Relationship Between Motivation and Job Performance

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
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 1|Page
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
Factors affecting motivation
Motivation of employees
Performance of employees
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.
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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
Unsatisfied needs
Resulting tension
Drive to satisfy the need
Reduction of tension
Satisfaction of need
Search behaviour
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.
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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 p erform 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 st udy 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 Existe nce 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 probably 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 a ny 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 requir ed 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 ev entually 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 environment s. 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 necessa ry 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 mor e 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 en ough 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 fo r 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 co rrelation 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 servic e 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 do wn 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 sel ected 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 perso nnel 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
Choice of the particular research topic
Formulation of the research problem and purpose of research
Developing theoretical framework
Identifying potential respondents
Designing the questionnaire Contacting the chosen respondents and getting them to reply favourably
Collection of empirical data from returned questionnaires
Interpretation of the empirical data through quantitative statistical methods
Analysis of results from interpretation of empirical data, deduce relationships between variables and discuss the research questions
Source: Authors Creation
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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 employ ee 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) 20-25 26-30 31-35 36 and above Number of respondents (Total=250) 60 116 52 22 Percentage of respondents 24.00% 46.40% 20.80% 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 3135 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 Job satisfaction Fair performance appraisal Recognition by supervisors Effective reward management Opportunities for promotion Work environment Incentives Working hours Pay scale Punitive action Total number of Employees 20-25 years 26-30 years 31-35 years 36 years and above 5 2 1 1 3 2 2 2 1 1 22
12 10 8 9 6 2 5 2 5 1 60
25 15 13 7 22 9 12 5 7 1 116
11 7 7 5 8 1 4 1 6 2 52
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 1 2 3 4 5 6 7 8 9 10 Motivation factor Job satisfaction Opportunities for promotion Fair performance appraisal Recognition by supervisors Incentives Effective reward management Pay scale Work environment Working hours Punitive action Ranked by number of respondents 53 39 34 29 25 22 19 14 10 5 Percentage of respondents 21.20% 15.60% 13.60% 11.60% 10.00% 8.80% 7.60% 5.60% 4.00% 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 Highly motivated Motivated Neutral Demotivated Highly demotivated TOTAL Number of respondents 75 153 17 5 0 250 Percentage of respondents 30 61 7 2 0 100
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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? Scale Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied TOTAL Number of respondents 85 140 18 5 2 250 Percentage of respondents 34 56 7 2 1 100
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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 Financial Non-financial A combination of both TOTAL Number of Respondents 75 50 125 250 Percentage of respondents 30 20 50 100
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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 hel ps 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? Scale Number of respondents 68 138 15 25 5 250 Percentage of respondents 27 55 6 10 2 100
Highly effective Fairly Effective Satisfactory Ineffective Highly ineffective TOTAL
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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? Scale Number of respondents 50 150 25 18 7 250 Percentage of respondents 20 60 10 7 3 100
Highly motivating Fairly motivating Satisfactory Demotivating Highly demotivating TOTAL
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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? Scale Number of respondents 175 52 20 3 0 250 Percentage of respondents 70 21 8 1 0 100
Very important Important Neutral Unimportant Not required TOTAL
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7. How motivating is the job satisfaction for you? Scale Number of respondents 138 62 25 18 7 250 Percentage of respondents 55 25 10 7 3 100
Highly motivating Fairly motivating Satisfactory Demotivating Highly demotivating TOTAL
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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 Incentive based rewards Degree of impact on motivation 2.7 1.400 250 2.5 1.140 Number of respondents 250
