Value Management: Value Chain Analysis on Toyota

This post provides a comprehensive portfolio of the various business activities of Toyota Motors Co. The introduction includes Toyota’s history as well as general knowledge about the business process of the company. TOWS Analysis and Value Chain Analysis include information about primary and support activities that help the company to maintain operations, meet customer expectations and gain competitive advantage. The conclusion of this report provides recommendations that may help Toyota to maintain the productivity and attract more customers.

INTRODUCTION TO TOYOTA

Kiichiro Toyoda was the founder of Toyota Motor Corporation and the automotive-centred Toyota Group. Kiichiro was a keen, skillful inventor and the continuous resolve of invention helped him to create the business base acquired from his father, Sakichi Toyoda. With the incessant drive towards innovation and invention, Kiichiro extended into the automotive business and build the groundwork of Toyota Group that you see today.

In 2008, Toyota's sales surpassed General Motors, making Toyota number one in the world. In 2010, Toyota employed 350,005 people worldwide, and was ranked the third-largest automobile manufacturer in 2011 in terms of production, behind General Motors and Volkswagen Group . Toyota is also ranked as the eleventh-largest company in the world by revenue. In July 2012, the company reported it had manufactured its 200-millionth vehicle.

In order to mandate the achievement of such a high level of production and demand for vehicles, the company has established different long-term strategies, integrated corporate philosophies that help to set a balance on the demand and quantity of the products. In addition, continuous improvement of communications with its partners in order to rake in investments and find the competitive advantage that aids Toyota to constantly meet customer expectations. Moreover, these strategies involve the use of enhanced technologies that help to ensure quality and safety of the products.

The mission of Toyota Motors is the provision of the best qualified service and products as well as cooperation with dealers. “Since its foundation, Toyota has been using its guiding principles to produce reliable vehicles and sustainable development of society by employing innovative and high quality products and services” 

SITUATIONAL ANALYSIS

         Strengths and Opportunities (SO) strategies

Successful companies identify their strengths in order to take maximum advantage of their opportunities. Toyota uses its global presence in order to join forces with countries with developing economies and capitalize into these countries. To sustain at the position as leading motor vehicle manufacturer, Toyota Motors also increased its investments into "green" technologies and support constant research on other types of technologies such as safety and enhanced motility that helps the company to produce cars with high level of safety and quality and as a result, Toyota is able to meet customer expectations and gain competitive advantage

         Weaknesses and Opportunities (WO)

Toyota has expanded into the European market, increasing the number of sales worldwide and their profit growth, in order to endure its leading image. Moreover, the company plans to reposition its less profitable production plants into developing countries like India and South Africa. Furthermore, it is vital to diminish support that comes from Japan to enable each foreign production locations to become more independent. For example, the Toyota plant that recently commenced productions in Texas made supreme use of the expertise from the Toyota plant in Kentucky which has been refined over the past 20 years. This strategy also benefits Toyota as it evades the fluctuation of Yen in the Japanese economy

Toyota's Reach

       Strengths and Threats (ST)

With the use of "green" engines in the production process of the cars, Toyota can reduce influence of the rising price on the fuel and thereby provide customers with a more environment-friendly mode of transportation. Toyota Motors’ Guiding Principles urges the production of high quality products and therefore it pays great attention to all operations and activities, technological development and their workforce. Toyota identifies the importance of employee morale and satisfaction hence provides a more than suitable amenities and conditions of work, as Toyota believes that a motivated workforce results in better operations and the adequate use of enhanced technologies adds quality to their products, and this inclusive concept gives Toyota the prospect to cater to its customers’ needs.

       Weaknesses and Threats (WT)  

The approach of relocation of several plants to emergent economies which was described above, will not only benefit Toyota to elude the impact of currency fluctuations, but also gives the opportunity to be less reliant on the government of Japan. Another aspect of WT strategies encourages Toyota Motors to concentrate on each specific section of the motor vehicles they produce, for instance, the production of luxury cars. This strategy helps to focus on a more niche market of luxury cars, enabling Toyota to stretch their worldwide market and further widen their immense product list.

