THE EFFECT OF EMPLOYEE MOTIVATION ON ORGANIZATIONAL PRODUCTIVITY IN VERITAS UNIVERSITY

CHAPTER ONE

INTRODUCTION

Background of the study: Creating a work environment and atmosphere that helps to satisfy the aspirations, needs and interests of employees and stimulate their action in a desirable way can be a complex but objective process. According to Anwa and Budi (2018) organization productivity can be majorly influenced by employee motivation. The quality of human potential plays an important role and is a key factor affecting the functioning of a company, its prosperity, as well as sustainable development. A successful company is aware of the importance of its employees and their positive motivation; they are the greatest asset that helps the company achieve its goals. Today, with advances in technology, information and increasing globalization, the human factor is becoming the biggest competitive advantage. According to Hussein and Simba (2017), the performance of employees essentially depends on the motivation, training and development of the employees, the performance evaluation, the satisfaction of the employees, the salary, occupational safety, the organizational structure, etc. Osabiya (2015) recognizes the different strategies different organizations develop to compete and achieve prosperity. He claimed that employee motivation determines the success of a company. In addition, he pointed out that the ability to attract, retain and develop talented employees is the main characteristic of a successful business. He believes that people are the most important asset in the organization, especially in strict industries with little technical content.

Geomani (2012) noted that in order for an organization to grow it must consider motivation as an important factor in achieving its growth. Stanley recognizes the changes and competition between companies seeking a competitive advantage in today's marketplace and therefore encourages employees to motivate them to stay with the company to improve performance. Neeraj (2014) believes that organizational values and visions, employee commitment, recognition and appreciation of work after work, and the legitimacy of inclusive leadership are key factors that motivate employees to improve their performance.

Levy (2013) believes that employee motivation is the greatest challenge for many companies, although they recognize that employee motivation can improve organizational performance. Even so, the organization is still working hard to identify and implement the Deci (2012) Plan, which has been shown to be effective in increasing employee productivity. Increasing wages alone is not enough, other incentives need to be considered to improve organizational performance. The cost of an underserved workforce is high because it causes companies to experience lower productivity and performance. Lack of motivation is characterized by excessive employee turnover, frequent absenteeism, increased spending and negative effects on coworkers' morale.

The productivity of an organization largely depends on the quality of its human resources and has nothing to do with the industry in which the organization is located. This leaves managers and executives with no choice but to work hard to motivate their employees to improve the performance of their organizations. Employees are the real capital and engine of any organization. In order for employers and organizations to get the output they need from employees and make them do their jobs correctly, management must have sufficient staff motivation.

Maintaining employee loyalty, enthusiasm and attitude towards work is always good for the company, because motivated and dedicated employees can improve work efficiency. Managers face constant pressure to keep their organizations in a highly competitive global environment and experienced, reliable, and highly skilled employees are the assets of any organization. Many scholars believe that generally highly motivated employees are characterized by high productivity.

Nevertheless, Certo (2016) argues that good results come not only from motivation but also from other factors such as employees' talents and skills, inventory, equipment and time. Previous scientific research has highlighted the pressures that most organizations are constantly experiencing to keep their workforce in a highly competitive, international environment. Employee productivity increases with the level of motivation and good performance is not only due to motivation but also includes other factors such as capacity, skills, equipment, supplies and time.

Managers and supervisors need to understand the needs of individual employees and what motivates them instead of considering them as a whole. An organization can be compared to its employees given that an organization can only be as strong as its employees.

Consider a variety of incentives, such as training, promotion, salary increases, support for continuing education, improving the work environment, offering gifts and prizes for hard work and the likes. It is quite unfortunate that many organizations have not used these techniques to improve performance. Instead, workers receive their wages or allowances late, sometimes face harassment and frustration, work in unfavorable working conditions and are treated like slaves. Mangers are sometimes racist and refuse to make advertisements, medical care, health insurance and housing assistance available to its employees, some also refuse to pay overtime for the extra efforts the employees put in. In some cases, employees are removed from the job market simply because there is no skill that the organization tries to improve by providing training at any level.

Motivation as a strategy to improve the productivity of an organization, is a pertinent issue that requires close attention. Most organizations have failed only because they neglected the well-being of their employees, especially skilful employees.

1.2 Statement of the problem

James (2014) cited three warning signs of a demotivated workforce these include poor workplace atmosphere, slipping job standards and decreased productivity. He further stated that if any of these factors is observed to be trending downwards then there is a great chance that the organization is dealing with a demotivated workforce. Most businesses and organizations have failed to recognize the importance of motivation as a concept be it intrinsic such as employee well-being, relationship with co-workers, relationship with managers, organizational policies etc. or extrinsic such as training and career development, good working conditions, compensation, promotion amongst other factors that enhance or improve employee performance as well as organizational productivity levels.

