2.1 Introduction
This chapter is a report of the concerning topic and includes the findings of authorized researchers. This literature review focuses on the influence of motivation on the employees in the banking sector. It explains how motivation affects workforce in the organization.
2.2 Motivation
In (1999), Butkus and Green stated in their research that motivation is the power to carry on for satisfying a wish. According to Martin and Bartor (2003), motivation is an influence to improve work performance and maintain it. These clarifications state that in order to achieve and be sure about their goal. According to a research made by Bulkus and Green (2009), motivation come from the word “motivate”, a push to proceed for fulfilling an objective. According to Kalimullah et al.(2010), motivation involves set of steps that with a person in power will increase efficiency and helps in achieving targeted goals.
Motivation is the behavior, inspiration, initiative of employees to carry out tasks given to them. It can also be described as the process which arise, direct and maintain employee’s behavior in order to complete targeted objectives. Drives are called motives that are the behavior in the process of motivation. Each and every organization has some goals to achieve and these goals can only be achieved by the hard work of its employees. The main issue is to find out what motivates the employees. Motivation is internal to the employees. According to a research done by Berelson and Steiner, “a motive is an inner state that motivates and direct employees towards the goal targeted.” Human behavior is ruled by many factors. An employee is working because he is in need for money. Similarly, a thirsty person needs water to conquer his thirst. The feeling of need is a continuous process and the satisfied need leads to the creation of another need. It is a never ending process.
In organization where there is lack of motivation among employees, we see that many staff have high qualifications but his performance is poor. Keith Davis said that motivation is very important for the day to day smooth running of businesses. No matter how many high tech machinery and equipment there is in the organization, if the employees are not well motivated these equipment and machinery are of no use. It can be said that motivation among employees in the workforce is like the life of the organization, without motivation the day to day running will not be smooth; many problems will arise, and can also lead to the closure of the company.
2.3 Motivational theories and its effectiveness and efficiency:
An organization is a team which has been formed to achieve some specific goals. The main focus of managers will always be to motivate its workforce in order to reach targeted goals as cost-effective and as quickly as possible. Motivation is quite difficult to explain and also to put into practice. Still it is what makes employees productive in their jobs. Many researchers have come up with different motivational theories that can be applied to situations the organization is going through.
Abraham Maslow
Abraham Maslow (1943) provided the hierarchy of needs of people. He believed that there exists a hierarchy of 5 needs within every individual. Every person must satisfy the present level of need to pursue to the next higher level of needs. As the person reaches the next level, the previous needs lose its motivational value. The five levels of needs according to Abraham Maslow are, firstly the basic needs that is the need for food, water and clothes which are essential to survive. If these basic needs are not met then the other higher level of needs will not be a source of motivation for the person. Secondly the safety needs, which refers to the need to feel safe from any physical and emotional harm or danger. Then the next level is the social needs which are concerned with social interaction. It is to feel a sense of belonging, affection, acceptance and friendship. On the forth position comes the esteem need which is the feeling to have been able to achieve something. The self confidence that comes from the recognition and prestige when an employee have done something correctly. Finally the self actualization need is the need to fulfill one’s full potential and dreams. At this stage the person has achieved all that he could need.
The efficiency and effectiveness of Maslow theory is how well it can be use to interpret human behavior and motivate employees. Managers while using the Maslow theory can easily understand their employee’s need no matter on which level. Creating an environment which meets these needs will boost up employees performance and help them to operate at their full potential for the business.
Herzberg two factor theory
The Herzberg two factor theory (1959), according to which there are two kinds of factors that affects motivation and they take effect in different ways. There are the hygiene factors which are decent working conditions, security, pay, benefits and so on. These factors motivate employees when they are absent however their presence has no perceived effect. These are factors that when take away from employees they become dissatisfied and start to work hard in order to get it back. The second factor of the theory is motivators. Its presence motivates the worker to a large extent however its absence has no great effect, it only fails to motivate. So bottom line, we can say that hygiene factors determine dissatisfaction and motivators determine satisfaction. The two are dependent upon each other. According to Herzberg theory, employees are motivated by motivators.
The advantage of his theory is that it looks at factors in general will motivate and demotivate the workforce. The Herzberg’s theory is use to indentify and address broad issues. An example can be; in an environment where the workforce is uncertain about their job security, the theory will identify the problem and help managers to decrease the demotivating effect by reassuring employees and also provide open communication about the situation.
