A study on motivation factors at work for employee what matters and how they affect the employee satisfactions and performance

HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT MBQPM4 NGO NGUYEN THUY PHUONG THAO A STUDY ON MOTIVATION FACTORS AT WORK FOR EMPLOYEE: WHAT MATTERS AND HOW THEY AFFECT THE EMPLOYEE SATISFACTIONS AND PERFORMANCE MASTER FINAL PROJECT MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT Ho Chi Minh City (2014) STATEMENT OF AUTHENTICATION I certify that all materials presented here are of my own creation, and that any work adopted from other sources is duly cited and referenced as such Ngo Nguyen Thuy Phuong Thao Date Acknowledgements I would like to take this great opportunity to sincerely thank a number of people and the institution who have made it possible for my final project and this master program to become a reality My gratitude goes to Professor Jacques Martin for the useful comments, remarks and engagement through the learning process of this master thesis Also, I like to thank the participants-my colleagues at Room to Read, who have willingly shared their precious time during the process of survey and interviewing My appreciation goes to my manager-the Country Director of Room to Read Vietnam-Mr Phong Le for his dedicated encouragement and support and he provided me opportunities to balance my work and time for completing this paper In addition, I would also express my sincere thanks to my closed classmate, Ngan Ho, who has given me thoughtful discussions and all the fun that we had for the past one and a half years of this program Also I thank to my best friend, Anh Nguyen who have been giving me the motivation all the way Lastly, I have so much appreciation and thankful to my families especially my parents who have given me unconditional love and encouragement in my studies My very special thanks go to my younger brother and my sister-in-law for their love and patience to endure my divided attention between the family and the demanding studies Table of Contents Acknowledgements List of Tables Abstract Introduction Subject Statement of the Problem Significance of the study Objectives Main Research Questions Scope of the Study 10 Methodology 10 Justification 11 Limitations of the study 11 10 The structure of this research paper 11 Part 1: Literature Review and Conceptual Framework 1.1 Introduction 12 1.2 Maslow’s Hierarchy of Needs theory 12 1.3 Herzberg’s Two-Factor Theory of work motivation 13 1.4 Motivation theory 15 1.5 Conceptual Framework 16 Motivation 17 Intrinsic Motivators 17 Extrinsic Motivators 17 Performance Management 17 Part 2: Performance Assessment of RtR and Efforts of Human Resource Department in Improving Performance 2.1 Introduction 18 2.2 Assessment of employee performance evaluation results 18 2.3 Human Resource department and its functions 19 2.4 Training 19 2.5 Employee Management System 19 2.5.1 Staff benefits and allowances 20 2.5.2 Staff Programs 20 2.5.3 Staff attendance 20 2.5.4 Discipline 20 2.5.5 Supervision 20 2.5.6 Performance Management 21 Part 3: Findings and Analysis 3.1 Introduction 22 3.2 Work Performance at RtR 22 3.3 Managers’ responses 23 3.4 All employees’ responses 23 3.4.1 Hygiene Factors 24 3.4.2 Motivation Factors 28 Conclusion: Summary of the Findings Introduction 32 Summary of the key Findings and Conclusion 32 De-motivating factors 33 Positive results 33 Positive Relationship between Motivation and Performance 33 Alternative Measures for improvement 34 Conclusion 34 Recommendations 35 References 37 Appendix A Questionnaires for all employees 40 Appendix B Interview questions 47 Appendix C Presentation Outline 48 List of Tables 1.1 Maslow’s hierarchy of need 13 1.2 Hygiene and Motivator factors 15 2.1 Summary of performance evaluation results in three years (2011-2013) 20 3.1 Overall opinion about staff’s performance 23 3.2 Do you feel motivated at your current job? 24 3.3 Do you see your job is secured in the organization? 25 3.4 How communication in your workplace is? 26 3.5 Management shows a genuine interest in motivating employees? 27 3.6 Supervisors’ communication 28 3.7 I feel the job I gives me a good status 28 3.8 Do you feel that your supervisor recognized you in your job? 29 3.9 If achieving recognition, credit, and acclaim motivates you to your best work? 30 3.10 I find opportunities for advancement in the organization 30 3.11 I am satisfied with the responsibility and role that I have in my work 31 Abstract Employers have asked themselves over and over what it takes to motivate an employee, and there are many studies that have been done to understand the motivation factors, and yet applications differ from one organization to another Room to Read organization (RtR) is not different, we have established some employee programs and benefits structures in order to put efforts in motivating employees, but still existing challenges when dealing with motivations Satisfaction survey still received certain comments such as no room for advancement, communication problems still exist, lack of motivation at work This study examined the factor structure of the motivation in working environment, and the main target for this examination is all employees at RtR in Vietnam office The participants are comprised of various functions in the organization; they are from program teams, administration, monitoring & evaluation, and finance team (N=44) The theories to be discussed are the Hierarchy of Needs theory, Herzberg’s motivators, and motivation theory