motivation research term paper

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1Motivatio

n

MOTIVATIONthrough

Compensation and Working Environment

inBanking Sector of Pakistan

Submitted to:

Ms. Samra Javed

Submitted by:

Uzair Ur Rehman

Student ID: 10576

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CONTENTS

Abstract.3

Literature Review .4

Statistical Data . 9

Findings 14

Conclusion 16

Reference .... 18

Questionnaire 20

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ABSTRACT

In any organization employee motivation is the key factor for

organizational performance. Previous studies have shown positive impact

of Working Environment and Compensation on employees motivation. Inthis study a sample of 150 bank officer was taken by adopting non

probability convenient sampling, to investigate the relationship between

Motivation & Working Environment and Employee Motivation. Bank

employees found not highly motivated as a result of working environment

and compensation. Result showed there is a highly positive relationship of

independent variable over dependent variable.

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LITERATURE REVIEW

Introduction

A literature review is a clear and logical presentation of the relevantresearch work done before in the same area of investigation.

Over and over again studies (Bacon et al, 1996; Deshpande and Golhar,

1994 and Julien, 1998) have emphasized that employees are key to

maintaining a competitive edge by a business. To be successful in a global

market, a firm needs a highly motivated, skilled and satisfied workforce

that can produce quality goods at low costs (Wagar, 1998).

RESEARCHERS VIEW

Figure: Compensation and Work environment effect on

Employee Satisfaction and Performance.

(Emmert and Tamer)

Compensation

Basically compensation refers to all forms of financial returns and tangible

services and benefits employees receive as part of an employment

relationship (Milkovich & Newman).

Many researchers describe the importance of compensation in motivating

employees.

Compensation benefits (Pay, rewards, medical & transportation) are a

major consideration in human resource management because it provides

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employees with a tangible reward for their services (Bohlander, Snell, and

Sherman, 2001)

Sansone and Hareckiewicz (2000) identify that compensation benefits

energize and guide behaviors toward reaching a particular goal (Milkovichand Newman, 2002).

Stone (1982) indicated that people are motivated by money for many

different reasons. The need to provide the basic necessities of life

motivates most people (Kovach, 1987).

Benefits, both financial and otherwise, send a powerful message to

employees of an organization as to what kind of organization management

seeks to create and maintain, and what kind of behavior and attitudes

management seeks from its employees (Beer, et al 1988).

I- Pay or Salaries

Cotton and Tuttle say that employee satisfaction with pay level is

important because it has been found to have an effect on levels of

absenteeism and turnover (Jerald, 1997).

Pay can be a factor in decision to stay or leave, it is clear that

dissatisfaction with pay can be a key factor in turnovers (R. Heneman and

T. Judge: 1999).

Linkage between pay and behaviors of employees results in better

individual and organizational performance (W. N. Cooke: 1987).

The process by which the organization creates and administers incentive

pay can help, it use incentives to achieve the goal of motivating employee

(R. T. Kaufman: 1992).

Level of pay and pay system characteristics influence a job candidates

decision to join a firm (E. E. Lawler: 1971).

II- Rewards & IncentivesIn motivation, rewards and incentives directly effect on the behaviors of

employees. Human Resource Professionals are continuously searching for

fresh and innovative ideas to drive positive results through employees

incentive, recognition and reward programs. According to Daniel and

Metcalf, High-performance companies understand the importance of

offering awards and incentives that recognize, validate and value

outstanding work. They keep employees motivated and are effectivemethods of reinforcing company expectations and goals, especially in

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times when promotion is rare, health premiums are on rise and overall job

satisfaction is low (Evans, 1986).

According to a report by the American Compensation Associations,August 1996.

When it comes to reinforcing team behavior, the reward system is one of

the most effective and influential tools available to the organization (IRS

1996).

Rewards may enhance the employees financial well-being through wages,

bonuses, or profit sharing, or indirectly, through employer-subsidized

benefits such as retirement plans, paid vacations, paid sick leaves, and

purchase discounts (Sue Shellenbarger, 19999).

