Nidhi HR Thesis 1

Title of Dissertation
Employee Motivation and Job Performance- Exploring the

relationship

Nidhi Upadhyay

Presented to the IIPM in partial fulfillment of the requirements for the
Master of Business Administration in Management degree

IIPM
June 1, 2014

Table of Contents
Chapter 1: Introduction
MBA Management 2014 Dissertation

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1.1. Background4
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 Motivation10-37
2.2. Motivation Theories
2.2.1. Need Based Theories
2.2.1.1. Maslows hierarchy need theory (1943)
2.2.1.2. Herzbergs two factor theory
2.2.1.3. ERG Theory
2.2.1.4. Mc Clellands theory of needs
2.2.2. Process Based Theories
2.2.2.1. Cognitive Evaluation Theory
2.2.2.2. Locke and Lathams Goal Setting Theory
2.2.2.3. Vrooms 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 Supervisors 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: Methodol ogy
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 Collection41
3.7. Choice of research method42
3.8. Sampling..42
4. Chapter 4: Findings and Anal ysis
4.1. Introduction..43
4.2. Demographic characteristics of the employees surveyed ..44
4.3. Descriptive Statistics49
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 peoples 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: Authors 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.
Factors
affecting
motivation
Motivation of
employees
Performance
of employees

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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
employees 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 individuals 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
higher performance. It is interesting to notice therefore, that motivation can result in
higher performance and higher performance can nurture motivation in the employees.
Unsatisfied needs Resulting tension Drive to satisfy the
need
Reduction of
tension
Satisfaction of
need
Search behaviour

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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 levelof 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
H4: There is no significant relationship between the supervisors attitude, behaviour and
leadership style followed and employee motivation.


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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 individuals 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)
certain basi c need(s) whi ch they want to fulfil, thus motivati on caused by
the deficiency of need(s).

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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 naturall y and there are not only
basic needs but more than that.
Earlier theories that focused on need based definitions of motivations
include Maslows hierarchy need theory, Herzbergs two factor theory, ERG
theory and McCellends need theory.
2. 2. 1. 1. Maslow s hierarchy need theory
Maslow (1943)consi deredmotivati on as a continually changing desire
governed bythe 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 moti vation for an
employee to work are arranged in a hierarchical order of increasing
importance. Thi s 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 critici sed
because there i s no certainty that these needs are moti vators i n strictl y the
hierarchical order as suggested, therefore motivation doesnt always follow
the hierarchy as mentioned in Maslows theory of needs.
Although Maslows 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
the only motivator important for employees at times.

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The factors such as participation, invol vement and the feeling of being
recognized and appreciated and valued by the management and peers seem
to be more important for keeping the empl oyees moti vated (Laurie, 2007, p.
255). According to Needham (1999, p. 272), Maslows 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. Herzbergs two factor theory
Frederick Herzbergs 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 Herzbergs 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 organizations 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 Herzbergs 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 motivati on 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 hi gher moti vation levels and the managers and supervisors must
ensure that the hygiene factors are sound and therefore operate effectivel y
by managing the ri ght 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 Herzbergs two types of factors seem to
emanate on the basis of Maslows hierarchy needs with two clusters namel y
hygiene correspondi ng to lower levels such as safety, soci al security and
physiologi cal and motivation factors corresponding to higher level s such
asrelationships, job security and salary. Fi gure 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 Herzbergs two factor theory

Source: Johnson & Gill (1993)
It is critical to note that both Maslows hi erarchy needs and Herzbergs two
factor theories are subject to criticism. Goldthorpe et al . argued that
whether it is the sci entific management approach or the human relations
approach, their applicability is contingent and is thus not applicable
universall y in all the situations. A prime reason behind this proposition
seems to be that different employees behave differently in various
situations are moti vated 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 wi th interest, another secti on 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 formulat e an effective motivational
environment. Goldthorpe (1968) termed these variables as to be culturally
determined instead of being psychologi cal contracts.
2. 2. 1. 3. ERG theory
Alderfers (1972) work on improving the Maslows hierarchy theory of needs
was an attempt to segregate the needs into three distinct categories namel y
Existence, Relatedness and Growth (ERG) basing the argument on the
empirical work carri ed out. The Existence group includes the employees
fundamental requirements necessary for the basic survival. Corresponding
to the Maslows theory, this group includes the physiologi cal and safety
needs. The next Subsequent group includes the needs that deal with social
and interpersonal needs of employees and correspond to the Maslows
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 Maslows self -
actualization needs category. The ERG theory succeeds the Maslows theory
due to the fact that i t doesnt attribute importance to the hierarchical order
of such needs and does not stress that only once a parti cular 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 sociall y
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. McCellends theory
Another need theory which I find important to discuss here is the
McCellends theory of needs which considers only three i mportant needs
including achievement, power and affiliation which are defined as:
Achievement need This includes the employees dri ve to
betterown 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 themact i n a
certain desired way most probably to ones own advantage.
Affiliation need The natural desire of peopleto build, develop
and sustainamiable and close interpersonal relationships for better
work environment sociall y.
This theory suggests that the employees who show a higher drive to excel
achieve more than their counterparts wi th lower moti vation 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 desi re to perform
more effectively and efficiently in order to be more productive.