Equity theory
The equity theory focuses on equality among same level employees. Will an employee who gets a raise of 10% be as motivated as an employee that gets a raise of 20%. People’s motivation comes from a ratio of ratios that is an employee compares the ratio of rewards to efforts with the comparable ratio of reward to effort that they think other staffs are getting. The theory is based on the idea that employees are motivated by fairness, and if encounter inequities in the input or output ratios, they will seek to adapt their input to attain their perceived equity. Adam stated that the higher the level of an employee perception of equity, the more motivated he will be. On the other side, if an employee perceives an unfair environment, he will be demotivated.
The effectiveness and efficiency of this theory can be observed by focusing on aspects like achievement, employee retention, new potential employees recruited and so on. The theory looks beyond the employees and takes into consideration other factors that affect motivation. The equity theory is very important tool to managers to access employee satisfaction which is the connection between motivation and productivity. Being treated fairly and equally in an organization helps people to be more motivated at work.
Frederick Taylor theory
Mr. Taylor stated in his scientific management theory that there are four main principals which can be use in a companies.
Collection of the traditional knowledge of the employees, record and codify it.
Proper selection of staff and follow his progression development.
Combination of trained employees and the specific approach.
Enhance group work between employees and management; sharing of the division of labor.
This theory involves the scientific method in management decision-making process. It helps to enhance performance of the workforce in the organization. Taylor stated that workers are motivated by pay. Frederick Wislow Taylor, 1903, shop management research & The principle of scientific management, 1911.
The scientific theory has able to avoid wastage of resources, method of production has been made better to help employees to maximize their performance, tasks are fairly distributed to make the whole workforce to want to work and they do not feel like superiors are imposing unfairly on them. These improvements has been said to be very efficient as it serves the interest of both employers, employees and the society in general.
Victor Vroom expectancy theory
The expectancy theory was created by Victor Vroom which was published in 1964. The theory is base on the concept of expectancy, force and value. The Expectancy theory provides a mechanism for finding out motivation through a formula (M = E * I * V). Every employee has certain goals in their mind so they want to fulfill these goals. These goals can be achieved by organizational rewards so the relationship between goals of employees and organizational is very important and it is the main focus of the expectancy theory (Miyamoto, 2007, p.207).
Many researchers has viewed the expectancy theory as one of the most acceptable motivational theory, as there is sufficient evidence to support the theory. It helps them to motivate their staffs in a better way and more easily. It explain and provides solutions for many of the situations related to employee efforts, work performance, motivation of employees and so on. Another advantage of this theory is that it understands the subjective difference that may create differences in motivating different individuals.
McClelland theory
McClelland said that particular needs of employees are achieved over time as a result of time experience (wood et al.p.146). There are three categories of needs, achievement, affiliation and power needs. The theory provides a clear picture of the company and helps the managers to know which type of job is more suitable for which kind of employees.
McClelland believed that needs were not innate but learned at a younger age which could be developed in individuals. It helps employers to make better decisions of which type of staff to put in various places it has focus on team-work which help staffs to motivate each other.
Among all motivational theories, these motivational theories has proven to be the most efficient and effective ones because all of them has been supported by huge empirical data and has been use since years. Also these theories have proved to be right in organizations making managers’ life easy. With the help of these theories, motivating staffs has become a little easy not like before when motivating staffs was like headache, like a huge burden, an enormous problem. These theories have simplified the process of motivating the workforce.
David McClelland in his acquired theory, stated that an employee needs are shaped by its own life experience and are fulfill over time. Peoples needs can be:
Need to achieve
Need to affiliate with other people
Need for power.
2.4 Ways to motivate employees
The question how to motivate staffs correctly has been a huge problem which management need to take into consideration, as motivation in workforce plays a crucial role to success of companies. Staffs are motivated to do things which are in their best interest. Once they feel that something is in their interest, they naturally feel motivated to work hard.