In Cheung and Scherling (1999:563), Martin and Touch identifies that

employee job satisfaction is a function of extrinsic (pay, promotion and

good relationship in the work place) and intrinsic (achievement of tasks)

rewards offered by a job.

Rewards that are proportional to the value of suggestions will facilitate

intrinsic motivations (Amabile, 1996).

Rewards promote efforts, performance and there is lot of evidence that

they often do (Gibbons, 1997; Lazear, 2000,).

D. M. Cable & T. A. Judge (1994) suggest that job candidates look for

organizations with reward systems that fit their personalities.

Therefore the reward issue can not be ignored, as it will create a situation

in which the expectation or the actual goal-directed behavior of one person

or group are blocked or are about to be blocked (Steers and Black 1994).

III- Health BenefitsWellness programs for healthy working environment, may help

organization to cut employer health costs and to lower absenteeism and

turnover of employees (Carolyn Petersen).

Family Health benefits often have spillover effects in the form of loyalty

because employees see the benefits as evidence that the organization care

about its employees. (S. L. Grover and K. J. Crooker: 1995).

IV- Working Environment

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Organization officials have a legal responsibility, if not a moral one, to

ensure that the workplace is free from unnecessary hazards and that

conditions surrounding the workplace are not hazardous to employees

physical or mental health (Decenzo).

Good working environment such as work relationships, adequate

equipment, space, heating, lighting and ventilation motivated employees

(Gerhart).

Green (2001) says managers can motivate employees by setting in motion

the conditions required for motivation such as working environment,

confidence, trust and satisfaction that enforce employees to improve their

performances.

Herzberg and Miller (1968) states that compensation including pay,

rewards, communication and working conditions are four common

incentives, which motivate employees.

