Influence of variable remuneration on an employee's motivation

Case Study from the year 2024 in the subject Leadership and Human Resources - Employee Motivation, Employee Satisfaction, grade: 1,0, University of Applied Sciences Essen (BWL II), course: Human Resource & Leadership Competencies, language: English, abstract: This assignment delves into the intricate relationship between variable remuneration and employee motivation within a large European company, using a case study approach to provide pragmatic insights. Beginning with a comprehensive introduction, key terms are defined, and the importance of intrinsic and extrinsic motivations is elucidated. The literature review offers diverse perspectives, emphasizing the significance of transparent evaluation processes and alignment with organizational goals. The case study unveils issues of opacity and inconsistency in performance evaluation, leading to a critical analysis highlighting the need for reformulating the variable pay scheme. Key problems identified include the lack of transparency, difficulty in decreasing variable pay for underperforming employees, and limitations in awarding high performers. Potential solutions revolve around recalibrating evaluation criteria and considering broader organizational dynamics, such as employee empowerment. The assignment concludes with an outlook, proposing theoretical options for reformulating the variable pay scheme to enhance motivation and mitigate disparities. However, it underscores the importance of ongoing evaluation and adaptation to evolving organizational dynamics. Further research is recommended to explore the effectiveness of proposed interventions in fostering a more equitable and motivational work environment. By fostering a culture of continuous improvement and responsiveness to employee needs, the company can enhance organizational effectiveness and employee well-being.