Employee Motivation and Job Performance- Exploring the Relationship

Title of Dissertation

Employee Motivation and Job Performance- Exploring the

relationship

Saurabh Singh

Presented to the Bangor Business School in partial fulfillment of the

requirements for the Master of Business Administration in Management

degree

University of Bangor, Wales

September 30, 2011

Table of Contents

MBA Management 2011 Dissertation

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Chapter 1: Introduction

1.1. Background4

1.2. Theoretical framework.5

1.3. Objectives of research.6

1.3.1. Primary objectives..6

1.3.2. Secondary objectives.6

1.4. Problem statement..7

1.5. Research questions.8

1.6. Research hypotheses.8

1.7. Scope and limitations.9

2. Chapter 2: Literature Review

2.1. Background to Motivation10-37

2.2. Motivation Theories

2.2.1. Need Based Theories

2.2.1.1. Maslows hierarchy need theory (1943)

2.2.1.2. Herzbergs two factor theory

2.2.1.3. ERG Theory

2.2.1.4. Mc Clellands theory of needs

2.2.2. Process Based Theories

2.2.2.1. Cognitive Evaluation Theory

2.2.2.2. Locke and Lathams Goal Setting Theory

2.2.2.3. Vrooms Expectancy Theory

2.2.2.4. Equity Theory

2.2.2.5. Reinforcement Theory


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2.3. Impact of Managers on Employees Motivation

2.4. Impact of Supervisors Behaviour on motivation of sales persons

2.5. Linking motivation and employee learning

2.6. Employee performance

2.7. Importance of Motivation for Service based firms

2. 8. Motivators- External and Internal

2.9. Employee motivation and job design

2.10. Relationship between motivation and team performance

3. Chapter 3: Methodology

3.1. Methodological Framework.38

3.2. Research method.39

3.3. Research process....40

3.4. Research approach.41

3.5. Nature of Research.41

3.6. Data Collection41

3.7. Choice of research method42

3.8. Sampling..42

4. Chapter 4: Findings and Analysis

4.1. Introduction..43

4.2. Demographic characteristics of the employees surveyed ..44

4.3. Descriptive Statistics49

4.4. Inferential Statistics....59


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5. Chapter 5: Conclusion

List of References....81

Appendix 1: Questionnaire...87


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Chapter 1: Introduction

1.1. Background

The most contentious problem of the modern society, especially in the tough business

environments is providing jobs to able workers. Once this problem is resolved, the

responsibility shifts towards the management of a business organization for now it

becomes its duty to keep its employees motivated in order to perform effectively over a

long period of time.

Motivating is in itself a challenge and keeping people motivated a bigger one. Li (nd.)

suggests that employee motivation is one of the most important and critical function to

be performed by the managers due to need for increasing productivity and utilizing the

resources in the most optimum fashion. The simplest terms in which motivation can be

defined is the stimulation of peoples needs, wants and desires and lead them into

action and converting those unfulfilled expectations by providing the right channel.

This is the backdrop against which I propose to carry out a research to deduce the

dimensions of relationship between motivation and performance, particularly

emphasizing on which factors are most effective in promoting the motivation of

employees in an organization.

The research proposal entitled Relationship between motivation and performance

intends to assess the various factors that affect the level of motivation in the employees

and how motivation is related to their level of performance. The study will be carried

out with special reference to the Lucknow, Kanpur, Gorakhpur and Varanasi city

branches of Life Insurance Corporation (LIC) of India.


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1.2. Theoretical Framework

Source: Authors Creation

The research proposal will communicate the need to evaluate the employees

motivation within the context of a business organization. It is easier for an organization

to perform well when its employees are motivated towards their professional, personal

and organizational goals and objectives. I attempt to study this very issue wherein I

focus on evaluating the various factors that impact the motivation of employees and the

extent of this impact. Subsequently I also focus on deriving the relationship between

motivation and performance of employees.

Factors

affecting

motivation

Motivation of

employees

Performance

of employees


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It is advisable for the organizations to establish motivational programmes to improve

the motivation and thus their performance and in turn the organizational performance

and organizational effectiveness.

1.3. Objectives of Research

1.3.1. Primary Objectives

1. To assess the impact of various factors within a work environment those

motivate the employees to perform.

2. To analyze the dimensions of relationship between the motivation of employees

and their performance at work.

1.3.2. Secondary Objectives

1. To establish different ways in which LIC India can improve the motivation levels

and increase the productivity without increasing the pressure on employees.

2. To study the impact of monetary and non-monetary systems of reward on the

employees motivation and performance.

3. To examine the relationships between the employees motivation, performance,

satisfaction and organizational effectiveness.

4. To propose some pragmatic recommendations for improving the performance of

employees and organization by fostering motivational climate embedded in the

organizational culture.


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1.4. Problem Statement

Robbins (1993, p. 206) defined motivation as a process which results from unfulfilled

needs that create a tension and thus drive an individual to satisfy those needs by

performing certain functions. This easing of tension influences the individuals cognition

and brings about a change in behaviour according to Kanfer (1991, p. 11, In Dunnette &

Hough).

Figure 1.4.1 Process of Motivation

Source: Adapted from Robbins (1993, p. 206)

Motivation of employees is fundamentally embedded in the works of researchers like

Abraham Maslow (hierarchy of needs), Frederick Winslow Taylor (scientific

management), Elton Mayo (Hawthorne studies) and Frederick Herzberg (motivation and

hygiene factors). According to Simms (2007), Jakobson (2007) motivation requires

common communication to act as a mediator between the employees and

management. Sharbrough (2006) finds that higher levels of motivation are linked with

higher performance. It is interesting to notice therefore, that motivation can result in

higher performance and higher performance can nurture motivation in the employees.

Unsatisfied needs Resulting tension Drive to satisfy the

need

Reduction of

tension

Satisfaction of

need

Search behaviour


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Silverman (2006) finds there is an essential need for employers to promote idea sharing

and collaborative functioning towards developing the motivation and increasing the

performance. This proposal intends to present a case for relating motivation and

performance at the level of employees and examine the drivers of motivation and

develop practical solutions for organizations where employees lack motivation and

performance suffers due to this problem.

1.5. Research Questions

1. Does a positive relationship exist between employee motivation and job

performance? To what extent does motivation influence performance of

employees?

2. What is the influence of different motivation factors that affect and

increase/decrease the motivation level of the employees of LIC, India?

1.6. Research Hypotheses

Null Hypotheses to be tested

H1: There is no significant relationship between incentives based rewards and employee

performance.

H2: There is no significant relationship between employee training & development and

employee motivation.

H3: There is no significant relationship between performance appraisals system and

employee motivation.

H4: There is no significant relationship between the supervisors attitude, behaviour and

leadership style followed and employee motivation.


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1.7. Scope and limitations

The primary focus of research will be to assess the drivers of motivation and the impact

of motivation on employees performance. The research will emphasize on the

employees working in the middle and lower management categories of LIC (India)

branches of Lucknow, Kanpur, Gorakhpur and Varanasi, thus acting as the

representative sample for the overall population of employees working at LIC India. This

study will include employees irrespective of their age gender and marital status. The

study will be a blend of traditional and contemporary theoretical perspectives on the

issue and empirical analysis from responses sought in questionnaires.

