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 ContentsChapter 1: Introduction

MBA Management 2011 Dissertation

1.1. Background…………………………………………………………………………………………………………4

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 Motivation……………………………………………………………………………10-37

2.2. Motivation Theories

2.2.1. Need Based Theories

2.2.1.1. Maslow’s hierarchy need theory (1943)

2.2.1.2. Herzberg’s two factor theory

2.2.1.3. ERG Theory

2.2.1.4. Mc Clelland’s theory of needs

2.2.2. Process Based Theories

2.2.2.1. Cognitive Evaluation Theory

2.2.2.2. Locke and Latham’s Goal Setting Theory

2.2.2.3. Vroom’s Expectancy Theory

2.2.2.4. Equity Theory

2.2.2.5. Reinforcement Theory

2.3. Impact of Managers on Employees’ Motivation

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2.4. Impact of Supervisor’s 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 Collection……………………………………………………………………………………………………41

3.7. Choice of research method…………………………………………………………………………………42

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 Statistics……………………………………………………………………………………………49

4.4. Inferential Statistics…………………………………………………………………………………………....59

5. Chapter 5: Conclusion

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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 people’s needs, wants and desires and lead them into

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

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

dimensions of relationship between motivation and performance, particularly

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

employees in an organization.

The research proposal entitled “Relationship between motivation and performance”

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

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

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

branches of Life Insurance Corporation (LIC) of India.

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1.2. Theoretical Framework

Source: Author’s 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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Factors affecting

motivation

Motivation of employees

Performance of employees


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

employee’s 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 individual’s cognition

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

Hough).

Figure 1.4.1 Process of Motivation

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

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

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

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

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

common communication to act as a mediator between the employees and

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

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Unsatisfied needs Resulting tension Drive to satisfy the need

Reduction of tension

Satisfaction of need

Search behaviour


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

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

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


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H4: There is no significant relationship between the supervisor’s attitude, behaviour and

leadership style followed and employee motivation.

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 individual’s 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)

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

the deficiency of need(s).

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 Maslow’s hierarchy need theory, Herzberg’s two factor theory, ERG

theory and McCellend’s need theory.

2.2.1.1. Maslow’s 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 motivation for an

employee to work are arranged in a hierarchical order of increasing

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

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

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

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

hierarchical order as suggested, therefore motivation doesn’t always follow

the hierarchy as mentioned in Maslow’s theory of needs.

Although Maslow’s 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

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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), Maslow’s 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. Herzberg’s two factor theory

Frederick Herzberg’s 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 Herzberg’s 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 organization’s 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 Herzberg’s 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 Herzberg’s two types of factors seem to

emanate on the basis of Maslow’s 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 Herzberg’s two factor theory

Source: Johnson & Gill (1993)

It is critical to note that both Maslow’s hierarchy needs and Herzberg’s two

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

whether it is the scientific management approach or the human relations

approach, their applicability is contingent and is thus not applicable

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

seems to be that different employees behave differently in various

situations are motivated through different ways. Even people from different

socio-economic backgrounds exhibit different work orientations (Parker,

1972).

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

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

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

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

having a negative impact.

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

behavioural patterns, expectations from job and organization and their

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

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

determined” instead of being psychological contracts.

2.2.1.3. ERG theory

Alderfer’s (1972) work on improving the Maslow’s hierarchy theory of needs

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

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

empirical work carried out. The Existence group includes the employees’

fundamental requirements necessary for the basic survival. Corresponding to

the Maslow’s 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 Maslow’s 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 Maslow’s self-

actualization needs category. The ERG theory succeeds the Maslow’s theory

due to the fact that it doesn’t 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. McCellend’s theory

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

McCellend’s 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 one’s 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 dedicated

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 they consider is as

“too easy” or “too difficult”.

Some employees who are considered to be high achievers experience a

sense of achievement and contentment when they achieve their objectives

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

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

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

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

Figure summarises the four classical need theories and compares what

constitutes their basic concepts.

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Figure: Need based theories

Source: Griffin (1995)

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2.2.2. Process Based Theories

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

the process based theories present a perspective that focuses on the

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

in the behaviour of employees. Process based theories provide for listing

specific factors that motivate the employees in an organization and also

studying how these factors motivate the behaviour. Ultimately process or

content based theories seek to find how employees satisfy their various

needs while choosing between the alternative behavioural patterns possible.