Incentive based rewards Incentive based rewards Pearson coefficient of correlation Sigma 2-tailed Covariance Job performance Pearson coefficient of correlation Sigma 2-tailed Covariance 0.000 0.320 1.290 0.815(**) 1.000
Degree of motivation 0.815
0.000 1.580 1
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 perfor mance 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 targ et 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 performance of employees is most often a motivational problem which can be resolved through implementation of proper motivation programs whether financial or non-financial rewards based. 3. The desired performance of employees must be matched against the benchmark standards of performance which is quantifiable on terms of how many, much and often. 4. The goals for which incentives are offered must be realisable bu t stimulating at the same time, i.e. too easy goals fail to motivate the employees. 5. The supervisors should regularly ensure that the employees are able to meet targets set for them.
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The PIBI Model The following PIBI Model is an analytical and prescriptive mechanism to rightfully select the types of incentive programs that should be used and their implementation through features including: 1. Identification of important factors and their impact on motivation. 2. Choosing the right type of incentive program depend ing on the task characteristics and employee characteristics. There should be a match between these two to avoid any motivational problems that may occur and cause discontentment between employees and supervisors. This can be done by analysing the utility and interest value of the task at hand. 3. Generating the necessary feedback through proper mechanism and take corrective actions as and when required. 4. Guiding the implementation process aimed towards better execution and trying to overcome any obstacles hind ering the motivation. 5. Supporting decision makers to identify the problem areas and rectify them if the results are not matching the expected scales of quantity and quality and eventually increasing performance through increased motivation. (Source: Grass Roots Project Link)
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Performance Improvement by Incentives Model
Source: Grass Roots Project Link
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Role of Financial and Group Incentives in motivating employees Incentives offered are either financial, i.e. monetary which are in the form of cash or alike or they can be in the form of intangible non -financial rewards such as recognition, appreciation and awards. The direct financial incentives offered to sales professionals at LIC, India are job -based salary, pension schemes, insurance benefit s, periodic or performance based bonuses, etc. Other indirect financial incentives may include housing facilities for employees, healthcare benefits, subsidies in meals and grocery shopping through official canteens of LIC. Managers at LIC strive to reward sales personnels performance linking it to special incentive reward. Although better performance is awarded higher incentives, poorer performance may actually lead to equivalent cuts. In cases where remuneration received by the employees is lower, as in case of newer salesmen, cash based incentives prove to be highly effective. This is markedly distinct from that of private sector where pays are higher than their public sector counterparts. In addition to financial incentives, the effect of non -financial incentives cannot be neglected. Non-financial incentives are awarded to the employees in the form of gifts, non-monetary rewards and travel benefits, etc. These are increasingly effective when the employees are remunerated adequately and they experience higher flexibility in their jobs, independence at work, recognition and appreciation and the scope for development and promotion. This is related more with the psychological indicators of employees rather than physiological. Their importance is not ignored at the LIC and they are valued by their employees in equality with financial incentives.
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The sales personnel at LIC are rewarded with both formal and informal incentives. The formal incentives can come in the form of bonus added salary and staff privileges. The informal incentives can come in the forms other than these and may be legitimate or illegitimate depending on the context in which they are offered. Personal practices which lead to improper deriving of benefit are not highlighted at LIC as the organization follows a tight bureaucratic structure. In addition to this, incentives are disti nguished as being materialistic or non-materialistic which can affect the intrinsic and extrinsic motivations in distinct ways. Though generally acceptable view is that money is the single most important motivator for people to work and perform, the reali ty is found to be different as non-financial incentives are more or less given equal preference in comparison to financial incentives by the sales personnel surveyed in this research. This supports the dynamic nature and presence of underlying psychological features of motivation. Therefore it is necessary not to be inclined only or in a major way towards designing rewarding systems which are based on money; more so because it is critical to recognize that different people are motivated in different ways an d such ways are varied and of complex effects. Link between Remuneration and Performance The usual belief of the management is to follow the performance related pay system; but with the introduction of concept such as Management by Objectives which made the management to focus on incentivizing the pay system. Today any successful organization such as LIC gives a lot of importance to pay and non-pay related incentives to attracting, developing and retaining the most talented individuals from the market.