The aspect of limitation in this research is the concentration of sample size. I expect

around 250 respondents including four distinct age groups. Moreover the results may

not be applicable to every company or organization as the motivational needs of

employees may be different in different organizations. Also this study is restricted to

studying the motivation of sales personnel working at the Life Insurance Company of

India, thus the results may not be replicable in the other organizations in the same

business. The needs may be different in other parts of the countries as well.


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Chapter 2: Literature Review

2.1. Background to Motivation

Higgins, 1994 (Cited in: Linder, 1998) has defined motivation as the psychological

process that provides purpose and direction to an individuals behaviour, a tendency to

behave in a purposive manner which helps to satisfy the specific unfulfilled needs.

According to Young (2000) motivation is the driving force that controls the level of

efforts, direction of execution and persistence of work.

Greenberg & Baron (2000, p. 190) have defined motivation as a three dimensional

process wherein there is a drive in an individual that leads to action; then there are

choices that individuals make and the changes in behaviour that occur and lastly

maintenance of behaviour in order to persist until the desired goals or targets are

reached and the needs are fulfilled. Halepota (2005) has defined motivation as active

participation and commitment towards achievement of specific goals to attain the

desired results. According to Halepota, the concept of motivation is contingent upon the

different situations because no one particular strategy can be effective in all the

situations.

2.2. Motivation Theories

2.2.1. Need Based Theories

In the earliest reflections on motivation, it was believed that people indulge

in hedonism and try to attain comfort and pleasure in their activities and by

nature avoided work. The need theories were pre-eminently based on the

idea that people do not like work and they work only because there is (are)

certain basic need(s) which they want to fulfil, thus motivation caused by

the deficiency of need(s).


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However this was later challenged by researchers who claimed this to not be

the case, thus advocating for enrichment of the scope of motivation. They

also proposed that people do not hate work naturally and there are not only

basic needs but more than that.

Earlier theories that focused on need based definitions of motivations

include Maslows hierarchy need theory, Herzbergs two factor theory, ERG

theory and McCellends need theory.

2.2.1.1. Maslows hierarchy need theory

Maslow (1943) considered motivation as a continually changing desire

governed by the needs and their fulfilment that people experience over a

period of time as impacted by the various levels of needs ranging from basic

needs to self-actualization needs.

According to Maslow, these needs which are the driver of motivatio n for an

employee to work are arranged in a hierarchical order of increasing

importance. This order is known as prepotency. It means that a need

satisfied remains no longer a motivator and only the next higher level of

needs can motivate an employee to perform further. This was later criticised

because there is no certainty that these needs are motivators in strictly the

hierarchical order as suggested, therefore motivation doesnt always follow

the hierarchy as mentioned in Maslows theory of needs.

Although Maslows hierarchy need theory (Maslow, 1943) suggests

hierarchical need based motivation, the commonly agreed fact is that the

strongest motivator of people at work is money. However, money cannot be

the only motivator important for employees at times.


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The factors such as participation, involvement and the feeling of being

recognized and appreciated and valued by the management and peers seem

to be more important for keeping the employees motivated (Laurie, 2007, p.

255). According to Needham (1999, p. 272), Maslows hierarchy need theory

is too rigid as different individuals may have needs and priorities. In

addition, they may have different motivators to influence their performance.

2.2.1.2. Herzbergs two factor theory

Frederick Herzbergs two factor theory (motivation and hygiene factors) postulates that

employees are motivated by two sets of factors- motivation and hygiene. The

motivation factors including achievement, recognition, participation, involvement,

delegation, autonomy and other intrinsic aspects when fulfilled generate motivation in

the employees. Contrary to this, when Herzbergs hygiene factors such as salary,

working conditions, policies and administration are not properly fulfilled or not

managed well lead to dissatisfaction in the employees (Saiyadain, 2009, p. 158).

According to John (2007, p. 41), a lot of responsibility for handling motivation issues of

employees rests on the shoulders of the organizations leaders. Although it is difficult

for them to directly overlook the motivation of individual employees, it must be an

important area for managers to deal with so as to manage the motivation of employees

in direction of performance and better results.

According to the argument in Herzbergs theory, the two types of factors work in polar

directions, however the extrinsic work factors (hygiene factors) are unable to act as a

source of motivation on a standalone basis. Motivation is only possible when the

hygiene factors are satisfied, thus they are a pre-requisite for the motivation factors to

work. Thus motivation factors alone cannot motivate employees even if completely

satisfied, thus necessitating the need for fulfilment of hygiene factors.


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This again highlights the importance of material incentives for motivating people.

Factors like recognition and participation can influence people at work once hygiene

factors are met.

Once all or most of the hygiene factors are present, the employees would

reach a state where there is not any dissatisfaction. It is now that the

presence of motivation factors can be utilized to improve the motivation

levels of the employees by engaging them in development thus improving

the overall productivity of the employees and thus the organization. The

combined operation of these two types of factors guides the employees

towards higher motivation levels and the managers and supervisors must

ensure that the hygiene factors are sound and therefore operate effectively

by managing the right motivation factors by manipulating the various

aspects of work such as involvement, appreciation, autonomy. This not only

motivates the employees to perform better but also makes the job more

enriched and fulfilling.

It is also important to note that the Herzbergs two types of factors seem to

emanate on the basis of Maslows hierarchy needs with two clusters namely

hygiene corresponding to lower levels such as safety, social security and

physiological and motivation factors corresponding to higher levels such as

relationships, job security and salary. Figure 2.2.2.1 shows the remedial

measures by the managers for different types of factors .


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Figure 2.1.2.1- Dichotomy of Herzbergs two factor theory

Source: Johnson & Gill (1993)

It is critical to note that both Maslows hierarchy needs and Herzbergs two

factor theories are subject to criticism. Goldthorpe et al. argued that

whether it is the scientific management approach or the human relations

approach, their applicability is contingent and is thus not applicable

universally in all the situations. A prime reason behind this proposition

seems to be that different employees behave differently in various

situations are motivated through different ways. Even people from different

socio-economic backgrounds exhibit different work orientations (Parker,

1972).

An important aspect has been brought forward by Stanworth (1977)

according to who, not all the human relations approaches of management

may go down well with the employees concerned. While a section of workers

may approve of it with interest, another section may feel demotivated thus

having a negative impact.


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Thus it is critical for the management to study the types of workers and

their behavioural patterns, expectations from job and organization and their

attitudes towards the work to be able to formulate an effective motivational

environment. Goldthorpe (1968) termed these variables as to be culturally

determined instead of being psychological contracts.

2.2.1.3. ERG theory

Alderfers (1972) work on improving the Maslows hierarchy theory of needs

was an attempt to segregate the needs into three distinct categories namely

Existence, Relatedness and Growth (ERG) basing the argument on the

empirical work carried out. The Existence group includes the employees

fundamental requirements necessary for the basic survival. Corresponding

to the Maslows theory, this group includes the physiological and safety

needs. The next Subsequent group includes the needs that deal with social

and interpersonal needs of employees and correspond to the Maslows

social needs and personal esteem.

And the highest of the three, the Growth needs include the employees

desire to learn, grow and develop and it aligns with Maslows self -

actualization needs category. The ERG theory succeeds the Maslows theory

due to the fact that it doesnt attribute importance to the hierarchical order

of such needs and does not stress that only once a particular need is

satisfied, the employees can move up the need level . As such there is no

level of need in ERG theory. Also the most important element of this theory

is that it promotes the idea that the employees can look towards satisfying

their various needs at one point of time. An employee who is socially

satisfied can at the same time look for personal development and self -

actualization. Thus employees are considered to satisfy more than one type

of need simultaneously.


