TOPIC: ORGANISATIONAL BEHAVIOUR AND MOTIVATION

TITLE: Motivating Employees through Incentive Programs

ISSUE: Lack of an effective incentive program pertaining to work motivation

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 EXECUTIVE SUMMARY

Motivated employees are the cornerstone of any successful organization. The objectives of this

research are to explore the motivational factors and the effectiveness of these incentive programs

pertaining to work motivation.

The thesis consists of two main components: theoretical and research. The first part is the

theoretical framework, which examines the various motivation theories and the different

categories of incentives. Information for the theoretical background was collected from

publications, books and internet sources. For the empirical study, a close-ended questionnaire

was employed as the primary research instrument in the data collection period to gather

information from six (6) employees.

The results from the study showed that incentives do have a very strong motivational potential to

influence the employees‟ willingness to work harder. The three motivating factors valued by

employees are interpersonal relationship, interesting work and work environment, all of which

have the potential to motivate employees at higher levels. For long-term motivation, job related

factors such as the meaningful work, flexible working hours and friendly social gestures were

found to be effective motivators while, on the other hand, it was discovered that monetary, social

gatherings, tangible items such as award, certificates and gifts are the most effective motivators

for the short-term.

Keywords:

Employee motivation, incentives, rewards, human resource management.

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I. LITERATURE REVIEW

a. Introduction

It is useful to review some of the significant motivational theories because each person is

motivated differently and it would be helpful to identify what makes them tick in order to align

employees‟ goals to the organisations goals.

Over the past years, many theorists have attempted to explain the complexity of motivation in the

workplace. Each theorist‟s perspective illuminates how motivation influences work performance.

The theoretical perspective illuminates how motivation influences work performance. The

theories can be broadly classified into content theories (Maslow‟s Hierarchy of Needs and

Aldefer‟s ERG Theory). In this section, theories related to the purpose of this research will be

presented.

b. Theoretical Perspective

Content theories attempt to explain what drives individuals to act in a certain manner based on a

universal understanding that all human beings have needs to satisfy. However, there are several

limitations these approaches can contribute in practice due to the complexity of human nature.

As such, it is important for organisational managers to know what employees need and also their

needs will evolve over time while bearing in mind that needs differ considerably among

employees. Subsequently design a flexible reward system (McShane, Von Glinow 2000, 74) to

adapt to various needs of the employees. In this case, the needs of employees will determine the

effectiveness of incentives used to motivate them.

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Content Theory: Maslow‟s Hierarchy of Needs

One of the most well-known easily comprehensible motivational theories was propounded by

American psychologist Maslow, who conceptualized the infamous five stages of needs that

influence human motivation as illustrated below:

FIGURE1: Maslow Hierarchy of Needs (Griffin 2008, 438.)

 Physiological needs such as food, air, water and shelter outline the basis for motivation

and are necessary to ensure the continuation of human life.

 Safety needs are required by individuals to feel protected from emotional and physical

jeopardy. Organisations can satisfy these needs by providing safe working environment,

job security and retirement benefit package.

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 Belongingness needs refer to the need for affiliation and group identification individuals

obtain from family members, friends, colleagues etc. This includes, but not limited to

friendship, social interaction, belongingness, or acceptance by others.

 Esteem needs can be simply described as feeling good about oneself. Self-esteem and

personal accomplishment through challenging assignments are part of internal esteem

needs while nice jobs titles, recognition, rewards and reputation are external esteem

needs.

 Self-actualization is the pinnacle level of attainment in the need hierarchy. It implies that

the full potential of an individual has been realized. This need, however, is hard for a

manager to address as it is completely up to the employee‟s desire to achieve. Griffin

(2008, 439) suggests that managers can help foster an environment where attaining self-

actualization is possible for instance empower employees to make decisions about work

and providing opportunities for self-development. As observed by Maslow, this need is

never entirely fulfilled as the individual will continue to seek growth opportunities.

Maslow once suggested that only 2 percent of human population actually achieve self-

actualization.

Maslow concluded that individuals are primarily motivated by unsatisfied needs in an

ascending scale. This concept is termed “satisfaction-progression process” or prepotency

whereby individuals will proceed to fulfill a next higher level need only after a lower

level need of the hierarchy is fully satisfied. In other words, an individual whose

physiological needs are unmet will not escalate to fulfill the next year layer I.e. safety

needs; instead will motivate oneself to preserve until the currently recognized need is

satisfied (McShane et al. 2000, 67).