2.2.2.1. Cognitive evaluation theory

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

marked independence among the extrinsic or external motivation factors

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

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

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

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

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

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

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

previously been intrinsically motivating for the employees, there is no

improvement in motivation rather a decrease is observed if employees are

awarded extrinsic motivation due to an obvious decline in the interest

attributable to the intrinsic motivation (Jung, 1978).

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Some of the most influential intrinsic motivation is delivered through

instruments such as achievement related rewards, responsibility,

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

valuable feedback provided, variety of skills and knowledge required to

execute tasks and responsibilities and avenues for career development.

Though the management might consider all such factors while designing the

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

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

inclusion of several elements of intrinsic motivation, another employee

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

not much an organization do in relation to the perceptions and 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 management’s 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 organizational

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 Latham’s 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: O’Neil and Drillings (1994) in their study

have found evidence that the individual performance goals as powerful

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

behind some individuals’ performing better is their different performance

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

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

Baron (2003) have linked motivation with performance by defining

motivation as a process that directs behaviour towards achieving goals and

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

elements of a successful performance appraisal program; which help to

generate motivation required by employees for job performance (Earley et

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

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

results result in positive performance evaluation which leads to better

reactions towards performance appraisal of employees.

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

difficult the performance increases as does the level of challenge

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

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

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

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

to reach the desired goals.

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

organization to find out the mismatch between what the acceptable

standards and what has been achieved previously by the employees. 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.22 | P a g e


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. Vroom’s expectancy theory

Vroom’s 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 underlying this theory have

been enlisted in the following list:

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

efforts involved and the dedication towards achieving the set

objectives, the employees make strategic and conscious decisions

about their behaviour.

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

towards the job expressed as distinct needs and desires and their

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

improve the levels of motivation among the employees in an

organization.

3. Employees being consciously aware of their behavioural responses

need to choose from the various available alternatives. In choosing

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

objectives to be accomplished.

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4. To successfully interpret the phenomenon of motivation at workplace

it is critical that the management accepts that people behave

differently to the same stimuli and attach different notions to their

job characteristics and work environments.

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

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

to a favourable and good performance appraisal. The appraisal thus provided

to the employee will help the employee to have access to rewards such as

increment in pay, bonus, commission, promotion, appreciation on a broad

level. This in turn will help satisfying the personal 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

individual’s 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 equity 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 possible, 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 learn

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 without pushing too

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

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

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

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

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

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

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

performance standards. Leadership and learning should be given primary

importance while overlooking the motivation levels of employees.

Enough significance should be associated with the delegation of authority

and responsibility from managers and supervisors to subsequent employees.

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

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

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

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

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

done before delegating responsibility keeping in mind any potential

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

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

the chosen employee possesses the right kind of training for successful

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

themselves in frustration and discontentment.

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

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

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

managers should exhibit their leadership while keeping faith in their

employees.

2.4. Links between motivation and learning

Bandura (1991, p. 158) in his definition of motivation 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 individual’s learning and result in

permanent change in behaviour. Also motivation leads an individual towards

performance and results into learning. According to Atkinson & Raynor

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

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

process than lesser motivated learners. This learning results into better

performance and vice-versa.

2.5. Job performance management

Employees’ performance on job has been defined solely as the employees’

behaviour that is consistent with the goals and objectives of organization

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

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

the organizational effectiveness. Viswesvaran & Ones (2000) proposes

employees’ performance as behaviour in which employees involve and that

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

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

considered prior to evaluating the performance of employee.

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For creating an organizational environment where motivation works behind

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

job performance management system with the most efficient tools and

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

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

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

essential that both the management and employees strive to leverage the

most from such mechanism for enhancing motivation and performance

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

effective when it is aligned with the management’s 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 system can

be utilized at the optimum level only when both management and employees

are dedicated towards achieving better state of motivation and performance

and have complete understanding of what is required and what the rewards

are. Employees must pay enough attention to what is expected from them

and operate accordingly. It is a symbiotic association where both the

employees and organization can benefit from higher levels of performance

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

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

own and company targets. If this is missing then it becomes difficult to

evaluate the performance of the employees in their own relation as well as

the performance in comparison to the other employees in the organization

(Robert, 2005, p. 7).