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2.2.1.4. McCellends theory

Another need theory which I find important to discuss here is the

McCellends theory of needs which considers only three important needs

including achievement, power and affiliation which are defined as:

Achievement need This includes the employees drive to better

own records and others, to achieve with relation to a benchmark

of standards, to continuously strive to perform better and improve

to achieve more success with time.

Power need The need to be able to influence the decisions and

judgements of other people in organization make them act in a

certain desired way most probab ly to ones own advantage.

Affiliation need The natural desire of people to build, develop

and sustain amiable and close interpersonal relationships for

better work environment socially.

This theory suggests that the employees who show a higher drive to excel

achieve more than their counterparts with lower motivation to succeed.

These employees also work towards attaining more personal achievement

instead of earning rewards from the management since they are dedica ted

to personal development and achievement and exhibit a desire to perform

more effectively and efficiently in order to be more productive.


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Also these types of employees always look for finding solutions rather than

waiting for management to provide them. They prefer to work in situations

where the opportunities for personal development are high, where they

receive regular and prompt feedback regarding their performance and use it

to continually improve themselves. According to McCellend, the

achievement oriented employees avoid the work tasks if the y consider is as

too easy or too difficult.

Some employees who are considered to be high achievers experience a

sense of achievement and contentment when they achieve their objectives

by overcoming certain obstacles. They perform best when they are sure that

their achievements are a result of their own actions and nothing else. Also in

their case performance exceeds the level of expectation when they find an

equal probability of success and failure in any work related situation.

Figure summarises the four classical need theories and compares what

constitutes their basic concepts.


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Figure: Need based theories

Source: Griffin (1995)


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2.2.2. Process Based Theories

Moving from the theories that concentrate on the need based motivation,

the process based theories present a perspective that focuses on the

particular aspects of work that motivate and bring forth a permanent change

in the behaviour of employees. Process based theories provide for lis ting

specific factors that motivate the employees in an organization and also

studying how these factors motivate the behaviour. Ultimately process or

content based theories seek to find how employees satisfy their various

needs while choosing between the alternative behavioural patterns possible.

2.2.2.1. Cognitive evaluation theory

The general belief regarding the motivational factors is that there is a

marked independence among the extrinsic or external motivation factors

(such as pay, money, financial incentives, working conditions in an

organization, etc.) and the intrinsic or internal motivation factors (such as

achievement, delegation, participation, involvement, competence, etc.).

However this does not seem to fit the modern organization where only one

of the either is deemed to be insufficient by the employees and the

management alike. This is where Cognitive Evaluation Theory (CET) comes in

for it quashes this accepted belief and argues that for the work that has

previously been intrinsically motivating for the employees, there is no

improvement in motivation rather a decrease is observed if employees are

awarded extrinsic motivation due to an obvious decline in the interest

attributable to the intrinsic motivation (Jung, 1978).


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Some of the most influential intrinsic motivation is delivered through

instruments such as achievement related rewards, responsibility,

appreciation, realisation of self -worth, autonomy allowed to employees,

valuable feedback provided, variety of skills and knowledge required to

execute tasks and responsibilities and avenues for career development.

Though the management might consider all such factors while designing the

job, the value assigned to it by various employees can differ subjectively,

where one employee might consider the job highly rewarding on the basis of

inclusion of several elements of intrinsic motivation, another employee

might find the same elements of job as limiting and worthless. Thus there is

not much an organization do in relation to the perceptions an d assumptions

of employees, thus leaving it uncontrollable by the organization.

Figure 2.2.2.1.1- Various aspects of rewards

Source: Boal & Cummings (1981)


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Cognitive Evaluation Theory is important in relation to the management of

organizations in respect to the managements need to effectively design jobs

in a way that makes it easy to attract the best talent by paying them right

money along with also helping them participate in the or ganizational

activities. Thus the main focus is on job enrichment which will lead to

improved performance by the employees (Boal & Cummings, 1981).

2.2.2.2. Locke and Lathams goal setting theory

Goal setting theory is largely credited to Locke (1968). He proposes that the

major source of work motivation is inherent in the employees intention

towards goals and objectives. Therefore the performance is enhanced when

employees are challenged with specific goals and as these goals become

difficult, if accepted by the employees, their performance increases to

higher levels and more feedback is sought than earlier.

Locke and Latham, 1994 (Cited in: ONeil and Drillings (1994) in their study

have found evidence that the individual performance goals as powerful

motivator. Locke and Latham (1990) propounded that simplest reasons

behind some individuals performing better is their different performance

goals and objectives and their actions are driven and controlled by those

goals. That is what helps them perform better than others. Greenberg and

Baron (2003) have linked motivation with performance by defining

motivation as a process that directs behaviour towards achieving goals and

objectives. Goal setting and feedback have been considered to be critical

elements of a successful performance appraisal program; which help to

generate motivation required by employees for job performance (Earley et

al., 1990; Neubert, 1998 and Fletcher, 2001).


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Furthermore, Kavanagh et al. (2007) believes that positive performance

results result in positive performance evaluation which leads to better

reactions towards performance appraisal of employees.

Presumably, while other factors being constant, as the goal becomes more

difficult the performance increases as does the level of challenge

acceptability. Though it is natural that easier goals are more easily

acceptable, however if the job task is challenging enough but not

intimidating, the more involved employees will take up the challenge as they

are encouraged by higher achievement and will eventually put in more effort

to reach the desired goals.

An important element of such job tasks is feedback because it helps the

organization to find out the mismatch between what the acceptable

standards and what has been achieved previously by the employe es. It acts

as a guiding and directing tool which ensures that the progress is on track

and what remedial measures would be required, if any to perform as

expected. Another significant aspect of feedback provided to employees is

that compared to the external feedback provided by the supervisors, self -

generated feedback is more effective in motivating them.

Where the employees have the autonomy to participate in their own goal

setting, they are more motivated to achieve those goals than those designed

for them by the managers and supervisors as it gives them a sense of

freedom (Moorhead & Griffin, 1995). Though this is to be empirically

established, when this is the case, the employees may be willing to accept

more challenging and difficult goals and roles. According to Kennish (1994),

too much of control inhibits the employee motivation whereas a more open

and participative approach propels them to accept and achieve tougher

objectives thus increasing the productivity of an organization.


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The acceptance and achievement of objectives set for employees by the

management largely depends on the quality of motivation provided to the

employees of the organization. In the era of extreme globalization, it is

essential for the management to understand the culture and needs of

employees in order to satisfy them and keep them motivated towards

achievement of goals (McShane & Von Glinow, 2003, p. 132).

2.2.2.3. Vrooms expectancy theory

Vrooms expectancy theory (1964) deviates from the ideology that seems to

fixate the needs of people; instead it approaches the issue of motivation in

concordance with the complexity and variability of the human nature. It

assumes that all the people act differently and they have their own ideas of

motivation and achievement. The assumptions underly ing this theory have

been enlisted in the following list:

1. In alignment with the job tasks and responsibilities, the amount of

efforts involved and the dedication towards achieving the set

objectives, the employees make strategic and conscious decisions

about their behaviour.