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Pay attracts the prospective employees whereas other rewards retain them for making the organization more productive. This does not imply that financial incentives should be neglected because people will not perform to their optimum and beyond even if they hav e all the required rewards but lack at financial rewards. Payment mechanism is characterized by presence of a bonus linked plan where better performing employees are offered bonuses or reaching certain level of performance. It increases relatively with their performance. At LIC, India, the sales personnel are given due training and development towards better motivation and equipping them with ability to enhance their performance. How the particular job is done and target is achieved is equally valued as how good the results are. In particular, it is worth reflecting on the fact that there is a strong preference in many companies to cascade objectives down through the organisation. This has the effect of disempowering staff, preventing them from fully participating in objective selection. This is likely to be counter productive if the aim is to lift levels of engagement.
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H2: There is no significant relationship between employee training & development and employee motivation. Mean Standard Deviation Training and development opportunities Degree of impact on motivation 3.28 1.527 250 3.60 1.235 Number of respondents 250
Performance Appraisal Training and development opportunities Sigma 2-tailed Covariance Job performance Pearson coefficient of correlation Sigma 2-tailed Covariance 0.000 1.286 1.175 0.918(**) Pearson coefficient of correlation 1.000
0.000 1.290 1
2.104
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A high correlation value of 0.918** at 99% confidence level shows that the two variables viz. training and development and the performance are strongly positively correlated. This should draw attention towards the need and significance of development opportunities and their strong influence on motivation and performance of sales pers onnel at LIC, India. The stimulating work environment in an organization exists when the objectives are clear, the standards are high and the employees are provided with ample training and development opportunities along with a fair and healthy reward management plan paired up with excellent leadership and favourable work climate (Capozzoli, 1998). Helminger (1997) also throws light on the continuing effect of motivational factors. Hackman and Oldham (1976) attribute high value to training as a motivational influence for workforce, especially when working in teams as there are better prospects to learn from other team members. Employees are more motivated when they eye an opportunity to learn and develop. This gives us an idea why the opportunities for train ing and development are ranked highly among various motivational factors to which the sales personnel at LIC are subjected.
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H3: There is no significant relationship between performance appraisals system and employee motivation. Mean Standard Deviation Fair Performance appraisal Degree of impact on motivation 2.60 1.350 250 2.40 1.159 Number of respondents 250
Performance Appraisal Fair Performance appraisal Pearson coefficient of correlation Sigma 2-tailed Covariance Job performance Pearson coefficient of correlation Sigma 2-tailed Covariance 0.000 1.489 1.212 0.964(**) 1.000
0.000 1.387 1.000
1.892
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While testing for the existing relationship between fair performance appraisal and job performance of sales personnel at LIC, India as collected through the survey responses, it is found that there is a positive correlation (amounting to 0.964** at 99% confidence level) between the two variables and thus null hypothesis is rejected and trans formed into the outcome that performance appraisal has a direct impact on the motivation and performance of employees. There is a covariance of 1.892 between the variables suggesting highly positive linkage between the two. Kavussishal (1999) argues that the most important resulting element of performance appraisal is the identification of the best performing
employees and rewarding them appropriately according the reward and incentive management approaches being followed in the organization. Thus, performance appraisal is a critical method to identify the best performers and reward them to increase their motiva tion and productivity. Kavussishal (1999) believes performance appraisal to be the perfect tool in the hands of managers to improve the quality of pe rformance. At LIC, India the results indicate overall satisfaction among the employees in relation to the performance appraisal and most of them find it to be fairly motivating (60% of the respondents), however 10% of them also found it to be demotivating, which infers there are some problem areas that need to be identified and rectified so as to improve the appraisal process and make it more acceptable and fruitful.
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The potential problem areas at LIC may be: 1. Inadequate support from supervisors and managers 2. Impractical appraisal mechanism 3. Possibility of unfair practices 4. Non-concordance of actual practices with the stated If these problem areas are dealt with in a professional manner, the appraisal system can become even more effective in improving t he motivation of sales personnel at LIC.