VALUE CHAIN ANALYSIS OF TOYOTA

Value chain analysis is a systematic approach that helps to identify and examine the developing of competitive advantage. All organisations comprise of activities that link together to develop the value of the business, and these activities collectively form the organisation’s value chain. This analysis process includes activities which are further allocated into primary and secondary activities, which combine to form the value delivered by the company. Such activities may include procurement, manufacturing, distribution and marketing.

The Primary Activities

The primary activities in Toyota's value chain analysis include inbound logistics, operations, outbound logistics, marketing and sales service.

       Inbound logistics

The main aspect of Toyota Company’s value chain analysis is the inbound logistics. Inbound logistics use JIT (Just-in-Time) system of production as it decreases the inventory cost. JIT helps Toyota to optimize their assembling and production process as well as to minimize parts going to waste or getting unused as inventory. Inbound logistics are the goods that the company receives from its suppliers and store for some period of time until the moment when they will be used in the production process. Toyota company does not have and is not able to create own raw materials that are needed for assembling of cars, thus it has to collaborate with a third party.

Toyota orders the raw materials from all over the world and in the interest of maximizing their availability of raw materials; they maintain good relationships with their suppliers. Toyota uses Just-in-Time system to manage the supply of raw materials as well as optimizing the supply and production processes.

       Operations

These activities comprise mainly of the manufacturing and assembling process of the motor vehicles. Other activities in the operations may include motor tuning, configuration of motor parts and final engine tuning. Toyota Motors have established and maintained the image of producing reliable and long lasting vehicles largely due to their well-designed and moderated operation process. One of the main factors of Toyota’s successful sales record is credited to their comprehensive implementation of an exquisitely planned operation system.

Toyota Production System (TPS) is an operation structure followed, which consists of the integration of the lean production concept and Just-In-Time (JIT) management, controls the production process in accordance with the customer requirements. Other operation activities also include the ‘Jidoka’ system; which stops the production process if any defects or other operational problems occur. Operational constancy is also a part of TPS and consists of ‘Heijunka’ concept which focuses on the uniform distribution of work at any position of the production process; Work Organization focusing on the accurate distribution of tasks in the correct order and description; and Total Productive Maintenance (TPM) which emphasizes on overall check-up of all equipment and tools used in the production process.

       Outbound Logistics

 On completion of the operation process, final products are transferred to the retailers, wholesalers and,  ultimately, to the final customers. Toyota controls the whole process of vehicles distribution, from the factory to  their branches worldwide, to ensure that the final products are delivered in the right place at the right time. Each  Toyota dealer is directly linked and controlled by Toyota, with few or no subsidiaries involved in the   distribution process. Outbound logistics of finished vehicles are the responsibility of Toyota Motor Sales. Parts Distribution manages the supply of service parts from the plant to the service centre. It supports service parts  production and shipping preparation which includes containerization and overseas shipping. This group is also  responsible for quality, technical support and overseas logistics and customs 

       Marketing and Sales

 In these activities, Toyota’s marketing department assigns new products to the precise group of targeted c  customers. Marketing and sales activities of Toyota also include emphasis of on their planned promotion mix and  marketing communication approaches, like advertising and sales promotions, as well as building groundwork f or offers that would be suitable for meeting the customer expectations and the company as well.

       Services

Services are the final aspect of the primary activities that mainly adds value to the products and ensures successful distribution as well as obtaining feedback and response from the customers. This includes all areas of service such as final checking, after-sales service, maintenance, complaints handling, training, repair services and additional customer services. Toyota recognises that its customers are the “driver” of the company’s success, thus it provides and improve several types of their offered services. As Toyota product’s main factor is reliability, therefore services are delivered by qualified personnel ensuring all services provided are of high quality. The importance of perfection ensures service excellence and more satisfied customers as well as sustaining a greater competitive advantage.