2. It is very natural that various employees possess different attitudes

towards the job expressed as distinct needs and desires and their

motivation to perform. These can be analysed by the management to

improve the levels of motivation among the employees in an

organization.

3. Employees being consciously aware of their behavioural responses

need to choose from the various available alternatives . In choosing

the alternative, they consider the degree to which they assume their

objectives to be accomplished.


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4. To successfully interpret the phenomenon of motivation at workplace

it is critical that the management accepts that people behave

differently to the same stimuli and attach different notions to their

job characteristics and work environments.

Performance appraisal is an important element of this theory as it states

that an employee will be more motivated to put in extra efforts if it will lead

to a favourable and good performance appraisal. The appraisal thus

provided to the employee will help the employee to have access to rewards

such as increment in pay, bonus, commission, promotion, appreciation on a

broad level. This in turn will help satisfying the pe rsonal and organizational

goals (Vroom, 1966).

Expectancy theory focuses on three types of relationships as mentioned in

the following list:

1. Effort-performance relationship This implies the likelihood

perceived by an employee that putting in a specific amount of effort

would result in desired outcomes and an improved performance.

2. Performance-reward relationship The degree to which the

employee believes that a particular level of performance will lead to a

desired reward.

3. Rewards-personal goals relationship The degree to which an

individuals personal objectives are satisfied by organisational

rewards also considering the appeal of such potential rewards.


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2.2.2.4. Equity theory

Adams (1963) propounded the Equity theory of motivation in 1963. He

proposed the argument that employees are not only with the rewards

achieved by them but also the relative rewards achieved by the others in an

organization, thus reflecting the need for attaining equi ty in relation to

others in a workplace.

This guides the comparisons drawn by employees in terms of their inputs,

efforts and outcomes with the other employees. Firstly employees perceive

the suitability of the rewards earned for a particular level of input and then

compare the same with others. There are four references in relation to

which the employees compare their input and outcome with the others

(Adams, 1963). They are as following:

1. Self-Inside: this involves the experiences of an employee in a position

different than present in the same organization.

2. Self-Outside: this involves the experiences of an employee in a

position or situation outside the present organization.

3. Other-Inside: involves the experiences of other individual(s) in the

same organization as the employee in question.

4. Other-Outside: involves the experiences of other individual(s) out of

the organization of the employee in question.


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As can be understood, it is natural that some employees might find the

current situation to be of an inequity or bias; it is predictable that they will

choose one of the following six alternative choices p ossible, these are as

following (Adams, 1963):

1. Manipulate their personal inputs or efforts, this can mean a decrease

in the amount of effort or an increase in it.

2. Adjust their outcomes in an attempt to generate higher rewards.

3. Distort their self-perception and believe that they perform better

than their counterparts in the organization.

4. Distort the other employees perception and believe that the other

employees work is not suitable or desirable as perceived earlier.

5. Make decisions regarding comparisons basing on a different reference

point, involving comparison with the employees at a lower

performance level rather than comparison with employees with

performance above par.

6. Quit the field and look for other alternatives.

2.2.2.5. Reinforcement theory

The reinforcement theory takes a behaviouristic approach instead of

cognitive approaches followed by earlier theories. It proposes that

behaviour at workplace is habituated by reinforcement. The manner in

which an employee behaves in an organization is environmentally influenced

by the forces called reinforcers. A reinforcer can be understood as any

result or outcome, when followed by a particular response improves the

possibility of the repetition of certain behaviour (Campbell and Pritchard, 1976).


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This theory completely overlooks the internal state of the employees while

concentrating wholly on the behaviour emanating from an action or path

taken by them. Also this theory is not specifically a theory of motivation

because it is not concerned with the behaviour that produces motivation; in

broad view it completely ignores the human elements (such as attitudes,

expectations, feelings, responses, etc.) of behaviour .

2.3. Impact of Managers on Employees motivation

Employees can be expected to perform more effectively if the organization

they work for takes proactive measures to keep them motivated. Along with

this, it is important for the managers to respect the behavioural differences

among the workforce as what is a motivational factor for one might not be

the same for others. Attitudes and value system are a major influence on the

process of effectiveness of motivational initiatives. This creates a need for

better communication between the employees and managers. Managers

must strive to understand individual needs and desires, motivational patters

and therefore utilize the right kind of tools for motivation. This ensures that

all the employees are working up to their optimum level and even exceeding

their own targets. This way there is minimal compromise on productivity of

the organization. Buhler (1998) is of the view that the managers must

regularly create avenues for the employees where they get a chance to le arn

and develop both professionally and personally. To achieve this, the

management should conduct training and development opportunities,

special skills sessions. Managers must remain actively involved not only

through the execution phase but also through the feedback phase. It is

essential to evaluate the impact of such mechanisms to get to know if the

motivational programs are having the desired impact. It is important that

employees experience self-motivation and participate actively.


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Both managers and employees can enhance their motivation through such

activity. The motivational environment should be moderate, neither too

liberal nor too strict. It should be such that the employees are motivated to

their level best and work to their maximum abilities w ithout pushing too

much. At the same time, it should be challenging enough so that employees

can test their own abilities and seek more effective performance in certain

situations. It is not necessary that the employees are satisfied in all kinds of

circumstances, some might promote efficiency while some may need to be

modified or the right kinds of employees are employed to take on the task.

Capozzoli (1998) stated that motivational environment should be based on

determinants such as subjectivity, fairness , equality, and high service and

performance standards. Leadership and learning should be given primary

importance while overlooking the motivation levels of employees.

Enough significance should be associated with the delegation of authority

and responsibility from managers and supervisors to subsequent employees.

It is a critical decision taken by the managers because they need to ensure

that they have chosen the right kind of person with right kinds of skills to

perform the task successfully. Only when the employee and manager have

necessary understanding regarding the task to be performed and result to be

achieved; the job performance will be optimum. All the planning needs to be

done before delegating responsibility keeping in mind any potential

contingencies that may arise during the course of action. Before assigning a

particular job responsibility to a subordinate; the manager must ensure that

the chosen employee possesses the right kind of training for successful

execution of task. If otherwise, both the manager and employee may find

themselves in frustration and discontentment.


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This can also affect the morale of the employee significantly and hamper the

motivation. Prior to assigning any task, the employee may be trained to

reach the level where performance becomes possible . It is here that the

managers should exhibit their leadership while keeping faith in their

employees.

2.4. Links between motivation and learning

Bandura (1991, p. 158) in his definition of motivat ion has combined

motivation and cognition perspectives. Motivation has been described in

terms of intensity of efforts and persistence of exertion. Simon (1967, p.

29) believes that motivation can affect the individuals learning and result in

permanent change in behaviour. Also motivation leads an individual towards

performance and results into learning. According to Atkinson & Raynor

(1974) motivation directly impacts the level of persistence in an individual

and highly motivated learners tend to be more involved in the learning

process than lesser motivated learners. This learning results into better

performance and vice-versa.

2.5. Job performance management

Employees performance on job has been defined solely as the employees

behaviour that is consistent with the goals and objectives of organization

(Campbell, 1990). Motowidlo (1993) have considered job performance as the

behaviour which can be evaluated in terms of its contribution to improving

the organizational effectiveness. Viswesvaran & Ones (2000) proposes

employees performance as behaviour in which employees involve and that

is linked with the objectives of organization. According to Viswesvaran et al.