Managers should be able to work out a truly motivating plan, one that inspires employees to give their best every single day. Motivation can be of two types, intrinsic and extrinsic motivation. It is essential to put in mind that not all employees are same so to best motivate your employees you have to first understand them, and understand the different types of motivation. Different employees need different types of motivation formula as their needs varies. Concerning intrinsic motivation, the people motivated by it will meet any obligation of an area of their passion. On the other part, others will be attracted to extrinsic motivation which is in their mind there is that difficult tasks can be dealt with provided there is a reward when completed.
Intrinsic motivation means that the employee’s motivational stimuli are coming within him itself. Because the results are correct according to his belief or fulfills a desire, it motivates him to work hard and complete the task (Mullins, 2005). Example of some intrinsic motivators:
• Acceptance: being accepted at work, by co-workers may bring happiness and satisfaction that increase its motivation to work harder.
• Curiosity: the desire to know more and more motivates as well.
• Honor: being ethical and respected rules established.
• Independence: the feeling of being unique.
• Power: to be able to be influence over other staffs arouse the wish to work harder to get more power.
Intrinsic motivation is concern with value each employees holds for taking part in various activities (Eccles & Wigfield, 2002). Values are motives for employees to be engage in activities. According to (Eccles & Wigfield, 2002; Stipek, 1996) Values consist of four parts:
Attainment value
Intrinsic value
Utility value
Cost of engagement
Intrinsic motivation is the motivation that is enhance by personal enjoyment, interest and pleasure (Guay et al, 2010). It is closely related to values of the interest of an individual that is the connection between an employee and his working environment (Hidi & Harackiewicz, 2000, p.152). There many researches that have been done which connect interest with employee performance (Hidi & Harackiewiez, 2000) for example have given a clear and powerful explanation on this and the theory has been proven reliable.
Extrinsic motivation is that the desire to perform better comes from an outside source. The most powerful motivators are extrinsic; they have greater impact on employees. The most important, well-known and on which there has been lot of debates is money. However there are many more other motivators which are not less influencing (Mullins, 2005). These are some extrinsic motivators:
1) Financial motivators:
With the recent economic development, there have been major changes in employee compensation. Financial incentives are very popular in the industry nowadays, however they have become problematic due to its advantages and disadvantages. The human resource manager plays crucial role in deciding how good the reward system is in motivating the workforce. Financial incentive motivates people to exert additional effort, which in turn should improve task performance. (Journal of Management Accounting Research, vol 12, 19-64,2000). In nowadays competitive market, financial motivators are deployed by employers to retain and maintain their best hand (Nelson, 2003, p 7-9)
Types of incentive plan:
Incentives for operations employees:
Piecework plans, team incentive plans.
Incentive for executive and managers:
Examples are: Annual bonus, share options, employee share purchase plan, and employee-funded share schemes. Annual bonus is the additional money employees get along with their salary by the end of the year. It encourages both employees and managers to work hard to achieve the firm’s target and improve their personal performance.
Incentives for other professionals:
Examples are: merit pay, incentives for professional employees, rewarding key contributors.
Employee share ownership plans:
It is in which a company gives share of its own stock. The shares are put on the employee name and are given to them on retirement, assuming the employee has worked long enough to earn the ownership of the stock.
Profit sharing:
Profit sharing is such a plan that according to which most staffs receive will receive a share of the company’s annual profits. The firm give a portion of its pre-tax profits to a pool which is the distributed among eligible employees. Each staff’s base salary is taken into consideration to calculate how much money he will get from the pool. This is done generally on an annual basis. It help employees to focus more on the profitability of the firm. Also enhance commitment of workforce towards the organizational goals.
2) Non financial motivators:
The banking sector uses the non financial incentives also to motivate its employees. May researcher have made research to evaluate how effective is non financial incentive on motivating employees. Example of non financial ways to motivate staffs:
Job enrichment: It a way to motivate employees by giving them more responsibilities which in the past was only for higher ranking officers, by these mean employees gets greater job satisfaction and feel important in the company (vroom, 1964: Swinth, 1971).
Employee recognition: It is a return on employee’s efforts which can be praising good work or saying simple things like thank you for this excellent job (Stajkovic and luthans, 2003)
Pay equity: This is to eliminate discrimination within the organization, this motivates employees as their sex, and skin color and so on does not affect anything in their working environment (Time of equity at work, ILO, 2003)
Good managerial skills of superiors: It can be managers giving best guides, managers with good communication skills, does not hide anything, in a way it motivates the workforce as staffs feel important to the company and are being understood by their superiors.