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STATISTICAL DATA

Gender

Male 74%

Female 26%

AgeAbove 20 years

21-30 years 53%

31-40 years 28%

41-50 years 11%

Above 50 years 5%

Education

Ph.D 1%

Master Degree 60%

Bechlore Degree 31%

Intermediat 8%

OthersIncome (monthly) Rs.10,000-Rs.20,000 28%

Rs.21,000-Rs.30,000 38%

Rs.31,000-Rs.40,000 11%

Rs.41,000-Rs.50,000 17%

Above 50,000 6%

Work Experience Less than 6 month 5%

6 month to 1 year 32%

1 to 2 years 22%

3 to 5 years 23%

More than 5 years 18%

S. No. Demographics Working Environment Compensation Motivation

IV 1 IV2 DV

1 2.6 2.0 2.25 2.00

2 2.2 2.0 2.125 2.00

3 2.2 2.6 3.375 2.00

4 2.4 2.4 3.375 3.00

5 2.8 1.9 3 2.00

6 2 2.4 3.375 2.50

7 3 1.7 2.625 2.00

8 2.2 2.5 3 3.00

9 2.6 2.3 2.25 2.0010 1.8 2.2 3.5 2.00

11 2.6 2.3 3.125 2.50

12 2.4 2.3 3.25 2.50

13 1.4 2.3 2.875 2.00

14 2.6 2.6 3.125 3.00

15 1.8 1.9 2.875 2.00

16 1.8 2.0 2.375 2.00

17 2 2.0 2.5 2.00

18 1.8 2.3 3.25 2.50

19 2 2.3 2.625 2.50

20 2 1.8 3 1.00

21 2.2 1.6 1.75 1.50

22 1.8 2.1 3 2.00

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23 1.8 2.0 3 2.00

24 1.4 1.9 4.25 2.50

25 2.4 2.2 2.125 2.00

26 3.4 2.0 2.375 1.5027 3.8 2.0 2.125 2.00

28 3 2.3 2.25 2.00

29 1.8 3.0 3 3.00

30 2.4 2.2 1.75 2.50

31 2.4 2.6 3.5 3.00

32 1.8 2.5 2.625 2.00

33 2.2 2.0 2.375 2.00

34 2.4 1.8 2.25 2.50

35 1.8 2.4 3.625 3.00

36 2.6 1.8 2 1.50

37 2.8 3.8 4.5 2.00

38 2.8 2.3 2.375 2.00

39 2 2.2 2.125 2.50

40 2 2.0 2.375 2.00

41 2.2 2.2 2.5 2.00

42 3 1.8 1.625 2.50

43 2.2 2.3 3.25 2.00

44 3.4 2.0 2.5 2.00

45 1.8 1.6 3.75 2.00

46 2.6 2.4 3 1.50

47 3.2 2.5 3.25 3.00

48 2.2 2.0 3.875 2.50

49 3.8 2.2 2.25 2.50

50 2.4 2.3 2.75 3.00

51 3 2.2 2.5 2.50

52 3.4 2.2 2.125 2.00

53 3.2 2.3 2.25 2.00

54 3.4 2.8 2.875 3.50

55 2.8 2.7 2 3.00

56 3.2 2.2 2.25 2.50

57 3 2.2 3 3.00

58 3 2.3 2.125 2.50

59 1.6 2.0 1.75 2.50

60 2.6 2.2 1.875 2.00

61 2.4 2.2 1.75 1.50

62 2 2.0 3 2.50

63 1.6 2.4 2.625 2.00

64 1.8 2.4 2.5 2.00

65 3.2 1.9 3.875 3.50

66 2.2 2.1 3.5 3.00

67 2.6 2.7 3.625 2.50

68 2.6 3.2 3.5 4.00

69 3.4 1.3 1.75 1.50

70 1.8 3.0 3.75 3.00

71 2.4 1.8 1.25 1.50

72 2.2 1.8 2.875 2.00

73 3 2.0 3.375 3.50

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74 3.2 2.3 1.625 2.50

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75 2.6 2.2 2.875 1.50

76 2.2 2.1 3.5 2.50

77 3.8 1.7 1.5 1.50

78 2 1.5 2 2.00

79 2.4 2.1 2.25 3.0080 2.8 2.0 2.625 2.00

81 2.2 2.8 1.75 3.00

82 2.8 2.3 1.75 2.00

83 2.2 1.6 1.375 2.00

84 2.8 1.8 1.625 1.50

85 2.2 2.1 1.25 3.00

86 4 2.5 2.875 3.00

87 2.6 1.9 2 1.50

88 3 1.7 1.75 1.00

89 3 2.3 1.75 3.50

90 2.8 1.9 1 2.00

91 3.4 2.5 4.5 2.50

92 3.6 1.6 1.25 2.00

93 2.8 2.1 2 2.00

94 2 2.3 3.25 2.50

95 2.4 2.3 1.75 2.50

96 2.4 1.8 2.5 2.50

97 2.4 2.4 2.875 2.50

98 3 1.7 2.375 2.00

99 2.8 2.2 3.125 2.50

100 2.6 2.1 2.125 2.00

101 2 2.6 5 4.50

102 2 2.8 4.25 3.00

103 1.8 3.4 4.25 4.50

104 3 3.4 4.5 2.00

105 2 3.4 4.75 5.00

106 2.2 3.0 3.25 3.00

107 1.6 2.1 2.375 2.00

108 2.4 1.7 2.375 2.00

109 2.6 2.8 3.25 2.50

110 2.2 2.3 2.625 3.00

111 2.4 1.9 2.625 3.00

112 1.8 1.8 2.5 2.00

113 2.6 1.6 3.125 1.50

114 2.4 2.0 3.125 3.50115 2.2 1.3 2.25 1.50

116 1.4 1.8 2.25 2.00

117 3 2.7 4.25 3.50

118 2.4 2.0 2.75 2.00

119 2.2 2.2 3.375 2.50

120 2.2 2.5 3.625 2.50

121 2.8 2.1 3.375 2.50

122 3.2 1.7 2.5 2.00

123 3.2 3.3 2.875 3.00

124 3.2 3.3 3.125 3.00

125 1.8 2.4 3.625 2.50

126 2 2.7 2.625 3.00

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127 3.4 2.3 2.625 1.50

128 2.4 2.3 2.625 3.00

129 3 2.3 2.5 3.00

130 2.6 4.2 3.625 4.50

131 3.6 1.7 2 2.50132 3.2 2.7 3.375 3.00

133 2.4 2.2 4 2.50

134 2 1.8 3.625 1.50

135 3.8 4.3 3.875 4.00

136 2.8 1.7 2 2.00

137 3 2.5 1.5 2.00