(1996) there are several motivational factors (variables) that must be

considered prior to evaluating the performance of employee.


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For creating an organizational environment where motivation works behind

the employees performance, it is highly crucial to put in place an effective

job performance management system with the most efficient tools and

processes. And that is not the only thing important. Once the proper

performance management system is in place, all depends on how that

system is executed by the management and followed by the workforce. It is

essential that both the management and employees strive to leverage the

most from such mechanism for enhancing motivation and performance

(Pulakos 2009, p. 103). Therefore performance management is most

effective when it is aligned with the managements ideology of motivation,

the reward system and is regularly upgrading and synchronising in order to

add value to the organization and the various stakeholders. Cokins (2009, 9)

views performance management as the essential tool to enhance the

motivation of employees at workplace; at the same time such a sy stem can

be utilized at the optimum level only when both management and

employees are dedicated towards achieving better state of motivation and

performance and have complete understanding of what is required and what

the rewards are. Employees must pay enough attention to what is expected

from them and operate accordingly. It is a symbiotic association where both

the employees and organization can benefit from higher levels of

performance and productivity. Only when the employees are aware of the

requirements of job they can put in the right amount of required efforts to

achieve their own and company targets. If this is missing then it becomes

difficult to evaluate the performance of the employees in their own relation

as well as the performance in comparison to the other employees in the

organization (Robert, 2005, p. 7).


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2.6. Relationship between motivation and performance

Pulakos (2009, p. 100-105) has addressed the vital importance of

performance management systems in place within a work environment of an

organization. It is essential that both managers and employees are

motivated towards achieving the desired levels of pe rformance. Only an

effective performance management system is unlikely to induce higher

performances. It is critical to support it with determination and interest

from employers and employees (Cokins, 2009, p. 10).

Lee & Bruvold (2003) suggest the need for management to invest in the

development of employees as it helps to maintain and develop the level of

skills, knowledge and abilities (SKAs) of employees and business

organization.

It refers to the personal development and self -actualization needs of the

employees as a tool to manage and promote motivation for effective

performance from employees and share their contributions with the

organization they work for. The researches by Gagne et al (1997) and Richer

et al (2002) have established the positive correlation between the

fulfillment of employee needs and their intrinsic motivation.

Moreover the studies by Gagne & Deci (2005) support the positive

relationship between autonomic work environment and intrinsic motivation

which helps to enhance the performance of employees. Kuvaas (2006, 2007)

and Piccolo & Colquitt (2006) have considered intrinsic motivation as an

indicator of task performance at job. Recent study by Grant (2008) reveals

the strong linkage between intrinsic motivation and persistence,

productivity and performance.


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The studies by Fagbemi (1990) and Latham & Pinder (2005) indicate the

direct and strong association between motivation and job performance and

therefore reflect the organizations management to identify the most

motivating factors and leverage with them to increase the motivation of

employees and thus performance.

If the management is aware what motivates their employees best, they can

utilize the knowledge and create motivational programs, performance

appraisals and performance management systems in place.

When the employees are not properly or adequately motivated, there are

chances of failure to achieve the goals which can cause a decline in their

self-efficacy (Ordonez et al. 2009), however there are no reporting that

higher self-efficacy in employees affects the achievement or failure to reach

goals (Bandura, 1997).

2.7. Importance of motivation for service based firms

In the particular context of service based organizations, quality of service is

a decisive factor that impacts the competitive advantage. In relation to the

Resource based view (RBV) of a firm, employee motivation can significantly

influence the quality of service (Hays & Hill, 1999).

According to Ziethaml, Parasuraman and Berry (1990), perceptions of

customers regarding quality are largely shaped by employee related factors

such as empathy and responsiveness and the way the employees feel and

behave certainly transfers on to the service provided by them (Bowen and

Lawler, 1992). Therefore, it is logical to assume that if the employees are

motivated enough, they will perform well and deliver better service and

therefore help the organization achieve competitive advantage.


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Waldham (1994) says that leadership system followed by a business

organization and the job characteristics of employees. Motivation and vision

influence the organizational learning and learning influences the motivation

and vision of employees in return.

2.8. Motivators- External and Internal

When an organizations management plans to create the apt motivational environment,

it becomes important that a balance is achieved among the type and quantity of a

variety of motivation factors to be used. These factors can be extrinsic or intrinsic and

the most important elements of such factors are their impact and effectiveness over a

period of time. Some motivators may have more impact than others depending upon

the employees. Also the motivators which have a positive impact on employees may

cease to have the same impact in future. This is ephemeral nature of motivational

factors and is especially relevant in case of extrinsic motivators. Thus, it is advisable to

use the right blend of external and internal motivators to keep the workforce motivated

for a long time. Some motivators such as punitive action may even prove to be

counterproductive over the long run. Helminger (1997) argues for the increased use of

intrinsic motivators along with traditional extrinsic rewards. This leads to overall

satisfaction of employees which in turn creates a motivated work environment.

For the management to motivate their employees in the right fashion; the prerequisite

is to ascertain the types of motivational factors that will be helpful in motivating them

and then manoeuvring the different motivators to better the performance at job. Job

designing plays the vital role in achieving this through matching the available job

responsibilities with skills, abilities and knowledge of employees. Furthermore, with

increasing empowerment among the employees, there are higher chances of them

going on to assume tasks which are more challenging and rewarding.


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This helps create professionals who can deliver as and when required of them. The

whole process becomes more result-oriented when the managers and employees

continuously exchange feedback through a suitable feedback mechanism and enrich the

decision making capabilities in relation to key aspects of the job responsibility.

Zimmer (1998) supports the view that when the employees get a chance to learn by

making mistakes, they are better equipped to take critical decisions in future with better

ability. Employees should have the opportunity to learn by doing. He also supports the

need to motivators like projects, social communication, teamwork, appreciation and

rewarding.

The effects of external motivators such as incentives might be counterproductive and

(or) ephemeral. Therefore he calls for concentrating on internal motivators as well.

Zimmer (1998) argues in favour of management implementing motivational

environment with variables such as team working, social interaction and performance

appraisal and employee appreciation platform.

Robbins & Coulter (1996) have suggested that employees can be motivated and kept

motivated by designing jobs that are motivating for them. This can be suitably done

through job enlargement (expanding the responsibilities within a particular job profile),

job enrichment (increasing the quality of work involves in a job) and job rotation

(switching different jobs for different employees and assigning best person at best

position within an organization).


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2.9. Employee motivation and Job Design

Managers are required to devote attention towards designing such jobs

which are motivating for employees. The most common ways to effectively

motivating jobs are job enlargement and job enrichment. The job should be

designed in a way that integrates work environment, organizational

resources and employee behavioural characteristics. It ens ures that the right

kinds of job characteristics are created and to accomplish them the

organization is able to select the suitable employees based on their match

with the requirements of the job. If it is otherwise, the employees might not

be properly motivated to take on the responsibility which would eventually

lower their productivity and hamper their motivation in the long run. Jobs

should preferentially be assigned on the basis of employee characteristics

(Robbins & Coulter, 1996). In LIC, India when the employees are satisfied

with the kind of job tasks organization requires them to do; managers

gradually decrease the narrow focus of very specialized jobs such as selling

insurance policies to people and broaden their responsibilities. The direct

results of such measure are improvement in employee and customer

satisfaction, increased productivity, enhanced motivation and morale of the

employees. Job enrichment leads to significant improvement in the quality

of work performed by the employees. In order t o do this, LIC, India

employees are given planning and organizing tasks which makes them feel a

deeper involvement with their job and increased importance is felt by them.