Additionally, we will look into perspectives between the managers and the staff in regarding the motivation factors, to see if there is any gap As a result, motivation strategies and programs will be recommended by the end of this paper and it will be presented to RtR’s management team It thus builds awareness to employer as well as management to keep employees motivated by creating a positive work environment, and giving employees opportunities to grow When employees are motivated there is high performance and reducing turnover which are most concerns of vary organizations Qualitative and quantitative data and direct experiences’ information were used The findings will support the significant measurement toward motivating employees; this brings a new dimension of boosting employee morale and performance in the organization As RtR is considered to have the salary competitive advantage, this study will not analyze deeply into the salary factor, in fact it made an overview of all aspects that are linked to create positive and expected environment where the employees feel motivated A detailed analysis is made based on the responses from the questionnaires from all participants INTRODUCTION Subject It is said that the most valuable asset that an organization has is its employees, as they are not possible to copy from competitors and each employee is unique from one to another Therefore, motivating employees to create loyalty and high productivity would be considered as an art of the management in the organization Motivation in the workplace is affected by several factors as each employee has his or her own individuality (Honore, 2009) “Motivating employees requires employers to study the employee’s monetary, physical and psychological needs, because individuals are motivated by a number of items namely intrinsic and extrinsic rewards.” Intrinsic reward is the pleasant feeling an individual gets from doing a good job, while extrinsic reward is something given to an individual by someone else as appreciation for doing a good job which consists of salary increases, commendations, and promotion” (Certo, 1998 cited in Honore, 2009, p 63) The organization’s cultures and features of each job should determine what best approach taken to motivate To build strong foundation for a motivating culture, we need to understand the power and complexity of the internal factors that motivate each of employees’ behavior This research study addresses numbers of important issues regarding the factors of motivating employees in the workplace How importance of determined factors those lead to employee satisfaction and well-performing job? What are the current practices that affect the employee motivation, and the study will also look into applied theories to support the findings and recommendations Statement of problem Room to Read is a non-governmental organization that is working on the educational development in some of rural areas that is less developed and needs the supports The office in Vietnam has been operating since 2001 As a non-profit business, people somehow takes advantages of values through business processes, people efficiency is neglected because they are not working to create profits for running the business They also claimed that NGO working environment (staff performance) should be taken easy and no need to put any pressure Therefore, there are employees’ performance problems, unfortunately managers just bypassed without finding solutions or resolving the problems Poor time management and the failure to meet deadlines for the preparation of important working documents has become a common practice This has been observed by the missing documents during Human Resources assessments and internal audits, penalties and fines given by Local Government authorities and internal correction procedures had to be processed every time there was internal audit carried out annually The staff appraisal exercise has also shown that duties and responsibilities are not being adequately carried out, with low scores observed in many cases This is revealed through the appraisal files that are filled annually and kept in the Human resource office Some line managers have shown great weakness in the supervision of their subordinates with the appraisal assessment not carried out, or defined review comments Performance goals have not been set correctly as some KPIs are not relevant to the staff’s duties and responsibilities Managers’ perspectives tend to be task-oriented as it is observed that some staff’s behavior issues are neglected to resolve by the managers, they requested their Director and HR to solve it for them Consequently, some managers have ignored their supervisory roles and have taken to blaming the subordinates for their failures This is indicated by the way in which workers manage their own affairs without superior intervention Consequently, although there is training budget available, staffs still claimed that they not see opportunities to advance their knowledge and skill in the organization Although most of policies and procedures have been managed globally, the country office has not been well understood and left them unintentional The practices are too flexible and they can be changed whenever there are requests from any manager of the country management team (a group of selected managers who are authorized to give and suggest certain practices), without any risk management or considering over operational practices This have been experienced in