138 2.6 2.3 2 2.00

139 1.8 2.7 2.625 1.50

140 2 1.9 2.5 2.50

141 2.6 2.0 1.375 2.00

142 3 2.5 3 2.50

143 3.2 2.5 2.75 4.00

144 3.8 1.6 2.5 1.50

145 1.8 3.1 4.375 4.50

146 2.4 3.0 3 3.00

147 2 3.2 4.625 4.50

148 2.8 1.8 2.25 2.00

149 2 2.0 2.125 1.50

150 2.8 3.1 3.75 3.50

Working

Environment

Compensation Motivation

Mean 2.256666667 2.784166667 2.436666667

Median 2.2 2.6 2.5

Mode 2.0 2.3 2.0

Standard Deviation 0.5 1.0 0.7

Sample Variance 0.3 0.9 0.5

Minimum 1.3 1.0 1.0

Maximum 4.3 5.0 5.0

Correlation b/w Motivationand king Environment

Correlation b/w Motivationand Compensation

0.646238187 0.530625915

Regression Lines b/w Motivation

(X) and Working Environment (Y)

Regression Lines b/w Motivation

(X) and Compensation (Z)

X = 0.30 + 0.95Y X = 1.11 + 0.48Z

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0.01.02.03.04.05.06.07.08.09.0

10.0

1 12 23 34 45 56 67 78 89 100 111 122 133 144

Motivation

Working Environment

Motivation and Working Environment

Working Environment IV 1 Motivation DV

0

1

2

3

4

5

6

1 11 21 31 41 51 61 71 81 91 101 111 121 131 141

Motivation

Compensation

Motivation and Compensation

Compensation IV2 Motivation DV

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FINDINGS

Descriptive results revealed positive trend of variables i.e. Working

Environment & Motivation and Compensation and Motivation. Likertscale helped to explain the feelings of bank officers towards

Compensation, Working Environment and motivation.

The aggregate mean of 1st independent variable (Working Environment) is

calculated as (2.26), median (2.2), mode (2) with (0.50) standard deviation

and (0.30) sample variance, which shows that the people working in

banking sector of Pakistan feel that there is need to update the working

environment of the banks. They are of a view that working environment in

banking sector of Pakistan has some flaws in it which needs to beremoved. In nutshell, bank employees are not found highly satisfied and

motivated with their current working environment of the banks in Pakistan.

The aggregate mean of 2nd independent variable (Compensation) is

calculated as (2.78),median (2.6),mode (2.3) with (1.0) standard deviation

and (0.90) sample variance. This again reveals that most of the people are

not satisfied with the fully satisfied with their compensation structure. The

bank employees feel that they are not paid according to the services they

are giving to bank. They are not getting the true fruit of their hard work.There is a need to update the compensation structure according to the

services provided by employees.

Aggregate mean of dependent variable (motivation) is found as (2.44),

median (2.5), mode (2.0) with (0.7) standard deviation and (0.5) sample

variance. This analysis shows that the motivation level of bank employees

is not very high. They are somehow dissatisfied or not motivated in terms

of working environment and compensation.

Co Relational Analysis

Correlation b/w Motivation

and Working Environment

Correlation b/w Motivation

and Compensation

0.646238187 0.530625915

According to the research there is a high positive correlation between

Motivation and Working Environment as well as Motivation and

Compensation.

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If the Working Environment is conducive and cooperating which give the

employees a feeling of self accomplishment, hen they will be moremotivated and loyal to their organization.

Many of other researchers previously found similar results from their

research and analysis. Sansone and Hareckiewicz (2000) identify that

compensation benefits energize and guide behaviors toward reaching a

particular goal (Milkovich and Newman, 2002).

