Human Resource Management
REDZ18
ABWFINALDISSERTATION.docx
Name: Bernadette Williams STU65467
Course Code and Name:RES6001D
Supervisor’s Name:
Institutional Affiliation: Arden University
RELATIONSHIP BETWEEN FINANCIAL INCENTIVES AND EMPLOYEE MOTIVATION
Date July 18, 2022
Chapter 1: Introduction
The aim of this research is to determine the relationship between employee motivation and compensation. The success of an organization or corporation is contingent upon the level of employee motivation. Motivation is critical to the accomplishment of the organization's goals and objectives. It is critical for firms with varied cross-cultural teams to guarantee that their employees are highly engaged. Management is responsible for ensuring that workplace goals and objectives are consistent with the company’s culture (Vlaev et al., 2019). Setting workplace goals is critical for establishing and monitoring the organization's level of employee motivation (Pang & Lu, 2018). Employee commitment, engagement, and motivation are critical components of an organization's success. Financial remuneration practices play a significant role in motivating employees.
According to many surveys, if an organization does not try to motivate its employees through monetary incentives, the organization is likely to have low performance (Vlaev et al., 2019). Organizations in the United States work diligently to increase employee engagement through monetary and financial pay and awards. Financial and monetary incentives have a stronger effect on employee motivation, according to studies (Pang & Lu, 2018). The United States government has implemented policies aimed at increasing compensation and incentive programs throughout all sectors of the labor market (Vlaev et al., 2019). As with any other firm, the government is attempting to improve employee performance through a variety of financial incentives.
The Federal Reserve System is the United States of America's central bank. It is responsible for issuing currency to all financial institutions and exercising influence over the economy via monetary policy (Coccia & Igor, 2018). The Federal Reserve System has a number of financial incentives in place to motivate its personnel. Several of these tools include the following:
· This assists in meeting rental obligations.
· Gratuities are paid to all contract employees. This is a component of their terminal benefits and a token of appreciation for their long-term contribution to the business.
· Employees are eligible for personal loans and medical insurance coverage if they have worked for the bank for an extended length of time.
The Federal Reserve System (FRS) is in the position of regulating the United States monetary system as well as the financial system. The FRS's main functions include the banking institutions' regulation, protecting the consumers' credit rights, monitoring financial system stability as well as aiding in the provision of financial services to the government of the United States. Therefore, the Federal Reserve System forms one of the major forces in banking and the general economy at large. Notably, Fed equally controls the general money supply in the US economy. Of importance, Fed offers lending services to various financial institutions and also serves as a lender.
The services of the Federal Reserve System to its personnel set a notable example to other institutions in regard to motivating employees. Benefits such as medical insurance covers are vital to employees in ensuring their good health so that they can perform exceptionally well thus resulting in higher productivity (Novianty & Evita, 2018). Additionally, the Fed governors' board highly values the diverse backgrounds of employees. Consequently, the Fed relies on networking and teamwork to effectively implement policies alongside practices that are inclusive of all employees and enhance diversity as well as success. Through the provision of equal opportunities to all employees, Fed has managed to foster an inclusive work environment that presents all the employees with an environment that promotes the full use of their talents and related skills.
To maintain a strong workforce, Fed employees indulge in their responsibilities with the fulfillment of their mission as their driving force. Significantly, Federal Reserve System ensures a payment system that is dependable to all the employees. A payment system that is dependable is vital for economic growth and general nation stability. Notably, the involvement of the Fed in the system of payment enhances efficiency in many ways. The Fed has the interest of the public as its motivation for stimulating related improvements in payment efficiency (Coccia & Igor, 2018).
The role of financial incentives in motivating employees should not be understated. Past research indicates that motivation by incentives can increase the motivation of employees as well as a company’s profit margin (Novianty & Evita, 2018). Usually, when workers go past their normal levels of work, it is prudent to offer them financial incentives that range from bonuses, additional allowances, and many other monetary benefits. Notably, the monetary benefits and allowances aid the employees in compensating for their time of challenging work, dedication as well as efforts. According to research done by authors Novianty and Evita, financial incentives are sure motivators, especially in the workplace. Based on the two researchers' studies, it indicates that the provision of financial incentives at the workplace fosters a healthy, work environment, positive relationships, as well as outputs of higher quality (Novianty & Evita, 2018).
Additionally, financial incentives such as increases in salaries, allowances, and employee bonuses increase employee morale, function as a sign of appreciation in recognizing the efforts of employees, encourage collaboration among employees, and equally motivate all employees to work towards achieving the set objectives and company goals. It is important to note that financial incentives for employees may come in the form of profit shares, wage incentives, raises in salaries, benefits of retirement, commissions, bonuses, extra allowances, and referral programs (Landry et al., 2017). In evaluating the implementation of employee financial incentives, there is a need to determine the measure of performance (Novianty & Evita, 2018). Thus, this call s for the identification of key metrics in relation to progress, achievement as well as improvement. On the same note, a program that is inclusive of all employees has to be developed. The program, therefore, needs to incorporate incentives based on different employment cadres. Significantly, there is a need for organizations to offer incentives on team levels and individual levels. In so doing it will be better able to award individual and team accomplishments. Consequently, it is important to collaborate effectively with the involved staff as well as the supervisors. Collaboration will provide insights on employee preferences.
Research Questions
How does compensation impact employee motivation?
Can employee motivation be improved through compensation?
Research Objectives
To investigate the relationship between employee motivation and compensation.
To explore a clear explanation of the impact of compensation on employee motivation.
To explore recommendation for leaders in organizations to understand the dimensions of compensation and how they can impact motivation.
.
