Features of Methods of Motivation and Incentives in the Context of

Sustainable Development

Elena Kuznetsova

and Marina Fedorova

K.G.Razumovsky Moscow State University of Technologies and Management

(the First Cossak University), Omsk, Russia

Keywords: Personnel Motivation, Sustainable Development, Organizational and Moral and Psychological Factors in the

Motivation System, New Estimated Indicators, Rationalization Proposals.

Abstract: The article is devoted to topical issues of motivation and incentives for company employees in the context of

sustainable development. The features of various systems of motivation are noted and the effectiveness of

their application in the organizational activities of the company is analyzed. The author considers the essence

and significance of the motivation system in domestic and foreign studies. In the era of sustainable

development, the priority influence of organizational and moral-psychological factors in the personnel

motivation system is shown. A special role in the effective management of employee motivation is assigned

to the introduction of proposals for the improvement and improvement of current production processes. The

number of proposals made by employees is considered as an important criterion in assessing the effectiveness

of the activities of departments and the enterprise as a whole.

1 INTRODUCTION

The purpose of this article is to identify the features

of the most effective methods of motivating and

stimulating employees in conditions of sustainable

development, as well as the influence of these

methods on the behavior of employees and the

development of their professional competencies.

Along with the material factors of motivation and

incentives, the creative and innovative potential and

energy of those people who own them become a key

factor in the development of the economy in

conditions of sustainable development (Lutokhina,

2020).

The effective activity of any organization depends

on the quality and efficient work of its employees.

And therefore, in the modern world in organizations,

the question of the effectiveness of the use of labor

resources increasingly arises. In this case, the

readiness of the personnel and their desire to perform

their work with high quality is important.

Productive and useful work of an employee of the

organization presupposes that he has an incentive to

work. Many heads of organizations and companies

https://orcid.org/0000-0002-0549-384X

https://orcid.org/0000-0002-0903-1132

understand that today it is impossible to do without a

competent personnel motivation system, and now, in

conditions of sustainable development, the problem

of employee motivation is very relevant, since the

results of the company's organizational activities

depend on precisely developed motivation systems.

Work motivation is one of the leading places in

the organization's personnel management. Changes in

the content of labor in the context of sustainable

development and social expectations of employees

have increased the importance of motivation as one

of the main functions of management.

Therefore, the problems of methods of motivating

and stimulating employees often become the subject

of many studies and are key in building the

management process.

To date, the solution of problems of management

of the system of motivation and incentives for

personnel, as well as the search for mechanisms for

the effectiveness of such management, in their studies

are engaged as foreign ones (I. Ansoff, F. Becker, P.

Drucker, G. Kunz, M. Mescon, F. Hedouri , S.

O'Donnell T. Peters, G. Simon, S. Adam, D.

McClelen and A. Maslow.), And domestic scientists

Kuznetsova, E. and Fedorova, M.

Features of Methods of Motivation and Incentives in the Context of Sustainable Development.

DOI: 10.5220/0010669100003223

In Proceedings of the 1st International Scientiﬁc Forum on Sustainable Development of Socio-economic Systems (WFSDS 2021), pages 385-390

ISBN: 978-989-758-597-5

385

(N.A. Solomatina, Z.A. Nagimova, D. Boginya, A.

Kolot, I. Petrova, L. Balabanova, V. A. Yadova, V. I.

Gerchikov).

So Peter Drucker developed a theory of

motivation based on management by goals (Drucker,

2003). The idea of this concept is that in all the

diversity of the organization's goals (not only the

traditional profit maximization, but also the focus on

motivation), the task of a rational manager is to

optimally combine the various goals of the

organization.

Using this concept as a method of improving

organizational performance helps to integrate

planning and control, increases the involvement of

managers at all levels in the process of setting goals

and stimulates feedback processes.

F. Hedouri and M. Mescon define motivation as

"the process of stimulating oneself and others to work

aimed at achieving the individual and general goals

of the organization."