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Also these types of employees al ways 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
isastoo easy or too difficult.
Some employees who are considered to be high achievers experience a
sense of achievement and contentment when they achieve their objecti ves
by overcoming certai n obstacles. They perform best when they are sure that
their achievements are a result of their own actions and nothing else. Al so 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 classi cal 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 sati sfy their various
needs while choosing between the alternative behavioural patterns possible.
2. 2. 2. 1. Cognitive evaluation theory
The general belief regarding the moti vational factors is that there is a
marked independence among the extrinsic or external motivation factors
(such as pay, money, financial incentives, working condi tions 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 ali ke. This is where Cogniti ve Evaluation Theory (CET) comes in
for it quashes this accepted belief and argues that for the work that has
previously been intrinsical ly motivating for the employees, there is no
improvement in motivation rather a decrease is observed if employees are
awarded extrinsi c 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, reali sation of self -worth, autonomy allowed to employees,
valuable feedback provided, variety of skil ls and knowledge required to
execute tasks and responsibilities and avenues for career development.
Though the management might consider all such factors whi le designing the
job, the value assi gned to it by various employees can differ subjectivel y,
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 li miting and worthless. Thus there is
not much an organization do in relation to the perceptions and assumptions
of employees, thus leaving it uncontrollabl e 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 i n relation to the management of
organizations in respect to the managements need to effectively desi gn 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 or ganizational
activities. Thus the main focus is on job enrichment whi ch wil l lead to
improved performance by the employees (Boal & Cummings, 1981).
2. 2. 2. 2. Locke and Lathams 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 chal l enged 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: ONeil and Drillings (1994) i n 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 bett er than others. Greenberg and
Baron (2003) have linked moti vation with performance by defining
motivation as a process that directs behaviour towards achievi ng goals and
objectives. Goal setti ng and feedback have been considered to be criti cal
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 easi l y
acceptable, however if the job task i s challenging enough but not
intimidating, the more involved employees will take up the challenge as they
are encouraged by hi gher achievement and wil l eventuall y put i n 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 empl oyees. 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 si gnificant aspect of feedback provided to employees is
that compared to the external feedback provided by the supervisors, self -
generated feedback i s 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 goal s 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 empirical ly
established, when this is the case, the employees may be will i ng to accept
more challenging and difficult goals and roles. According to Kennish (1994),
too much of control i nhibits 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.

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The acceptance and achievement of objectives set for employees by the
management largel y depends on the quality of motivation provided to the
employees of the organization. In the era of extreme global i zation, 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. Vrooms expectancy theory
Vrooms 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 empl oyees make strategi c and conscious decisions
about their behaviour.
2. It is very natural that various employees possess different attitudes
towards the job expressed as di stinct needs and desires and their
motivation to perform. These can be anal ysed by the management to
improve the level s of motivation among the employees in an
organization.
3. Employees being consciousl y aware of their behavioural responses
need to choose from the various availabl e alternatives . In choosing
the alternative, they consider the degree to which they assume their
objectives to be accomplished.