Chapter 2: Literature Review
Previous research has established that the public sector does not operate in a business-like manner. This has resulted in subpar performance from its employees, who do not receive the same treatment as those working in a corporate context. With the implementation of management services in the American government's public sector, it is critical to consider employee motivation via financial incentives (Coccia & Igor, 2018). The government intends to consider pay for performance and compensation in particular. Historically, monetary prizes and incentives were viewed as bribes and unethical. Nevertheless, other scholars have provided explanations for the effect of financial incentives on employee performance. Financial incentives serve as a foundation for the organization's sustained interaction with its employees.
The authors, Coccia and Igor lay a theoretical framework in an attempt to order the clarification of cadres in rewarding employees. Therefore, their research lays a solid foundation for developing sophisticated taxonomies and related theories to enhance better management implications. Further, the two authors point out that the sector of public administration has been faced with difficulties concerning reward taxonomy (Coccia & Igor, 2018). Notably, the research has indicated that there is a gap in the public sector, especially on the criterion of employee reward as well as the taxonomies involved.
In addition, the study of public sector rewards categorizes rewards as measurable and immeasurable rewards. The measurable reward can therefore be defined as elements that are tangible usually measured in monetary form and designed metric systems. According to Coccia and Igor, monetary rewards prove effective only if they are accompanied by better systems of performance appraisal (Coccia & Igor, 2018). However, in the public sector and organizations systems of performance appraisal have proved inadequate and inefficient. Thus, the impact of the financial incentives highly relies on superior performance appraisal systems.
On the other hand, the immeasurable rewards include elements that are intangible for instance professionalism, responsibility, and many more. Additionally, there are the intrinsic as well as the extrinsic rewards. The intrinsic rewards are immeasurable and may involve work satisfaction to employees, recognition, and empowerment (Coccia & Igor, 2018). Ostensibly, the intrinsic reward in most instances enhances the positive involvement of the employees with work. On the other hand, extrinsic rewards consist of tangible elements such as money gifted to employees because of specific accomplishments. Both the intrinsic reward and the extrinsic reward are vital in the motivation of employees. Studies indicate that with gradual development many organizations are in the process of shifting to extrinsic reward, as it is effective and initiative-taking. Additionally, research shows that extrinsic benefits to employees are in most instances incorporated by institutions that are mission oriented (Quan et al., 2018).
From previous research, it has been known that the system of financial incentives to employees is determined by two aspects namely, tangibility and the aspect of formality. The aspect of formality is concerned with the legitimacy of the financial incentives as well as the transparency involved. The second aspect of tangibility determines the physical characteristics of the reward. Significantly, human behavior to a greater extent can be determined by the provision of financial incentives. Employees are more likely to do their best when the workplace puts in place systems of financial incentives as a form of reward. Notably, payments made regarding performance increase individual efforts and overall performance (Coccia & Igor, 2018). Additionally, according to the research conducted by authors Coccia and Igor, Intrinsic reward, which is defined as a non-monetary reward is mainly practiced in the public sector and can only aid in the satisfaction of personal needs in a direct manner for the employees to attain given accomplishments. On the other hand, employees in private sectors are in most cases rewarded with extrinsic rewards, which are tangible elements for instance pay rises and wages.
Consequently, the underlying motive in employee rewards whether intrinsic or extrinsic is the aspect of motivation. Notably, the motivation of employees plays a crucial role in elevating employee performance spirits thereby resulting in increased production. Looking into past research, several theories are attributed to employee motivation, for instance, the theory of content. The content theory looks into the needs of the employees as well as their strengths (Coccia & Igor, 2018). On the same note, the theory looks into the. involved processes pursued by the employees to attain the set goals and standards. The content theory, therefore, incorporate famous theories such as Maslow's model, Clelland's achievement model as well as Herzberg's theory.
Further, the research paper clarifies process theory. The theory places more emphasis on motivation processes such as good and healthy relationships, initiation of behavior, the direction of behavior, and the sustaining of the initiated behavior (Hanley et al., 2019). Some of the models under this theory include the model of expectancy, goal theory, theory of attribution, and equity theory. From the conclusion of the research done by Ozteme, the public sector and civil servants are more aligned to intrinsic reward as opposed to extrinsic reward. On the contrary, the private sector highly values extrinsic reward.
The majority of enterprises worldwide have adopted performance-based compensation. This involves monetary compensation based on an employee's performance. Employees are monetarily rewarded for their accomplishments. Financial incentives are the most fundamental way for employees to feel motivated, as they increase their morale (Oztem et al.,2020). Employees feel understood and respected in the workplace when they receive such financial presents and incentives. As a result, employees are more inclined to stay in their current employment, resulting in lower employee turnover.
According to research done by Lynn Asghar, and fellow authors, it is the responsibility of the managers and the leaders of organizations to provide a work environment that motivates the employees. Additionally, the research hints that motivation for employees is a necessity for survival in order for organizations to remain competitive in terms of the workforce (Asghar et al., 2020). Similarly, it is important for managers to conduct audits on the related culture of their organization and get to know how the employees feel in regard to certain cultures and practices incorporated in the companies. Nonetheless, motivation gives room for the needs of the employees to be recognized both from an internal perspective as well as the external perspective.
In regard to DeVito's research integrating motivation, theories would result in an improved motivation theory as well as value and time maximization (De Vito et al., 2018). Notably, the motivation theory may vary from one aspect to another, but the underlying motive remains the same. Based on Maslow’s theory, the needs of the employees are to be looked into first before focusing on more advanced needs. The needs incorporated in Maslow’s theory are the need for a decent salary, employees’ safety that involves insurance as well a work environment that is safe. Lastly, there is the need to belong. It is the role of the managers and the general manager to ensure work practices and cultures that are inclusive to enhance the sense of belonging in employees (De Vito et al., 2018). When the employees have a sense of belonging, this provides a comfortable work environment, and the employees will strive to do their best in relation to performance. Maslow established a hierarchical classification of human needs in 1943. Security, self-actualization, self-esteem, physiological needs, and belongings are the five areas of human wants. According to the professor, a person must first be biologically driven (De Vito et al., 2018). This is to ensure that the mental health and value of the employee are determined. When employees' physiological needs are met, they become content and work toward achieving their own demands (De Vito et al., 2018). The following step is to address security concerns. This practice is repeated until all needs are met. Maslow asserts that unmotivated employees are less likely to be productive. By addressing their requirements, employees remain motivated and perform better.
