Cross Domain Impact of HR on Motivation

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A Cross domain analysis of effectiveness of HR

policies towards employee motivation: An Indian

IT Industry Perspective

Submitted By:Group 10

Aravind R FPM-08/06/M

Krishnan Jeesha FPM-08/08/M

Praveen GP PGP/18/099

Shahinsha S PGP/18/107

Shijima Shareef PGP/18/108

Shraddha Jose PGP/18/346


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A Cross domain analysis of effectiveness of HR policies towards employee motivation 2

Table of ContentsIntroduction .......................................................................................................................................... 3

Literature Review: ................................................................................................................................. 3

Research Model and Hypothesis........................................................................................................... 5

METHODOLOGY .................................................................................................................................... 6

FACTOR ANALYSIS RESULT FOR THE INDEPENDENT SURVEY ITEMS ..................................................... 7

FACTOR ANALYSIS RESULT FOR THE DEPENDENT SURVEY ITEMS ......................................................... 7

REGRESSION ANALYSIS ......................................................................................................................... 8

Results .................................................................................................................................................. 9

Conclusion .......................................................................................................................................... 10

Limitations and Future Scope ............................................................................................................. 11

References .......................................................................................................................................... 12

Appendix ............................................................................................................................................. 13

Questionnaire Used ........................................................................................................................ 13


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Introduction

Extensive research on the effectiveness of HR policies on the performance of the employee

has documented a positive relationship between them. Many theories of the HRM-

performance linkage rest on an assumption that employees have a positive motivational

response to HRM practices, but this is rarely tested in studies concerned with Indian IT

industry perspective. Our study, in this respect, establishes the relation between motivation

and effectiveness of HR policies across domains from an Indian IT industry perspective.

Motivation (as per Robbins & Judge, 2009) is defined as the processes that account for an

individual's intensity, direction, and persistence of effort toward attaining a goal. Cross

domain is referred in our study from White, M., & Bryson, A.,2011, has split the HR domains

in to 7 fields: Employee Participation, Development, Teams, Incentives, Recruitment, Equal

Opportunities, Family-Friendly. Our quantitative analyses were based on the questions

framed accordingly from these fields and their connection with motivation. Thus it will help

to fill the gap (From an IT Industry perspective) and, if the relationship is shown to be

positive, may help explain the HRM-performance relationship. Conversely, if HRM is not

accompanied by higher employee motivation, this may stimulate interest in other plausible

mechanisms.

Literature Review:

Another study explores the examining the relationship between HR practices and firm

performance, and research support has assumed HR as the causal variable. The study

demonstrates that HR practices are strongly related to future performance but that they are

also strongly related to past performance, suggesting caution among both academics and

practitioners in making any causal inferences. (Wright, Gardner, Moynihan & Allen, 2003)


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MacDuffie (1995) found that bundles of HR practiceswere related to productivity and

quality in his sample of worldwide auto assembly plants. Delery and Doty (1996) found

significant relationships between HR practices and accounting profits among a sample of

banks. Youndt, Snell, Dean, and Lepak (1996) found that among their sample of

manufacturing firms, certain combinations of HR practices were related to operational

performance indicators. Guthrie (2001) surveyed corporations in New Zealand and found that

their HR practices were related to turnover and profitability.

A study of high-performance work practices, use a national probability sample of

establishments, measures work practices and performance that are comparable across

organizations, and, most important, a unique longitudinal design incorporating data from a

period prior to the advent of high-performance work practices. The outcome this study

measures are sales per worker, total labor costs per worker and the ratio of those two

measures. The conclusion of this study most strongly supported that work practices

transferring power to employees, often described as "high-performance" or "high road"

practices, raise labor costs per employee, suggesting that tbese practices raise employee

compensation, which represents a cost to employers. The evidence is also consistent with

these practices raising productivity (sales per employee). (Cappelli & Neumark, 2001)

Also In order for employees to act as a source of competitive advantage, i.e., to contribute to

the development of an enterprises competitiveness, they need to beknowledgeable and

motivated.( Voki, Klindi& akovi, 2008)

Another study advances the understanding of the link between systems of HR practices and

firm performance by examining middle managers affective and continuance commitment to a

firm. The authors identified commonly examined HR practices that apply to the middle

manager level and classified them into the maintenance- and performance-oriented HR

subsystems. The authors found support for the 2-factor model on the basis of responses from


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2,148 managers from 463 firms operating in China. Regression results indicate that the

performance-oriented HR subsystems had a positive relationship with firm performance and

that the relationship was mediated by middle managers affective commitment to the firm.