meetings, staff not care to read policies’ documents and managers not mind, and previous applied practices such as poor of time-off management, inadequate required staff’s own pocket contribution to the office activities, inconsistent staff benefits applied In addition, reasons for staff leaving mostly are looking for better opportunities and advancements Poor people management can negatively affect the long term business perspectives; additionally inadequate staff professional behaviors also are harmful for the organizational image and environment, especially for the strategies of retaining and attracting talents Motivated employees are needed for organizational survival (Honore, 2009, p.74) Satisfied employees are more productive, and thus help organizations prosper as a result So how people are motivated? This therefore makes it appropriate through research, for the factors affecting staff performance to be identified and appropriate measures to be taken to revive the organization, to avoid negative consequences that may affect the future functional ability of the organization “Wright and McMahan's work points to the importance of human resources in the creation of firm-specific competitive advantage HRM practices influence employee skills through the acquisition and development of a firm's human capital The effectiveness of even highly skilled employees will be limited if they are not motivated to perform, however, and HRM can affect employee motivation by encouraging them to work both harder and smarter” (Mark, 1995, p 637) Significance of the study This research study would benefit to both current employees, especially the managers and also the organization as a whole The studies and literature will withdraw necessary attention to the management regarding the effort of motivating their staff as well as effective and appropriate ways to Efforts need to be made to ensure that reasons preventing optimal performance are identified The research study will help to inform RtR about the motivational problems and develop strategies to minimize the problems, and help the managers and the workers, to realize their obligations and responsibility towards, the good performance of the organization The research information can be used to get more value out of the people hiring and already employed by using effective motivational strategies rather than monetary incentives Managers then will have a clearer picture to lead the staff and work with peer in order to achieve effective leadership practice in the workplace The recommendations in this report will enable managers to get the best performance out of their employees and increase productivity in their departments Additionally, employees can use this information to determine what helps motivate them as well as understand what motivates their peers If there is a greater level of understanding and cohesion between employees and managers, the organization as a whole will prosper Objectives The main objective of this study is to identify the employee motivational factors in the organization, and how they affect the work performance Specifically, we will look into: 1) To understand the current motivational measures and the effectiveness of those 2) To analyze if there is a relationship between motivational factors and performance 3) To identify effective ways to improve current situations with focusing on motivation toward employees Main research questions The main research questions are: 1) What are the causes of the described problems at RtR? 2) Why are the current motivational perspectives and practices not effective and to what extend they affect the performance? 3) What are the better motivational measures can be identified in order to ensure improvements? 35 The study also has revealed that the managers felt unsatisfactory with overall employee performance and the performance rating metric has also showed the decline in the performance ratings through years This creates a dilemma in which unsatisfactory performance needs to be conveyed in order to arrange for improvement, and the message implied that motivation does affect the performance outcomes as it determines how much efforts a person puts in his or her work, the direction to which those efforts are geared and a measure of how long a person can maintain effort However, the supervisors seemed to have lack of focus in staff development and interval performance follow ups The above point of conclusion has brought the attention of the findings about supervisors’ communication as numbers of employees found that the communication was not effective As a result, the low performance outcome is not only caused by one party, in fact the managers play a critical role in delivering performance, through effective communication the managers need to be able to consistently deliver performance and results and get the best possible performance from the teams and individuals they manage This withdraws the point of extrinsic motivator toward the employees The findings established that most of hygiene factors have been met, and there is a missing element of job secured which is needed for improvement The motivators are considered not being sufficient enough to enable the employee motivation and additionally it has affected the job performance outcomes Additionally, due to people form themselves with different needs and expectations, the main reasons can be varied from one and another, therefore the action plan and conclusion for further improvement will mostly