       Support Activities

Support activities include procurement, technology development, Human Resources Management (HRM) and firm infrastructure.

       Procurement

These activities are associated with the purchase of goods, materials, equipment and services, and focus on reducing the cost on purchases and receiving them on the assigned time. Toyota Motors uses e-buying and outsourcing methods to manage procurement activities. Furthermore, in collaboration with its suppliers, Toyota supports the reduction of environmental pollution that occurs during the delivery of supplies.

       Technological Development

These activities are the integration of constantly developing technologies in the processes used and help to create and maintain their competitive advantage. Every department of Toyota is build up on technologies; the main focus on technology development is to guarantee the customers of the safety of the vehicles. Toyota Motors combine forces with Collaborative Safety Research Centre located in U.S.A to reform safety checks of the vehicles and improvised test-drives as well as improving their overall product performance. Toyota has integrated safety technological systems that are aimed to provide safety of the drivers and vehicles. The first technology is PCS (Pre-Crash Safety) system that helps to predict possible crash and thereby minimizes the risk of damage and injuries. Pop-Up Bonnet technology is a definite design of the car frame structures that was created by Toyota Motors to avoid the damage caused to other vehicles and the pedestrians. Adaptive Driving Beam system was assimilated in some models of Toyota cars and helps to regulate high beam in automatic way.

       HRM (Human Resource Department)

It is the important part of the whole organizational business and thus Toyota Indus Motors Co. uses different tactics to sustain its employees. Other car manufacturing companies are considered as producers of high quality cars, however they cannot compete with Toyota in HRM (Human Resource Management), as well as its suppliers and methods of distribution. Toyota has a highly integrated Lean Production System in order to use the workforce in more productive and efficient way. The main concept of managing human resource is to expand the capacity and capability of the employees by providing them a material encouragement for the extra work, training to develop their working skills and various rewards. These methods lead to friendly and comfortable working atmosphere in the company that in turn increase in productivity and quality of the product and results in creating of the competitive advantage.

       Firm Infrastructure

These activities are connected with developing the strategic plans of the organization. MIS (Management Information System) plays a vital role in designing the strategic plan, organizing and controlling the various departments of Toyota such as finance, accounting and corporate strategy. Moreover, Toyota uses robotics system where people act as operators that make the production process fast and efficient.

Toyota's Value Chain Model

 Toyota may use value evaluations to accurately identify their under-utilized resources and thereby make better u se of these resources. Developing synergies may also aid in a stronger inventory control. Toyota may also en hance designing to further maximize their operations and offshoot process within the value chain processes  should re-modelled to support the value chain.

 The success of Toyota in Japanese and international markets involves production of motor vehicles with high l evel of  quality and safety,  as well as continuous improvement of technologies that are involved in all activities o f the company's operations. Toyota Motors has designed different models and concepts that help to increase pr oductivity and are focused on customer needs and preferences as the customer is the pioneer of Toyota’s  success. Furthermore, Toyota pays great attention to its workforce and motivates its employees with different v ariety of rewards. This method leads to production improvement and results in customer satisfaction.

Quality Management: Deming's 14-point Theory

Dr.W.Edwards Deming (1900-1993) is considered to be the Father of Modern Quality Management. He was widely deemed with leading the Japanese quality revolution and addressed that to achieve the highest level of performance requires more than a good philosophy and how an organization must change its behaviour and implement new ways of carrying out their business activities.

Dr Deming’s approach was thoroughly summed up in his famous 14-point philosophy. In this blog Deming’s 14-Point philosophy will be widely explained as to how this philosophy can be accurately applied to an academic environment.

Deming’s 14 Point Theory.

•   Create Constancy of Purpose for Improvement of Product and Service.