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H4: There is no significant relationship between the supervisors attitude, behaviour and leadership style followed and employee motivation. Mean Standard Deviation Role of Supervisor(s) Degree of impact on motivation 2.36 1.131 250 1.93 0.83 Number of respondents 250
Performance Appraisal Role of Supervisor(s) Pearson coefficient of correlation Sigma 2-tailed Covariance Job performance Pearson coefficient of correlation Sigma 2-tailed Covariance 0.000 0.753 0.547 0.716(**) 1.000
0.000 0.729 1
1.482
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A positive correlation figure of 0.716** confirms the positive relationship existing between the relationship (between sales personnel and supervisors) and motivation level of employees. It leads to rejection of null hypotheses and thus strengthening the perceived relationship between supervisors attitudes and employee performance. In any organization, there exists a close relationship betwe en the employees (in this context, the sales persons) and their direct supervisors. The kind of performance an employee is able to achieve is largely dependent on the quality of guidance and support they receive from their supervisors. Selling insurance can be a challenging responsibility for the sales persons at LIC, India. Dubins et al. (1999) have focused their research on deriving a relationship between the supervisory behaviour and influence on the motivation of employees working under them. They have proposed the need for transactional, transformational and charismatic leaders hip in order to motivate employees and develop the organization. This has acquired greatest significance in the case of motivating sales pro fessionals. DeCarlo et al. (1997) have emphasized on the importance of effective sales personnels motivation management. Baldauf et al. (2001) supports this view and stresses that the different supervisors can behave totally different under the same type of situation. Also differing can be the type of leadership exercised by them. While some supervisors may believe tha t motivational, cooperative and mutual work environment can enhance the performance of sales personnel while others may find critical and penalty based environment to be better for achieving sales targets.
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However it has been observed through the study that employees perform better in a motivational and stimulating environment rather than a punitive one. This requires us to focus our thinking towards the need for right kind of supervisors as well. Employees may perform better under the supervision of one leader than the other; therefore it is essential that the right supervisors work with right sales personnel. This is bound to improve the performance in sales. The responsibility to bring together the compatible teams of supervisors and sales personnel lies with both the senior management and the supervisors. Sales performance is at its peak when a match is acquired between the supervisory style of leaders and performance dimensions of employees. Hence it is managements duty to select the right combinatio n of supervisors and sales professionals in order to achieve the sales target and foster the level of motivation. The type of direction and control on behalf of supervisors should be a part of the overall policy of motivation
management. Before assigning sales tasks, the whole process should be evaluated for its viability. During this, the supervisors can choose the type of supervisory style they will be following, either it can be reward based or criticism based. This is contingent upon the expected outcom e. If the supervisor believes a certain action would improve performance, it will certainly be followed. No particular type of motivational strategy can be effective for all the employees under all the conditions. Both rewarding and repressive supervision should be practiced according to the requirements.
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Some situations may demand cooperation whereas sometimes punitive action is needed. Therefore, the supervisors should use their discretion and utilize the action deemed to be fit with the situation. Im proper action may result in contention and lower the productivity of taskforce. However in case of LIC, it has been found that positive behaviour is more likely to create the right kind of impact to direct sales personnel to achieve their sales targets effectively. Supervisors are believed to have a far reaching impact on their sales team and govern their performance in a major way. Tyagi (1985) argues that in comparison to negative behaviour of supervisors, the positive behaviour goes a long way in motivat ing the sales personnel. Both extrinsic and intrinsic rewards work positively in case of most employees.