be based on the general data and information collected with as much detailed as possible Furthermore, through my experiences in human resources and frequent encounters with day-to-day communication with the employees who can be high demand and perceived the practices negatively could place themselves in the position of not being motivated Recommendations The study findings point to some important recommendations: A Improving job security, both mentality and benefits: Board of management is to provide interval updates and information of the operation such as how we go with fundraising; in addition, country office puts effort in fundraising activities which would give greater financial support Apply seniority program which is the privilege for those employees who have contributed long time to the organization and have the loyal service B Improving supervisors’ skills and management: Compulsory training programs for supervisors and senior supervisors: Supervisor’s orientation program 36 Supervisory skills program Management skills program Leadership program is to focus on performance management and staff development C Standardize and redesign job: Standardized job descriptions for all positions Work on standardized staffing model and redesign job scopes to balance between the business needs and employee’s potentials Develop succession plan for staff development and advancement 37 References Amabile, T.M, 1993 Motivational synergy: toward new conceptualizations of intrinsic and extrinsic motivation in the workplace Human Resource Management Review, [e-journal] 3(3), Available through: RMIT University library database [Accessed 12 April 2014] Certio, S.C eds., 1998 Supervision-Concepts and Skills Building New York Dieleman, M Toonen, J Toure, H & Martineau, T 2009 The Match between Motivation and Performance Management on Health Sectors in Mali Human Resources for Health, [e-journal] 4(2), Available through: Human resources for health [Accessed 12 April 2014] F.Herzberg, B Mausner & B.S Bloch, ‘The motivation to work’, (New Jersey: 2005) Fisher, C.D 1978 The Effects of Personal Control, Competence, and Extrinsic Reward System on Intrinsic Motivation Organizational Behavior and Human Performance, [e-journal] 21, Available through: 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competence Psychological Review, 66, pp 297-333 Wilson, M 2005 The psychology of motivation and employee retention Maintenance supplies, [e-journal] 48, Available through: RMIT University library database [Accessed 12 April 2014] 39 Wright, P 1989 Motivation and job satisfaction Human resource management, Sweden 40 Appendix A Questionnaires for all employees Part I: Please choose the appropriate option What is your gender? Male Female What is your status? Single Married Divorced Widowed Separated What is your age range? 18 25 26 33 34 41 42 49 50 57 58 65 What is your monthly income (VND in million)? 90 How long have you been at your current job? 11 years How many hours per week you work on average? 50 Part II: Please rank the following incentives from Most Motivating (1) to Least Motivating (8) _Benefits (social insurances/health insurance/vacation or sick pay) _Company socials/parties/celebrations _Opportunity for promotion 41 _Performance based bonuses _Recognition for good work _Salary _Schedule flexibility _Training course fee reimbursement Part III: Please rate the following statements about your current place of work based on your level of agreement from (Strongly Disagree)to (Strongly Agree) BASIC NEEDS: The salary increments given to employees who their jobs very well motivates them 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree Financial incentives motivates me more than non-financial incentives 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I am satisfied with the salary I draw at present 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I am satisfied with the lunch break, rest breaks and leaves given in the organization 42 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree SAFETY Good physical working conditions are provided in the organization 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I feel secured in my job 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree The medical benefits provided in the organization are satisfactory 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree ESTEEM: 43 Management shows a genuine interest in motivating employees 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I feel that my superior always recognizes the work done by me 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I feel that the job I gives me a good status 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I am satisfied with the responsibility and role that I have in my work 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 44 5) Strongly Agree LOVE: The quality of the relationships in the informal workgroup is quite important to me 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree In this organization there is fair amount of team spirit 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I feel more motivated while participating in activities done here like Team buildings, gatherings 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree SELF ACTUALIZATION: Achieving recognition, credit, and acclaim motivates me to my best work 1) Strongly Disagree 2) Disagree 45 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I generally like to schedule my own work and to make job-related decisions