A Study of Employee Motivation at the Standard Chartered Bank of Kenya

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Running head: MOTIVATION OF EMPLOYEES AT THE STANDARD CHARTERED BANK

OF KENYA

A Study of Employee Motivation at the Standard Chartered Bank of Kenya

DHR 301: Organizational Behavior

Term-Paper Assignment

Kiumba John Irungu

D33/2749/2013

University of Nairobi

Lower Kabete Campus

School of Business

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MOTIVATION OF EMPLOYEES AT THE STANDARD CHARTERED BANK OF KENYA

Table of Contents

Introduction to the Organization and the Topic…………………………………………….....4

1.1 Background to Motivation…………………………………………………………….………4

1.2 Banking Industry in Kenya……………………………………………………………………5

1.3 Standard Chartered Bank of Kenya Limited………………………………..…………………6

1.4 Statement of the problem………………………………………………………………….…..7

1.5 Objectives of the Study……………………………………………………………………….7

2.0 Explanation of Various Concepts about Motivation………………………………………8

3.0 Theoretical Perspective of Motivation..........................................................................…...11

3.1 Frederick Taylor Theory of Scientific Management…………………………………….…..11

3.2 Abraham Maslow’s Theory of Hierarchy of Needs…………………………………….……11

3.3 Herzberg’s Two-Factor Theory………………….…………………………………………..13

3.4 Self Determination Theory…………………………………………………………………..14

4.0 Method of Data Collection…………………………………………………………………14

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5.0 Practical Application of Motivation of Employees at the Standard Chartered Bank of

Kenya……………………………………………………………………………………………15

5.1 Factors that motivate employees of the bank…………………………………………….…..15

5.2 Factors that motivate employees to desire a longer stay in the bank/Retention

factors………………………………………………………………………………………….…15

5.3 Factors that may make an employee of the bank to desire to leave the bank………………..16

6.0 Strengths and weaknesses of Motivation in the Standard Chartered Bank of Kenya…17

7.0 Conclusion…………………………………………………………………………………..18

References…………………………………………………………………………………….....19

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INTRODUCTION TO THE TOPIC AND THE ORGANIZATION

1.1 Background to Motivation

Employees motivation is one of the challenges that modern managers have to cope with.

Ensuring that people do what they do best is not such an easy task. Keeping employees

motivated calls for deeper understanding of the needs of employee and some of these needs are

not so clear to the managers. Therefore, managers have to face a dilemma of identifying what

each and every employee needs, not by use of a catalogue listing requirements of every

employee, but absurd enough, through observation (Nohria, Lee & Groysberg, 2008). Despite

how difficult it is to understand employees motivation, managers have to struggle and adjust

constantly if they have to get maximum productivity from the workforce employed.

Employees motivation entails primarily getting workers to do their best. However, the

traditional use of motivation, which was to get employees to perform at their maximum

productivity, is quickly changing. Motivation has also become especially important in ensuring

corporate citizenship. Modern business environment is characterized by stiff competition and

technology changes that have a changing effect on what matters for a given employee. Therefore,

in keeping their employees motivated, employers need to understand that employees cannot be

kept in the firm by a limited portfolio of motivating factors. Contrariwise, employers need to

come up with diversified and dynamic employees motivating factors if they have to retain their

talented employees. Though many organizations use money related benefits to keep employees

motivated, there are other myriad of things that make a job more interesting. Some intrinsic

factors like promotions and job enlargement are crucial in not only motivating an employee but

also in ensuring corporate citizenship.

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Employees motivation and retention is especially important since corporate success cannot

be achieved without a committed workforce. Employees form the significant part of the

organization. Therefore, keeping them interested in their job, and most importantly in the firm, is

a delicate matter. Today’s organizations are using employees motivation as a tool for competitive

advantage. The competitiveness in keeping employees motivated comes from the fact that if an

employee is happy, the customers will be served well resulting to customer satisfaction and

loyalty. Additionally, a well-motivated employee is likely to engage in activities beyond the

scope of the job that are beneficial to the firm (Nohria, Lee & Groysberg, 2008)