Adam Smith believed that money is the only

motivating factor, seeing people as purely economic

beings who work only to obtain funds to buy food,

clothing or housing. But today it is known that an

employee can be motivated by the desire to receive

not only material profit.

For some workers, universal respect and

recognition may be the most important on the scale of

needs. Satisfaction of needs is expressed in the form

of rewards, which are divided into internal and

external. A person receives internal reward from the

very process of work, feeling the significance of his

work, or receiving satisfaction from friendly relations

with colleagues. Accordingly, external needs are

salaries, promotions, symbols of service status and

prestige.

In his works, N.A. Solomatina, Z.A. Nagimova

give a definition of motivation as "the internal state

of a person, an integral part of character, associated

with his interests and determining his behavior in the

organization" (Solomatina, 2011).

Vladimir Aleksandrovich Yadov offers his own

view of motivation within the framework of the

dispositional theory of personality. According to his

theory, human behavior is regulated by his system of

dispositions (attitudes of various levels). What level

of dispositions play a role at the moment is

determined by actual needs and the situation

(Poisons, 1983).

Moscow professor V.I. Gerchikov developed a

model based on the selection among the personnel of

persons with a predominance of one of the five types

of motivation. Gerchikov summarized the basic rules

for applying incentive systems to employees who

differ in the type of labor motivation (Gerchikov,

2005).

Despite the fact that modern authors do not have

a single definition of the concept of "labor

motivation" and each has its own vision and

interpretation, all definitions have a common feature

- motivation acts as a motivation for a person to work.

The analysis of all foreign and domestic

esearchers in the field of methods of motivation and

incentives confirms that additional and new

directions of scientific research in the field of

motivation and incentives are required.

2 MATERIALS AND METHODS

The main research method used in the work was

system analysis, the essence of which is to find the

relationship between various phenomena and

processes.

The theoretical, methodological and

informational base of the study was the works of

domestic and foreign scientists dedicated to the

development and construction of systems of

motivation and incentives in market conditions of

management.

Based on the analysis of the above definitions and

features of methods of motivation and incentives, the

author believes that there are still little-studied issues

in the field of building a system of motivation and

incentives for personnel in the era of sustainable

development.

So O.A. Kozlova in her article "Features of

employee motivation in the formation of the digital

economy" notes that the digitalization of the economy

and society requires the system of motivation to

adjust to reveal the personal qualities and abilities of

a person, the ability to think critically, the ability to

work in a team, initiative, perseverance, and

sociability (Kozlova and Selezeneva, 2018).

As a result, it becomes necessary to correct the

motivation system based on achieving a balance

between the methods of material incentives and

methods that open up the possibility of self-

realization of workers, the growth of their interest in

work and obtaining not only material, but also moral

satisfaction from work.

To ensure competitiveness, employees need to

constantly improve their skills, master related

professions, and raise the level of knowledge and

qualifications.

Professor of the Department of Economic Theory

of the Academy of Management under the President

E. Lutokhin in his article "Motivational" thresholds

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386

"on the path of the digital economy" says that the

leading force of digital transformation is the creative

and innovative activity of employees. It is formed by

the synergy of two essential components: the

availability of the appropriate potential for the

personnel (this is especially significant in the

transition to the VI technological order), as well as

strong motivation of employees for innovative,

including digital restructuring, which, as a rule,

complicates the customary traditional human

activities, enterprises and management systems

(Lutokhina, 2020).

In addition, workers and personnel in general

must be capable not only of training, but, which is

more difficult, of retraining. However, not everyone

can do it. Here special efforts are needed to overcome

the established stereotypes, traditions and habits.

Why do companies today strive and want to have

skilled and motivated employees? Changes in the

world and business environment in recent decades

have undergone significant changes in traditional

positions in organizations.

Each position in a company has a role to play and

contributes to the success of the business (software

developers, electronics engineers, developers,

network professionals, IT managers, etc.). Expanding

the range requires opening and motivating new

vacancies.