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4. To successfull y 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 characteri stics and work envi ronments.
Performance appraisal is an important el ement 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 wil l help the employee to have access to rewards
such as increment in pay, bonus, commissi on, promotion, appreciation on a
broad level. This in turn will help satisfyi ng 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 thelikelihood
perceived by anempl oyee that putting in a specifi c amount of effort
would result in desired outcomes and an improved performance.
2. Performance-reward relationship The degree to which the
employeebelieves that a particular level of performance wil l lead to a
desired reward.
3. Rewards-personal goals relationship The degree to which an
individuals personal objectivesare satisfied by organisational
rewardsalso consideri ng theappeal 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 equi ty 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. Firstl y employees percei ve
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 invol ves 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: invol ves the experiences of other individual(s) i n 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 mi ght find the
current situation to be of an inequity or bi as; it i s predictable that they wil l
choose one of the following si x alternati ve choi ces 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 percei ved earlier.
5. Make deci sions regarding compari sons 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 behaviouristi c approach instead of
cognitive approaches followed by earl ier theories. It proposes that
behaviour at workpl ace is habituated by reinforcement. The manner in
which an employee behaves in an organization is envi ronmentally influenced
by the forces called rei nforcers. 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 specifical ly a theory of motivation
because it is not concerned with the behaviour that produces motivation; in
broad view it compl etely 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 i s 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, motivati onal patters
and therefore utilize the right kind of tool s 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) i s 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 achi eve this, the
management should conduct training and development opportunities,
special skills sessions. Managers must remain actively invol ved 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 i s i mportant that
employees experience self-motivation and participate activel y.

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Both managers and employees can enhance their motivation thr ough 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 ti me, it should be chal lenging 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 effici ency whil e 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 subjecti vity, fairness, equal ity, and high servi ce and
performance standards. Leadership and learning should be given primary
importance while overlooking the motivati on 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 successfull y. Onl y when the employee and manager have
necessary understanding regarding the task to be performed and result to be
achieved; the job performance wi ll be optimum. All the planning needs to be
done before delegating responsibility keeping in mind any potential
contingencies that may ari se 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 significantl y 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 leadershi p while keeping fai th 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 individuals learning and result in
permanent change in behaviour. Al so moti vation leads an indi vi dual towards
performance and results into learning. According to Atkinson & Raynor
(1974) moti vation 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 i nvolve 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 wi th 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 i s executed by the management and followed by the workforce. It is
essential that both the management and employees stri ve to leverage the
most from such mechanism for enhanci ng motivation and performance
(Pulakos 2009, p. 103). Therefore performance management is most
effective when it is aligned with the managements ideology of motivation,
the reward system and is regularly upgrading and synchronisi ng 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 achievi ng 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 accordingl y. It is a symbiotic association where both
the employees and organization can benefit from higher level s of
performance and productivity. Onl y when the employees are aware of the
requirements of job they can put in the ri ght 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 empl oyees i n 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 i s essential that both managers and employees are
motivated towards achieving the desired levels of performance. Only an
effective performance management system is unli kely to i nduce higher
performances. It i s 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
skil ls, 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 studi es by Gagne & Deci (2005) support the positive
relationship between autonomic wor k environment and intrinsi c 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 organizations 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 moti vational 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 fail ure to reach
goals (Bandura, 1997).
2. 7. Importance of motivation for service based firms
In the particular context of servi ce based organizations, quality of servi ce is
a decisi ve factor that impacts the competi tive advantage. In rel ation to the
Resource based view (RBV) of a firm, employee motivation can signifi cantly
influence the quality of service (Hays & Hil l, 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 certainl y transfers on to the servi ce 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 servi ce 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 characteristi cs 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 organizations 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 designi ng 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 woul d eventually
lower their productivity and hamper t heir motivation in the long run. Jobs
should preferentially be assigned on the basis of employee characteristi cs
(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 sel ling
insurance poli cies to people and broaden their responsibi lities. The direct
results of such measure are i mprovement 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 gi ven 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 responsibi li ties. The motivati onal 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 measurabl e tasks and thereby, focusing moti vation rel ated efforts
to overcome any possible hindrances that may be coming i n the way of
otherwise achievable performance level (Weinberger, 1998 and Brumbach,
1998).
There are differences between situations where employees need to be
motivated individuall y and when it is to be done in groups or speciall y
selected teams. It is criti cal that indivi dual 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 incul cates 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 l earning of team members, supervisor and organization
as wel l. 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 projects 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 whi ch the personnel approach a particul ar
work target and in turn improves the motivation level which translates into
better performance (Kerkfoot and Knight, 1992).