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Content Theory: ERG Theory

Alderfer revised Maslow‟s theory of hierarchical needs by reclassifying the five-level

pyramid into three broader categories of human needs:

 Existence needs combines Maslow‟s physiological and safety needs. It simply

refers to essential needs for survival such as food, shelter, and safe working

environment

 Relatedness needs is similar to social need of Maslow‟s theory; a need for

individuals to sustain interpersonal relationships and to feel connected to others.

Extrinsic motivation also falls within this category.

 Growth needs encompasses esteem needs and self-actualization of Maslow‟s

theory. This is a need consisting of self-improvement; develop intrinsic

motivation for task through accomplishments; compete meaningful task and be

creative.

Unlike Maslow, Alderfer contends an individual may be motivated by two ot three need

category at the same time where one need appears more dominant than the other. This is

known as the „frustration-regression process‟ whereby if an individual who is unable to

satisfy the growth need will regress to relatedness need which continues to be a strong

motivator. (McShane et al. 2000, 68)

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II. CASE STUDY OF THE ORGANISATION

Motivating employees can be difficult; there are no magic formulas or programs to motivate

individuals. The basic rule is to discover what your employees want and create a way to give it

to them or encourage them to earn it. Following this principle should motivate your employees

and allow them to become engaged in the success of the campus and your department.

In 2012, the employees at UTT campuses participated in a Performance Management Appraisal

Program known as (PMAP). Through this process, the Human Resource Department evaluated

employees on the basis of job performance and where they can improve.

Results and key trends from the surveys are highlighted below.

In 2012, 90% of employees saw their job as vital to the overall purpose of the University.In

2012, 89% of employees were willing to go above and beyond their normal work dutiesIn 2012,

the percentage of employees who believe they are utilizing their talents increased by 9% (75%

overall).Currently, 72% of employees would recommend a friend to work

Employees with a shorter length of service (under two years) have been consistently more

positive and optimistic about the work environment. It is vital that campus capture and build on

this optimism

While employee opinions have improved in regards to recognition programs and rewarding

employees, the 2012 survey highlighted that this is still a key area to focus on improving. Since

the inception there was no salary increase over a 10 years period, removal of study leave,

removal of the educational assistance program, no trade union representative and no Human

Resource representative at the various campuses. Our hope is that this guide will help UTT

recognize those individuals who are willing to go above and beyond to make the campus and

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your department a better place. By effectively recognizing employees, you can help support,

develop and retain great employees who have chosen to work for the University of Trinidad and

Tobago. Without recognizing and motivating employees in ways that are meaningful to them

there is a risk that you will lose them. Love „Em or Lose „Em.

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III. METHODOLOGY

a. Questionnaire Design and Analysis

The mixed-method questionnaire was employed as the primary research instrument in the data

collection period to gather information from respondents. The majority of the questions were

closed-ended type for the convenience of employees and also to achieve higher reliability under

controlled observations.

To test the validity of the first draft of questionnaire after it was designed, a pilot study was

conducted among 6 employees from The Professional Education Unit. Appropriate amendments

were made and the refined questionnaire was sent to my manager for approval before it was

released to the unit. The final version of the questionnaire comprised 23 items, categorized into 5

sections.

Part 1 consisted of 6 questions that captured demographic information of the employees which

will be used later for analysis.

Part 2 consist of 1 open-ended question designed to give employees an opportunity to state the

first word that comes to his/her mind when the word „incentive‟ is mentioned. The purpose of

this question is to test for any significant differences in responses across the employees working

in different departments and position level in the organisation.

Part 3 is made up of 1 close-ended to find out the importance of incentive in motivating them.

Part4 consisted a total of 14 items that requires employees to indicate their strength of

association for each item on a 5-point Likert scale ranging from 1 = Strongly Disagree to 5 =

Strongly Agree. The questions in these sections addresses the eleven dimensions of motivation,

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 including compensation, job security, working environment, benefits, communications,

interpersonal relations, appraisals, training and development, recognition, respect and career.