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2.10. Relationship between Motivation and Team Performance

Sales targets are mostly achieved by a team operating under a team

leader/supervisor. Among the team members, there may be varied levels of

motivations depending upon the type of task, its importance as perceived by

them and its desired outcomes. Therefore it is essential for a supe rvisor to

properly understand what the motivating factors are for various team

members and thereafter manipulating the work environment in such a way

that the team is motivated in a combined way. There should be effective

linkage between employees expectations and the work assignments, goals

and objectives and involved responsibilities. The motivational construct

should encompass from the basic level of needs to the higher self -related

needs (Gradulous, 1986).

For this purpose, supervisor needs to break down the larger responsibilities

into easily measurable tasks and thereby, focusing motivation related efforts

to overcome any possible hindrances that may be coming in the way of

otherwise achievable performance level (Weinberger, 1998 and Brumbach,

1998).

There are differences between situations where employees need to be

motivated individually and when it is to be done in groups or specially

selected teams. It is critical that individual needs are also given due

importance and the right kind of team is selected based on their

compatibility with other individuals and the goals and objectives set by the

supervisor. The targets are to be achieved based on the predefined

conditions including quality of work, time and costs incurred Hoegl and

Weinkauf (2005).


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Brumbach (1998) has suggested that performance is inculcates both job

related behaviour of employees and the outcomes achieved by them. Thus it

can be argued that motivation plays an important role in how the teams are

to perform, henceforth relating teamwork and performance. Moreover it is

an imperative element of sales related tasks in context of sales professionals

at LIC.

It is when the measures of team performance are evaluated, that the

relationship between teamwork and performance can be better

apprehended. Thamhain (1998) proposed that teamwork is improved

through improving motivation by the means of overall contribution of the

project towards the learning of team members, supervisor and organization

as well. The sales personnel at LIC have access t o important documented

information relevant to the projects on which they are working. It enables

improved communication with other team members and supervisor(s).

Kaliprasad (2006) advocates for easy access of project related information as

it makes them completely aware of the projects various aspects such as

organization, responsibilities, rules, procedures, reporting relationships and

overall standards of performance expected from them (Kerzner, 2003). This

increases the confidence with which the personnel approach a particular

work target and in turn improves the motivation level which translates into

better performance (Kerkfoot and Knight, 1992).


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Chapter 3: Methodology

3.1. Methodological Framework

Source: Authors Creation

Choice of the particular research

topic

Developing theoretical

framework

Collection of empirical data from

returned questionnaires

Interpretation of the empirical

data through quantitative

statistical methods

Identifying potential

respondents

Contacting the chosen

respondents and getting them to

reply favourably

Designing the questionnaire

Formulation of the research

problem and purpose of research

Analysis of results from

interpretation of empirical data,

deduce relationships between

variables and discuss the research

questions


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3.2. Research method

Depending on the research question(s), there exist two broad research

methods which are chosen on the basis of research question dimensions and

what has to be answered in what manner. They are qualitative and

quantitative research methods. The qualitative method is used to enhance

the knowledge about a pre-existing issue through observation and

understanding; whereas the quantitative method is use d when the research

tries to deduce the relationships between a few variables. In the interview

stage in qualitative research, the whole process should only be guided

minimally by the interviewer while the interviewee should be allowed to

respond in an open way. This allows for collection of most important

information from the respondents. It is important that such observations are

recorded and analysed in conjunction with the quantitative methods which

are considered to be more legible as they express the facts in the form of

numerical data. Also quantitative methods are based on pre -decided closely

designed questions, the answers for which are sought from each participant.

The questions in such process are open ended and flexible in perspective of

respondents. Looking at the kind of research question in this research which

tries to explore the relationship between motivation and job performance

requires to look into the subject in a qualitative way as it involves human

behaviour under certain situations; at the same time it is essential to

represent the results of the research in a quantitative format because it

helps us easily derive conclusions which can be mathematically tested. Thus

I have attempted to use both qualitative and quantitative research metho ds

as they seem to complement each other by providing more analytical depth

to the research.


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In the initial stages I gathered qualitative data through the responses of

various participants in this study and subsequently applied quantitative

techniques to validate their responses and generate the response pattern.

For this purpose I have done an extensive critical analysis of the already

existing literature in the field of motivation and developed an understanding

about the motivation-performance relationship and further testing it

quantitatively. This combined approach seemed to me as the most effective

way to touch the subject. Since the focus of the research conducted by me is

to relate motivation factors and their effect on job performance and present

the results in quantifiable form. The result section presents the outcomes by

analysing the results among different sub sections of respondents. This is

expressed through charts and figures for easy understanding.

3.3. Research process

Ethridge (2004) has defined research as the systematic approach to obtaining and

confirming new and reliable knowledge. According to Brink and Van der Walt (2006)

research involves four phases including conceptual phase (idea development takes

place), empirical phase (doing), interpretive phase (analysis of results) and

communication phase (research writing). Saunders et al., (2009) distinguished between

research method and research methodology. Research methods infer the

techniques employed in a particular research whereas methodology refers to the

manner in which a research is conducted.


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3.3. Research approach

The two basic reasoning methods in a research are deductive reasoning and inductive

reasoning (Trochim, 1999). In a deductive study, research takes the direction of working

on an already existing theory or proposition, thereafter deduce hypothesis, test those

hypotheses on the basis of empirical analysis conducted in the research (Bryman & Bell,

2009). The inductive research takes the opposite direction in which observation leads to

development of pattern, thereafter hypotheses are developed and a theory is

generalized. Thus deductive approach is from more general to more specific and

inductive approach is from more specific to more general (Saunders et al., 2009).

3.4. Nature of Research

For the purpose of this research I intend to utilize the descriptive research. In this type

of research, I will describe the data collected through surveys conducted on the sample

population and present the characteristics regarding sample and the topic of research.

This research will include surveying (through questionnaires) and correlational studies.

3.5. Data Collection

My aim through this research work is to ascertain the role and importance played by

motivational factors in influencing the motivation level of sales personnel in the

organization LIC, India. The foundation to this project is provided by the several theories

which explain the relationship between motivation and job performance. Further the

results are ranked in order to provide a better comparison of the impact of various

motivation factors on the job related performance of sales personnel. The respondents

are asked to rank a particular set of motivation factors thus marking them according to

their impact on employees. A survey method through questionnaire is adopted to

achieve this. However this study is solely focussed on the sales personnel at LIC, India.

The sample population comprised of sales personnel from different demographic and

behavioural characteristics.


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Primary source of data collection is the responses in the questionnaires (Appendix 1).

Secondary sources of data collection include company websites, academic journals,

business periodicals, business magazines, books and conferences. The commonly

referred databases include Business Source Premier, Science Direct, JSTOR, SAGE

Journals, Wiley Blackwell journals, Emerald Full Text, Springer link, and Harvard Business

Review.

3.6. Choice of research method

The most common demarcations of research methods are qualitative research methods

and quantitative research methods. During this research a mix of qualitative and

quantitative research methods will be used. The quantitative methods will reveal the

extents of relation between motivation and performance whereas qualitative methods

will infer the causes behind the phenomenon. The quantitative method will use

statistical tool of analysis which is correlation to help test the hypotheses and draw

inferences from results.