According to a research (Journal of Management Development, vol.19, page.733-763,nov 2000), there were sufficient evidence to say that salary and financial benefits was, at the very least, a motivation enhancing factor concerning the huge success of non financial incentives. The study has shows that by boosting job satisfaction through job enrichment, employee recognition, internal pay equity and use of skilled managers, firms can motivate its workforce to a very large extent and achieve all its targeted goals.
2.5 Impacts of demotivation on companies
Finding out signs of demotivation is not always easy for managers. However if carefully observe the workforce in action you will certainly be able to find out who is demotivated in your workforce. Demotivation can be very dangerous for the organization as it may decrease overall productivity with time thus go towards loses.
Demotivated employees may in turn demotivate other employees who were motivated to work. They will spread negativity around them. Their low level interest in their own goals breeds discontent in them, which pushes them towards frustration. Demotivation is a package that comes with bad views for positivity and has to spread it around. The demotivated employee may think be it sharing their woes with other staffs. Normally we become who we are surrounded with. In very little time the demotivation will slowly start percolating down to others as well.
Loss of productivity is one which is easy but how do we recognize it? The trends of output over couple of weeks or months have to be observed. If it has constantly being decreasing, it shows a sign of demotivation in the workforce (Expectancy theory, Tolman, 1932 & Vroom, 1964).
No visible sign of fun among employees in the workforce is also a hint for demotivation. If your workforce is gloomy, sad and there is no laughter that you can hear from a distance, it may be an indicator that the moral of employees is down. If they are not enjoying their jobs, they will feel demotivated thus there will be a decrease in level of quantity and quality (2009 employee job satisfaction).
Absenteeism and labor turnover is one of the most common symptoms of an unhappy workforce. It is said that if a considerable amount of staff has left the organization within the average period of month to 2 years, it is a sure sign that employees are not satisfied and are moving on.it is very frequent nowadays, if you are demotivated in your work, you take long eaves or frequent absenteeism in order to take a break. The management cannot force workers to come to work however it can arouse the want within them itself to come to work every day (Shawn Doyle’, The manager’s pocket guide to improve employees’ motivation).
Not wanting to improve anymore is also a clear sign of demotivation. A well-motivated staff will want to improve its skills without the management organizing training sessions for them. They will always try to find out new ways to learn new things and increase their knowledge enhance their knowledge. They will try to bring in new challenges and avoid monotonies by becoming better themselves. Demotivated staff will find improving as being a problem, loss orders and so on (Federick I. Herzberg, 1923- 2000).
It may also create bad publicity among employees which in turn will result to a workforce not interested to work.
2.6 How to overcome demotivation
Motivation is said t be the backbone of an organization. The main reason for a happy and productive firm is motivation. Demotivation in employees or within workforce can be very harmful for the company, so it has to be overcome. It is the task of managers to eradicate demotivation.
What can be done by managers to overcome demotivation?
Be there, give your staffs proper attention and get involve in their daily activities, show them that you are always here to help them in case they encounter difficulties!
Try to listen to the told and untold of the employees. Observing body language of staff can provide you with lots of information, about the atmosphere in the company, read it and do the needful, if it needs corrections.
Encourage teamwork
Teamwork can help in encouraging staff to work happily. It makes tasks become fun to work on with other employees as friends. Group work enhances better productivity as they got motivated to work better due to pleasant competition among friends.
Appraisal, praise and encourage
Simple words of encouragement, praise make the employee happy as he has done his tasks correctly and also motivates him to work hard each time in order to get this praise.
Acknowledge and appreciate good jobs
`Acknowledge a good job by an employee make him feel like he has achieved something and this also boasts his morale.
Help employees, decrease their problems
While helping an employee, you help him to focus only at his job as he will no more have any tension bothering him. It makes life simpler and better for both the staff and the organization. He will deliver his maximum and in a way, he will try to return the favors to the company by working hard.