According to Herzberg, some employment result in employee satisfaction, whereas others result in employee dissatisfaction (De Vito et al., 2018). According to the scholar, employee motivation results in a sense of accomplishment, responsibility, and promotion opportunities. Herzberg states that some factors in the workplace result in job satisfaction and motivate employees. The theory is considered practical in the workplace. According to the scholar, employees find gratification of higher levels such as recognition, advancement, achievement, and responsibility. He also states that the presence of one set of characteristics in the workplace leads to satisfaction at work. Herzberg disregards the fact that a higher level of satisfaction leads to a low level of dissatisfaction. He however states that both are independent phenomena that are not a continuum. According to the scholar, for employers to attain workplace productivity through enhancing motivation, they should focus on both ends of the equation. As they work on satisfaction, they should also focus on dissatisfaction.
Herzberg’s two-factor theory distinguishes between motivators and hygiene factors. Some of the motivators captioned in this theory include recognition of one’s achievements, opportunities from work, responsibility, and involvement in decision making (Novianty & Evita, 2018). Hygiene factors as recorded by Herzberg include salaries, fringe benefits, good pay, pay raises, and job security. According to the scholar, lack of hygiene factors leads to dissatisfaction of employees hence a lower performance. However, their presence in the workplace does not guarantee satisfaction. Eliminating dissatisfaction in the workplace is halfway to creating a conducive environment (Novianty & Evita, 2018). The other task is to increase satisfaction through motivation.
Articulately, in view of authors Ramchandani, and her peers, managers should recognize the various needs that call for improvement in workplaces. Additionally, factors associated with discouragements and low morale to a greater extent contribute to instability and put employees in a state of jeopardy. De Vito alongside her peers affirms that such events result in employees having emotional distress and demeaning their efforts and, in most instances, prefer to look for other jobs elsewhere (Ramchandani, et al., 2020). However much it may prove easy to get other employees and replace the vacancies, this poses as a barrier to continuity thereby. contributing to instability and discouragements.
The research further details that employee who are unmotivated put little to no effort into their performance avoid the workplace in most instances and are usually willing to leave their working places if granted the opportunity (De Vito et al., 2018). On the other hand, motivated employees put more effort and are creative, and give quality work. The authors equally note that the motivation of employees has been a problem for many managers. Based on the research, the authors determined that monetary elements form part of consistent motivation factors for employees. This is because monetary value remains the only process and way to attaining financial stability.
The research recommends hiring employees on the basis of their motivation factor in regard to the hiring company. In this manner, the employees would be able to identify their fit, whether the intrinsic reward or extrinsic reward. This will help in sieving the employees in accordance with their motivation preferences (De Vito et al., 2018). Further, the researchers recommend that the belonging needs of all the employees need to be addressed in regard to Maslow's theory. Under this, the employees are to be provided with a suitable work environment as well as enough motivation for quality work. Consequently, in reference to the research work of Landry and his fellow researchers, they concluded that when employers embrace the aspect of motivation such as bonuses, for employees alongside other financial incentives, it contributes to competency in employees (Landry et al., 2017). When the employees are motivated performance is likely to improve. The research suggests that financial incentives have positive impacts on employees and the general growth and development of workplaces. Often the plans to issue financial incentives are inadequate including the performance measurements, this, therefore, makes it difficult for proper incentive measures. With the appropriate plans, financial incentives would prove more effective.
Chapter 3: Methodology
The chapter explains the methodologies that the study will adopt for it to be successful. The area under description of the study is covered as well as data collection methods, research designs, and the sources that the data is collected from. The details about the description of the study population are also discussed in the paper as well as the sampling procedure, sample size, and the tools used for data analysis.
Research Strategies
A cross-sectional survey will be used in this investigation since the research is defined. The research will collect data in both quantitative and qualitative formats. The study will take place at the Federal Reserve System and other important US government agencies. The study will focus on existing employees at large government agencies. They will represent all other government employees. The Federal Reserve Bank, the Department of Defense, the Department of Education, and the Department of Commerce will provide data for this study. As a result, the sample size will be limited to twenty people employed by the United States government. The reason a cross sectional survey was adopted is because the problem was well defined and the aim here is to come up with the relationship between the two variables and that is the incentives and the employee motivation. A cross sectional survey will help the researcher to come up with the root of this problem so that strategies can be created from a point of information. The researcher will be able to approve or disapprove any wrong information given about the topic using the data collected in the survey. Quantitative approach is also used to gather data. Quantitative approach is chosen in this study because it is more statistical than the qualitative method. This is a study that is more concerned with data. The aim is to come up with the impact of the incentives on the performance of the employee and their motivation. Therefore, it is only wise to use a method that is more statistical to understand the relationship between the two variables (Novianty et al.,2018). This information will be collected using different methods that will be discussed later in this paper, but the method of analysis used will be the quantitative method which will give more meaning to the data by statistically analyzing it.