This aspect of Deming’s theory identifies how a management must change from a concentration on the short run to establishing for the long run. This requires adherence to innovation in all areas, not only from the managers but the employees as well, to provide an enhanced quality service to the customers.

In an academic environment, classes in schools and colleges sometimes have a feebly defined objective on the outcomes of their academic process which reflects negatively on the student, and on the college itself, as they are not sure on what is expected of them in this area. This must be avoided in order to aid the students to boost their confidence towards their academic approach and provide them with a stable idea on what the students expect from themselves.

• Adopt the New Philosophy.

This point encourages the implication of maintaining a high standard of quality throughout the organization, by creating a specific quality vision and urging every personnel of the organization to implement on it.

Colleges and schools must implement on new philosophies to obtain the new objectives. With the rapid growth of technology, academic entities must make use of information technology to minimize errors and carry out procedures faster. Management should also take necessary steps to reduce barriers between students and their staff and create an atmosphere of alliance and cooperation, so that the staff and students can work together and produce the best possible results.

For example, in Asia Pacific University (A.P.U), the students are provided with access to adequate tools and resources which include libraries and well maintained labs, in addition to this, teachers at A.P.U administer the students with suitable training and sufficient time to enable the students to work to the best of their abilities. Thus, maintaining the high standard of education which the university boasts.

•  Cease Dependence on Mass Inspection.

Reliance on inspection to acquire and manage quality should be avoided on the whole to improve the performance in an academic environment, as it incurs various costs and it arrives at a junction where it is too late to make modifications and change in its improvement. Students should be aided to become more self-reliant and determinant to take authority for their own academic performances. Over dependency on the teachers would hinder their ability to apply and analyse, which in turn affects their primary improvement on their academic performance.

This point can improve the academic environment by encouraging the students to self-assess themselves in the form of group work, peer assessment and self-learning, rather than going to their teachers with every small dilemma they face in the academics. Thereby, enhancing the students’ ability to face challenges in their studies and making them more analytical in their approach.

•   End the Practice of Awarding Business on Price only.

The focus solely should not be on minimizing costs, quality should be the main factor. Colleges should move towards a single supplier for materials, these materials could be the curriculum, the books, and the IT supplies and so on. The college should choose the supplier who delivers the best quality goods at a reasonable price and then buy goods only from this supplier. This reduces variations in quality and helps develop a relationship of trust and eminence with the supplier. For example, new teachers should be handpicked from specific training institutes, which have an excellent record of producing quality teachers with sufficient experience.

•   Improve constantly the system of production and service.

      There should be continuous improvement of quality in every activity so as to produce a recurrent rise in productivity and a significant decrease in costs. Colleges should ask themselves the following questions; are their customers happy? Are the faculty members happy? Are others associated with the college happy? If the answer to any of the above is no then the college must immediately do what is necessary to resolve this problem. To help decide where to look for things to improve, colleges can use surveys, suggestion boxes. Classroom techniques should be improved, teaching techniques should be updated and all vital departments of the college should be under close observation to constantly improve them. For Example study other successful colleges to see if you can make any improvements and better the system of providing the service.

•  Institute Training and Retraining.

    Modern methods of training and education should be instituted for all students and staff for their expansion and development. To ensure that all the teachers know their job thoroughly, they must be trained adequately. With training, the teachers will become more productive which in turn will improve the results of the students which make the college more productive and consequently result in enhanced quality of education. So it is clear that money spent on faculty and staff training has long-term payback; therefore it is very important that colleges have a training department to help train and develop staff. Sample is faculty should be well educated, not only in the art of teaching, but also in class management and discipline, so it will help if they are trained in lecture delivery and effective communication.

• Institute Leadership.