1.2 Banking Industry in Kenya

Kenya’s banking industry has been experiencing exponential growth in the recent past. There has

been a significant and noticeable change of the way banking was conducted for about a decade

ago. Every bank has been moving in a direction of ensuring customer satisfaction and leaving the

old practice of banks concentrating on diversifying the products they offer at expense of

customer satisfaction. By the end of June 2012, the industry had forty three licensed commercial

banks, one mortgage finance company, six deposit-taking microfinance institutions, five

representatives of foreign banks, a hundred and fifteen foreign exchange bureaus and two credit

reference bureaus (CBK, 2012). With this kind of number of firms within a given industry, stiff

competition is clearly inevitable. Any firm that intends to continue operating profitably has to

position itself as a competitive bank. To be competitive, the banks need to learn how to motivate

their employees since this is a very delicate matter when competitiveness is concerned. If any

bank makes a mistake of failing to keep its working environment desirable, it will become a

breeding ground for employee turnover. The impact of employee turnover will be reduced

customer satisfaction hence the banks will be losing their customers to the best banks. The

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reduction of customer satisfaction will come from the fact that if employees come and exit the

organization within the shortest time possible, they will hardly have enough time to know the

specific customers’ needs in order to serve them better.

1.3 Standard Chartered Bank of Kenya Limited

The Standard Chartered Bank of Kenya Limited was established in Kenya in 1911 in

Mombasa. One hundred and one years later, the bank has grown to 33 branches countrywide,

ninety six ATMs and 1698 employees. The bank is committed to better service to their customers

and continued existence in the business. Besides that, the bank boasts milestones like being the

first bank to receive ISO 9002 certification in technology system in Kenya, introduction of the

first ATM, introduction of corporate section for affluent customers and being the first bank to

use photo debit card. The bank also was the first to introduce mobile top-up system, unsecured

personal loans and Banking Business Solutions for their corporate customers.

Apart from the milestones above, the bank has also received a forest of rewards in

customer satisfaction, corporate governance, best foreign bank, consumer internet banking and

foreign exchange. Other rewards received by the bank include Green Building Recognition,

Financial Reporting Excellence, Best Bank in Kenya for three consecutive years (2010, 2011,

and 2012) and a reward in Corporate Citizenship. The bank has also been recognized as the most

respected bank in East Africa, as the bank with the most promising new products, and was

awarded the best internet bank in 2007 and 2008 (Standard Charted Bank Of Kenya, 2015).

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1.4 Statement of the problem

The topic of motivation has been studied at great length with a myriad of theories trying

to explain this concept. However, in the organizational settings the aspect of motivation of

employees has not taken the serious it should as many organizations still cling to the notion that

the main employee motivating factor is money. However, this is about to be proven otherwise. In

the recent times, there has arisen a problem of organizations trying to downsize thereby resulting

to layoffs of many workers. Many organizations have after downsizing found that there is less

employee loyalty and higher rate of employee turnover, something that has made human

resource management even more complicated. The impact of the above actions is normally

reduced employee productivity, dwindled corporate citizenship, and loss of promising and

talented employees (Nyamekye, 2012).. It is against this problem that this study is on based and

be will trying to address the above problems at a length.

1.5 Objectives of the Study

The main motive of conducting this study this to find out how the motivation is employed at

the standard Chartered Bank of Kenya. The study will also extend to look at the effects of

motivation on employee retention. The main objectives can be summarized as below:

I. To find out the factors that motivate employees within the Bank

II. To find out the factors that motivate employees to stick to the bank

III. To examine the factors that are likely to make employees desire to leave the bank and

IV. To recommend to the organizations what they need to do to ensure a longer stay of

employees within their organizations.

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2.0 Explanation of Various Concepts about Motivation

Motivation can be termed as orienting a person’s behavior to a specific and desired goal.

Motivation is applied in many areas but in organizations, that is where its application is of

importance to learners and managers. The purpose of motivating employees is to ensure that they

perform their work, not at the satisfactory level, but to the highest level possible and with

maximum productivity. The purpose of motivation does not end with job performance only, but

in an organization, motivation is needed to ensure that employees are loyal to the firm and are

willing to stay longer.

According to (Nohria, Lee & Groysberg, 2008), no matter the direction or approach used in

motivating employees, the motivation process will be centered on four drives. These drives

include:

I. The drive to acquire

A person normally works to acquire something in life, be it basic commodities like

food, shelter and clothing or get recognized or promoted. In the workplace, this is not

exclusive. Employees report to work daily with the expectation of getting a salary at the

end of the month so that they can manage to settle their bills. If employees cannot acquire

what they want in an organization, they will tend to be dissatisfied. This is in agreement

with Herzberg Two Factor Theory that extrinsic motivators leads to dissatisfaction when

they lack in an organization. This drive is better catered for by organization’s reward

system containing factors like salary and other fringe benefits, better performance

recognition, and promotions.