Finally, the last part requires the employees to evaluate, using a forced choice 4-point Likert

scale ranging from 1 = Not at All Effective to 5 = Very Effective, how effective each item on the

exhaustive list of various types of incentives are in positively affecting their motivation. In

addition, the employees are required to mark whether the incentive will motivate them in the

short or long term.

IV. RESEARCH FINDINGS AND CONCLUSION

All the responses collected from the survey were adequate to address all three objectives laid out

in this research. The purpose of this study was to find out what the factors are that motivates

employees and how effective these factors are in contributing to the employees‟ motivation. The

findings suggest that incentives do have a very strong motivational potential in influencing the

employees willingness to expand more effort into their jobs.

The first research question was to understand how employees conceptualize the meaning of

incentive. Since the most frequently repeated responses to this question were “money” and

“bonuses”, therefore it would be reliable and safe to say that, very likely, the first thing that

comes to an employee‟s mind would be monetary related. This finding is comprehensible

because it supports the theory of Maslow‟s hierarchy of needs that employees will seek to satisfy

the lower level need before anything else, thus it is usually the first thing that would come to

one‟s mind. However, in the later part of the research, it was discovered that money is not the

best motivator.

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Table 1: Rankings of motivating factors based on importance

Question Motivating Factors Mean

number
14 Interpersonal relationship 4.53
11 Workplace environment 4.49
20 Interesting work 4.32
19 Career advancement 4.25
17 Recognition 4.16
18 Respect 4.06
16 Training & Development 3.88
13 Internal communication 3.66
12 Benefits 3.48
9 Money 3.13
22 Autonomy 3.07
15 Appraisals 2.90
21 More responsibility 2.57
10 Job security 2.34

According to the analysis (see Table 1) and of response to the second research question, non-

monetary incentives appear to take precedence over monetary incentives. In general, the top

three most motivating factors in order, after taking into account all the difference, are:

interpersonal relationships, interesting work and workplace environment. Looking at the

employees‟ choice of preferred incentives may mean that the employees have high social need

strength and high growth need strength. Additionally, these choices may imply that the

employees are likely to be intrinsically motivated. Either way, it may also imply that the

employees are deprived of social and growth opportunities.

Interestingly though, the three motivators mentioned above represent three different levels of

need in the Maslow‟s hierarchy: safety, belongingness and esteem. Furthermore, two of these

factors – interpersonal relationship and workplace environment – are considered hygiene factors

in the Herzberg‟s motivation theory. This may suggest that employees are displeased with the

current state of workplace environment, find there are inadequate opportunities to interact with

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their colleagues or/and think the work they are doing is uninteresting. But if the problem should

follow according to the “satisfaction-regression process‟ then it may seem employees are most

dissatisfied with their current workplace environment.

Table 2: Effectiveness of long-term motivational factors

Long-term Motivation Factors Mean

1. Engage in meaningful work 4.81

2. Flexible working hours 4.79
3. Friendly social gestures 4.67
4. Celebration or other fun team-building events 4.56
5. Being asked for my input & expertise 4.51
6. Opportunity to improve job-related skills 4.48
7. A personal “thank you” or note from superior or 4.42
colleagues
8. Opportunity to work on interesting projects 4.39
9. Promotion and career growth in the company 4.27
10. Being recognized by superiors 4.13

Intrinsically motivating factors were also identified as effective long-term motivators seen above

in Table 2 as part of the final research question. More than half of the preferred specific

incentives being listed in the top ten most effective long-term motivators were job-related while

the rest were social incentives. This finding supports the above-mentioned three factors, where

the three most effective motivators were to (interpersonal relationship) “friendly social gestures”,

“flexible working hours” (workplace environment), and “engage in meaningful work” (interested

work). The other seven factors are also in support of interesting work, workplace environment

and interesting work.