New technologies and global competition are

pushing entrepreneurs to train professionally,

improve their skills and use new methods of

incentives. The rapid obsolescence of knowledge has

an impact on an entrepreneur who needs to manage

knowledge and improve employee literacy.

Among the large number of different theories of

motivation, it is necessary in the context of digital

transformation to single out organizational and moral

and psychological factors in the personnel motivation

system.

Figure 1, 2 shows the organizational and moral-

psychological incentives of personnel in the

motivation system.

Figure 1: Organizational incentives of personnel in the motivation system.

Figure 2: Moral and psychological incentives of staff.

At some modern enterprises (with an

unconventional approach to management, world-

class enterprises), traditional competitive advantages

(cheap labor and energy, low rents and low social

costs) are being replaced by a trademark, know-how,

inventions, the degree of creative activity of workers,

introduction of new technologies, the ability to build

marketing and distribution networks, the brand of the

enterprise, its business reputation.

Features of Methods of Motivation and Incentives in the Context of Sustainable Development

387

In these conditions, it is necessary to develop

intra-firm entrepreneurship, identify the intellectual

capabilities of the team, delegate authority to all

employees of the enterprise.

New approaches are required. What are they?

These companies with a non-traditional

management approach set the same goals as

companies with a traditional approach to

management - to reduce production costs, but in a

completely different way. Namely:

 Through new relationships with suppliers,

business partners;

 Due to sometimes minor, but everyday

improvements in the production process;

 Due to the new organization of incentives for

participants in production.

The key element is strict adherence to the rule:

make at least a little bit of any improvements and

improvements in production every day. And thanks to

this approach, they achieve a stream of proposals. In

these companies, stimulation of the development of

personnel creativity is developed.

Thus, it is advisable and necessary in the company

to establish such indicators that would stimulate

workers and employees to achieve the most effective

results.

In many factories (with world-class

manufacturing), many business estimates are

excluded. First of all, they do not use the indicator of

labor productivity, calculated as output per one

production worker or per 1 man-hour of working

time. In general, production rates, various standards

for the expenditure of working time per unit of output,

etc., are practically not applied. Completely new

estimates appear, namely, the number of

rationalization proposals, the process of their

implementation, which characterizes the degree of

involvement of ordinary workers and employees in

management; indicators of reducing the time for

launching a new product and others.

What can a leader, a manager of any enterprise,

do in order to achieve efficiency gains in the shortest

and least costly way?

Try to implement a system of incentives for

employees for making any proposals aimed at

improving the organization and management of

production at their enterprise.

Determine the terms of payment of remuneration

for any offer. Why any? Because it contributes to the

development of a new way of thinking, aimed at a

constant, everyday search for new ideas, solutions,

discoveries. Workers develop the habit of constantly

thinking about improvements.

3 RESULTS AND DISCUSSION

How consistent is the modern system of motivation

aimed at new performance indicators at

manufacturing enterprises? To answer the question

posed, let us consider a modern personnel motivation

system using the example of Omskvinprom LLC,

introduced at the end of 2019.

An effective personnel management system at

Omskvinprom LLC includes a set of measures that

stimulate personnel not only to work for which

money is paid, but above all to special diligence and

an active desire to work at this particular enterprise,

to obtain high results in the process of performing

their duties, to increase loyalty to the management.

The company has a developed motivation system

based on rewarding employees for being active in the

development and implementation of positive changes

(improvements) in production.

An Improvement Proposal is an employee idea

aimed at improving current production processes. The

proposal submission system aims to involve staff in a

continuous improvement process.

The number of proposals made by employees is

considered as an important criterion in assessing the

effectiveness of the activities of departments and the

enterprise as a whole.

The manager assesses the significance of this

improvement according to one or several criteria:

 increasing labor productivity;

 increasing the level of labor safety;

 reducing production costs and saving

resources;

 increasing the efficiency of the equipment;

 improving the organization of the workplace

and working conditions;

 improving the quality of products and work

performed.