Population and Study Area
This study will be carried out in the Federal Reserve System and other important government agencies. The study mainly targets employees and employers and aims at establishing the relationship between the incentives given to the employees and their motivation. Therefore, the researcher will focus their study on the employees and the employers to try and understand the relationship between the two because it is the employers who give the incentives while the employees receive them. The few employees chosen from the federal reserve and the other important agencies in the US will represent all the other employees in different organizations and will devise a conclusion on how the incentives and the employee motivation impact each other (Ritala et al., 2020). The profile of the number of people who were included in the study was described in categories such as gender, educational level, income, job qualifications, and work experience. This sample size's profile will be characterized in terms of age, degree of education, work experience, and attitude toward motivation. The sample technique employed represents 4% of the entire population. This is a good number of representation because it will give a reliable insight on the variables being investigated. Although the variables might have a different impact on different people majority consensus of most persons in the population is most likely to be the true answer.
Secondary data will be collected. Secondary data will be gathered through library resources and surveys completed previously by others. The data collected will be evaluated using a social science-specific statistical software.
This research will take place from March 16th, 2022. The research will be conducted for a period of three months. Therefore, the research will be concluded on June 17th, 2022.
Sampling Design and Procedure
This research will involve different sampling designs, these sampling designs will be combined to come up with the best results. The probability sampling will involve random selection allowing the researcher to make strong statistical inferences about the whole group. As discussed earlier the only sample that is considered is 4 percent of the whole population. Therefore, using the probability method of sampling allows the researcher to have an easy time when making inferences about the rest of the population. In addition, in this method every member of the sample can be selected. There is no limitation when it comes to the people who can be chosen as the sample. Any employee has the chance to be chosen as well as any employer. This method is also appropriate because the research is quantitative, and this method is perfectly compatible with the quantitate research (Nurlina & Jumady, 2021). The method also produces results that are representative of the whole population that is the main advantage of this method and that is why it is used in this study. Simple random sampling is also used where all the members in the population have an equal chance to being selected. The sampling frame here includes the whole population.
Sampling Design
The purposive sampling technique was used to select the respondents of the study. This method involved the selection of a sample with a clear purpose in the mind of the researcher. In this case the purpose of the researcher is to establish the impact of the incentives on the motivation of the employees. Hence the sample selected must be able to give this relationship, the purpose guides the researcher to choose the sample. In addition, the kind of people chosen also is important. For instance, the researcher cannot choose a sample that does not relate with their topic in any given way. In this study therefore the sample chosen is relevant to the topic being investigated. They are employees who receive incentives the employers who give the incentives (Monnot, 2018). This is the perfect sample to collect information about incentives from. The purposive technique also gives the researcher a good base of the sample that should be taken from the population because there is a clear distinction between the sample that is relevant to the topic and that which is not. It becomes simple to choose the sample knowing the topic and purpose the researcher is trying to achieve.
Sample size
This study will use sample sizes between thirty and five hundred people. The sample sizes that are greater than 30 have the tendency to give a normal distribution trend which has the validity for generalization. There are other researchers who have suggested that the minimum of the sample size should be 5 percent of the total population. This increases the chance of representation and gives the researcher better results which are not biased. Having a five percent representation of the population gives more insight on the whole population. The decision arrived at is more inclusive than when the representation is lower than that number. Therefore, in this study the total number of employees in the federal reserves and the other government agencies is determined so as to decide on the number of employees which should be selected as the sample. The same procedure is also applied to the employers. The goal is to achieve a number which is very inclusive, but which is not too huge that it will be difficult to even collect the data from the sample. The population size is a main determinant and once it has been decided it becomes possible to ascertain the sample size.
Variables and measurement procedures
The data collection methods in this study will include the techniques which are used by the researcher to carefully select the methods for his own study based on the scope, nature, and the objectives of the research. Other factors to be considered is the availability of funds and the time factor. The data collection methods used in this study therefore include questionnaires which are given to the respondents to complete anonymously on how incentives having impacts their moods. The employers are also given the questionnaires to provide feedback on how they have experienced motivation changes in employees after they have given them incentives. The second data collection method used is the interviews, this is to collect the primary data from the respondent. Interviews are more sincere than the questionnaires. The researcher is able to tell when the respondent is lying. Interviews are also less biased since the researcher gets to ask questions on the issues that they do not understand clearly thus eliminating the bias and prejudice. This study will employ both the primary and the secondary data to collect information that is more concrete.
Primary Data
This is the data collected from the participants, the employees and the employers from the Federal Reserve and the other important agencies in the US will be the one providing this data. The researcher will not reveal the main purpose of their questionnaire in the study. Therefore, the participants are asked questions that relate to the topic mixed with other questions that are not relevant to the topic. This increases the chances of the respondents to be more open since they do not know why those questions are being asked. The questions however will be made simple and easy to understand for the respondents. The survey method is also employed in collecting primary data in order to collect the primary data from the respondent. Interviews are more sincere than the questionnaires. The researcher is able to tell when the respondent is lying. Interviews are also less biased since the researcher gets to ask questions on the issues that they do not understand clearly and therefore doing away with the bias and prejudice. These two methods will enable the researcher to come up with the most accurate and unbiased primary data.
Secondary Data
The secondary data will be used to construct the literature review and the information collected from the past research to build on the topic. Different books and scholarly articles published on the topic about incentives and motivation from different libraries are used to come up with the explanation about the two. During the literature review of the secondary data the researcher also tries to come up with the gap that exists and that the researcher should fill. Secondary data is important because it gives the researcher direction to know if the primary data is accurate. The scope of the secondary data is guided by defining a research topic this keeps the researcher vested at the right path and the materials used are relevant to the topic. In addition, the researcher having a goal when reviewing the literature is important. The goal helps the researcher to focus on the important materials that are associated with the topic. It keeps the researcher from looking into materials that do not include the content about the incentives or the motivation of the employees. Then lastly the researcher will design a process of analyzing these materials to come up with the best information needed.
