AN EXAMINATION OF THE EFFECT OF EMPLOYEE MOTIVATION ON ORGANIZATIONAL PRODUCTIVITY

CHAPTER ONE

INTRODUCTION

Background of the study: Establishing a conducive work environment and atmosphere that caters to the aspirations, needs, and interests of employees, while also motivating them to take desirable actions, can be a challenging yet worthwhile endeavour. According to Anwa and Budi (2018), the productivity of an organisation can be significantly impacted by the motivation of its employees. The calibre of human potential is crucial in shaping a company's operations, success, and long-term growth. A successful company recognises the significance of its employees and their motivation, as they play a crucial role in helping the company reach its objectives. Today, in this era of technological advancements, vast information availability, and a rapidly globalising world, the human element is emerging as the most significant source of competitive advantage. As per Hussein and Simba (2017), employee performance is greatly influenced by factors such as motivation, training and development, performance evaluation, employee satisfaction, salary, occupational safety, and organisational structure. Osabiya (2015) acknowledges the various approaches that organisations adopt to compete and attain success. He argued that the success of a company hinges on the motivation of its employees. Furthermore, he emphasised that the key attribute of a thriving business lies in its capacity to allure, retain, and cultivate skilled personnel. He values the significance of individuals as the primary asset within an organisation, particularly in industries that have limited technical aspects.

According to Geomani (2012), organisations must prioritise motivation as a crucial factor in achieving growth. Stanley acknowledges the shifts and rivalries among companies vying for an edge in the current market. As a result, he urges employees to find motivation to remain with the company and enhance their performance. According to Neeraj (2014), there are several important factors that drive employees to enhance their performance, including organisational values and visions, employee commitment, recognition and appreciation of work, and the importance of inclusive leadership.

According to Levy (2013), employee motivation poses a significant challenge for numerous companies, despite the acknowledgment that it can enhance organisational performance. Nevertheless, the organisation remains dedicated to identifying and implementing the Deci (2012) Plan, a proven method for enhancing employee productivity. Merely raising wages won't suffice; additional incentives must be taken into account to enhance organisational performance. The price of an underutilised workforce is substantial as it leads to decreased productivity and performance for companies. Insufficient drive is evident through a high rate of employee turnover, frequent absences, escalated expenditures, and detrimental impacts on colleagues' morale.

The effectiveness of an organisation is heavily influenced by the calibre of its personnel and is unrelated to the sector in which the organisation operates. This compels managers and executives to exert effort in order to inspire their employees to enhance the performance of their organisations. Employees are the driving force and invaluable asset of any organisation. In order for employers and organisations to effectively harness the potential of their employees and ensure optimal performance, it is crucial for management to cultivate a culture of motivation among their staff.

It is highly beneficial for a company to foster employee loyalty, enthusiasm, and a positive attitude towards work. This is because motivated and dedicated employees have the ability to enhance work efficiency. Managers are constantly under pressure to maintain the competitiveness of their organisations in a global environment. The assets of any organisation are its experienced, reliable, and highly skilled employees. Many experts argue that employees who are highly motivated tend to exhibit high levels of productivity.

However, according to Certo (2016), achieving positive outcomes is not solely dependent on motivation. Other factors, such as employees' talents and skills, inventory, equipment, and time, also play a significant role. Prior scientific research has emphasised the challenges that many organisations face in maintaining a highly competitive workforce in a global environment. Employee productivity is influenced by various factors, including motivation, capacity, skills, equipment, supplies, and time. It's important to consider all these elements to ensure good performance.

Managers and supervisors should strive to comprehend the unique needs and sources of motivation for each employee, rather than treating them as a collective entity. An organisation can be likened to its employees, as the strength of an organisation is directly tied to the capabilities and contributions of its workforce.

Explore a range of incentives, including training, promotions, salary increases, support for ongoing education, enhancements to the work environment, and recognition for exceptional performance. It is rather unfortunate that numerous organisations have failed to utilise these techniques to enhance performance. Instead, workers often experience delays in receiving their wages or allowances, and may encounter harassment and frustration. They also work in challenging conditions and are not always treated with the respect they deserve. Some managers display discriminatory behaviour by denying employees access to advertisements, medical care, health insurance, and housing assistance. Additionally, they fail to compensate employees for their overtime work despite their extra efforts. In certain instances, individuals may be excluded from the job market due to a lack of emphasis on skill development and training within organisations. The importance of motivation as a strategy to enhance organisational productivity cannot be overstated. Many organisations have experienced setbacks due to their disregard for the welfare of their employees, particularly those who possess great skill.

1.2 Statement of the problem

According to James (2014), there are three indicators that suggest a lack of motivation among employees: a negative work environment, declining job performance, and reduced productivity. He also mentioned that if any of these factors is seen to be declining, it is likely that the organisation is facing a demotivated workforce. Many businesses and organisations have overlooked the significance of motivation in various aspects, including employee well-being, relationships with colleagues and managers, organisational policies, training and career development, working conditions, compensation, and promotion. These factors play a crucial role in enhancing employee performance and overall organisational productivity.

Factors such as financial incentives, training and development, and job security can significantly impact the productivity of employees within an organisation (Matthias and Jackson, 2003). As per the authors' analysis, employees are provided with various forms of compensation, including wages, salaries, and pay. Many highly educated and skilled individuals often find themselves dissatisfied with their job and salary packages, leading to high turnover rates and low productivity.

The recognition of the importance of workers and the ongoing development of their skills and qualifications through training is now widely acknowledged as essential for securing employment opportunities, increasing productivity, and ensuring the profitability and long-term success of organisations and businesses. It also fosters a positive workplace culture that encourages continuous learning (Davies, J., 2005). Well-trained employees have the ability to evaluate and take advantage of the opportunities for career growth within the company's hierarchy. This aspect caters to the psychological needs of the employee. Here they perceive their value to the organisation. These opportunities offer personal development, more challenging positions, increased responsibilities, and elevated social standing. When promotion opportunities are seen as equitable, they tend to lead to greater job satisfaction and enhance productivity (Altinoz et.al, 2012).

As per the research conducted by Islam et al. (2011), the stability of employee job security plays a crucial role in enhancing workplace performance and the production of high-quality outputs. This is because employees in an organisation rely on the certainty of their job and do not expect any sudden job loss. The emphasis on job safety in the workplace fosters a sense of enthusiasm among employees, leading to increased performance. Ensuring job security for employees is seen as a crucial factor in enhancing their job performance, which in turn contributes to the overall productivity of the organisation.

This has been a significant issue for managers for many years, as employee productivity levels have been declining. This decline has been recognised as a growing concern in the field of business and management research (Akerele, 2001). While there are various factors that can contribute to a decrease in productivity, such as ineffective decision-making, inadequate infrastructure, leadership styles, and organisational culture, it is important to consider these influences. Recent studies have highlighted the importance of considering employee perspectives, needs, and expectations when examining workforce motivation and productivity. These factors have been found to significantly impact performance and productivity levels. Exploring the factors that are significant to employees in carrying out their work responsibilities has evolved into a new realm. Thus, it is crucial for an organisation to create a conducive work environment that enables their employees to surpass expectations. Additionally, providing a variety of incentives can enhance 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.