with a minimum of supervision 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree I find opportunities for advancement in this organization 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree My aim is self-knowledge and enlightenment The most important thing to me is realizing my ultimate personal potential 1) Strongly Disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly Agree Part IV: Please choose one of the answers that best fits your feelings about various aspects of your current job Communication at my organization is _ (E) Highly effective and makes me feel like an integral part of the team 46 (F) Fairly strong and allows me to understand most of what is going on in the organization on a daily basis (G) Lacking in certain areas and could use some improvement (H) Poor and leaves me feeling left out and in the dark in many circumstances My boss or immediate supervisor _ (E) Talks to me on a daily basis about work and shows a great interest in getting to know me (F) Talks to me pretty regularly and is generally helpful and friendly (G) Talks to me only when necessary or when problems arise (H) Rarely talks to me and shows little interest in getting to know me I find it to be most helpful when my boss gives me feedback regarding my job performance on _ basis (A) daily (B) weekly (C) monthly (D) quarterly (E) other I feel that my work (A) Is very valuable to the organization (B) Is necessary but sometimes unrecognized (C) Does not contribute as much to the organization as I would like it to (D) Is completely pointless When employees at my organization a great job on a certain task or project, they are (A) Financially rewarded (B) Praised and personally thanked for a job well done (C) Both A and B (D) Neither A nor B I am at my current job (A) Very motivated (B) Somewhat motivated (C) Unmotivated (D) Very unmotivated For supervisors only: Please rank the following incentives from Most Motivating (1) to Least Motivating (8) to your subordinates _Benefits (social insurances/health insurance/vacation or sick pay) _Company socials/parties/celebrations _Opportunity for promotion _Performance based bonuses _Recognition for good work _Salary _Schedule flexibility _Training course fee reimbursement 47 Appendix B Interview questions For supervisors: How you think about overall opinion about staff’s performance and why you indicate that? Very good Good Fair Bad Very bad For other staff: What reasons made you feel not motivated? Why did you feel not sure about job secured at RtR? Could you please explain more about the way of supervisor’ communication? 48 Appendix C Presentation Outline Subject & interest • Motivation factors in workplace • Determined factors for satisfaction and well-performing job • Value human asset • Motivation to employee’s loyalty and high productivity Organization • Room to Read is a non-profit organization • Ineffective performance management • Weak supervision, tend to task-oriented • Employee’s leaving for better advancement Methodology • 44 participants (employees) • Survey used open and closed questions to all staff • Interviewed 10 managers and selected staff • To establish understanding what motivated the staff at work and the expectations • Data from annual employee satisfaction survey • Statistical tools: excel data analysis, averages and percentages Main findings – Managers Staff performance: • 40% good; 60% fair • not meet certain set of skills • More workloads for managers • Struggled with determining the ratings Motivation factors: • Salary • Recognition and opportunity for advancement Main findings – Employees Motivation at work: • 50% motivated • 36% somewhat motivated • 14% felt not motivated at work • Less chance to maximize their skills Hygiene factors Job secured: • 68% agreed/strongly agreed • 20% not sure 49 • • • • • • • • • 11% disagreed and strongly disagreed NGO business: insecure strong correlation (r=0.6) with “motivation” Communication: 30% “poor” 36% “lacking in certain areas” 27% “fairly strong” 7% “highly effective” r=0.3 (motivation) Positively perceived how the management has given the effort to motivate them • r=0.7 between the “management’s effort of motivating employees” and “motivation” • Not satisfied with supervisors’ communication • 50% “only talked to them when necessary” • r=0.5 to “motivation” Motivators Supervisors recognized: • 50% agreed • employees’ view: does matter to the motivation • Supervisors’ rating for the significance of recognition: average • “Opportunities for advancement” and the “motivation” : r=0.7 Responsibility’s satisfaction • 73% agreed and strongly agreed • “job status” responses (r=0.8) • Conclusion • Hygiene factors adequately in place • Motivation rate at average level • Supervisors are not satisfied with overall employee performance • Ineffective communication and low performance outcome • Motivators are considered not being sufficient Q&A ... methodology The approach is to understand clearly the employees’ perspectives and expectations of their motivational factors at work, both primary data and secondary data are used Information was gathered... boost the performance In the motivational measures, the consideration of whether there is a positive relationship between motivation and good performance, and what alternative measures can be... determine what helps motivate them as well as understand what motivates their peers If there is a greater level of understanding and cohesion between employees and managers, the organization as a whole