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II. The drive to bond

Employees are social beings as other people and animals are. Therefore, in the

workplace, they need to feel appreciated and be made to feel that they are part of the

organization. When this need is met, there is creation of environment full of care and

regard for others. When employees view themselves as part of the organization, they will

extend their care more to the organization than the employees sub-grouping found within

the organization. In the contrary, when there lacks a sense of belonging within the

organization, the employees are likely to be always at loggerheads with each other and

less loyal to the organization. The drive to bond can be catered via building a strong

culture of comradeship and a family like bond within the organization.

III. The Drive to Comprehend

This drive entails desire to make meaningful contribution to the environment around

us. In the workplace, this desire is met by giving employees challenging tasks that can

contribute positively to the organization success. Challenging jobs present the employees

with an opportunity to learn new things and expand their portfolio of skills which in turn

make them marketable. If an organization’s job is saddled with monotonous work,

talented employees will exit to seek challenging jobs in other firms. To deal with the

desire to comprehend, organizations should come up with job designs that make the job

challenging, interesting and meaningful.

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IV. The Drive to Defend

People are always ready to defend themselves, their properties and achievements,

their ideas and beliefs against any imminent external attack. This fight to fight tendency

in humans may be manifested through aggressiveness or defensive behavior. In the

workplace, the drive to defend comes in areas like organizational justice. When

employees fulfill the desire to defend, they feel secure and confident. These drives are

catered for in the organization through fair treatment and job security. When they lack in

an organization, there is a tendency of employees being resistive and fearful which causes

demotivation. To satisfy the drive to defend, organizations should inculcate a

transparent, fair, and trustworthy resource allocation process. Additionally, supervisors

should not excessively control employees action but should give employees room to

control most of the actions exclusive to their jobs.

Employee retention can be termed as opposite of employee turnover. Employee turnover

refer to the probability that an employee is likely to leave the organization. The factors that affect

employee retention are intertwined in the motivational factors. In particular, intrinsic motivators

like promotion, recognition, training and development are very crucial when an organization

want to retain especially talented employees (Sukriket, P. 2015).

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3.0 Theoretical Perspective of Motivation

This paper is based on various theories that try to explain the aspect of employee

motivation.

3.1 Frederick Taylor Theory of Scientific Management

In his theory of scientific management, Taylor argued that employees are mainly

motivated by money. He saw workers as economical beings mainly motivated by monetary

benefits. Taylor opined that if you want to make an employee more productive, you need to add

the amount of monetary rewards that the worker is getting.

3.2 Abraham Maslow’s Theory of Hierarchy of Needs

In his theory, Maslow viewed people as wanting beings whose wants never ends and that

what they desire depends on what they already have. He arranged people’s wants in five levels

according to their perceived level of importance. He outlined the needs as follows:

Physiological Needs. These needs are physical in nature and are always unlearned

(primary wants). They include need for water, food, shelter among others. They are

referred to as unlearned because they are required by every person no matter the level of

education or exposure. In the work setting, these needs are achieved by employees

through salary or wages and pleasant and safe working conditions.

Safety needs. These needs are required by people since many people, if not all, have a

tendency to desire an environment that is predictable and has fewer threats.

These needs include safety and security, freedom from pain or threats as well as

protection from physical attack, danger and need for orderliness. In the workplace, these

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needs are achieved via job security and other fringe benefits like medical scheme,

insurance schemes and pensions.

Social needs/love and belongingness. These needs include desire for affection, sense of

belonging, social activities and friendship. These needs are catered for in the work place

through informal work groupings, having friendly coworkers, joining clubs and social

groups.

Esteem needs. These needs include self- respect and esteem of others. Self-respect is

achieved through desire for confidence, strength, independence and freedom as well

achievement. On the other hand, the esteem of others includes desire for reputation,

prestige, and recognition from others. In the work setting, the said needs are attained

through promotions, merit pay increase, high job status, less direct supervision, and

delegation of authority.

Self-actualization needs. These needs entails realization of one’s full potential. On

achieving this need, an individual feels accomplished and satisfied with one self. In the

workplace, this need is met through tackling challenging assignments, training and

development opportunities, achievement in work, and career advancement.

