Monday, 5 September 2011


Factor analysis is a statistical method used to describe variability among observed variables in terms of a potentially lower number of unobserved variables called factors. Factor analysis searches for such joint variations in response to unobserved latent variables. The observed variables are modelled as linear combinations of the potential factors, plus "error" terms. The information gained about the interdependencies between observed variables can be used later to reduce the set of variables in a dataset. Factor analysis estimates how much of the variability is due to common factors.

Factor analysis originated in psychometrics, and is used in behavioral sciences, social sciences, arketing, product management, operations research, and other applied sciences that deal with large quantities of data.

Factor analysis is also extensively used in the domain of human resource management. It can also be used to identify the work motivation and the job satisfaction dynamics in the employees in an organisation. Factor analysis can help to analyse the effectiveness of psycho – social, economic, organisational and managerial tools over individual’s motivation and the job satisfaction of the employees in the business.

The four factors that are instrumental in determining the perceived level of motivation are:

1. Organisational and managerial tools:

Employment of tools of development such as training, courses, etc. Maintenance of participation into decision making processes, sufficient sensitivity of the management towards the problems about work, sufficient sensitivity of the management towards the problems of the employees, the existence for opportunities for promotion, fairness of rewarding and punishment.

2. Psycho-social tools:

Sufficient appreciation of human being and respect for private life, existence of exposure to negative factors such as noise, brightness, radiation or smoke rising,

3. Economic tools

Fairness of waging system, use of rewarding success and fairness of promotion system

4. Tools for maintaining balance between authority and responsibility:

Fairness of benefiting from opportunities such as training, courses, etc. having returns for overtime, application of a policy of assigning more authority, responsibility and independence

Managers may apply to encouraging their employees by monetary awards when they act in the way expected from them. The effect of such awards is still limited like other motivating tools and they may be useless or even become a damaging factor in the case that they are not used carefully and in a fair manner or not individualized sufficiently. The function of economic awarding used by many enterprises today in various ways in motivating people cannot be denied. However it is seen that appeal to the motivating economic tools and expecting from them more than needed does not seem to result in success very much. Therefore, in planning rewarding, encouraging economic tools should be employed in accordance with employees’ needs. In fact, there are ways of increasing employees’ work motivation and satisfaction other than monetary tools.

Today people spend most of their lives in business organizations and satisfy many of their material social and even sentimental needs at these organizations. Therefore, members of the organizations become more dependent on their organizations in satisfying some of their needs. Social security and retirement plans invented to prevent people from being negatively affected by this dependency should

include various forms of economic protection that would provide life-long revenue such as retirement, or accident, disease, life and unemployment insurances. However it is possible for organization managers to shape these tools into more useful forms and employ them as tools of motivation. Opportunity of retirement under better conditions, more convenient health security, paid or unpaid vacation opportunity offered without any problem when necessary, food, fuel or child aids and other similar tools that would render the enterprise more attractive compared to others contribute to the personnel’s sense of satisfaction from job and safety.

Group- HR1

Author- Bithi Ghosh

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