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Table3: Effectiveness of short-term motivational factors

Short-term Motivation Factors Mean

1. Cash bonus 4.83
2. Tangible items (electronic, garments etc.) 4.80
3. Celebration or other fun team-building events 4.75
4. A personal “thank you” or note from superior or colleagues 4.63
5. Gift certificate, tickets to movies/concerts or other events 4.54
6. Friendly social gestures 4.48
7. High salary 4.33
8. Small personal gifts (pins, diaries etc.) 4.27
9. Award, certificate, or plaque to recognize my achievement 4.19
10. Newspaper and/or magazine subscription 4.12

However, with regard to short-term motivators as seen above in Table 3, the incentives being

listed were mainly related to tangible items, where the choice of the most effective motivator

being cash bonus. The results suggest that money is only beneficial under certain circumstances,

where in this case merely helps to address the employee‟s short-term motivation. According to

Herzberg‟s motivation and hygiene theory, these incentives are there only to prevent

dissatisfaction but do not truly motivate the employee. If this statement hold true, then it

reasonable to say that in the short term, employees will try to keep themselves in their job that

will truly motivate them. In addition, some similarities have been observed between the choice of

long and short term motivators. The similar items are “celebration or other fun team-building

events”, “a personal thank you or note from superior or colleagues”, and “friendly social

gestures”. This result supports the findings of the previous research question that interpersonal

relationship was the most important motivating factor. Since the three incentives can be used to

improve motivation in the short term, organisations should try to create and enforce a workplace

environment that is possible to let it happen, and ensure its consistency.

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In light of the above findings, organisations can develop a customizable incentive program that

suits the needs of all employees. One of the few suggestions organisations can take note are to

improve the interpersonal relationship among the colleagues. Some ways include having a

monthly meal for all employees, and put together a quarterly team-building event, allow

employees to take time off to do their own leisure activities and also make work more interesting

through job rotation but not adding more responsibilities to their workload as this seems to be

one of the de-motivators. Most importantly, organisations should emphasize on fostering long-

term motivation in employees because short-tem incentives, as noted above, may incur large cost

in the long run.

To conclude, the theoretical and research study have provided sufficient information to prove the

effectiveness of the use of incentives to motivate employees in the public sector. As it was stated

before, the results findings may not be generalized to the private sector or nob-white-collar

employees. However, the results may be used as guide for companies that share similar social

environment and culture. Lastly, recommendations for further research can be done to find out

the current state of satisfaction for each motivating factor so as to fine tune the incentive program

to the needs of employees.

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V. REFERENCES

Cornelius & Associates. Creating an Intrinsically Motivating Environment [Referred to

21.09.2008] http;// www.corneliusassoc.com/CA/new/uncertaininfoweb/motivation.htm

Maslow Hierarchy of Needs [Referred to 08.09.2008] - http://www.abraham-

maslow.com/m_motivation/Hierarchy_of_Needs.asp
McConnell,C.R. 2006. Employee Recognition: What, Why and How [Referred to 02.11.2008]
http://www.nfib.com/object/IO_31334.html
Rocco, T.S., Bliss, L.A., Gallagher, S., Perez-Prado, A. 2003. Taking the Next Step: Mixed
Methods Research in Organisational Systems. Information Technology, learning, and
performance Journal Vol. 2.1

VI. BIBLIOGRAPHY
Adams, J. 2007. Managing People in Organisations: Contemporary Theory and Practice.
Palgrave Macmillan
Dessler, G. 2008. Human Resource Management. New Jersey: Pearson Prentice-Hall
Herzberg, F., Mausner,B.,Snyderman,B.B.1959. The Motivation to Work. John Wiley and Sons,
Inc
Martin,G. 1988. Behaviour Modification: What It Is and How to Do It. Englewood Cliffs, NJ:
Prentice-Hall
McShane, S.L., Von Glinow, M.A. 2000. Organisational Behavior. New York: McGraw-Hill
Robbins, S.P., Coulter, M. 2005. Management. Upper Saddle River, NJ: Pearson Prentice-Hall

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Appendix:

Section 1: Demographic Data

Directions: Please select the option that best describes you.

1. Gender _____Female _____Male

2. Age: _____Less than 25 ____ 25-35 ____ 36-45 ____ 46-55 _____ More than 55

3. What is your highest level of education?

____ High School (O-level/A-level) ____ Diploma

____ Bachelor‟s Degree ____ Master‟s Degree

____ Doctorate

4. What is your position level?

______Administrative ______Supervisor _______ Manager

5. How long have you worked at your organisation?

_____Less than 1year _____ 1-3+ years _____ 4-6+ years ______7-9 +years
_____More than 10 years.
6. What department do you work in?