Maslow argued that, people will start to satisfy a low level need before proceeding to the other.

That is, when, for example, physiological needs are satisfied, they become irrelevant and the

person will now continue to the next need, security needs (Mullins, 2005).

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3.3 Herzberg’s Two-Factor Theory

Herzberg argued that there exist two set of factors that affect employee motivation as

follows:

Hygiene factors. The conditions contained here include type of supervision, pay,

company policies, physical working conditions, relationship with co-workers, and job

security. These conditions are also referred to as extrinsic motivators as they are not

directly related to the type of job. If they lack in a company, they cause dissatisfaction

hence they are also referred to as dissatisfies. According to Herzberg, these factors are

necessary to ensure that an employee reports to work daily and performs at minimum

level. The hygienic factors of this theory can be traced back from the Abraham Maslow’s

Theory of Hierarchy of Needs among the low level needs (physiological, Safety, and

Social needs).

Job Related Factors such as promotional opportunities, personal growth opportunities,

recognition, added responsibility and achievement. These factors are referred to as

intrinsic motivators as they are directly related to the job (Work itself). These factors

are also called motivators. These factors are necessary in providing energizing and

directing effort and behavior above minimum levels (Mullins, 2005). The factors that

Herzberg viewed as motivators are also seen in the high level needs of the Abraham

Maslow wok (Esteem and Self-actualization need).

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3.4 Self Determination Theory

The theory proposes that people prefer to feel they have control over their actions.

Therefore, anything that makes previously enjoyed task more of an obligation than a freely

chosen task will undermine motivation. Simply put, the theory proposes that organizations

should employ democratic type of leadership and supervision so as to make employees feel

independent, trusted, and respected so as to motivate them. The theory implies that extrinsic

rewards can improve intrinsic motivators if the organization uses extrinsic motivators while

allowing employees to control their behavior. However, if the organization uses extrinsic

rewards coercively, this scenario will lead to demotivation (Gunnell, Crocker, Mack, Wilson &

Zumbo, 2014).

4.0 Method of Data Collection

Data for the study was sourced from both primary and secondary sources. Through the

administration of questionnaires and direct interviews with some employees and interns of the

firm, primary data was obtained. The sample chosen centered on senior and junior employees of

the company. For secondary data, website was the source used.

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5.0 Practical Application of Motivation of Employees at the Standard Chartered Bank

of Kenya

According to the findings based on objectives of the study, it is evident that the management

of the Standard Chartered Bank has an in-depth understanding of the aspect of employees

motivation. The following are the finding based on objectives of the study.

5.1 Factors that motivate employees of the bank

The employees stated that the following factors made them feel rejuvenated in their place

of work, stated in the order in which the employees viewed them as important.

- Salary and other fringe benefits

- Job security

- Training and development opportunities

- Appreciation and good relationship with co-workers

- Respect and fair treatment from supervisors

- Availability/ Chances of future promotional opportunities

- Supportive supervisors who offer guidance on how to handle assignments

5.2 Factors that motivate employees to desire a longer stay in the bank/Retention factors

Employees intimated that the following conditions that existed within the working

environment of the bank motivated them to be loyal to the bank.

- The fact that supervisors sit down with employees to discuss the development plan for the

employees

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- The company gives employees a chance to take part in assignments beyond the core of

the employee’s job

- Management communicates efficiently and effectively with the employees

- There exist environment of openness and trust within the bank

- Employees are valued within the firm and that they are treated with respect and fairness

- Supervisors embrace sharing of responsibility and authority with the juniors

- Management gives a chance to employees to give ideas and contributions relevant to the

bank

5.3 Factors that may make an employee of the bank to desire to leave the bank

According to the findings, the employees explicitly and implicitly stated that what would

make many of them desire to quit was the attitude of management towards them. A small

number indicated that there existed negative attitude from management albeit many were

satisfied with the attitude that existed. Attitude in this case means the level of interaction

between the management and the workers. If the level of interaction is satisfactory, workers

viewed that as positive attitude and vice versa. In addition, many employees felt that some

supervisors were using the authoritarian style of supervision. Employees felt that too much

authoritarianism was limiting the autonomy they had on their job hence reducing the satisfaction

of being in that job (Nyamekye, 2012). This scenario is in agreement with Gosh (2000) which

indicated that employees of these days are not easily subdued and are not ready to cope with

rigidity but embrace flexibility and shared responsibility.