Data processing analysis
The data that is obtained either from secondary sources or the primary sources is summarized, analyzed, and coded using different tools. The statistical package for social science (SPSS) is used. This is a software for analyzing data, the main objective here is to come up with a meaningful data that conclusions can be drawn from. The software will help in making the researchers work easier because it will assist in showing patterns and coming up with conclusions about the variables. The software also helps in structuring the unstructured data and giving this data more meaning. The descriptive statistics tools were also used to analyses the specific objectives of the study. The objectives of the study and the goals that the researcher is trying to achieve are already known. Hence the descriptive tools help the researcher to reach these goals with ease by structuring data in a way that is more understandable and sensible for the researcher to draw their desired conclusions. The specific objectives are analyzed using the descriptive tools. The researcher will also utilize the Chi square for the purposes of testing the hypothesis, to evaluate the relationship between the variables. After data is analyzed, it is represented in the form of tables for easy interpretation.
Reliability and validity of data
A reliable data means that the results yielded are consistent. It further means that what was intended to be measured it is measured to the degree it was intended to be measured in. The researcher used the survey method to test reliability of data collected from respondents. The responses collected from the respondents who indicates a series of attributions when making choices of motivation, it is attributed to a 5-point measure of the Likert-scale. The data is said to be reliable if the results are consistent and they are not confusing.
A valid measure in statistics is one measure of what is supposed to be measured. Validity is getting the results that are supposed to be gotten and those are accurate, and which reflect the concept that is being measured. In this study validity will help the researcher to get the measure of the impact of incentives on motivation. The researcher will test the validity of the questionnaire by making use of the content validity to argue logically about the questionnaire content. This testing aims at showing if the questionnaire is appropriate and complete for further analysis and findings.
Expected results study
The researcher expects to come up with the relationship between the incentives offered to the employees by their employers and how these incentives affect the motivation of these workers. The researcher also hopes to identify in detail how employees appreciate the role of incentives in their jobs. This will help in coming up with compensation plans and determining the best strategies for motivating employees. The employer might use the incentives to motivate employees but without the knowledge of the impact of the incentives on motivation these strategies might not have any impact on employee motivation. The researcher also aims at understanding the various monetary incentives for the workers that companies can use to motivate their employees. This study is very important for the employers because it can be used to help the employers in developing motivation strategies for employees. The research will determine the attitude of employees towards incentives to determine the importance of incentives in an organization. The types of incentives are also determined so that if the results find out that there is a positive impact between the incentives and the motivation the leaders in the organization can take advantage and create the best strategies for the employees.
Chapter 4: Findings and Discussion
This study involved a total of 200 employees from both the Federal Reserve and other government agencies. These employees completed the questionnaires and were also involved in the survey. Out of the 200 questionnaires given out a total of 162 questionnaires were returned with a response rate of 91%. Each of these questionnaires after being collected back from the respondents were them corrected and cleaned before being fed to the SPSS database (Ponta et al., 2020). The most obstructive omissions were corrected by inspecting the inaccuracies. Two questionnaires were not used because they had not been completed which indicated either lack of interest or inadequate time. Therefore, the data from questionnaires that was used was from 160 employees.
Analysis and discussion findings
Data was analyzed with the help of the SPSS. Descriptive statistical methods were used to analyze descriptive data where cross -tabulation was used to represent the findings in the frequency distribution tables. Other tests that were also employed include the Chi-square fit test which tested the hypothesis to give out conclusions that are meaningful. Data analysis included combination of many analysis tools to help the researcher to come up with the best results. The tools also were used depending on the type of data that needed to be analyzed. For descriptive data descriptive tools were used and for the non-descriptive data non descriptive tools were used.
Profile of the respondents
Some personal information about the respondents were collected by the researcher. Personal information was important to be collected because it helped the researcher to define the characteristics of the demographic the researcher was working on. Understanding demographics is important because it can explain why a person gave a certain answer and what the person values according to their age or gender. The four main pillars of the definition of demographics that the researcher focused on are age, gender, work experience and education. Profiling the respondents also helps the researcher to know how to handle different respondents during the interviews and the questionnaire. It also guides the researcher to choose the correct vocabulary to use around the respondents. For instance, how the researcher will address a 60-year-old female is not the same with how a 20-year-old female will be addressed.
Staff category
The findings on gender showed that out of the supporting employees 9 (21%) were female while 8 (14%) were male. Out of the 66 employees 29 (67%) were females while 37 (65%) were male. Out of 17 employees 12 (21%) were male and 5 (12%) were females. This study in general involved almost an equal number of females and males. This showed that the government of the United States is a good employer who gives equal opportunity to all of its people. The study therefore will have little or no bias or prejudice which is caused by gender inequality in the workplace.
Age distribution and staff category
Out of the 17 employees, 16 (94%) were aged between 36-45 while one (6%) and below the age of 35. Out of the 66 employees in the federal staff 48 (73%) were aged between 36-45 years while 15 (23%) were below 35 years old. The other 17 employees 2 (12%) were above the age of 55 years while 15 (88%) were between 36-55 years old. The majority of the employees who were involved in this study were aged between 36-55 years old. This study represents a group of mature and working-class people who are capable of providing information that is relevant to the study. These people also have enough experience in their work, and they are likely to give information that is accurate about the matters of the job such as incentives and motivation. In addition, this is a group with families and responsibilities therefore they have high motives for work.
Educational level and staff category
On the educational levels of the employees out of the 17 employees 2 (125) had graduate degrees, while 14 (82%) had no degrees the other one had either master’s degree or a postgraduate degree. Fifty-one (77%) of the other employees had masters or postgraduate degree. One (2%) had no degree and 14 (21%) had undergraduate degree. The employees at the topmost positions 16 (94%) had masters and post graduate degrees while 1 (6%) had undergraduate degree. These employees are based on their level of education and therefore this shows that the United States compensates individuals depending on their level of education. The people that earn the title of professionals are only the ones with degrees either undergraduate, masters or postgraduate those with no degrees are supporting staff. It can be concluded that the employees with the highest qualifications are likely to get the highest positions within the government agencies and also in the Federal Reserve.