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Conclusion The research work aimed at scrutinizing the relationship between employee motivation and job performance is targeted at the sales professionals working at the Life Insurance Corporation of India. The study presents a critical evaluation of the theoretical background of this vast subject. In the subsequent sections a quantitative analytical study is conducted to critically investigate the relationships existing between various motivation factors and their impact on the motivation of employees at the said organization. All the null hypotheses as formed in the beginning of research are rejected and new hypotheses are formed which establishes a positive link between motivation factors and variables. In the findings and analysis of the outcomes, we can identify clear existence of relationship between motivation and performance. The employees put a greater emphasis to motivation factors including job satisfaction, performance appraisal system, rewards management and supervisors impact. According to the statistical analysis these four factors are ranked highest implying their importance in motivating the employees. Thus, LIC should focus on leveraging the benefit from improving the penetration and effectiveness of these motivation factors. While financial incentives (30%) are given more importance as compared to non-financial incentives (20%), but a majority (50%) prefers a combination of both these types of incentives. This gives us an idea regarding increasing importance of non-monetary rewards in modern business world. However there is a need to appreciate the employees more frequently and in more innovative ways. The focus should be on devising incentive based rewards schemes while also taking some punitive action if really required. There is a need for more planning in terms of training and development of sales personnel at the organization as they may be well equipped to deal with the challenging work responsibilities and remain motivated even in hostile business environment in order to deliver and perform as expected.
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Participation and involvement are important areas where the organization can look forward to improve because it has a direct bearing on the motivation and confidence levels of the employees. The system can be allowed to decentralize to an extent and provide for decision making by the employees concerned. The overall results of this study infer presence of an effective motivation management framework in place at LIC and that most of the employees are motivated towards their jobs and responsibilities. The organization can enhance the motivation level of their sales personnel through these measures and eventually can perform better at individual and organizational level.
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Appendix 1- Questionnaire Relationship between Motivation and Performance Please mark the appropriate responses by putting a tick mark beside the associated answers.
Part A
1. Please mention your age bracket accordingly. a) 20-25 b) 26-30 c) 31-35 d) 36 and above 2. How motivated you feel with your immediate supervisors? a) Highly motivated b) Motivated c) Neutral d) Demotivated e) Highly demotivated 3. How satisfied you are with the motivation management in practice at your organization? a) Very satisfied b) Satisfied c) Satisfactory d) Dissatisfied e) Highly dissatisfied
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4. Which types of incentives motivate you in a more effective way? a) Financial b) Non-financial c) A combination of both 5. How effective, according to you is the reward management system at your organization? a) Highly effective b) Fairly Effective c) Satisfactory d) Ineffective e) Highly ineffective 6. How motivating is the current performance appraisal at your organization? a) Highly motivating b) Motivating c) Neutral d) Demotivating e) Highly demotivating
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7. How important are the opportunities for promotions within the organization? a) Very important b) Important c) Neutral d) Unimportant e) Not required 8. How motivating is the job satisfaction for you? a) Highly motivating b) Motivating c) Neutral d) Demotivating e) Highly demotivating
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Part B
Kindly rank the following motivation factors in their order of importance to your performance at work at LIC, India. (Use numbers 1-10 as you deem suitable). a) Work environment b) Recognition by supervisors c) Incentives d) Opportunities for promotion e) Working hours f) Pay scale g) Effective reward management h) Job satisfaction i) Fair performance appraisal j) Punitive action
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Title of Dissertation

Employee Motivation and Job Performance- Exploring the relationship

University of Bangor, Wales September 30, 2011

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

5. Chapter 5: Conclusion List of References....81 Appendix 1: Questionnaire...87

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

1.2. Theoretical Framework

Factors affecting motivation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Drive to satisfy the need

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Chapter 2: Literature Review

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Figure 2.1.2.1- Dichotomy of Herzbergs two factor theory

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Figure: Need based theories

Source: Griffin (1995)

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Source: Boal & Cummings (1981)

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

rewards also considering the appeal of such potential rewards.

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Relationship between motivation and performance

productivity and performance.

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Employee motivation and Job Design

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation

Choice of the particular research topic

Formulation of the research problem and purpose of research

Developing theoretical framework

Identifying potential respondents

Collection of empirical data from returned questionnaires

Interpretation of the empirical data through quantitative statistical methods

Source: Authors Creation

MBA Management 2011 Dissertation

MBA Management 2011 Dissertation