      According to Deming’s theory, the job of leaders is not just to supervise but also to help subordinates do a better job by leading effectually and act as a role model for them. It is also a part of the leader’s job to train the people being supervised to develop the quality of their work. Improvement of quality will automatically improve productivity as the main objective of teachers is to help students mend their performance. In this case, teachers have a new role as classroom managers. Teachers should become leaders rather than managers/supervisors and serve as role models. They can achieve this by authorizing the students by creating an atmosphere where the students feel comfortable to express themselves without fear of reprimand. For example, one way a teacher can empower students is by giving them a sense of responsibility. This can be done by appointing a class representative or by appointing group leaders for group assignments. 

• Drive out fear.

Fear is a barrier to improvement; it should be driven out by reassuring effective two-way communication that will eliminate fear among teachers and students in colleges. Fear can be of many types, it could be fear of change, fear of failure, fear of top management. Fear should be driven out by creating an environment that encourages people to speak freely so that everyone can benefit for the college system. Unfortunately, many schools operate on fear of punishment and low grades. Fear leads students to obey, but does not motivate them to be excited about work or learning. 

Students should not be afraid of voicing their criticisms and complaints. On the faculty and staff side, fear can play an important role. If a high price must be paid for failure, few people will be keen to risk experimenting with a promising new innovation, thus keeping the course improvement out of the system. For example, teachers should be given the liberty to try new methods of teaching without fear of failure, or embarrassment if the experiment fails.

• Break down barrier between staff areas.

Barriers result in self-development as each part tries to do what is best for itself rather than collaborating in order to achieve what is good for the college as a whole. Institutes are formed of different departments, all of which have their own benefits and objectives. Even different subject teachers act or think differently, it is management’s responsibility to ensure that they work as a team and provide a nourishing education for the students, certifying free flow of information and cooperation among the different departments.

 For example, barriers between teachers and students can be broken down by appointing student representatives who acknowledge the problems to the teachers on behalf of the student community. Barriers between the different teaching departments can be broken down by having regular staff meetings where teachers can discuss critical issues and improve overall quality of education.

•  Eliminate slogans, exhortations and targets.

      On targets, for teachers and students asking for excellence should be avoided as this creates an adverse atmosphere of pressure and can be counterproductive. Most reasons of low productivity have to do with the system and not the personnel, therefore management must improve the processes of effective teaching and quality deliverance so that the primary goals can be achieved. For instance, stating that 80% is the minimum acceptable score on an exam will not by itself achieve that goal; it may in turn result in growing workloads for students and the teachers as well, who may strive to acquire this target. Stating that goal and then providing excellent instruction, arranging for study teams, giving extra help where needed giving the students a much better chance for success. Example is if a teacher has unreasonable expectations of students, the students will most likely get demotivated by their teachers who try to overwork the students which may create a negative learning environment.

•   Eliminate numerical quotas.

      The traditional and standardized grading system should be thoroughly accessed before its implementation. Deming points out that the educational system would be improved immeasurably by closely analysing the grading process of the college. Classroom goals should not focus on numbers, as it is a proven fact that standardized test scores usually ignore more important measures of student knowledge. They cannot test critical thinking or problem solving skills or the decision making abilities of students. Therefore, it is essential that education systems should be based on the overall skills and class performance of the students. Students should be marked on the improvement in their presentation and the effort that they make rather than just the marks they score. For instance, if management instructs teachers to finish a lot of coursework in a short period of time, teachers will be required to take half measures on the quality of education just so that they can finish the course on time; therefore numerical intents should be eluded.

•  Remove barriers to pride of workmanship.

      Pride is a solid motivator. Both, students and teachers, should be given the liberty to express themselves and should not always be told what to do, and should not be reprimanded for experimenting or trying something new. When students do well in individual and group assessments, they should be commended and encouraged to keep up the good work. This motivates them to work harder and enhance on their respective skills. Students should not be valued and compared to one another. This negatively affects their attitudes; therefore pride may result as a negative influence on their progress. For example, if student representatives are consulted when making important decisions, they will feel like an integral part of the college and the teaching system which boosts their self-esteem, confidence and enhances their drive towards excellence.