Based on the existing ideas, the employees of the

enterprise are selected in the following nominations:

"The most productive" and "The most productive".

Within the framework of the incentive program

for suggestions for improvement, the motivation of

the heads of the division is provided. At the end of the

year, the head of the authors of promising ideas is

provided with a one-time bonus in the amount of 20%

of the total amount of accrued employee benefits.

Also, the employee motivation system provides

for training and advanced training of employees,

which is continuous and is carried out throughout the

entire labor activity.

Personnel training consists in teaching the labor

skills necessary for high-quality work performance.

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388

For lifelong learning to be effective, employees need

to have a stake in it.

In modern conditions, the management of any

organization should admit that the existence of a cost-

effective company is simply impossible without a

well-thought-out system of staff training, this applies

to both ordinary employees and top managers.

The high level of qualifications of employees

allows them to more quickly and efficiently fulfill

their duties, improves the quality of the company, and

minimizes the occurrence of risks and problems.

As a result of the introduction of the new incentive

system, there was a 5% decrease in production costs

due to a decrease in product rejects due to the interest

in the work of employees and a better organization of

labor. There was also a 3% decrease in the staff

turnover rate.

The forecast of the main economic indicators of

Omskvinprom LLC after the introduction of the new

personnel incentive system is presented in Table 1.

Table 1: Forecast of the main economic indicators of the activity of Omskvinprom LLC, thousand rubles.

Indicator 2019 year

Forecast

2020

Deviation is

absolute

Growth

rate, %

Revenue

5 080 617 5 080 617

100

Cost of sales

2 871 353 2 727 785

-143 568

95,0

Gross profit

2 209 264 2 352 832

143 568

106,5

Business expenses

1 862 992 1 862 992

100,0

Administrative expenses

102 033 102 033

100,0

Revenue from sales

244 239 387 807

143 568

158,78

Return on sales,% E

4,81 7,63

2,82

158,63

Employee turnover rate

0,14 0,136

-0,004

97,14

Cost of sales for 2020 amounted to 2,727,785

thousand rubles. and decreased by 143,568 thousand

rubles. compared to 2019, the rate of decline was

95%.

Gross profit for 2020 amounted to 2,352,832

thousand. rub. and increased by 143,568 thousand

rubles. or 6.5% compared to 2019.

Profit from sales increased by 143,568 thousand

rubles. and amounted to 387,807 thousand rubles in

2020. The employee turnover rate was 0.136 and

decreased by 0.004 compared to 2019, the rate of

decline was 97.14%.

In general, it can be noted that the new system of

incentives for employees of the enterprise had a

positive impact on the effectiveness of personnel

management.

4 CONCLUSION

Thus, the problem of motivation is multifaceted and

directly affects the attitude of staff to work.

Motivation is an external influence on the work

behavior of an employee, aimed at achieving

personal, group and social goals. The motivation

system is a system that is not of an operational

material nature and that stimulates personnel to a

certain way of thinking, organizational behavior and

work itself.

There are various requirements for building an

effective motivation system in modern conditions of

sustainable development. The effectiveness of the

motivation system in a particular organization

depends on many factors that are individual for each

organization. When forming a motivation system, it

is important that incentives are based on the goals of

the organization and its strategy, generate in

employees exactly the behavior that is expected of

them, would be understandable, objective and

transparent.

In the context of sustainable development,

modern enterprises and companies need, first of all,

the development of intra-firm entrepreneurship, the

identification of the intellectual capabilities of the

team, the delegation of powers of all employees of the

enterprise. All this can be achieved through new

relationships with suppliers, business partners,

through sometimes insignificant but everyday

improvements in the production process, as well as

through a new organization of incentives for

participants in production.

Features of Methods of Motivation and Incentives in the Context of Sustainable Development

389

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