theoretical background on employee motivation

1 ACKNOWLEDGEMENT First of all, I would like to express a sincere thanks and appreciation to my supervisor, Professor Tran ThoDat, who helped me a lot to finish this thesis. This thesis took me such a long time to complete because of the huge and detailed data collected for the tests which are used as research tools in this material. More, I had to be on a long business trip right at the last month of the thesis submission resulting in a rush. He not only motivated me to complete this thesis but also sympathize at my situation and supported me a lot. Then I want to give my special thanks to all of the professors, tutors and coordinators supporting me during the whole course of this program. In addition, I would like to thank to VKX Company in general, which creates a favorable condition and provide me all the databases and documents for my research opportunities. Personally, I appreciate the support from VKX employees and my colleagues who helped me with the questionnaire for the research as well as the directions to approach. Last but not least, my huge thanks would be given to my family who always stands by and encourage me for overcoming all the difficulties I have ever faced regarding the studying time of this program. 1 2 TABLE OF CONTENTS 2 3 KEY TERMS IN THE THESIS No. Key Term 1 Motivational Profile 2 Extrinsic motivational factors 3 Intrinsic motivational factors 4 Money 5 Challenge 6 Security 7 Benefits 8 Work Environment 9 Advancement 10 Location 11 Demographic Subgroups 12 Ranking survey 13 Non-parametric statistical analysis 3 4 LIST OF TABLES LIST OF CHARTS 4 5 EXECUTIVE SUMMARY Motivated employees are one of the key factors that provide competitive advantage forbusinesses. By determining the best way to encourage and boost the employee’sperformance in businesses the management ensures success of their business on the market field. Customized employee motivation i.e. good work environment and the best incentive for each employee individually is what getsthe business closer to reaching its goals and objectives. This thesis focuses on the issue ofcustomized employee motivation. More specifically, it deals with demographically determined(age and gender) differences in the motivational profiles of the workers. In this regard, aliterature review and statistical research was conducted in order to determine the demographicdifferences between the motivational profiles of employees in a manufacturing and R&D company named VKX Co., Ltd inHanoi, Vietnam. Even though the literature review suggested significant differences between the motivational profiles of employees at different age and from different gender, this study’s results provide some similarities vs differences. The employees from bothgenders and all age subgroups are mostly motivated by challenging job positions, advancementopportunities, good compensation packages i.e. money and well managed/good workenvironment. At the same time, benefits, job security and location of the work place are less of amotivator and different in ranking for all demographic subgroups. Still, this research study suggests that some statistically significant differences do exist. The two genders give significantly different importance to benefits and work environment as motivators, while the agesubgroups give significantly different importance to security, challenge and advancement. Based on the findings, recommendations were given to the management board of VKX Co., Ltd in terms of improvement of motivation policies and practices and recommendations in future researches. 5 6 CHAPTER I: INTRODUCTION 1.1 Rationale It is widely perceived that motivation is very important for an organization as it can bring it a lot of benefits. Every concern requires physical, financial and human resources to accomplish the goals. It is through motivation that the human resources can be made full use. Motivation will help the organization in securing the best possible utilization of resources. For getting the best of their work performance, the gap between ability and motivation has to be filled which helps in improving the performance level of subordinates. This will result in productivity increase, cost reduction for operational activities, and overall improved efficiency. So are the concerns from Vietnam Korea Exchange Limited regarding this issue. Being established when Vietnamese government was carrying out Innovation policy; VKX is the result of the cooperation between VNPT Group of Vietnam and LG-Ericsson Group of Korea. For over 18 years since the establishing date (6/1994), VKX has attempted to become a prime manufacturing enterprise in Telecommunication - Information Technology in Vietnam. Main business activities centralize on: Supply switchboard equipment, other modern telecommunication equipment based on IP and solutions for telecommunication, mobile providers; enterprises and consumers all over the country. Concurrently, with modern facilities and well-skilled employees, VKX has adequate competence to manufacture, supply terminal devices for domestic and abroad markets. With the head count of 267, VKX is ranked as a mid-sized enterprise. VKX Saying: We-VKX think that: “Clients and staff should always be respected, because: Human is an important, core factor, which contributes for the development of enterprises and social community”. 