Financial incentives, training and development as well as job security are among the factors that constitute a problem in affecting organization productivity of employees (Matthias and Jackson, 2003). According to the authors, employees receive different kinds of benefits in the form of wages, salaries and pay. Mostly individuals with good education, relevant skills and experience are unsatisfied with their job and salary packages resulting in high rates of turnover and low productivity.

The value of workers and the continuous upgrade of their skills and qualifications through training is now widely seen and viewed as a prerequisite to gaining employment opportunities, higher productivity and guaranteeing the profitability and future success of most organizations and businesses alike while promoting the right kind of workplace culture that sustains constant learning (Davies, J., 2005). Adequately trained workers are able to assess and benefit from those opportunities available for advancement in the hierarchy of the organization. This dimension is one that satisfies the psychological needs of the employee. Here they see themselves valuable to the organization. These are opportunities for individual growth, greater and advanced roles and responsibilities as well as higher societal status. Promotion opportunities, when perceived as fair is more likely to result in job satisfaction and facilitate productivity (Altinoz et.al, 2012).

According to Islam et al. (2011), employee job security has significant role to improve workplace performance as well as production of quality outputs because employees in the organization expected to continue their job with certainty without unexpected sudden job loss. The job safety in the workplace make employees enthusiastic in doing their job duties which results to more employee performance. Employee job security regarded as vital element in the organization in increasing their job performance which ultimately fosters organization’s total productivity.

This in turn has continued to represent major managerial concerns for decades as employee productivity levels has relatively declined which has been acknowledged as a subject of growing concern in the aspect of business and management research (Akerele, 2001). Although a lot of factors may also be responsible or even cause a decline in productivity such as poor strategic and structural changes in decisions and executions, lack of infrastructure, leadership styles and organizational culture amongst others. Contemporary investigations that connects the concept of workforce motivation and productivity has laid an emphasis on employee perspective, needs and expectations as factors affecting their performance and productivity levels respectively. As such investigating those factors of importance to employees in the discharge of their duties at work has taken a new dimension.  

Therefore, an organization’s best strategy is to provide suitable work environs that allow their workforce to meet or exceed expectations as well as offer a range of motivators to improve enthusiasm, performance and productivity levels.

1.3 Objectives of the study

The main objective of this study is to examine the effect of employee motivation on organizational productivity; specifically, the study seeks to:

1. Ascertain the degree to which financial incentives enhance organizational productivity.

2. To determine the extent to which training and development affects organizational productivity.

3. Examine if job security enhances organizational productivity.

1.4 Research Questions

The following research questions guided the study

1. To what extent does financial incentives affect the productivity of an organization?

2. How does training and development of employees affect the organizations productivity?

3. Does job security enhance organizational productivity?

 

1.5 Research hypotheses

The following null hypotheses were formulated for testing in this study.

H01: There is no significant relationship between financial incentives and employee motivation.

H02: There is no significant effect of training and development on employee motivation.

H03: There is no significant relationship between job security and employee motivation

1.6 Scope of the study

This study is focused on employee motivation and its relationship to organizational productivity. For this study, employee motivation is measured by financial incentives, job security and training and development. The findings of this study is restricted to Veritas University which serves as the case study.

1.7 Significance of the study

For this study not to be an effort in futility, it has to be useful to a number of people and institutions among which are;

i. Organizations: The aim of this study is that the outcomes, results or findings should be beneficial to business owners, managers and organizations especially in the locality where this study is being conducted. This is to enable them understand the concept of motivation and its effect on productivity. It also gives an insight to managers and business owners on the importance of knowing their employees and ensuring adequate motivation in their organizations.

ii. Research Institutions: This study is also relevant to research bodies and institutions in the nation as a whole because findings would also be relevant to students and users of information in conducting further research in areas similar to this study.  

iii. Government Agencies: This research is also of paramount importance because it would aid government agencies in making and implementing policies that would enhance the stability, growth and development of businesses throughout the region in matters concerning organizational productivity by seeking ways ensure that employees are adequately motivated in their various organizations thereby increasing overall productivity and performance levels.

1.8 Definition of terms

Motivation: A reason or reasons for acting or behaving in a particular way. It is the experience of desire or aversion.

Organizational Productivity: A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.

Financial incentives: Monetary bonuses or benefits an individual, company or organization offers its employees as a reward or means of encouragement for certain actions or behaviors.

Training and development: This is any attempt to improve an employee’s performance by imparting him/her with specific skills, knowledge and abilities in order to change the employee’s attitude.   

Job security: This refers to the probability that an individual will be able to keep his job for a long period of time as long as he abides by the rules and regulations of the organization. A job with a high level of security simply means that the chances of the person loosing that job is very slim.