Working experience
The employees involved in this study had work experience of more than three years. Even the employees with less qualifications and those who are considered supporting staff have an experience of more than three years. However, there are other top employees who were involved in the study who had as much as 10-year experience (Hale et al., 2019). These employees included the managers and the leaders. These employees are very reliable in the study because they are likely to give correct information due to their experience and many years they have spent on the job. Since the employees have enough experience on different things concerning their jobs, they are more suited to give their view on the issue of incentives and motivation.
Most significant indicators of motivation
The main objectives aimed at determining the indicators of motivation are analyzed by the researcher. The respondents are therefore asked to rank the attributes of motivation. Several attributes were chosen, and the researchers were asked to rank them indicating which was of more importance to them. The questions guiding both the researcher and the respondents included which is the most significant attribute of motivation? Using the five points Likert scale to rate the statements used there was 1 which was strongly disagree, 2-disagree.3-neutral, 4-agree and 5- strongly agree. The respondents gave their answers using the Likert scale to show which of the motivational attributes were more significant to them.
Salary as an indicator of motivation
Twenty nine percent of the employees concurred that salary was a basic indicator of motivation. Seventy four percent of the employees who are professionals with qualifications agreed that salary is an indicator of motivation and 20% of the topmost employees agreed that salary was an indicator of motivation. In this study 60% of the respondents either agreed or strongly agreed that salary was an indicator of motivation. Therefore, it can be concluded that salary is a basic indicator of motivation. Some people go to work with the sole purpose of earning a salary. They are motivated by salaries and increment of salaries can even motivate them more.
However, there are those employees who were neutral they did not agree or disagree whether salaries were indicator for motivation (Fallatah et al., 2018). Fifty seven percent of the supporting staff were neutral, 25% of the professionals were neutral and 20% of the topmost employees were neutral.
There is also the issue of overtime as an indicator for motivation. Sixty percent of the support staff disagreed that overtime was an indicator of motivation, 40% of the professionals disagreed that overtime was an indicator of motivation and 70% of the topmost employees disagreed that overtime was an indicator for motivation. Therefore, overtime is not considered an indicator for motivation.
Bonus pay as an indicator of motivation
On the issue of bonus pay as an indicator of motivation 30% of employees who are considered support staff disagreed that bonus was an indicator of motivation. Sixty percent of the employees considered professionals disagreed that bonus is an indicator of motivation and 23% of the topmost employees disagreed that bonus is an indicator for motivation. There were groups that reserved their comments too (Daniel, 2019). They did not agree or disagree whether bonuses are an indicator for motivation. Seventy percent of the professional support staff reserved their comments on the issue while indicating that this group of employees do not regard bonuses as a factor of motivation. Mangers also indicated that bonuses are not applicable to most of these employees.
Car loans as motivation indicator
The results of the employees and how they felt about car loans as an indicator of motivation are as follows. 61% of the professionals agreed that they are motivated by car loans, 27% of the topmost employee agreed that car loans were an indicator to motivation and 12% of the support staff agreed that car loans were an indicator for motivation. Thirty-two employees were not sure about car loans being an indicator to motivation. These people did not agree or disagree about car loans being an indicator to employee motivation. Sixty eight percent of the professionals reserved their comment on the issue, 18% of the support staff reserved their comments on the issue and 14% of the topmost employees reserved their comment on the issue. This indicates that to professionals and top-ranking employee’s car loans are an indicator of motivation. This is because of the reasons that are accrued when one problematic a private means of transportation.
House allowances as an indicator for motivation
The researcher also considered house allowances as incentives and aimed at establishing their relationship with motivation. Fifty four percent of employees strongly agreed that house allowances were indicators of motivation. Next, 45% of the employees strongly disagreed that house allowances were an indicator for motivation. The number that disagreed strongly was lower to the supporting staff and very high on the professionals. This shows that professionals do not consider house allowances an indicator for motivation. House allowances are necessary for the employees because it saves them money which they would have spent in seeking for good shelter which is a basic necessity.
Staff loans as an indicator for motivation
Sixty-one percent of the employees agreed, and others agreed strongly that staff loans were an indicator for motivation. Eleven people who agreed were support staff, 41 people were professionals and 9 people were topmost employees. They agreed that they were motivated by the staff loans. They even revealed in the comment sections of the questionnaire as well as in the interviews that staff loans helped them carry out projects which required large amounts of capital they did not have. This shows that staff loans are an important indicator of motivation to employees because it helps them in fostering their personal goals and promoting the work morale of the employees. There are things that their salary cannot fulfil and hence these loans are used to fulfil such things.
The following bar graph summarizes the indicators of motivation as explained above. The four most important factors were salaries, staff loans, car loans and house allowance. Other incentives such as bonus pay and , overtime allowances were not an indicator for motivation in this case. These factors that are not considered to be an indicator of motivation had lowest responses of people agreeing if they were an indicator or not. This helped the researcher to conclude on the factors that were indicators of motivation and those which were not indicators of motivation.
The most important indicators of motivation
Employee motivation in this study involved extrinsic rewards which results from the attainment of the rewards that are eternally administered which include material possession, pay, prestige, and the positive evaluations from others. The study realized the four major significant indicators of employee motivation and these included car loans, salary, staff loans and house allowances. In commenting on these significant indicators of motivation the respondents agreed or strongly agreed. However, on the other factors that have been ruled out as not significant indicators of motivation many respondents would withhold their comments or disagree.
