Issue 3 2016. June-July



While writing her Master's thesis on organizational culture in Georgian businesses, Tamar Megrelishvili, the executive director of Prospsero's Books and founder of Prospero B, found businesses were struggling to understand the motivational issues influencing people both at work and while applying for jobs.

Tamara Megrelishvili

I became interested in about motivational issues in SME (small-and medium-sized enterprise) culture a decade ago when receiving numerous amounts of job applications at my family-owned business. I noticed that there was an established vulnerability in the Georgian business sector due to a lack of labor resources, wage competition and the market's small size. It was not hard to notice that small organizations were struggling to find the best motivational incentives to reduce employee turnover. Businesses mostly lacked skilled labor and their HR departments were having trouble keeping employees happy while complying with organizational demands. It was clear that Georgian companies needed to understand how to motivate human capital in order to reach their full potential.

A new approach to motivation management

SME sustainability can be improved by implementing long-term labor strategies in Georgia but there is a challenge: gaps exist between Western management principles and Georgian local practices.

The vacancies at Georgian companies are filled by reducing employee turnover and implementing retention programs that do not affect employee motivation or job satisfaction, which is why using Western management methods and theories often fail in Georgian companies. In addition, Georgian managers are not familiar with the root causes job (dis)satisfaction, and public opinion also holds that increasing income or status yields improved performance.

Individualism vs. Collectivism

There are different factors and issues that have had a lasting impact on internal work relationships.

First, Georgian culture does not give extra weight to strategic planning and focuses on current problems rather than future planning at work. A legacy of Georgia's Soviet past is that companies rarely developed future strategies and only deal with the problems as they emerge.

Second, many issues arise in attempting to formulate healthy teams in a manner that disregards individualistic goals. Georgian culture has the natural tendency to build teams, which assign collective interests to individuals as their responsibilities.

Another issue is the tradition of rule breaking and violating disciplinary norms inside of an organization, which disrupts company procedures, policies, and performance. In Georgian society, the most popular manager is the one who fights regulations and allows more freedom.

All of these issues create a complex work environment. It is challenging to identify and apply the proper motivation. But companies that fail to do so struggle to develop to their full potential.

What do Georgian employees want?

Retention programs can help motivate staff to complete tasks that bring extrinsic and intrinsic rewards. For instance, a career is sometimes considered an extrinsic motivation due to (money, rewards, status) but it can also be intrinsically motivating, if it creates enjoyment and job satisfaction.

Extrinsic rewards- both in terms of forms of rumuneration (compensation, benefits, rewards) or benefits (recognition status, merchandise and travel) - are typically used as a scorecard to measure the degree a company appreciates an employee. However, intrinsic motivation can be the most powerful motivator.

Georgian managers put a lot of thought into employee retention strategies but fail to apply different motivations to the different stages of an employee's career. It is important for management to understand what their employees want.

So, what do Georgian employees and managers prefer in the long run? Extrinsic motives (salary, prestige, status) rather than intrinsic motivators (recognition, a sense of accomplishment) due to the economic conditions in the country? Or both intrinsic and extrinsic motivational incentives?

Salary vs job satisfaction

Employee motivations were examined through questionnaires. 172 organizations (161 small-and medium-sized enterprises and 12 large organizations) were chosen from private and public sector organizations.

Also, 3000 job seekers, SME employees and top or mid-level managers participated in this questionnaire. Among them, 81percent were women and 19 percent were men. Nearly half - 43 percent - of the respondents had never worked, while 57 percent had previous work experience.

The interviews showed that Georgian companies focus on extrinsic motives to retain employees, particularly salaries, but that falls short of employees' expectations.

Despite high salary and motivational programs, some managers complained that they could not achieve the engagement level and job satisfaction they desired among the employees, while others noted that focusing on intrinsic motivations at the workplace gave rise to equity issues among employees. This situation is an indication of the imbalance of extrinsic and intrinsic motivations in the Georgian companies: management focused on the rate of retention rather than job satisfaction.

To gain an understanding of their underlying motivations and rationales, the respondents were asked additional questions to have them describe how they view themselves as employees as well as their preferences in terms of team members and bosses.

Out of the young respondents, 22 percent focused on their sociable and communicative skills while 51 percent described themselves as lazy. Mid-level employees said they characterized themselves as responsible and hardworking. They also said they wanted to be part of a "good team" - happy, communicative co-workers with strong internal relationships.

All the respondents wished to work with fair and professional manager with a supportive, good attitude. Other motivators, including those related to "Stable Work", "High Salary" and "Location of Workplace" were in least important priorities for the young potential employees.

This explains several factors that affect Georgian organizational behaviors. First, since Georgian organizational culture mirrors the national culture, Georgian culture requires different human resource techniques and bonus-system approaches.

Second, another aspect that influences Georgian organizations is the cohesiveness of the collectivist culture. Many Georgian employees at SMEs desire to work in a company as a part of "good" teams, and prioritize that over high-salary and stable work. Third, demographic factors and need play a large role in Georgia. The difference between goals and motive depends on age. Senior employees prioritize their financial rumuneration, while Georgian young applicants give priority to being part of a motivated team and place less emphasis on financial reward.

In conclusion, Georgian culture has strong characteristics in terms of masculine, in-group collectivism with significant internal cohesiveness. This factor has a tendency to formulate natural interpersonal relationships. Such relationships propagate group security (stability) rather than the goal of the organization or individual interests. Furthermore, employees view extrinsic and intrinsic motivators differently at different ages. At an early professional age, belongingness and love (as extrinsic) and self-realization (as intrinsic) are the priority; whereas later in their professional development, employees better relate to financial and recognition incentives for motivation. It is a misconception that financial motivation is the dominant factor in Georgian organizational culture. The findings revealed that both extrinsic and intrinsic motivators are equally motivating for employees and valid if used together. Only a strategy built on equal extent of usage of extrinsic and intrinsic motivation can resolve motivational issues in organizations and, in the long run, led to happier and more productive employers and employees.