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Chapter 3: Methodology
3. 1. Methodological Framework

Source: Authors Creation
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
questions

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3. 2. Research method
Depending on the research question(s), there exi st 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 qual itative method is used to enhance
the knowledge about a pre-existing i ssue 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 qualitati ve research, the whole process should onl y be guided
minimall y by the interviewer whi le the i nterviewee 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 observati ons 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. Al so quantitative methods are based on pre-decided closely
designed questions, the answers for whi ch 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 whi ch
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 easi ly deri ve 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 extensi ve criti cal anal ysi s of the already
existing l iterature 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 characteristi cs. The survey
element was such designed so as to research into the elements linking
motivation and performance of sales professionals at LIC, Indi a. 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 onl y
250 agreed to partici pate, 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 Scal e 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 andanalyse them accordi ngl y:
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, i t is evident that the highest motivating factors show a
very mild devi ation under different age groups. Moreover, the four top
ranked motivating factors occur in al l 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 bel ong to the age group 26-30 years
(46.40%) and it can have a signifi cant impact on the moti vation 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 al l 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, sal es 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.

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Pay scale and incenti ves 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
Percentage 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. Fai r performance apprai sal (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%. Thi s gi ves us an insight into the
performance of sales professi onals being i mpacted most by satisfaction they
derive from their work. It is more i mportant 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 questi onnaire. The followi ng descripti ve statistical sets of
responses are as following:
1. How motivated you feel with your immediate supervisors?
Scale Number of
respondents
Percentage 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 moti vating, 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?
Scale Number of
respondents
Percentage of
respondents
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 whi ch
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
Percentage 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 organizations policies and strategi es aimed at
recognizing and rewarding the employees in a manner consistent with the
motivation related goals and other objectives. A proper reward management
framework exi sts 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 generall y perceived, reward system i s not
entirely dependent on financial rewards, non-financial rewards are al so
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%) fi nd 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 hel ps the management to ali gn the
employees behaviour to the organizational goals. This is in accordance with
the Harvard model of HRM whi ch 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?
Scale Number of
respondents
Percentage of
respondents
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) incenti ves li ke 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 whi ch 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?
Scale Number of
respondents
Percentage of
respondents
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 i s 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 motivat e 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 confi dence 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?
Scale Number of
respondents
Percentage of
respondents
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 satisfactionfor you?
Scale Number of
respondents
Percentage of
respondents
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 val ue is real ized, 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 performi ng 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 i mpact the l evel of motivation.An important role in this respect i s
played by the learning opportunities offered at workplace. When the
employees are directed towards learning, not only does it i mprove their
skil ls 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. Indivi dual level
2. Organizational level
3. Environment level
The question of motivation is inextri cably 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 supervi sors and managers with a better
understanding about what motivates who and to what extent. Incentives
program i s an important factor determining the reasons of joining a
particular organizati on 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 (percei ved 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 professional s at LIC can be expected to perform
only when they are rewarded accordingl y. Incenti ves attract the talented
people and hel p 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 organi zational goals
and they can be expected to perform increasingl y better and in innovative
ways. Incenti ves programs can work most effectivel y when they are
entrenched in the organizational structure and culture and are greatl y
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
characteri stics of tangible incentives and their influence on employee
motivation and resulting job performance:
1. A careful planning regarding financial i ncentives 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 moti vators on
performance. Doing this significantly i mproves the performance
achievable through incentives.