___ Customer Service ____Human Resources ____Management

___Sales/Marketing ____Finance/Accounting ____Engineering

___Operations ____Information Technology ____Others

Section 2: Incentive
7. What is the first word that comes to mind when you think about “incentive”?

_____________________

Section 3: Motivation:

Directions: Please indicate how strongly you agree or disagree with the statements.

8. How important are incentives in influencing you willingness to exert more effort in your
job? V. Unimportant 1 2 3 4 5 V. Important

Section 4: What motivates you?

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Directions: Please indicate how strongly you agree or disagree with the statements.

9. Money motivates me to exert more effort Strongly disagree 1 2 3 4 5 Strongly agree

in my work.
10. Job security motivates me to higher Strongly disagree 1 2 3 4 5 Strongly agree
performance.
11. A positive working environment is import Strongly disagree 1 2 3 4 5 Strongly agree
for me to perform well on my job.
12. Attractive benefit packages will boost my Strongly disagree 1 2 3 4 5 Strongly agree
motivation to work hard.
13. I believe having an effective internal Strongly disagree 1 2 3 4 5 Strongly agree
communication channel is what it takes to
bring about a motivated workforce.
14. A good relationship with whom I work is Strongly disagree 1 2 3 4 5 Strongly agree
a motivating factor.
15. My appraisal is an important way to help Strongly disagree 1 2 3 4 5 Strongly agree
me to continuously improve performance.
16. Skills training provide me the confidence Strongly disagree 1 2 3 4 5 Strongly agree
to put more effort to perform better in my
job.
17. When I receive recognition, I am more Strongly disagree 1 2 3 4 5 Strongly agree
motivated to perform better.
18. Gaining respect from others motivates me Strongly disagree 1 2 3 4 5 Strongly agree
to do well.
19. If I get a career advancement, I will be Strongly disagree 1 2 3 4 5 Strongly agree
motivated.
20. I am motivated by interesting work. Strongly disagree 1 2 3 4 5 Strongly agree

21. More responsibility motivates me to Strongly disagree 1 2 3 4 5 Strongly agree

higher performance
22. If I am granted autonomy at work, I will Strongly disagree 1 2 3 4 5 Strongly agree
be motivated.

Section 5: How effective are the incentives in motivating you?

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 23. How effective do you think each of the following job characteristics would be in
positively affecting your motivation to work?

1= Not at all Effective 2= Not Very effective 3= Somewhat Effective 4=Effective

Type of Recognition/Reward Strength of

Effectiveness
A personal “thank you” or note from my superior or colleague 1 2 3 4
The opportunity to work on an interesting assignment/project 1 2 3 4
Being asked for my input and expertise 1 2 3 4
The opportunity to improve my job-related skills or knowledge 1 2 3 4
Participate in professional or career development opportunities (workshops,
conferences, career-counseling, etc.) 1 2 3 4
Acknowledgement for my years of service to the company 1 2 3 4
High salary 1 2 3 4
Cash bonus 1 2 3 4
Profit-sharing or stock ownership plans 1 2 3 4
Being recognized by superiors 1 2 3 4
Being recognized by peers 1 2 3 4
Effective communication channels in the workplace 1 2 3 4
Promotion and career growth in the company 1 2 3 4
An award, certificate, or plaque to recognize my achievements 1 2 3 4
Gift certificates, tickets to movies/concerts or any other events 1 2 3 4
A celebration or other fun team-building events 1 2 3 4
Flexible working hours 1 2 3 4
Small personal gifts (watches, pins, decorative, diaries etc.) 1 2 3 4
Newspaper or magazine subscriptions 1 2 3 4
Tangible items (electronics, garments, accessories etc.) 1 2 3 4
Job security 1 2 3 4
Autonomy over daily work schedule 1 2 3 4
Participation in decision making 1 2 3 4
Increased responsibilities within current job 1 2 3 4
Retirement benefits and insurance policies 1 2 3 4
Engage in meaningful work, making a difference 1 2 3 4
Friendly social gestures (smiles, pat on the back, greetings etc.) 1 2 3 4
Feedbacks from superior 1 2 3 4
Supportive management 1 2 3 4
Job location 1 2 3 4

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