Stone (1982) indicated that people are motivated by money for many

different reasons. The need to provide the basic necessities of lifemotivates most people (Kovach, 1987).

Regression ResultsThe regression line expresses the best prediction of the dependent variable

( X, Motivation), on the independent variables (Y, Working Environment)

and (Z, Compensation). The regression lines equations for these variables

are as follows:

Regression Lines b/wMotivation (X) and Working

Environment (Y)

Regression Lines b/wMotivation (X) and

Compensation (Z)

X = 0.30 + 0.95Y X = 1.11 + 0.48Z

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CONCLUSION

Motivation is linked with good working environment and high level of

compensation.

The organization should must understand that what type of work

environment can motivate their employees and they can become loyal

employees of the organization which benefit the organization in the long

run. Moreover the organizations should develop such a compensation

structure that fulfill the needs of the employees in a best possible way and

that they dont look around to meet their needs.

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REFERENCES

1. Amabile, T. M. 1996, creativity in context, 2nd ed, Boulder, co, West view press.2. Beer, M. and Walton, E. R. 1990 Reward Systems and the Role of

Compensation Manage People, Not Personnel: Motivation and performance

Appraisal. A Harvard Business Review Book, Chapter 2, pp.15-30.

3. Bohlander, G., Snell, S. and Sherman A., 2001, Managing Human Resources.

Cincinnati, OH: South-Western College Publishing

4. Carolyn Petersen, 2000, Value of Complementary Care Rises, But Poses

Challenges, Managed Healthcare.

5. Colvin, G. (1998). What money makes you do? Fortune 138 (4), 213-214.

6. David A. Decenzo and Stephen P. Robbins. 2002, Human Resource

Management, 7th ed. John Wiley and Sons, Inc.

7. D. M. Cable & T. A. Judge, 1994, Pay Preferences and Job Search Decisions:A Person-Organization Fit Perspective, Personal Psychology 47, pp.317-48.

8. E. E. Lawler, 1971, Pay & Organizational Effectiveness: A Psychological View,

New York, McGrew-Hill, Inc.

9. Emmert, M. and Tamer W. A., 1992. Public Sector Professionals: The effect of

Public Sector Job on Motivation, Satisfaction and Work involvement. American

Review of Public Administration, Vol. 22, pp.37-48.

10. Evans M. G., 1986. Organizational behavior: The central role of motivation.

Journal of Management.

11. F. Herzberg, B. Mausner, B. Snyderman.1959, The motivation to work. New

York, Johnwiely.

12. Green Berg J, 2001. Organizational Justice as Probation and reactions:

Implications for research `and application. In Cropanzano R (ed.), Justice in

work place: form theory to practice (Vol. 2, pp. 271-302).

13. Gerhart B. (ed.), compensation in organization: Current Research and Practice,

pp. 32-60. San Francisco: Jossey-Bass.

14. Gibbons R., 1997, incentives and careers in organizations. In advances in

Economic theory and Econometrics, Vol. II, Kreps D. and Wallis K, ed.

Cambridge University press, U.K.

15. Herzberg. F. 1968, One more time: How do you motivate employees?

Harward business review, Vol. 46, ISS. 1, pp, 53-62

16. IRS Employment Review, 1996, Selecting team rewards. London , Internet17. Jerald, G. and Robert, A. B., 1997. Behavior in Organizations: Understanding

and Managing the Human Side of Work, Upper Saddle River, NJ: Prentice-Hall,

Inc.

18. Kovach, K., 1987. What Motivates Employees? Workers and Supervisors Give

Different Answers. Business Horizons.

19. Martin, J. and Hanson, S., 1985. Sex, family wage earning status and

satisfaction with work and occupations, 12, 91-109.

20. Milkovich & Newman, 2002. Compensation, 7th ed, The McGrew-Hill

Companies, Inc.

21. R. T. Kaufman, 1992, The Effects of Improshare on Productivity, Industrial

and Labour Relations Review 45, pp. 311-22.

