11 October 2012 | Ray Carter
Ray Carter aligns Maslow’s ‘hieracrchy of needs’ with the buyer/supplier relationship to see what can be learned.
The CIPS syllabus highlights that contractor motivation is a critical success factor in relation to the effective management of contracts.
The level four Managing Relationships in Purchasing and Supply syllabus devotes 30 per cent weighting of marks to the importance of “positive relationships with suppliers”. To that end, I have adapted a well-established management motivational model – namely Maslow’s ‘hierarchy of needs’ – and put it into the context of a buyer/supplier relationship.
A key element in the development of positive relationships is understanding the motivations of your suppliers and contractors, and what follows will attempt to provide a framework to facilitate that understanding.
As most of you will know, the basis of Maslow’s model is that a need results in the action to satisfy that requirement. Therefore to enable the individual to perform at a higher level, their needs have to be first satisfied. He classified these requirements into two areas, ‘lower’ and ‘higher’ needs.
I believe we can apply this same logic to the motivation of contracting organisations and that by identifying and meeting these needs we can ensure the success of the contract.
Focus of attention
The other important aspect is that as a hierarchy of needs, once a lower-level need is satisfied, the next level of needs becomes the focus of attention.
In Maslow’s model, the first and most basic needs are defined as ‘physiological’. This could be said to equate to prompt payment of invoices. No matter how interesting the work is, the contractor needs to get paid. Failure to pay the contractor on time will divert their attention from the core activity.
The second level of Maslow’s hierarchy concerns the need for individuals to have a sense of security, and without that security they are less likely to be focused on the task in hand.
Anyone who has experienced a major change project with the uncertainty that brings will no doubt identify with this lack of focus.
We can put the same sense of a need for security into the context of a supplier where the threat of contract termination hangs above it, or indeed simply being on a short-term contract. This need for security by the contractor can be provided by the buyer by implementing a longer-term contract.
Social need
The next level in Maslow’s hierarchy relates to the need of the individual to feel part of the team. He calls this the ‘social’ need.
In the context of contractor motivation this need could be meet by the inclusion of the supplier in activities like sporting events and away days, or sharing facilities with them, such as catering.
Maslow then moves on to the ‘higher’ needs. With these he is referring to recognition of achievement and a valued contribution by the individual.
In the context of a supplier’s motivation, recognition is also an important contractor need that, if met, can dramatically boost performance.
This need can be met by the use of public statements of recognition of their added value and contribution, alongside more traditional five-star contractor rating systems and yearly supplier awards ceremonies and programmes.
But you must take care not to demotivate the less-than-successful contractors when you use these.
Value adding
Once these levels of needs have been met, then the supplier will be able to perform as a ‘value adding’ contractor, displaying attributes such as innovation, flexibility and responsiveness.
This approach to contractor motivation is not directly related to any financial incentives and the cost to the purchaser’s organisation is relatively low, compared with the potential added value that could be created.
3 Key points
1. Pay on time Prompt payment is a ‘first and basic need’
2. Give security The need for security could be met by longer-term contracts
3. Teamwork Include suppliers in social activities or share facilities
☛ Ray Carter is director at DPSS Consultants