2.7 Empirical review
A research done at the Credit West Bank Cyprus:
This research was carried out to see what are the impacts of monetary and non-monetary incentives motivation its workforce and how effective each of them are on employees. The non-monetary incentives motivation includes: recognition, challenging work, advancement and opportunities, job security, job autonomy, prestigious job titles and responsibility giving to employees to motivate them. The monetary incentive motivation involves: Fringe benefits, salary, monthly or annual bonuses, pensions, profit sharing among high rank staffs and performance pay. Working out the impact of each of these incentives on workforce’s performance from the data analysis and interpretation, the conclusion was as such: If managers should be able to understand the basics of motivation and the theories that elaborate the concept of motivation. Managers should try to gather the important components of motivational theories such as Maslow’s pyramid of needs, and Herzberg’s theory and try to truly understand their employees. It is only by applying these concepts that they can hope to effectively bringing about continuous high performance in the workforce. The research and its results, and interviews have given us some valuable clarity into motivation and its impact in the workplace. Managers should provide growth opportunity and challenging jobs in order to motivate workers more effectively. When not providing these challenges and opportunities for growth, the staffs in the workforce may not see the necessity to perform highly at work. According to the research, it can be said that employee work recognition plays a major role in employees’ motivation and has been proven that it is a very effective motivator. Workers want and need to feel that their contributions make a difference in the organization and towards the organizational goals and recognition is one way to fulfill their wants or needs.
Our research has certify that the use of non-monetary incentives can be a very effective and economical way to motivate employees in the organization, and the majority of our research respondents agree with this statement. To sum, we can say that while trying take out the best performance out of employees, managers should provide growth opportunities and job concerning challenges, performance recognition and non-cash rewards is said to be more effective motivators than monetary incentives motivators.
The Impact of Motivation on employees performance thus organizational Performance (A Study Of Some Selected Firms In Anambra State Nigeria)
The importance of reward in everyday performance of workers duties cannot be focus too much, especially when employees has to be rewarded for every task they do. It has been certify by many researches that employee performance is improved by increase in motivation by managers. According to the findings of this research, it can be easily explain that workers rewards matters a lot to them and should be a concern of both the employers also. The result of the study obtained from the variables says that the different rewards given by employers have great value to the eyes of employees. So, when rewards are not given to employees, workers express their negative feelings through poor performance and non-commitment to their job and to the organization. It is therefore important for the company to take into consider the needs and feelings of its employees and not just ignore them in order to safeguard industrial harmony, because it is said that the more the employees are happy the more productive they will be. Having focus on the power of a decent remuneration policy on the performance of workers and the different method of rewards that can motivate employees to better to their job, this study calls for employers sense of commitment towards its workforce to put in place an effective incentive plan that will push workers to be more purposeful and improve their performance.
A study in the banking sector of Pakistan:
A research was done in the banking sector of Pakistan in 2011, about the influence of motivation on employees. A 103 questionnaire sample was used for the analysis. The results clearly showed that there is a significant positive correlation of 0.287 between motivation and employee performance (Muhammad et al, 2011).
A study conducted by Eisenberger and Rhoades mention that factor like good performance, high-self determination and performance reward expectancy to a large extent motivates employees. However Mayo (as cited in Riley 2012) said that in the theory of he has ignored the social needs of employees. But Tella et al discuss that the incentive system introduced by Taylor enhance employee performance, dedication and contentment. Being against Taylor and for Mayo, Al Harthy (2008) proves that motivation enhance by appreciation has toke over salary and benefits. In the same way, Wuand chen (2010) discuss that encouraging work environment is the factor that makes work interesting. Concerning motivation itself, Tella et al considering Abraham Maslow’s theory declares that motivation is what encourages employees to work better and harder. According to Adewunmi, Omotuyole and John (2011), motivation is the push that focuses employee efforts towards an specific goal. Meija et al (2004) stated that manager should have a good understanding about motivation of employees as if not properly motivated, employees will not be productive.
With the help of these empirical informations, we can say that both intrinsic and extrinsic rewards are important in organizations in order to motivate employees. Motivation is what influences employees in an organization to perform better and be effective towards the company.
2.8 Conclusion
“A company is only as good as the people it has” (Youssef, et al,2012.sec1.1). Good people in our context are motivated and productive people. Motivation is what makes a company’s function perfectly but however like everything it has its advantages and disadvantages, motivation also has. Its advantages if we manage can become the strength of the company and its disadvantages if well tackled, the firm can minimize its impacts. It is the function of managers to handle delicate issue called motivation.