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22. R. Heneman and T. Judge, 1999, Compensation Attitudes: A Review and

Recommendations for Future Research, in Compensation in Organization:

Progress and Prospects, S.L. Rynes and B. Gerhart, eds. New Lexington Press,

San Francisco.

23. Steers, R. and Black, J. 1994,Organization Behavior, 5th ed, Harper Collins.24. S. L. Grover and K. J. Crooker, 1995, Who Appreciates Family Responsive

Human Resource Policies: The Impact of Family-Friendly Policies on the

Organizational Attachment of Parents and Non-parents, Personnel Psychology

48, pp. 271-88.

25. Sue Shellenbarger, 1999, Employees who value time as much as money Now

get their Reward, Wall street journal, p. B-1.

26. Wagar, Terry H., 1998, "Determinants of Human Resource Management

Practices in Small Firms: some Evidence from Atlantic Canada," Journal of

Small Business Management, pp.13-23.

27. W. N. Cooke, 1994, Employee Participation Programs, Group based Incentives

& company Performance, Industrial and Labour Relations Review 47, pp. 603-

36.

28. NUML University, Digital Lab.Black wall Synergy Data Basis.

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Motivation of Employees in Banking Industry of Pakistan

Questionnaire

This research is confidential. No responder will be disclosed individually. It is myhumble request that you provide your honest views, avoiding overly positive and overly

negative feedback.

DEMOGRAPHICS

1. Gender

Male FemaleF

2. Age

a) Above 20

b) 21 30

c) 31 40

d) 41 50

e) Above 50

3. Education Level

a) PhD

b) Post Graduate Level

c) Graduate Level

d) Intermediate Level

e) Other

________________________________________________________________

4. How long have you been working at _______________________(Name of Bank)

a) Less than 6 months

b) 6 months 1 year

c) 1 2 years

d) 2 3 years

e) 3 5 years

f) More than 5 years

5. What is your management level?

________________________________________________

6. What is your pay level?

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a) 10,000 20,000

b) 20,000 30,000

c) 30,000 40,000

d) 40,000 50,000

e) Above 50,000

WORK ENVIRONMENT StronglyAgree

Agree Neutral Disagree Strongly

Disagree

7. I am treated with dignity and

respect by management

8. I fully utilize my skills and

abilities in the Bank.9. Work assigned to me is

interesting, rewarding and

challenging and give me a

feeling of personal

accomplishment.

10

.

Bank provides an environment

where diverse individuals can

work together effectively and

happily.

11

.

Bank is responsive to change and

encourages change within the

organization in order to stay

effective in a changing

environment.

12

.

Bank place a great emphasis on

honestly, integrity and ethical

behavior.

13

.

The amount of work expected to

do in my job is reasonable.

14

.

Employees have the support and

authority to make the decisionnecessary for accomplishing

their assigned tasks.

15

.

Employees have the resources

(personnel, finances, tools)

necessary to do quality work.

16

.

All employees at ____________

are treated fairly regardless of

age, race, gender, family status,

veteran status, national origin,

disability, personality, thinkingstyle or sexual orientation.

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17

.

We can exchange our views

freely in the work place.

18

.

Work environment is overall

very comfortable, friendly and

cooperative.

COMPENSATION StronglyAgree


Disagree

19

.

Overall, the employee benefits I

receive meet my needs.20

.

I understand the value of the

total compensation

(compensation + benefits)

package that Bank delivers to

me.

21

.

Bank pays for performance.

22

.

I receive good medical

allowances.

23

.

Bank is providing me with

transport allowances/facility.24

.

The overall benefits given to me

by Bank, provide good security

for me and my family.

25

.

Compared to other banks in the

industry my Bank has an

excellent compensation and

benefits package.

26

.

How would you rate the quality

of service you receive when you

have a benefits issue, question orclaim?

Very

Good

Good Average Poor Very Poor

MOTIVATION StronglyAgree


Disagree

27

.

I am highly motivated with the

current working environment of

my Bank.

28

.

I am satisfied with my

compensation & benefits

package.

Thank you very much for your support

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motivation research term paper