6 7 1.2 Research Objectives The objectives are to determine the differences in ranking seven motivators between the demographic groups (gender groups and age groups). The objectives are listed in details as follows: >To determine how male and female employees at VKX Co., LTD rank the importance of the seven motivators >To determine how the different age groups at VKX Co., LTD rank the importance of the seven motivators >To compare the difference in motivation between two genders and between the different age groups at VKX Co., Ltd >To provide the company’s management level recommendations to improve their employees’ motivation practices which may need different approaches depending on the motivational profile of the different employee groups 1.3 Research Methodology 1.3.1 Theoretical framework Age Seven Motivators How VKX managers motivate employees Work Motivation in SMEs Gender The figure below is the conceptual framework for the study, which depicts how my research concerns form a main theme and lead to managerial implications of work motivation. 1 2 3 4 5 6 7 7 8 8 9 10 1.3.2 Research Process Research Objectives Literature Review Theoretical Framework Data collection Primary data: >Questionaires >In-depth interviews 80 staff and 5 managers Secondary data: >Research, works and theoretical framework about VKX >Data related to VKX or taken from VKX systems for analytical and illustrated purposes. Data analysis (Qualitative, Statistical) Findings and Conclusions 8 9 Data sources: Primary data and Secondary data Data Collection: The data were collected from two main sources for analysis Secondary data: The Company’s documents and/or reports relate to motivation of VKX to analyze the current status of employee motivation. Primary data: The population for my research is 150 employees out of 267 people at VKX Company Limited in the means of questionnaire. The questionnaire is shown in Appendix A and B (English and Vietnamese versions). My research indicators were chosen based on Herzberg Theory of Motivation and the concept of intrinsic and extrinsic motivators: intrinsic/motivating: challenge and advancement; extrinsic/hygiene: money, location, benefits, security and work environment(see Section 2.3, Chapter II for details).Based on the ranking in the importance of each motivator, motivational profiles of the surveyed employees were set up. Furthermore, the set-up motivational profiles will be analyzed based on the division into different demographic subgroups and will be tested for statistical significance. 1.3.3 Determination of Demographic Subgroups The determination of the gender subgroup is obviously simple; however, for the determination of the age subgroups I was in consideration about three different approaches which base on other authors’ research studies. The first approach focuses in different generations depending on their birth year and socio-political circumstances to determine the age subgroups. This “generation” approach was used by Wong, et al. (2008) and Lundsford (2009) who analyzed the motivation of Traditionalists, Baby Boomers, Generation X and Generation Y. The second approach is the one based on chronological age only and used by Lord (2006) as an instance, who classified the employees to young workers (under 50 years old) and older workers (50 years old or higher). For the third 9 10 approach, the employees are divided into subgroups based on their career stage and City&Guilds (Cooper, 2008) was taken as an example in which the employees were divided into four groups: early career stage, mid-career stage (thirties), “career- striving years’ stage and final career stage. The first approach which is the generations-based determination including Traditionalist, Baby Boomers, Generation X and Generation Y mainly focuses on the socio-political circumstances in the United States – The Vietnam War, financial crises that occurred in its society, etc. These circumstances have not influenced the Vietnamese society as much as they influenced the United State. The socio-political situation in Vietnam would be more related to the transition into Socialism and the independence of Vietnam and Free trade in Vietnam, which occurred in the last decades of the 20 th century. Since there are not much data available in the literature regarding the influence of the recent political events on the behaviors of the different generations, I was not able to define generation subgroups applicable to this situation. More, the authors (Wong, et al., 2008) suggest that the differences which they discovered in this regard are more related to the career stage of the employees and their chronological age rather than the generation they belong to. The chronologicalage group has its positive sides, since the chronological age plays an important role in the way employees act at work and it is related to the cognitive/mental and physical abilities. However, the subdivision that Lord (2006) used seems to be insufficient because the group of young workers including 3 decades of work life. The career stage concept seems most convenient and is determined by many factors: the chronological age, the time when the employee starts working, the time he/she spends on education, the goals and the targets as well which the employees have set for themselves. Therefore, I decided to conduct my research by dividing the participants into age subgroups based on the career stage. Based on the various career stage concepts found in the literature for more details, many concepts determine the employee’s career as a whole which is made of three, four or more 10 [...]