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3. Tangible incentives are a strong influencer of employees interest in
the job responsibiliti es; if employees are aware that they are going to
be rewarded for a certain quality of perfor mance 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 invol ved in
team-based work.
The common types of tangible incenti ve i n use at LIC, India are in practice.
These include the following:
1. Quota-based programs- When sales personnel are offered certain
incentives for achievi ng or surpassing their target objectives.
2. Piece-Rate Incentive programs- This i s 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 incenti ve 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 assi gnment, program implementation and expected
performance level s 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 characteri stics:
1. Current performance on specific objecti ves should be adequate.
2. Inadequate performance of employees i s most often a motivational
problem whi ch can be resolved through implementation of proper
motivation programs whether financi al 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 fai l to motivate the
employees.
5. The supervisors should regularl y 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
characteri stics and employee characteristi cs. 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 ali ke 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 professional s at LIC, India are job-based salary,
pension schemes, i nsurance benefits, periodic or performance based
bonuses, etc. Other indirect financial i ncentives may include housing
facilities for employees, healthcare benefits, subsidies in meals and grocery
shopping through official canteens of LIC.
Managers at LIC stri ve to reward sales personnels 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. Thi s is
markedl y distinct from that of private sector where pays are higher than
their public sector counterparts.
In addition to financial incenti ves, 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 increasingl y 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 psychologi cal 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 pri vi leges. The informal i ncentives can come i n the forms
other than these and may be legitimate or illegitimate depending on the
context in whi ch they are offered. Personal practices whi ch 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 disti nguished
as being material istic or non-materiali stic which can affect the intrinsic and
extrinsi c motivations in distinct ways.
Though generally acceptable view is that money is the single most important
motivator for peopl e to work and perform, the reali ty i s found to be
different as non-financial incentives are more or less gi ven equal preference
in comparison to financial incenti ves 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 incentivi zing the pay
system. Today any successful organization such as LIC gi ves a lot of
importance to pay and non-pay related incentives to attracti ng, 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 incenti ves should be neglected because people will not perform to
their optimum and beyond even if they have all the required rewards but
lack at financi al rewards. Payment mechanism i s 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 i s done and target is
achieved is equall y 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 partici pati ng 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 positi vely 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 cli mate (Capozzoli, 1998). Helminger (1997) al so throws
light on the continuing effect of motivational factors.
Hackman and Oldham (1976) attribute high value to training as a
motivational influence for workforce, especiall y 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 gi ves us an idea why the opportunities for training and development are
ranked highl y among various motivational factors to whi ch 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 positi ve correl ation
(amounting to 0.964** at 99% confidence level) between the two variables
and thus null hypothesis i s rejected and transformed into the outcome that
performance appraisal has a direct i mpact on the motivation and
performance of employees. There is a covariance of 1.892 between the
variables suggesting highly positive l inkage between the two.
Kavussishal (1999) argues that the most important resulting element of
performance apprai sal is the identifi cation 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 criti cal method to identify the best performers
and reward them to increase their motivation and productivity. Kavussi shal
(1999) bel ieves performance apprai sal to be the perfect tool in the hands of
managers to improve the quality of performance.
At LIC, India the resul ts indicate overall satisfaction among the employees in
relation to the performance apprai sal and most of them find it to be fairl y
motivating (60% of the respondents), however 10% of them also found it to
be demotivating, whi ch infers there are some problem areas that need to be
identified and rectifi ed 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 apprai sal mechani sm
3. Possi bility of unfai r 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 effecti ve in improving the motivation of sales
personnel at LIC.


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H4: There is no significant relationship between the supervisors 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 rel ationship between the employees
(in this context, the sales persons) and their direct supervi sors. The kind of
performance an employee is able to achi eve i s largely dependent on the
quality of guidance and support they receive from their supervisors. Selling
insurance can be a challenging responsibi lity 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 leaders hip in order to
motivate employees and develop the organization. This has acquired
greatest signifi cance in the case of motivating sales professionals. DeCarlo
et al. (1997) have emphasized on the importance of effective sales
personnels 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 criti cal 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 i s bound to improve the performance
in sales.
The responsibility to bring together the compatible teams of supervisors and
sales personnel li es 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 i s managements duty to select the right combination of supervisors
and sales professionals in order to achieve the sales target and foster the
level of moti vation. The type of direction and control on behalf of
supervisors should be a part of the overall policy of motivation
management. Before assi gning sales tasks, the whole process should be
evaluated for its viability. During this, the supervisors can choose the type
of supervisory style they wil l be following, either it can be reward based or
criticism based. This is contingent upon the expected outcome. If the
supervisor bel ieves a certain action would improve performance, it wi ll
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 someti mes punitive
action is needed. Therefore, the supervisors should use their di scretion 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 li kel y to create the
right kind of impact to direct sales personnel to achieve their sales targets
effectively. Supervi sors are believed to have a far reaching i mpact on their
sales team and govern their performance in a major way. Tyagi (1985)
argues that in comparison to negati ve behaviour of supervisors, the positive
behaviour goes a long way in moti vat ing the sales personnel. Both extrinsic
and intrinsic rewards work positivel y 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 supervisors 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) Highl y motivated
b) Motivated
c) Neutral
d) Demotivated
e) Highl y 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) Highl y dissati sfied

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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) Highl y effective
b) Fairly Effecti ve
c) Satisfactory
d) Ineffective
e) Highl y ineffective
6. How motivating is the current performance appraisal at your
organization?
a) Highl y motivating
b) Motivating
c) Neutral
d) Demotivating
e) Highl y demotivating


90 | P a g e

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) Highl y motivating
b) Motivating
c) Neutral
d) Demotivating
e) Highl y 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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