The maintenance-oriented HR subsystems had a positive relationship with middle managers

continuance commitment but not with their affective commitment and firm performance.

(Gong, Law, Chang, & Xin, 2009)

After considerable Literature review we have arrived at a point where there was a glaring gap

which we wanted to explore which was that of the linkage of motivation to HR policies

prevalent in the organisations. Although we could find only one paper which was suggestive

in this direction there was no paper which had studied this in an Indian perspective. Our study

focuses on the IT industry since the background of majority of the team is from an IT

background and the industry is closest to the heart.

Research Model and HypothesisFrom the various literature studied we have arrived at mainly six domains for HR policies

namelyParticipation, Development, Incentives, Equal Opportunities, Recruitment and

Selection and Family Friendly. Also we have identified measuring the motivation using its

two components Intrinsic Job Satisfaction and Organizational Commitment. Based on these

the hypothesis we propose are:

Hypothesis 1(H1): HR policies in the Participation domain impacts the motivation levels of

the employees in an organisation

Hypothesis 2(H2): HR policies in the Developments domain impact the motivation levels of

the employees in an organisation

Hypothesis 3(H3): HR policies in the Incentives domain impact the motivation levels of the

employees in an organisation


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Hypothesis 4(H4): HR policies in the Equal Opportunities domain impact the motivation

levels of the employees in an organisation

Hypothesis 5(H5): HR policies in the Recruitment and Selection domain impacts the

motivation levels of the employees in an organisation

Hypothesis 6(H6): HR policies in the Family friendly domain impacts the motivation levels

of the employees in an organisation

METHODOLOGY

The online questionnaire was distributed to a sample size of 111 obtained through

convenience sampling from the population with experience in IT services sector.

The questionnaire consisted of two sectionsone for measuring Motivation and the other for

measuring the effectiveness of HR policies across various domains


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FACTOR ANALYSIS RESULT FOR THE INDEPENDENT SURVEY ITEMS

Sampling Adequacy was confirmed and 6 factors viz. Participation and Development

Policies, Incentives Policies, Recruitment and Selection Policies, Family Friendly Policies,

Equal Opportunity Policies and Disabled Employment Policies

FACTOR ANALYSIS RESULT FOR THE DEPENDENT SURVEY ITEMS

Sampling Adequacy was confirmed and 2 factors viz. Organizational commitment and

Intrinsic job satisfaction was identified.

Factors

1.

Participation and

Development Policies

2. Incentives Policies

3.

Recruitment and Selection

Policies

4.

Family Friendly Policies

5. Equal Opportunity Policies

6.

Disabled Employment

Policies


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REGRESSION ANALYSIS

Participation and development policies and favorable incentives policies have a positive

impact on intrinsic job satisfaction

Factors

1. Organizational

Commitment

2.

Intrinsic Job Satisfaction


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Family friendly policies and favorable incentives policies have a positive impact on

organizational commitment

Participation and development policies and favourable incentives policies have a positive

impact on overall motivation.

Results

Hypothesis 1(H1): Has been rejected

HR policies in the Participation domain impacts the motivation levels of the employees in an

organization


HR policies in the Developments domain impacts the motivation levels of the employees in

an organization


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HR policies in the Incentives domain impacts the motivation levels of the employees in an

organization

Hypothesis 4(H4): Has not been rejected

HR policies in the Equal Opportunities domain has no significant impact on the motivation of

the employees in an organization


HR policies in the Recruitment and Selection domain has no significant impact on the

motivation of the employees in an organization


HR policies in the Family friendly domain has no significant impact on the motivation of the

employees in an organization

Conclusion

From the analysis of the data we have collected, we observe that Organisational Commitment

is influenced by Incentive and Family friendly policies. On the other hand, Employee

participation Development and Incentives policies in organisations are the major factors

affecting Intrinsic Job Satisfaction and Motivation.

This throws out interesting implications for HR managers. While framing policies, a serious

focus has to be on Incentives and Family friendly measures. This increases commitment

towards the organisation from the part of employees.


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To instil intrinsic job satisfaction and motivation, they must consider having policies for

employee participation and development. Here again, Incentive policies play a major role.