... settled down on a secured position and would expect their retirement later on 1.4 Scope of Research This research will be conducted in VKX Location: No.139-Ngoc Hoi Street-Hoang Mai District- Hanoi-Vietnam The time of conducting: 6 months (March’13 – September’13) Participant pool: 150 employees 12 12 CHAPTER II: THEORETICAL BACKGROUND ON EMPLOYEE MOTIVATION 2.1 Importance of Employee Motivation within... certain person (Ahmad, 2010; Cardona, et al., 2003; etc.) Cardona, et al (2003) defined motivational profile as motivation type typical for an individual in a certain context, referring to four possible combinations of different types of motivators: extrinsic, intrinsic, relational and contributive motivators Every employee/ person has a specific motivational profile which is a combination of these... only used as research tool Moreover, it is considered as useful concept in work settings The determination of the specific motivational profile of an employee can have important implications for HR managers when creating HR practices in terms of selection process, incentive systems, coaching and development, motivation and retention of employees (Cardona, et al., 2003) Furthermore, the set of personality... Theories The classification was based on the influencing factors that determine and explain the motivation Need Theories focus on the personal characteristics of the people/employees and the needs those characteristics create Process Theories focus on motivation as a process and explain the context and other processes that have impact on themotivation At the same time, one group of theories does not exclude... types of motivation Ahmad (2010) defined motivational profile by using different personality traits and needsthey determine His variables were: need for achievement, locus of control, ambiguity tolerance, risk taking propensity and typeA personality characteristics and based on the combinations of those five components the author determines different motivational profiles The term motivational profile... affect employee s actions through the goals and objectives they apply to their work And they need to consider what the needs, personalities and the personal goals of their employees are before they set the goals and their employee s personal goals should support the company’s goal and vision 17 17 Vroom’s Expectancy Theory is one of the most popular motivation theories This theory focuses on three motivation. .. they are to the employee In conclusion, based on the importance which these seven factors have for an employee when choosing a new job and leaving the current one, or while still performing on the current position, the term motivational profileis determined for the research purposes of this thesis 20 20 CHAPTER III: EFFECTIVE MANAGEMENT OF MOTIVATION IN COMPANY HR management and organizational behavior... relationship with subordinates, relationship with peers, salary, work condition, relationship with supervisor, supervision, company policy and administration, and personal life At the same time, the following six intrinsic motivators were evaluated: achievement, recognition, work itself, responsibility, advancement and growth This research will examine the importance of the following seven motivational... andretention, by applying specific tools and systems and one step further would be the determinationof effective motivation practice which will continue and improve this process of employees’engagement In other words, the 13 13 motivation of employees, when implemented in the totalmanagement process and synchronized with the rest of the efforts that the companies appliescan have significant effects on the... motivation elements: inputs, performance and outcomes (Daniel and Metcalf, 2005) According to Vroom’s theory, in order to have high motivation, employees need to have high expectation, i.e when they believe that high level of effort leads to high performance and high performance leads to desired outcomes, only then they are highly motivated 2.3 Motivational Profile The term motivational profile is commonly . time of conducting: 6 months (March’13 – September’13) Participant pool: 150 employees 11 12 CHAPTER II: THEORETICAL BACKGROUND ON EMPLOYEE MOTIVATION 2.1 Importance of Employee Motivation within. “generation” approach was used by Wong, et al. (2008) and Lundsford (2009) who analyzed the motivation of Traditionalists, Baby Boomers, Generation X and Generation Y. The second approach is the one. type- A personality characteristics and based on the combinations of those five components the author determines different motivational profiles. The term motivational profile is not only used