3.7. Sampling

The sampling design used for this research is simple random sampling. The population

for study is the employees working in LIC of India branch offices. From this population a

specific number of respondents (which is proposed to be around 250) will be obtained

from the population. Thus sample size, N= 250. This will be done through probability

sampling where each subject will have equal odds of being selected in the research

sample.


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Chapter 4: Findings and Analysis

4.1. Introduction

The results found during the course of investigation on the research

questions are presented in structured fashion. The results will explain the

relationship between motivation and job performance in the context of

different motivational factors and employee characteristics. The survey

element was such designed so as to research into the elements linking

motivation and performance of sales professionals at LIC, India. Motivation

is not only influenced by the type of factors used for motivation but also the

various behavioural dimensions of employees. The responses of the survey

participants have been presented in tabulated formats and conveniently

presented in form of charts. The total number of sales professionals

approached for the purpose of this research work was 400, however only

250 agreed to participate, thus the responses recorded are from 250 sales

personnel. The most fundamental results are based on the age group of the

employees and express the number and percentage of respondents with

particular category of responses. A five point Likert Scale has been

employed to bring a range in the responses.


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4.2. Demographic characteristics of the employees surveyed

On the basis of participant employees, I found it rational to categorize them

into four different age groups and analyse them accordingly:

1. 20-25 years

2. 26-30 years

3. 31-35 years

4. 36 years and above.

Looking at the results acquired by ranking the different motivational factors

by the participants, it is evident that the highest motivating facto rs show a

very mild deviation under different age groups. Moreover, the four top

ranked motivating factors occur in all categories of respondents. The highest

rankings were achieved by fair performance appraisal and recognition by

supervisors, effective reward management, opportunities for development

and job satisfaction. Table 4.1.1 describes the subgroup based on the gender

of employees surveyed. Table 4.1.2 shows the ranking of motivational

factors by sales personnel belonging to different age groups.


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Table 4.2.1- Age based sub groups and number and percentage of

respondents belonging to each group.

Age Group

(Years)

Number of respondents

(Total=250)

Percentage of respondents

20-25 60 24.00%

26-30 116 46.40%

31-35 52 20.80%

36 and above 22 8.80%

The majority of respondents surveyed belong to the age group 26 -30 years

(46.40%) and it can have a significant impact on the motivation as governed

by differing needs of various age groups. The age group 20 -25 years and 31-

35 years are respectively the second (24%) and the third group (20.80%)

based on the number of respondents.


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Table 4.2.2- Ranking of motivational factors as tabulated on the basis of

responses from different age groups.

Motivation

factors

20-25 years 26-30 years 31-35 years 36 years and

above

Job satisfaction 12 25 11 5

Fair performance

appraisal

10 15 7 2

Recognition by

supervisors

8 13 7 1

Effective reward

management

9 7 5 1

Opportunities for

promotion

6 22 8 3

Work

environment

2 9 1 2

Incentives 5 12 4 2

Working hours 2 5 1 2

Pay scale 5 7 6 1

Punitive action 1 1 2 1

Total number of

Employees

60 116 52 22

In a general observation, it is clear that job satisfaction is ranked as the

most motivating factor among all the age groups. The top four motivating

factors in different groups are job satisfaction, fair performance appraisal ,

opportunities for promotion and effective reward management. In the age

groups of 20-25 years and 26-30 years, sales personnel seem to be driven by

incentives as well. All the age groups ranked job satisfaction as the most

motivating factor among all. The employees in the age groups put associate

high importance to opportunities for development.


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Pay scale and incentives are ranked higher in case of employees from age

groups of 20-25 years and 26-30 years. Younger sales personnel are driven

by the material incentives they receive whereas their senior counterparts

exhibit penchant for promotion and recognition .

Table 4.1.3- Overall ranking among all age groups

Rank Motivation factor Ranked by number of

respondents

Percentage of

respondents

1 Job satisfaction 53 21.20%

2 Opportunities for promotion 39 15.60%

3 Fair performance appraisal 34 13.60%

4 Recognition by supervisors 29 11.60%

5 Incentives 25 10.00%

6 Effective reward management 22 8.80%

7 Pay scale 19 7.60%

8 Work environment 14 5.60%

9 Working hours 10 4.00%

10 Punitive action 5 2.00%

TOTAL 250 100%


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Looking at the overall ranking, it is evident that the top four ranked

motivating factors are:

1. Job satisfaction (21.20%)

2. Opportunities for promotion (15.60%)

3. Fair performance appraisal (13.60%)

4. Recognition by supervisors (11.60%)

Whereas the two lowest ranked factors are working hours and punitive

action, the second last and last ranked ones respectivel y with overall

percentage of merely 4% and 2%. This gives us an insight into the

performance of sales professionals being impacted most by satisfaction they

derive from their work. It is more important to them in comparison to

material incentives such as pays and rewards.


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4.3. Descriptive Statistics

The results are presented according to the responses sough t from the

participant employees at LIC, India. The responses are in tabulated and

graphical forms. The results are structured according to the questions asked

in the survey questionnaire. The following descriptive statistical sets of

responses are as following:

1. How motivated you feel with your immediate supervisors?

Scale Number of respondents


Highly motivated 75 30

Motivated 153 61

Neutral 17 7

Demotivated 5 2

Highly demotivated 0 0

TOTAL 250 100


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A total of 91% the respondents at LIC find the behaviour of their supervisors

as motivating or highly motivating, whereas remaining 9% think otherwise.

This leaves a scope for improvement and even the demotivated employees

can be motivated leading to improvement in results.

2. How satisfied you are with the motivation management in practice

at your organization?



Highly satisfied 85 34

Satisfied 140 56

Neutral 18 7

Dissatisfied 5 2

Highly dissatisfied 2 1

TOTAL 250 100


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Majority of the respondents (90%) vouch for the effectiveness with which

their performance is managed and rewarded. Still 10% of them remain either

unsure or negative regarding the issue. The potential cause of this may be

the underlying problems with the way supervisors and managers handle the

motivation of employees and it needs to be sorted out to improve overall

effectiveness.

3. Which types of incentives motivate you in a more effective way?

Types of Incentives Number of Respondents


Financial 75 30

Non-financial 50 20

A combination of both

125 50

TOTAL 250 100


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Managers and supervisors use the reward and recognition as strategic tools

to formulate and implement organizations policies and strategies aimed at

recognizing and rewarding the employees in a manner consistent with the

motivation related goals and other objectives. A proper reward management

framework exists in LIC as represented by the responses of the surveyed

employees (a total of 82% found it to be highly important or important

motivating factor for them). As generally perceived, reward system is not

entirely dependent on financial rewards, non-financial rewards are also

important. Still monetary rewards are highly rated towards improving

motivational level. While 20% find non-monetary rewards as motivating,

30% chose monetary rewards and the highest proportion, half of the

respondents (50%) find a combination of both financial and non -financial

rewards based rewards program as most effective.


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Reward management is ranked as the 6 th most important factor by the

surveyed. A proper reward management helps the management to align the

employees behaviour to the organizational goals. This is in accordance with

the Harvard model of HRM which supports the inclusion of employees in

designing the reward management system.

4. How effective, according to you is the reward management system at

your organization?