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2.6. Relationship between motivation and performance

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

performance management systems in place within a work environment of an

organization. It is essential that both managers and employees are

motivated towards achieving the desired levels of performance. Only an

effective performance management system is unlikely to induce higher

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

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

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

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

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

organization.

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

employees as a tool to manage and promote motivation for effective

performance from employees and share their contributions with the

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

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

fulfillment of employee needs and their intrinsic motivation.

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

relationship between autonomic work environment and intrinsic motivation

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

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

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

the strong linkage between intrinsic motivation and “persistence,

productivity and performance”.

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

direct and strong association between motivation and job performance and

therefore reflect the organization’s management to identify the most

motivating factors and leverage with them to increase the motivation of

employees and thus performance.

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

utilize the knowledge and create motivational programs, performance

appraisals and performance management systems in place.

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

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

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

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

goals (Bandura, 1997).

2.7. Importance of motivation for service based firms

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

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

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

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

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

customers regarding quality are largely shaped by employee related factors

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

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

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

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

therefore help the organization achieve competitive advantage.

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

organization and the job characteristics of employees. Motivation and vision

influence the organizational learning and learning influences the motivation

and vision of employees in return.

2.8. Motivators- External and Internal

When an organization’s 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 ensures 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 to 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 supervisor to

properly understand what the motivating factors are for various team

members and thereafter manipulating the work environment in such a way

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

linkage between employees’ expectations and the work assignments, goals

and objectives and involved responsibilities. The motivational construct

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

needs (Gradulous, 1986).

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

into easily measurable tasks and thereby, focusing motivation related efforts

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

otherwise achievable performance level (Weinberger, 1998 and Brumbach,

1998).

There are differences between situations where employees need to be

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

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

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

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

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

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

Weinkauf (2005).

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

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

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

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

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

at LIC.

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

relationship between teamwork and performance can be better

apprehended. Thamhain (1998) proposed that teamwork is improved

through improving motivation by the means of overall contribution of the

project towards the learning of team members, supervisor and organization

as well. The sales personnel at LIC have access to 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 project’s various aspects such as

organization, responsibilities, rules, procedures, reporting relationships and

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

increases the confidence with which the personnel approach a particular

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

better performance (Kerkfoot and Knight, 1992).

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Chapter 3: Methodology3.1. Methodological Framework

Source: Author’s Creation

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Choice of the particular research topic

Developing theoretical framework

Collection of empirical data from returned questionnaires

Interpretation of the empirical data through quantitative

statistical methods

Identifying potential respondents

Contacting the chosen respondents and getting them to

reply favourably

Designing the questionnaire

Formulation of the research problem and purpose of research

Analysis of results from interpretation of empirical data, deduce relationships between

variables and discuss the research


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 used 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 methods

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

to the research.

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

various participants in this study and subsequently applied quantitative

techniques to validate their responses and generate the response pattern.

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

existing literature in the field of motivation and developed an understanding

about the motivation-performance relationship and further testing it

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

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

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

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

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

expressed through charts and figures for easy understanding.

3.3. Research process

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

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

research involves four phases including conceptual phase (idea development takes

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

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

“research method” and “research methodology”. Research methods infer the

techniques employed in a particular research whereas methodology refers to the

manner in which a research is conducted.

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3.3. Research approach

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

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

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

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

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

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

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

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

3.4. Nature of Research

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

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

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

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

3.5. Data Collection

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

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

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

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

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

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

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

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

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

The sample population comprised of sales personnel from different demographic and

behavioural characteristics.

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

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

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

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

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

Review.

3.6. Choice of research method

The most common demarcations of research methods are qualitative research methods

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

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

extents of relation between motivation and performance whereas qualitative methods

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

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

inferences from results.

3.7. Sampling

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

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

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

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

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

sample.

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Chapter 4: Findings and Analysis

4.1. Introduction

The results found during the course of investigation on the research

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

relationship between motivation and job performance in the context of

different motivational factors and employee characteristics. The survey

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

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

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

various behavioural dimensions of employees. The responses of the survey

participants have been presented in tabulated formats and conveniently

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

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

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

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

employees and express the number and percentage of respondents with

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

to bring a range in the responses.