These findings supported the study of Novianty, (Novianty, 2018) which suggested that there is a good relationship between the performance and the productivity of employees in an organization and compensation and incentives offered to these employees. In addition, there is a good relationship that exists between the remuneration and the performance of not only the employees but also the organization as a whole. Employees are likely to perform better in an organization due to the incentives offered to them. This is because these incentives make their lives easier, and they are able to focus on their work. For instance, when the organization offers the employees car loans, they ease the burden of the employee using public means of transport which are usually stressful and less reliable. It also increases the quality of life of the worker thus increasing their job morale and productivity. Some of these incentives also helps to boost the self-esteem of the workers. The Maslow’s hierarchy of needs places the self-actualization needs at the top and the basic needs at the bottom this means that lacking basic needs can make a person lack self-esteem. Therefore, helping the employees achieve the basic needs will help them acquire self-esteem. Employees with good attitude towards themselves also have good attitude towards their jobs.
The motivation hygiene factor states that ‘treat people as best as you can so that they have minimum dissatisfaction’. This theory suggests that people should be treated in a way that helps them to grow and become better in their work for this improves their achievements and their motivation. Therefore, for the employees to be entirely satisfied they must be properly compensated. The pay should match the level of work required and also be aligned to market conditions so that it meets the needs of the employees. However, most of the times compensating employees properly does not automatically result in the success of the organization, it is the responsibility of the leaders in the organization to use these incentives properly to increase morale. Therefore, the incentives should be given strategically in order to benefit the organization.
Significant and non-significant incentives
Chapter 5: CONCLUSIONS AND RECOMENDATIONS
This study has enriched its user’s knowledge on the importance of incentives on the performance of employees. This study was carried out at the Federal Reserve and the other agencies of the government of the United States. The main objective and goal of this study was to come up with the most significant incentives that impact motivation and also to come up with the relationship between the incentives and the motivation of the employees in the organization. It also aimed at showing which incentives improve the work performance of the employees in an organization and the types of incentives administered in an organization whether non-financial or financial. Purposive sampling was therefore employed, and a questionnaire and a survey was used as the main method of collection of primary data. Samples of 200 employees from the Federal Reserve and other government agencies were used. Data was analyzed using a data analysis software known as SPSS and the research was computed in tabulated tables in the database of this software which contained relevant findings. The chi-square was used to test the four-hypothesis employed by the study.
The study therefore identified that salary, car loans, staff loans and house allowances were the most important indicators of motivation for employees. The respondents were required to reply using a 5-point Likert scale and on these factors, majority agreed and strongly agreed that the above-mentioned factors were the main indicators of motivation. Subsequently, the researcher proceeded to fulfilling the second objective and wanted to find out the non-salary incentives which are indicators of motivation to the workers. The researcher was guided by this question, which of the non-salary incentives were most significant in motivating employees? The respondents also gave their answers using the 5-point Likert scale where 1-strongly disagree, 2-disagree, 3 -neutral, 4-agree and 5-strongly agree. Seventy five percent of the employees who participated in the study agreed that car loans, and staff loans were the most significant indicators of motivation which were non salary. The third objective prompted the researcher to investigate the most significant financial incentive which has an impact on motivation. Workers reveals that incentives like medical insurance were the most important incentives and 98% of the employees in general agreed to this fact. The second incentive which is financial and considered very important is salary and 92% of the employees agreed or strongly agreed to this fact.
The data that was collected from the field was thoroughly tested to find out the meaning of the hypothesis from the made observations. The relationship between salary and motivation were tested and it was found that the p-value was less than the alpha value and the two tailed in the level of significance (Mhlanga, 2018). This signifies that there is a positive relationship between salary and the motivation of employees. Hence, when employees’ salaries are raised their motivation is boosted and they perform better in the organization. It was also determined that there was a significant relationship between the house allowance and motivation. When the relationship between staff loans and motivation were tested there was a null hypothesis which resulted in a non-positive relationship between the staff loans and the motivation of employees. This therefore showed that there are other factors that can be used to explain the employee motivation in the areas of study.
Conclusions
Most significant indicators of motivation
Using the study findings, it can be concluded that not all extrinsic motivation motivates the workers. This is because employees have different needs and through fulfilling these needs one can unlock their motivation. There are employees who need to be recognized, there are those who want career development and those who want to have control over people. Through giving them what they need their motivation can be unlocked. It is realized through the research however, that most of the employees are motivated through either financial or non-financial incentives. This is because most employees need to meet their basic needs and also, they need to foster their personal development through incentives such as car loans and staff loans, or house allowance. Therefore, it can be concluded that motivation has a great impact on the performance of the employees (Hopper, 2020). Some of the factors that unlock this motivation are discussed but it is important to do further research to determine other factors apart from incentives because not all the employee’s motivation is unlocked through these incentives. However, there is a positive relationship between salaries and motivation deduced from the study and that means incentives play an important role in motivation. This is because there are employees who are much more concerned about their basic needs, therefore giving them financial incentives allows them to cater for these needs with ease and this motivates them. What is important for an employer is to know what suits their employees or rather what employee’s cares mostly about. Offering incentives that employees care more about meets the needs of the employees whether they are basic needs or secondary needs and they are motivated when their needs are met. Those who need to grow career wise should be given incentives that allow them to do so while those who need financial security and health covers should be offered incentives which allow them to get this kind of security.
Most important non salary incentives
The findings of this study also came up with a number of non-salary incentives which are good indicators of motivation. The financial rewards when given to employee’s offers them job satisfaction therefore the labor turnover is minimized. This study shows that having non-salary incentives help organizations to keep their workforce motivated by taking care of the areas that employees are most concerned about. Through this study it is possible to see that an organization that does not motivate its employees are likely to be confronted by problems of labor turnover due to low pay packages because of the lack of incentives which boosts employ pay. The other components of work motivation which are often ignored by the employers are the working conditions, lack of criteria when promoting employees and lack of recognition. As discussed earlier there are employees who are motivated by these factors instead of monetary incentives.
