Summary: AIG is an American financial company. It is in financial turmoil.

It is facing heavy losses and Govt has given a bailout package for the company as well to rescue this company. This case4 study deals with the motivation and commitment of employees shown in the time when it is on the verge of bankruptcy. Management is planning to shut it down slowly and for that purpose it has made an agreement with employees to keep working in the company and get retention bonus as a reword.s 1. What types of work behaviours did AIG intend to encourage through its retention bonus plan American International Group was facing financial losses in its financial product unit. It was on its knees and dying when American Govt bails out a package to rescue AIG. In !!" company decided to shut down slowly and for that purpose company asked its employees to remain in unit and work for the company. They will be given retention bonus and these will be honoured as well. #ompany used motivational techni$ue for employees to keep working in the company which was bearing financial loses. %ecause money is the most important thing for an employee. It is the part of internal motivation. Internal motivation for fulfilling necessary needs that Moslow has discussed in his theory of needs as well. This financial motivation was highly in favour of employees encouraged their committed work behaviour. Through this internal motivational techni$ue affected the work behaviour in working value sense. &mployees had been working in AIG since long and now company is in trouble. 'o employees also giving value to the company and want to contribute when it is in financially at the verge of bankruptcy. This work behaviour has been e(plained by cognitive process theory of motivation. !. Which needs seem to be important to the employees of AIG"s #inancial $roducts unit )hen *bamas administration and American public was annoyed on the policy of the company of high retention bonuses even in the time loses. #ompanys management decided to ask employees to return half of their bonuses to the company. This may cause employees to face retaliation from groups against this announcement. This was the time when safety need was the most important to employees who were ready to return their bounces. +eason behind other group who was not willing to return their bounces retaliate and sent emails to employees who returned their bonuses. &ven children at schools were abused. Along with this some of employees were so much in trouble that they kept their identity unknown. Therefore safety and security needs are most important. 'elf actualisation also played its part when they decided to leave half of the bonus. Giving moral support to the business unit as well.

%. &sing the model of the individual'organi(ational e)change relationship* e)plain the relationship that employees of AIG"s #inancial $roducts unit believed they had with the company. +ow was this e)change relationship violated According to ,-elson. /. And 0ames. 1. !2 3 relationships are either committed or calculated. In committed relationships there is no demand from either party. It is mostly n religious cases. %ut in calculated relationship each party demands certain things. Therefore social e(change theory is the best way to e(plain this give and take relationship. In AIG case company is facing and financial crises and management ask employees to keep working for the company and its mission and goals retention bonus will be constituted in response of their effort for the company. &mployees had this e(change relationship in which company demanded their skills and efforts and employees contributed that for the AIG. In e(change of this company will pay retention bonus to employees. %ut when *bama administration and American people outraged retention bonus policy of the company management had to for cut half bonuses. Mostly employees in companys trust and affiliation returned their bonuses. %ut some employees resigned. They thought that they have been treated unfair ,-elson. /. And 4ames. 1. !2 3. Therefore commitment was not fulfilled by the company and this relationship was violated. ,. Which motivation theory do you think has the most relevance for understanding the responses of the #inancial $roduct employees to the implementation and unravelling of the retention bonus plan -)plain the reasoning behind your answer. According to ,-elson. /. And 0ames. 1. !2 3 motivation deals with achieving goals and completing ob4ectives to fulfil the mission. Motivational theories can be categories in three different categories like internal. e(ternal and process ,ibid3. There are different theories like Maslows theory of needs. &(pectancy theory and different other theories of motivation. *ur AIG case study deals with different motivational theories. It is a mi( of different motivational theories. 5ike internal category of motivation contains elements of Maslows theory of needs. )hen employees faced retaliation. At that time safety and security needs were important. %ut in my mind e(pectancy theory of motivation is most relevant for understanding employees motivation of AIG. 'ince they need to make effort and perform and contribute to the company which was facing financial crises. )hen company asked for return of bonus this made employees restless and resign from the company. 'ome of them shown commitment and others were demotivated.

.. /he amount of compensation earned by e)ecutives0as well as by professional athletes and famous actors1actresses and musicians0often sparks emotionally charged debate. 2o you believe the 31 million plus retention bonuses received by seventy'three employees of AIG"s #inancial $roducts was e)cessive Why or why not 6es of course it was e(cessive amount despite the fact that company is facing huge losses. In !!7 company faced financial losses in its investment unit along with soured trades of the company in addition to its collapse. It paid 8 29:m for retention bonus despite loses. *bams administration had to accept a bailout package for its rescue. In !!; and !!" despite the paper lose employees were paid bonus of 8 4 <m. Therefore we can say that retention bonuses received by seventy=three employees of AIGs >inancial ?roducts was e(cessive. 4. What would you have done if you were one of the seventy'three #inancial $roducts employees who received a retention bonus of 31 million or more -)plain the reasoning behind your answer. As an employee I would rather return the bonus to prove my commitment with the company. loyalty for an organisation that paid me when it was in financial crises. -ow it is my turn to help my organisation. I will prove a commitment in its real sense.

Reference: Nelson, D and James, Q. (2012). Organisational Beha io!r: "cience, #he Real $orld and %o!. &th 'd. (engage )earning.