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4.2. Demographic characteristics of the employees surveyed

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

into four different age groups and analyse them accordingly:

1. 20-25 years

2. 26-30 years

3. 31-35 years

4. 36 years and above.

Looking at the results acquired by ranking the different motivational factors

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

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

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

rankings were achieved by fair performance appraisal and recognition by

supervisors, effective reward management, opportunities for development

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

of employees surveyed. Table 4.1.2 shows the ranking of motivational

factors by sales personnel belonging to different age groups.

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

respondents belonging to each group.

Age Group

(Years)

Number of respondents

(Total=250)

Percentage of respondents

20-25 60 24.00%

26-30 116 46.40%

31-35 52 20.80%

36 and above 22 8.80%

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

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

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

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

based on the number of respondents.

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

responses from different age groups.

Motivation factors

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

Job satisfaction 12 25 11 5

Fair performance appraisal

10 15 7 2

Recognition by supervisors

8 13 7 1

Effective reward management

9 7 5 1

Opportunities for promotion

6 22 8 3

Work environment

2 9 1 2

Incentives 5 12 4 2

Working hours 2 5 1 2

Pay scale 5 7 6 1

Punitive action 1 1 2 1

Total number of Employees

60 116 52 22

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

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

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

opportunities for promotion and effective reward management. In the age

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

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

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

high importance to opportunities for development. 46 | P a g e


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

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

by the material incentives they receive whereas their senior counterparts

exhibit penchant for promotion and recognition.

Table 4.1.3- Overall ranking among all age groups

Rank Motivation factor Ranked by number of respondents


1 Job satisfaction 53 21.20%

2 Opportunities for promotion 39 15.60%

3 Fair performance appraisal 34 13.60%

4 Recognition by supervisors 29 11.60%

5 Incentives 25 10.00%

6 Effective reward management 22 8.80%

7 Pay scale 19 7.60%

8 Work environment 14 5.60%

9 Working hours 10 4.00%

10 Punitive action 5 2.00%

TOTAL 250 100%

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

motivating factors are:

1. Job satisfaction (21.20%)

2. Opportunities for promotion (15.60%)

3. Fair performance appraisal (13.60%)

4. Recognition by supervisors (11.60%)

Whereas the two lowest ranked factors are working hours and punitive

action, the second last and last ranked ones respectively 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 sought from the

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

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

in the survey questionnaire. The following descriptive statistical sets of

responses are as following:

1. How motivated you feel with your immediate supervisors?

Scale Number of respondents


Highly motivated 75 30

Motivated 153 61

Neutral 17 7

Demotivated 5 2

Highly demotivated 0 0

TOTAL 250 100

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

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

This leaves a scope for improvement and even the demotivated employees

can be motivated leading to improvement in results.

2. How satisfied you are with the motivation management in practice at your organization?



Highly satisfied 85 34

Satisfied 140 56

Neutral 18 7

Dissatisfied 5 2

Highly dissatisfied 2 1

TOTAL 250 100

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

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

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

the underlying problems with the way supervisors and managers handle the

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

effectiveness.

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

Types of Incentives Number of Respondents


Financial 75 30

Non-financial 50 20

A combination of both

125 50

TOTAL 250 100

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Managers and supervisors use the reward and recognition as strategic tools

to formulate and implement organization’s policies and strategies aimed at

recognizing and rewarding the employees in a manner consistent with the

motivation related goals and other objectives. A proper reward management

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

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

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

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

important. Still monetary rewards are highly rated towards improving

motivational level. While 20% find non-monetary rewards as motivating, 30%

chose monetary rewards and the highest proportion, half of the respondents

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

rewards program as most effective.

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

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

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

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

designing the reward management system.

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



Highly effective 68 27

Fairly Effective 138 55

Satisfactory 15 6

Ineffective 25 10

Highly ineffective 5 2

TOTAL 250 100

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

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

monetary rewards, recognitions, appreciation and promotions have equally

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

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

punitive action which may actually enhance performance because the

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

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

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5. How motivating is the current performance appraisal at your organization?