• Institute a programme of education and retraining.

      Once more, what an organization needs is not just good people; it needs people that are improving with education. People will only improve if they continue to consistently expand their knowledge base. Education and self-education should be encouraged for every student and teacher; this will result in a positive outcome on their performance. 

     For example, courses should frequently be updated in keeping with the changing education system, students should study things that are applicable in the outside world, so the curriculum should be updated regularly and students and teachers should be encouraged to study and analyse courses that are related to the coursework. Groups and societies, like the business club or language clubs in the college should be encouraged to instill various set of skills in students.

•   Take action to accomplish the transformation.

      Lastly, management should encourage everybody in colleges or universities in charge of accomplishing transformation. The change begins at the top management and follows through right to the bottom. Teachers should lead the whole class in the drive for improving quality of every single activity by providing the proper encouragement, training, facilities, and time. Management, at every level but particularly at the very top, must undertake the responsibility to work towards a high standard of quality education and show pride in accepting the total quality philosophy. Followed by teachers and other staff to embrace the philosophy of increased quality education and implement on steps of acquiring high quality.

People Management: Financial Benefits & Pay Schemes

Motivation are forces that reflects, directs and makes people endure in their efforts to accomplish their given targets and goals. In accordance to the foundations of motivation theory, people are demotivated by unsatisfied and unfulfilled needs, so in order to motivate a person or employee, the human resource managers of respective companies should identify what the needs of their employees are.

Financial incentives are extrinsic and tangible rewards which are dependent on the performance of the employees. Referring to the motivational theories, there are certain hierarchy of needs which are needed to be fulfilled in order to achieve high motivation in the employees’ part.

This report will briefly identify the hierarchy of needs and how financial rewards and pay schemes effectively fulfill these needs, thereby making the workforce motivated.

HIERARCHY OF NEEDS

The hierarchy of needs consists of five stages of needs proposed by Abraham Maslow in 1943. Figure (below) shows the progression of the different types of needs.

The pyramid progresses from the bottom to the top, with the very basic and primary needs on the bottom and the self-actualization needs at the top. As each need of a worker is fulfilled, it moves to the next level of needs until one has reached self-actualization. However, in the realms and nature of human behaviour, it is said that self-actualisation can never be achieved.

Financial incentives and different pay schemes obtained by organizations aid workers to satisfy their growing needs.

• PERFORMANCE-RELATED PAY (BONUSES)

Performance- related pay, also referred to as PRP, is a method of payment to workers in affiliation to the performance of the employee. Money is paid to workers with how well they work and how productive they are.

This acts as a motivation for workers to increase their level of performance and be more productive in order to acquire these financial rewards. Basic examples of these types of pay schemes are acquired for car salesmen, real estate agents and at times for production line workers.

According to Dan Ariely a behavior economist at Duke University Fuqua Florida School of Business defines bonus as a performance based pay dependent on a superior performance given by an employee compared to his/her co-workers. In accordance to his studies, Dan Ariely claims that performance based pay is effective in situations where a person performing a physical task is more likely to be motivated to produce an increased output for the company, whereas employees who have a cognitive task , such as desk jobs, does not affect output as much.

Franklin Resources Inc, a large global investment organization is a renowned example of practicing this pay scheme. They have set a base pay, which the employees receive on a monthly basis for completing their job duties. Employees are paid a competitive salary, based on the local market and individual competencies and responsibilities. In addition to this, employees who have a stellar corporate and department performance record are eligible to obtain further financial bonuses at the end of the fiscal year. This reward system acts as a catalyst for workers to keep an excellent performance record in all areas of work, thereby increasing the productivity and the success of the firm.