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6.0 Strengths and weaknesses of Motivation in the Standard Chartered Bank of Kenya.

From the above findings, it is evident that the organization has immense strength when it

comes to motivating its employees. This is evident since by having a look of the various

motivation theories indicated in this study and others, you can see what they propose is contained

here. First are the motivating factors that are present in the bank. Salary and other fringe benefits

are present in the organization and this factor motivates employees most. This finding is a true

reflection of the Theory of Scientific Management that indicated that employees are mainly

motivated by money.

The organization does not stop there. Job security, good relationship with co-workers, respect

and fair treatment from the supervisors, promotion opportunities and training and development

chances are in complete agreement with the Theory of Hierarchy of Needs of Abraham Maslow.

The above mentioned factors are also in agreement with the Two-Factor Theory with both

hygienic and Motivators being well represented.

Other factors cited under retention factors like existence of sharing of responsibility with

supervisors, effective communication from management, existence of working environment full

of trust and openness indicates that within the bank, hygienic factors that every informed

employee would desire to work in are present. Moreover, the fact that employees are valued in

the bank and that they are given a chance to take part in decision-making is a crucial approach in

employee motivation as this lead to employees loyalty to the firm.

However, the fact that employees cited use of authoritarianism in supervising indicates the

major weakness of motivation in the bank. Therefore, the bank would have to otherwise educate

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its supervisors on the need to grant employees autonomy on what they are doing. Giving

employees autonomy over their task will make the work more enjoyable and fulfilling.

7.0 Conclusion

In conclusion, this study aimed at finding out the various factors that motivate employees

within the bank, retention factors as well as factors that may result to turnover. From findings

and ensuing discussion, it can be seen that successful firms do not take motivation of their

employees for granted. Therefore, any organization that would want to escape the wrath

associated with high labor turnover can have a look at this study to see what is at least expected

of it if it has to keep the employees motivated and retain them for that matter. It is highly

recommended that organizations should pay their employees well courtesy of the fact that

employees viewed salary and other fringe benefits as very important. The issue of organizational

justice or equity should also be embraced especially on promotions, training and development

and in payments so as to avoid feeling of inequity among employees. To retain employees,

organizations need to make available within their firm intrinsic motivators like job enrichment,

promotion opportunities and training and development opportunities. The organizations should

also inculcate the culture of giving employees a chance to take part in decision-making as this

will make them feel regarded and valued and the organization will get loyalty in return.

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References

CBK,. (2012). DEVELOPMENTS IN THE KENYAN BANKING SECTOR FOR THE QUARTER

ENDED 30TH JUNE 2012 (1st ed.). Nairobi: Central Bank of Kenya.

Ghosh, B. (2000). Human resources development and management. New Delhi: Vikas Pub.

House.

Gunnell, K., Crocker, P., Mack, D., Wilson, P., & Zumbo, B. (2014). Goal contents, motivation,

psychological need satisfaction, well-being and physical activity: A test of self-

determination theory over 6 months. Psychology Of Sport And Exercise, 15(1), 19-29.

doi:10.1016/j.psychsport.2013.08.005

Mullins, L. (2005). Management and organisational behaviour. Harlow, England: Prentice

Hall/Financial Times.

Nohria, N., Lee, L., & Groysberg, B. (2008). Employee Motivation:Â A Powerful New Model.

Harvard Business Review. Retrieved 12 July 2015, from

https://hbr.org/2008/07/employee-motivation-a-powerful-new-model

Nyamekye, F. (2012). Impact of Motivation on Employee Retention: A Case Study of Standard

Chartered Bank Ghana Limited (Doctoral dissertation, Institute of Distance Learning,

Kwame Nkrumah University of Science and Technology).

Standard Charted Bank Of Kenya,. (2015). About Us - Standard Chartered Bank Kenya. Sc.com.

Retrieved 15 July 2015, from https://www.sc.com/ke/about-us/

Sukriket, P. (2015). THE RELATIONSHIP BETWEEN JOB SATISFACTION AND

TURNOVER INTENTION OF THAI SOFTWARE PROGRAMMERS IN BANGKOK,

THAILAND. AU Journal of Management, 12(2).

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Documents

A Study of Employee Motivation at the Standard Chartered Bank of Kenya