Highly motivating 50 20

Fairly motivating 150 60

Satisfactory 25 10

Demotivating 18 7

Highly demotivating 7 3

TOTAL 250 100

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

formally evaluating the employees’ performance. As found in the

quantitative results, a large percentage of respondents attached importance

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

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

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

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

unbiased manner in order to motivate the employees to the maximum

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

effective management tool the execution of which is essential to increase

the employee confidence and interest in job and improve the overall

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

6. How important are the opportunities for promotions within the organization?



Very important 175 70

Important 52 21

Neutral 20 8

Unimportant 3 1

Not required 0 0

TOTAL 250 100

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7. How motivating is the job satisfaction for you?



Highly motivating 138 55

Fairly motivating 62 25

Satisfactory 25 10

Demotivating 18 7

Highly demotivating 7 3

TOTAL 250 100

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4.4. Inferential Statistics

The null research hypotheses when tested provide the following results:

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

employee performance.

Mean Standard

Deviation

Number of

respondents

Incentive based

rewards

2.5 1.140 250

Degree of impact

on motivation

2.7 1.400 250

Incentive based

rewards

Degree of

motivation

Incentive based

rewards

Pearson coefficient

of correlation

1.000 0.815

Sigma 2-tailed - 0.000

Covariance 1.290 1.580

Job performance Pearson coefficient

of correlation

0.815(**) 1

Sigma 2-tailed 0.000 -


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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 reasons 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 and in innovative

ways. Incentives programs can work most effectively when they are

entrenched in the organizational structure and culture and are greatly

influenced by the leadership styles of the managers.

Tangible Incentives

An analysis of already conducted important studies on the subject matter

and my personal research findings hint towards the following salient

characteristics of tangible incentives and their influence on employee

motivation and resulting job performance:

1. A careful planning regarding financial incentives and awards can

increase the job performance of employees in a dramatic way.

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

enough; the management must monitor the impact of motivators on

performance. Doing this significantly improves the performance

achievable through incentives.

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

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

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

motivated to achieve it in an efficient way.

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

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

performing employees must be rewarded highly to keep them

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

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

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

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

team-based work.

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

These include the following:

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

incentives for achieving or surpassing their target objectives.

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

offered incentives for increasing rates of performance – closing more

of insurance sales.

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

teams are targeted towards achieving the equivalent target and they

directly compete with each other for tangible incentives.

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

offered a straight salary-based compensation depending on their

performance standards.

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

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

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

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

rate incentive programs are less effective than the quota based incentive

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

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

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

complexity of assignment, program implementation and expected

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

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

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

The conditions for effective environment under which the incentive programs are implemented exhibits the following characteristics:

1. Current performance on specific objectives should be adequate.

2. Inadequate 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 but 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 depending 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 hindering 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 benefits, 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 personnel’s 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 distinguished

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 reality 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 and 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 have 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


Mean Standard

Deviation

Number of

respondents

Training and

development

opportunities

3.60 1.235 250

Degree of impact

on motivation

3.28 1.527 250

Performance

Appraisal

Degree of

motivation

Training and

development

opportunities

Pearson coefficient

of correlation

1.000 0.918




of correlation

0.918(**) 1



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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 personnel 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 training 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


Mean Standard

Deviation

Number of

respondents

Fair Performance

appraisal

2.40 1.159 250

Degree of impact

on motivation

2.60 1.350 250

Performance

Appraisal

Degree of

motivation

Fair Performance

appraisal

Pearson coefficient

of correlation

1.000 0.964




of correlation

0.964(**) 1.000



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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 transformed 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 motivation and productivity. Kavussishal

(1999) believes performance appraisal to be the perfect tool in the hands of

managers to improve the quality of performance.

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 the motivation of sales

personnel at LIC.

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H4: There is no significant relationship between the supervisor’s attitude, behaviour

and leadership style followed and employee motivation.

Mean Standard

Deviation

Number of

respondents

Role of

Supervisor(s)

1.93 0.83 250

Degree of impact

on motivation

2.36 1.131 250

Performance

Appraisal

Degree of

motivation

Role of

Supervisor(s)

Pearson coefficient

of correlation

1.000 0.716




of correlation

0.716(**) 1



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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 between 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 leadership in order to

motivate employees and develop the organization. This has acquired

greatest significance in the case of motivating sales professionals. DeCarlo

et al. (1997) have emphasized on the importance of effective sales

personnel’s 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 that

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 management’s duty to select the right combination 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 outcome. 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. Improper 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 motivating 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 supervisor’s 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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Relationship between motivation and job performance

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