Limitations and Future Scope

The major limitation of this study is the sample taken. The size of the sample might not be

adequate to be representative of a two million strong IT Industry. Also by restricting the

study to one industry we cannot be sure that the importance of policies across industries

would be same. It would be interesting to see the study replicated across multiple industries

and a comparison across industries of impact of HR policies might give more insights for the

HR function to evolve.


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References

Cappelli, P., & Neumark, D. (2001). Do high-performance work practices improve

establishment-level outcomes?.Industrial & Labor Relations Review, 54(4), 737-775.

Delery, J. E., & Doty, D. H. (1996). Modes of theorizing in strategic human resource

management: Tests of universalistic, contingency, and configurational performance

predictions.Academy of management Journal, 39(4), 802-835.

Gong, Y., Law, K. S., Chang, S., & Xin, K. R. (2009). Human resources management and

firm performance: The differential role of managerial affective and continuance commitment.

Journal of Applied Psychology, 94(1), 263.

Guthrie, J. P. (2001). High-involvement work practices, turnover, and productivity: Evidence

from New Zealand.Academy of management Journal, 44(1), 180-190.

MacDuffie, J. P. (1995). Human resource bundles and manufacturing performance:

Organizational logic and flexible production systems in the world auto industry.Industrial &

labor relations review, 48(2), 197-221.

Voki, N. P., Klindi, M., & akovi, M. (2008). Work Motivation of Highly-Educated

Croatian Employees - What Should Managers and HR Experts Know? South East European

Journal of Economics and Business, 3, 8996.

Wright, P. M., Gardner, T. M., Moynihan, L. M., & Allen, M. R. (2005). The relationship

between HR practices and firm performance: Examining causal order.Personnel psychology,

58(2), 409-446.

Youndt, M. A., Snell, S. A., Dean, J. W., & Lepak, D. P. (1996). Human resource

management, manufacturing strategy, and firm performance.Academy of management

Journal, 39(4), 836-866.


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Appendix

Questionnaire Used

Participation:

1.

In your last/current job were you involved in formal participation processes such as

quality improvement groups, problem-solving groups, roundtable discussions, or

suggestion systems, pay discussion briefings?

2. In your last/current job, did you have a reasonable and fair complaint process?

Development:

3. With respect to your development in your last/current job, was their sufficient off-

job training (eg: Instructor Led Training), required for the job, provided?

4. Do you agree that Systematic induction courses are provided in your organization

Incentives:

5. In your last/current job did you regularly receive a formal evaluation of your

performances?

6. Do you agree that pay raises for the employees in your last/current job are based on

job performance?

7. Do you have the opportunity in your last/current job to earn individual bonuses (or

commissions) for productivity, performance, or on other individual performance

outcomes?

Recruitment and Selection:

8. Do the applicants during the recruitment process undergo structured interviews (job

related questions, same questions asked of all applicants, rating scales) before being

hired?

9. In your last/current job, did the qualified employees have the opportunity to get

promoted to positions of greater pay and/or responsibility within the company?

10.Do the applicants of your last/current job take formal tests (paper and pencil or work

sample) during the recruitment process before being hired?

Family friendly:

11.Is working from home permitted (at least for a small period) in your organization?

Letssay for two days per month

12.Are flexible hours/ part time options available in your organization?

13.Are leaves available for elderly care or maternity/paternity (with paid) in your

organization?


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Equal Opportunities:

14.Are there equal opportunities for training for the employees at the same level in

your organization?

15.Are there equal opportunities for promotion of the employees at the same level in

your organization?

16.Do you agree that "My organization tries to recruit women returners"

17.Do you agree that "My organization tries to recruit people with disabilities "

Organizational Commitment:

18.I share many of the values of my organization - 5 point likert scale on Strongly

disagree to Strongly agree

19.

I feel loyal to my organization - 5 point likert scale on Strongly disagree to Strongly

agree

20.I am proud to tell people who I work for - 5 point likert scale on Strongly disagree to

Strongly agree

Intrinsic Job Satisfaction:

21.The sense of achievement you get from your work - 5 point likert scale on Highly

unsatisfied to Highly satisfied

22.

The scope for using your own initiative - 5 point likert scale on Unavailable toAvailable

23.The amount of influence you have over your job - 5 point likert scale on Low to High

24. The work, on a whole is - 5 point likert scale on Highly unsatisfied to Highly satisfied

Documents

Cross Domain Impact of HR on Motivation