• FRINGE BENEFITS

Fringe benefits are assorted non-wage rewards given to the employees in addition to their basic wage or salaries. These benefits usually are objects which aids the employees in their livelihood and their common welfare. There are numerous examples of fringe benefits which include collective insurances (health, car, life etc.), paid vacations, education funding, family benefits, accommodation with amenities and many more. These benefits catered to workers plays a pivotal role in increasing the morale of the workers, as it increases the financial security of the employees and in doing so, the organizations are successful in improving employee retention within the organization.

Google, the world’s largest online search engine, are highly acclaimed for their long list of fringe benefits that they provide for their employees. From free cafeteria food, annual ski trips to Sierra to free laundry services – Google probably has the best fringe benefit program provided to employees, in the world.

• TIME –RATE PAY

Time –rate pay is a form of pay scheme where employees are paid based on the amount of time they work. This process of pay scheme is usually acquired by smaller companies. It is a common method of wage payment in companies where the workforce consists mostly of hard labor. The usual form of time rate is the weekly wage or monthly salary and usually the time rate is fixed in relation to a standard working week. The main advantage of this method is that it helps employees to budget their finances with more certainty and assurity. But this pay scheme does little to encourage greater productivity from the workers, thereby giving them little or no incentive to achieve greater output.

Examples of companies using this method of wage payment include part-time manufacturing laborers, production line workers, call service attendants and many more.

• PIECE-RATE PAY

Piece-rate pay, also referred to as  a “payment by results system”,  is a pay scheme which gives payment for each item produced by the workers, therefore it is the easiest way for a business to affirm that employees are paid according to the amount of work they do.

This payment scheme is usually acquired by firms that have assembly lines and production line workers. In these firms, it is easy to monitor the performance of the workers on how much products each worker produces and hence find it easy to calculate their wage. Workers’ productivity also increases as they work up to produce more so that they earn more. However, it is highly argued that in this form of pay scheme, workers’ productivity might get high, but the quality of their product might suffer in a negative way.

Examples of companies using this pay scheme are mostly those which have assembly lines as a main method of production. These may include car manufacture companies and various other manufacturing industries.

• EMPLOYEE STOCK PURCHASE PLAN (ESPP).

This is a financial incentive provided by large companies whose shares are traded in the stock markets. It is a corporational plan in which employees of the firm can purchase company shares at a discounted price. The employees assign to this program through payroll deductions, which build up towards the stock purchase date. At the stock purchase date, the company uses the collected funds and purchases shares of the company on account of the partaking employees. The amount of the discount depends on specific programs and can be as much as 15% lower than the market price.

This acts as a strong motivator for the employees as they have purchased shares of the company, they feel more responsible towards their given tasks and work harder to accomplish them, in order to benefit the company and get greater returns from their shares.

Franklin Resources Inc also provides this incentive to its employees. Their Employee Stock Investment Plan (ESIP) caters employees with the opportunity to purchase the company common stock (BEN) at a 15% discount off the original market value.

• RETIREMENT PLAN

Some companies offer a 401(K) retirement plan for its employees. In this program, employees are given the option of saving a little money at a time from their payroll deductions and contributions. When they reach their retirement age, they can obtain this collected sum from the company to have a better financial stability. This provides a safety net to the employees when they come of retirement age, giving them a better life when they will, most probably, remain unemployed.

 Franklin Resources Inc offers these retirement planning options to their employees. Google, on the other hand, allows its employees to contribute up to 60% of their compensation where a single employee saves approximately $2,200 per year. 

• MOTIVATION ?

How important is money as a motivator?  It is widely accepted that poor or low pay acts as a de-motivator.  Someone who feels undervalued or under-paid may soon leave to find better-paid employment.  However, it is less clear that paying people more results in better motivation. 

For most people, motivation (the will to work) comes from “within”.  More money can help us feel better about out work, but it is unlikely to encourage us to work harder or to a higher standard.

So, financial motivators cannot always be reliable in complete motivation, in my opinion. Financial motivators will only make employees hungry for more economical benefits, rather than concentrating on how to improve his work – they might just be more interested in the financial benefits.