remuneration thanks to which the providers of goods and consumer services have the opportunity to sell them 20. In order for this function to be implemented, the employees remuneration must be composed not only of financial, but also of non-financial components. Are the employees, however, aware of the components that constitute their remuneration? Remuneration components Each remuneration component may be used for motivating employees, for meeting their need for recognition or prestige. Obviously, the amount and particular components of the remuneration depend on many factors. The labour market situation 21, globalisation 22, financial capacities of the company, number of employees and the type of work performed are just a few factors shaping the employee s remuneration system, defined as the body of rules for employee s remuneration calculation and payment in a company 23. This system is, therefore, directly related to the communication process, as in order for the employees to accept the remuneration system and to interpret and understand the remuneration principles correctly, they must be appropriately informed of the principles of remuneration calculation and payment. The employees should possess reliable and current information on any remuneration components, as otherwise the remuneration system will fail to perform its motivating function, or the implementation of this function will be limited. Discussing the remuneration-related issues, therefore, it is necessary to consider the remuneration components, including the financial ones, e.g. base remuneration, bonuses, commissions, financial awards, and the non-financial ones, such as training, awards, intangible components in the form of e.g. various honours. 20 Ibidem, p. 240. 21 J. Truszkowska, Rynek pracy, bezrobocie, kształcenie ustawiczne (wybrane problemy), in: Kapitał ludzki i społeczny w procesie kształcenia ustawicznego w świetle badań, Eds. T. Popławski, J. Truszkowska, Łomża 2010. 22 K. Kardis, M. Kardis, Wartości a globalizacja na tle przemian społeczno-gospodarczych współczesnego świata, in: Społeczeństwo, kultura, wartości. Studium Społeczne Rodzina wobec wyzwań współczesności Warszawa 2011. 23 Z. Pawlak, Personalna funkcja firmy op. cit., p. 254.
Communication in Employees Motivationand Remuneration System 153 It is not sufficient, however, to create a correct remuneration strategy without basing it on an efficient flow of information. The studies reveal that the employees are not fully aware of the components constituting their remuneration. What is more, the majority of employees believe that the remuneration is only made up of financial components, e.g. Remuneration is the constant monthly income for the work performed 24. The exception here is the statement of a woman who claimed that: For me remuneration is the pay for the working hours, which bring me much pleasure. This does not necessarily have to be a pecuniary payment. This can be a reward for e.g. good work 25. Most of the students I asked to present their concept of remuneration and understanding of this term provided the narrow approach to remuneration. One woman claimed that remuneration was due payment for the effort put into work 26. Another respondent, however, said: For me it is a reward for the effort put into the development of the company 27. Such an approach to remuneration presents the important issue of the entire company s development, and not only the development of individual employees. Through their work, knowledge and experience the employees build the company success, contributing to its development. That is why the efficient and effective HR management becomes so important today, as the quality of activities related to the implementation of the personal function determines the development and competitive advantage of companies. Therefore, many companies decide to take advantage of the services of HR consulting companies to ensure efficiency and high quality of HR actions. Consulting 28 becomes an important tool in the hands of those responsible for HR actions, as professional consulting services are likely to increase the competitive advantage of companies. The statements of young people also reveal that they perceive remuneration not only as the consideration making it possible to satisfy the basic needs, but the social and motivating function of remuneration also becomes visible. The following students statements deserve attention, e.g. For me remuneration is the payment for a well-performed job thanks to which I can pay my bills and satisfy my needs, 29 thanks to remuneration I can satisfy my needs, have some 24 Kamila, 30 years old. 25 Monika, 23 years old. 26 Anna, 29 years old. 27 Maciej, 18 years old. 28 See: T. Bąk, Teoretyczno-metodologiczne podstawy doradztwa, in: Społeczeństwo, kultura, wartości. Studium Społeczne Młodzież wobec wyzwań współczesności Warszawa 2010, p. 9. 29 Maria, 24 years old.