Highly effective 68 27

Fairly Effective 138 55

Satisfactory 15 6

Ineffective 25 10

Highly ineffective 5 2

TOTAL 250 100


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It is found that financial (tangible) incentives like suitable salary, additional

fringe benefits and non-financial (intangible) incentives such as non -

monetary rewards, recognitions, appreciation and promotions have equally

important bearing on the motivation. Contrary to presumed, there may be

situations where managers may need to cut down on incentives to initiate

punitive action which may actually enhance performance because the

employees may strive to get back on track and deliver better results. Th is

may dispense the need for devising newer or improved incentive plan.


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5. How motivating is the current performance appraisal at your

organization?



Highly motivating 50 20

Fairly motivating 150 60

Satisfactory 25 10

Demotivating 18 7

Highly demotivating 7 3

TOTAL 250 100


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According to Rostami (2000), performance appraisal is the process of

formally evaluating the employees performance. As found in the

quantitative results, a large percentage of respondents attached importance

to performance appraisal as a motivating factor (13.60% respondents ranked

it as the most motivating factor among the ten factors). Fair performance

appraisal is the key requirement to motivate the existing sales personnel as

their performance needs to be acknowledged, evaluated and rewarded in an

unbiased manner in order to motivate the employees to the maximum

extent. Performance appraisal is given due importance because it is an

effective management tool the execution of which is essential to increase

the employee confidence and interest in job and improve the overall

productivity of the organization (Rostami, R. 2000).

6. How important are the opportunities for promotions within th e

organization?



Very important 175 70

Important 52 21

Neutral 20 8

Unimportant 3 1

Not required 0 0

TOTAL 250 100


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7. How motivating is the job satisfaction for you?



Highly motivating 138 55

Fairly motivating 62 25

Satisfactory 25 10

Demotivating 18 7

Highly demotivating 7 3

TOTAL 250 100


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4.4. Inferential Statistics

The null research hypotheses when tested provide the following results:

H1: There is no significant relationship between incentives based rewards and

employee performance.

Mean Standard

Deviation

Number of

respondents

Incentive based

rewards

2.5 1.140 250

Degree of impact

on motivation

2.7 1.400 250

Incentive based

rewards

Degree of

motivation

Incentive based

rewards

Pearson coefficient

of correlation

1.000 0.815

Sigma 2-tailed - 0.000

Covariance 1.290 1.580

Job performance Pearson coefficient

of correlation

0.815(**) 1

Sigma 2-tailed 0.000 -

Covariance 0.320 0.610


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Since a positive correlation coefficient value is realized, i.e. 0.815** at 99%

significance level, the null hypotheses is rejected, hence leading to

conclusion that there is a positive relationship between Incentive based

rewards and employee motivation. Therefore it infers that the incentives are potent

motivator that can influence motivation and translate into performance.

Employees of an organization may be well -equipped with the capacity for

performance and development, but it does not always translate on its own

into improved motivation to perform better. Even when the employees are

capable of performing to their best, they require proper motivation and

guidance. One of the most potent methods to ensure this is delivery of

incentives (financial and non-financial) as it transcends them into a mode of

high performance. Boesen (2004) describes this as putting the employees

into higher performance gear directed towards development.

The ability to perform at work may be affected by internal issues such as

changing perceptions and behaviour or through external incentives which

directly impact the level of motivation. An important role in this respect is

played by the learning opportunities offered at workplace. When the

employees are directed towards learning , not only does it improve their

skills and motivation but also enriches the quality of work. Incentives are a

powerful way to influence the way an employee strives to perform whereas

absence of these may lead to intense demotivation, an example of this is

seen in the case of public versus private enterprises. LIC needs to improve at

motivating sales personnel through better designed incentive plans which

can include higher commission levels on insurance deals completed. The

larger impact will however be governed by the leadership qualities of

supervisors and managers.


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While analysing the linkage between incentives and motivation at three

levels:

1. Individual level

2. Organizational level

3. Environment level

The question of motivation is inextricably linked with capacity and needs to

be analyzed and addressed on all capacity levels: individual, organization

and enabling environment. Figure presents some of the important

motivators at LIC, India.

Source: LIC (2006)

Incentive system is an essential ingredient of the motivational therapy

program as it provides supervisors and managers with a better

understanding about what motivates who and to what extent. Incentives

program is an important factor determining the reaso ns of joining a

particular organization and the manner in which people are rewarded or

punished according to their relative performance.


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The jobs with a higher difficulty (perceived or real) level demand higher

incentives than comparatively easier jobs. The importance of incentive

system may be such that it can make or break the employees will to

perform as desired. Sales professionals at LIC can be expected to perform

only when they are rewarded accordingly. Incentives attract the talented

people and help them retain people over a long period of time to leverage

their performance to improve the organizational performance.

Also it helps improve the employees liability towards organizational goals

and they can be expected to perform increasingly better an d in innovative

ways. Incentives programs can work most effectively when they are

entrenched in the organizational structure and culture and are greatly

influenced by the leadership styles of the managers.

Tangible Incentives

An analysis of already conducted important studies on the subject matter

and my personal research findings hint towards the following salient

characteristics of tangible incentives and their influence on employee

motivation and resulting job performance:

1. A careful planning regarding financial incentives and awards can

increase the job performance of employees in a dramatic way.

2. Only implementing the right kinds of tangible incentives is not

enough; the management must monitor the impact of motivators on

performance. Doing this significantly improves the performance

achievable through incentives.


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3. Tangible incentives are a strong influencer of employees interest in

the job responsibilities; if employees are aware that they are going to

be rewarded for a certain quality of performance they tend to be

motivated to achieve it in an efficient way.

4. Tangible incentives are a powerful tool that enhances the employee

retention and it helps keep butterfly effect to the minimum. The best

performing employees must be rewarded highly to keep them

motivated and with the organization. However, it is very important to

keep in mind that the employers use them in conjunction with the

intangible rewards to retain the employees. This may be caused by

driving out of the lesser performing members of a group involved in

team-based work.

The common types of tangible incentive in use at LIC, India are in practice.

These include the following:

1. Quota-based programs- When sales personnel are offered certain

incentives for achieving or surpassing their target objectives.

2. Piece-Rate Incentive programs- This is when the personnel are

offered incentives for increasing rates of performance closing more

of insurance sales.

3. Tournament Programs- This is when the different personnel or

teams are targeted towards achieving the equivalent target and they

directly compete with each other for tangible incentives.

4. Fixed-Rate Incentives- this is where the sales personnel at LIC are

offered a straight salary-based compensation depending on their

performance standards.


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Among the LIC employees working in the sales department, it was found that

they put attach the greatest value to the quota based incentive programs

and drives the individual(s) to perform as desired or even exceed the

expectations to be able to gain higher incentives from the company. Piece-

rate incentive programs are less effective than the quota based incentive

program, however they are more valued than the tournament -based and

fixed-rate incentive programs. LIC should decide on the type of incentive

programs to be used on the basis of interaction between desired outcomes,

complexity of assignment, program implementation and expected

performance levels of the sales personnel (LIC, 2011).

While non-monetary rewards provide to be highly effective in motivating

employees; but monetary rewards have an upper hand in doing the same.

The conditions for effective environment under which the incentive

programs are implemented exhibits the following characteristics:

1. Current performance on specific objectives should be adequate.

2. Inadequate per

Documents

Employee Motivation and Job Performance- Exploring the Relationship