154 pleasure 30. These statements indicate the income function of remuneration thanks to which employees are able to meet their basic needs. Other statements, such as: reward for the work performed 31, remuneration is the way to recognise and appreciate the employee 32, stress the motivating function of remuneration. The above statements were uttered by young women (19 years old) working only for a couple of months. However, the motivating function of remuneration was also indicated by people with a longer professional experience (7 years): It is a payment for the work performed and should correspond to the work performed. It is the main incentive, we work for the remuneration 33. This statement shows that for the majority of employees remuneration is the primary and only income enabling to satisfy the basic needs. Moreover, from the point of view of the motivating and social function, it becomes crucial to create remuneration rules which are clear, transparent and acceptable for the employees, including the adjustment of the remuneration to the job requirements, amount and quality of work, as well as employees qualifications. To sum up, it can be stated that young people: identify the remuneration concept with the financial consideration. The exception are the few statements declaring that remuneration can also be of a non-financial nature, e.g. for me it is the payment for the work performed, the means I can use to satisfy my needs, source of income, but also the acknowledgement of my superior 34. stress that the remuneration enables them to satisfy their basic needs, being the main source of income, e.g. Hmm... for me the remuneration is not only the reward for my work, but it is the means necessary and indispensable for life and existence. Without this money I would not be able to live 35. identify remuneration with the consideration being a reward for their work and effort put into the performance of tasks allocated to them, e.g. For me, remuneration is like a recognition of my work. For me this is the value of the work performed. This is a reward for my effort 36. When it comes to the remuneration components, most young people indicated the financial components, or complemented them with non-financial tangible components, such as in-kind prizes, occasional vouchers, integration 30 Joanna, 19 years old. 31 Katarzyna, 19 years old. 32 Karina, 19 years old. 33 Natalia, 27 years old. 34 Ilona, 26 years old. 35 Iwona, 30 years old. 36 Zofia, 20 years old.
Communication in Employees Motivationand Remuneration System 155 trips, health care etc. Infrequent statements also mentioned intangible components, such as the employer s recognition and trust 37 ; praise, appreciation of the employee 38. Appropriate working atmosphere, organisational culture with the values compliant with the values advocated by individual employees are also important incentives. It is also worth stressing that the working atmosphere is shaped directly by the communication process which is also used for motivating, value transfer, training and integration of employees around the long-term objectives of the organisation 39. One of the respondents mentioned the following remuneration components: money, prestige, pleasure, satisfaction, reward 40. Another man also includes the following into the remuneration components: satisfaction, recognition, selffulfilment and incentive benefits, business trips, training, in-service training, care for the employee s family members (e.g. nursery school for children, holidays, healthcare etc 41. It is worth stressing that the employees training and professional carrier planning are other important components of the motivation and remuneration system. The employees development, being an integral part of HR management in the organisation, also enhances the development of the entire organisation, thus determining its market position 42. However, from the perspective of the motivating remuneration function, it becomes alarming that many young people define remuneration as the considerations of a solely financial character, identifying it with the base remuneration received regularly for the work performed. One of the students claims that remuneration is: the reward, motivation, type of assessment, but in our Polish conditions the remuneration does not correspond to the employee s value 43. If the remuneration is not fair and the remuneration system is not based on principles that are clear and acceptable for the employees, this will be more of a demotivating factor rather than the one motivating and integrating employees through appropriate remuneration. 37 Katarzyna, 19 years old. 38 Renata, 21 years old. 39 More about values in the communication process: J. Mierzwa, Wartości w procesie komunikowania się jednostek globalnego społeczeństwa, Seminare, 2002, No. 18. 40 Maciej, 18 years old. 41 Jan, 31 years old. 42 J. Truszkowska, Kształcenie zawodowe a potrzeby rynku pracy w Łomży, in: Edukacja dla bezpieczeństwa, nauki i pracy, Ed. A. Kusztelak, Poznań 2006. 43 Jan, 31 years old.
156 Conclusions Efficient HR management system, including motivating and remunerating employees, is based on clear and transparent rules concerning the performance of the most important HR actions. Without an efficient communication system, it will not be possible to manage this most valuable resource of the organisation in an efficient way 44. The future of business, according to the economic and media experts opinions is based on the communications 45. It is also worth adding that every remuneration component may play the motivating function if it is based on an efficient communication system, providing straightforward information on the rules and principles or remuneration, development, promotion or assessment through formal channels. The employees knowledge on the way of calculating the remuneration and on the remuneration components also remains an important issue. On the other hand, the employers should try to learn the needs and expectations of employees with respect to the remuneration issues, owing to which it will be possible to increase the motivating impact of particular remuneration components. For this reason, today it becomes necessary to create an efficient information flow system within the organisation, to make the employees aware of their remuneration components, and consequently of the way the remuneration and motivation system is shaped in the company. Bibliography Adler R.B., Rosenfeld L. B., Proctor II R. F., Interplay. The Process of Interpersonal Communication, Oxfort University Press, 2004. Bąk T., Teoretyczno-metodologiczne podstawy doradztwa, in: Społeczeństwo, kultura, wartości. Studium Społeczne Młodzież wobec wyzwań współczesności Warszawa, 2010. Borkowska S., Wynagradzanie, in: Zarządzanie zasobami ludzkimi, Eds. H. Król, A. Ludwiczyński, PWN, Warszawa 2007. Golnau W., Wynagradzanie pracowników, in: Zarządzanie zasobami ludzkimi, red. W. Golnau, M. Kalinowski, J. Litwin, CeDeWu, Warszawa 2007. 44 See: R.B. Adler, L. B. Rosenfeld, R. F. Proctor II, Interplay. The Process of Interpersonal Communication, Oxfort University Press, 2004. 45 L. Grabiec, Business of communication. Communication in business, in: Memoria Tyrnaviae 6, Trnavská univerzita v Trnave, Filozofcká fakulta Centrum komunikácie, Trnava 2010, p. 51.
Communication in Employees Motivationand Remuneration System 157 Grabiec L., Business of communication. Communication in business, in: Memoria Tyrnaviae 6, Trnavská univerzita v Trnave, Filozofcká fakulta Centrum komunikácie, Trnava 2010. Kardis K., Kardis M., Wartości a globalizacja na tle przemian społeczno-gospodarczych współczesnego świata, in: Społeczeństwo, kultura, wartości. Studium Społeczne Rodzina wobec wyzwań współczesności Warszawa 2011. Mierzwa J., Wartości w procesie komunikowania się jednostek globalnego społeczeństwa, Seminare, 2002, no. 18. Pawlak Z., Personalna funkcja firmy, Poltext, Warszawa 2003. Podkowińska M., Ciele a funkcie socialnej komunikacie, in: Zborník Religionistických a Sociologických štúdií, 1/2011, Prešovská univerzita v Prešove Gréckokatolická teologická fakulta, Prešov 2011. Podkowińska M., Komunikowanie jako narzędzie skutecznej motywacji pracowników, in: Komunikowanie w działalności przedsiębiorczej, Eds. K. Krzyżanowska, Wydawnictwo SGGW, Warszawa 2008. Podkowińska M., Listening as a basic effective communication, in: Memoria Tyrnaviae 6, Trnavská univerzita v Trnave, Filozofcká fakulta Centrum komunikácie, Trnava 2010. Podkowińska M., Procesy komunikowania w zarządzaniu zasobami ludzkimi, MAX- DRUK Drukarnia medyczna, Warszawa 2009. Stankiewicz J., Komunikowanie się w organizacji, Astrum, Wrocław 2006. Truszkowska J., Kształcenie zawodowe a potrzeby rynku pracy w Łomży, in: Edukacja dla bezpieczeństwa, nauki i pracy, Ed. A. Kusztelak, Poznań 2006. Truszkowska J., Rynek pracy, bezrobocie, kształcenie ustawiczne (wybrane problemy), in: Kapitał ludzki i społeczny w procesie kształcenia ustawicznego w świetle badań, Eds.. T. Popławski, J. Truszkowska, Łomża 2010. Truszkowska J., Zasoby ludzkie a potrzeby pracodawców (wybrane problemy) in: Przedsiębiorstwo wobec współczesnych wyzwań w procesie zarządzania, Tom II, red. I. Hajduk, L. Ciborowski, Wydawnictwo AP, Siedlce 2005. Peзюмe Коммуникация в системе мотивирования и вознаграждения работников Cтатья касается значения, какое в системе управления человеческими ресурсами на примере мотивирования и вознаграждения работников имеет процесс коммуникации. Коммуникация включает в себя все кадровые действия, дополняющие и поддерживающие реализацию отдельных действий, осуществляемых в рамках принятой кадровой политики. В своей статье авторка обращает внимание на мотивационную функцию всех элементов системы вознаграждения, а также на то, каким образом
158 работники дефинируют вознаграждение. Авторка представляет результаты собственных исследований, проведенных среди студентов нескольких варшавских вузов, позволяющие ответить на вопрос, чем для молодых дюдей является вознаграждение, как они его воспринимают, а также какие поощрения за труд относят к получаемому на предприятии вознаграждению. Ключевые слова: коммуникация, мотивирование работников, вознаграждение, элементы вознаграждений., PhD, is the head of the Institute of Social Communication in the Faculty of Humanities at the Warsaw University of Life Sciences. Her scientific interests focus on issues related to interpersonal communication, internal communication within organisations, family communication, silence and non-verbal communication, as well as sociology of labour and HR management. She is the author of books concerning the above-mentioned problems, such as: Procesy komunikowania w zarządzaniu zasobami ludzkimi, Warszawa, 2009; Komunikowanie w życiu człowieka, Warszawa 2010; Integracyjny wymiar komunikowania, Warszawa 2011; as well as numerous articles, among others: Elastyczność w komunikacji organizacyjnej sztywne i chaotyczne procesy wymiany informacji w organizacjach, Komunikowanie jako narzędzie skutecznej motywacji pracowników.