There is also the issue of the incentives that are suitable for the public sector and those that are more applicable in the private sector. In the public sector according to the findings of this research, the intrinsic factors are lowly exposed than the other sectors such as the private sector. Extrinsic rewards are usually capable of retaining employees for a very long period, these rewards motivate employees because they feel more appreciated, and that their contribution is valued, thus resulting in these employees putting more efforts in their work. Employees are able to change their attitudes towards their work due to these rewards. Therefore, if the employers are willing to offer incentives to their employees to increase their motivation, they must be willing to firstly understand their employees. This means understanding what each group of employees would be motivated when offered. For instance, the incentives offered to the support staff may not be similar with the incentives offered to the professionals and the topmost employees in the organization. This is because these groups have different needs in the organization. Therefore, understanding the needs of the employees will help improve motivation because incentives will be given in the most effective way. Most importantly, the employers must ensure the work environments are desirable and that employees are comfortable when working in these environments. If the working conditions are not good individual cannot perform properly. Even if their incentives are high, they still will not perform as well as they can because the working conditions affects the productivity of the employees. Employees are supposed to be very comfortable in the organization for them to be productive. Then when the working conditions are good, and the employees are comfortable at their jobs it is now safe to take care of the other incentives which meet the needs of the employees.
Most important financial incentive of motivation
According to the Maslow hierarchy of needs human beings have classes of needs and before one class of need is fulfilled the higher need cannot be unlocked. This means that these needs are unlocked in a given order from the lowest needs to the highest needs. The theory states that needs cannot be fully met but once a need has been fulfilled it does not lead to motivation anymore. Therefore, the employer needs to know where a person is on these hierarchy of needs for incentives to have an impact on motivation. When the level of needs is known the employer should focus on meeting the needs at that level. Employees from different groups are at different levels of needs. For instance, while the support staff might be motivated by incentives that involve basic needs the executive will not be motivated by basic needs because this is a level they have already achieved. Therefore, motivation only works if the incentives given can meet or fulfill the needs of the employees at their different levels. This means the employers should design a strategy that determines the level of the employees before they even start designing incentives for them. It is these levels that should be a guiding factor on what type of incentive be given to different classes of employees (Ali et al., 2021). The study can conclude that although the findings established a positive relationship between medical insurance and motivation the employers should not assume that all the employees will be motivated by medical insurance. Instead, employers should aim at finding out more ways of ensuring the employees are more satisfied in their job. The employee is more satisfied if the working conditions are good and if the incentives given to them meets their needs. These are the combination of factors that help the employers to make incentives more effective for the sake of the employees.
Recommendations
The following recommendations were given by the researcher after carrying out the study and drawing conclusions so as to provide implications and to guide the employers and the policy makers to improve motivation. The recommendations are purely based on the research findings and the researcher outlines those who will require this kind of information on how to make use of the findings. There are more simplified ways of what should be undertaken by the policy makers and employers if they want to ensure that their incentives are more effective in the organization. This is because if incentives are given with no good strategy, they might not be effective and have no impact on motivation which is the greatest reason employers provide the incentives in the first place.
It is important for the employers in the Federal Reserve and government agencies to design incentives which are suitable according to the sector. These incentives should be both intrinsic and extrinsic. When employees are properly compensated and given incentives and when their working environment is good, they do not conflict with the values of the organization. It only becomes a problem if the organization does not provide good working conditions for the employees, but they are expected to be motivated and highly productive. There should be attention focused at increasing the salaries for public employees. As discussed earlier in this study salary is an incentive that impacts motivation. Therefore, increasing the salaries of employees will help in improving their motivation at work which leads to increasing the performance in the organization. Increasing the salaries of the employees will have direct impact on their motivation and their performance, thereby increasing the profitability of the organization.
References
Ali, B. J., & Anwar, G. (2021). An Empirical Study of Employees’ Motivation and its Influence Job Satisfaction. Ali, BJ, & Anwar, G. (2021). An Empirical Study of Employees’ Motivation and its Influence Job Satisfaction. International Journal of Engineering, Business and Management, 5(2), 21-30.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3822723
Asghar, F., Shamim, N., Farooque, U., Sheikh, H., & Aqeel, R. (2020). Telogen effluvium: a review of the literature. Cureus, 12(5).
Coccia, M., & Igor, B. (2018). Rewards in public administration: a proposed classification. Journal of Social and Administrative Sciences, 5(2), 68-80.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3219109
Daniel, C. O. (2019). Effects of Incentives on Employees Productivity. International Journal of Business Marketing and Management, 4(1).
De Vito, L., Brown, A., Bannister, B., Cianci, M., & Mujtaba, B. G. (2018). Employee motivation based on the hierarchy of needs, expectancy and the two-factor theories applied with higher education employees. IJAMEE.
Fallatah, R. H. M., & Syed, J. (2018). A critical review of Maslow’s hierarchy of needs. employee motivation in Saudi Arabia, 19-59.
Hale, A. J., Ricotta, D. N., Freed, J., Smith, C. C., & Huang, G. C. (2019). Adapting Maslow's hierarchy of needs as a framework for resident wellness. Teaching and learning in medicine, 31(1), 109-118.
Hanley, Margaret, Lauren Sayres, Emily S. Reiff, Amber Wood, Chad A. Grotegut, and Jeffrey A. Kuller.
Hopper, E. (2020). Maslow's hierarchy of needs explained. ThoughtCo, ThoughtCo, 24.
http://www.christianworldmedia.com/client/docs/603_1585079540_17.pdf
Landry, A. T., Gagné, M., Forest, J., Guerrero, S., Séguin, M., & Papachristopoulos, K. (2017). The relation between financial incentives, motivation, and performance. Journal of personnel Psychology.
https://econtent.hogrefe.com/doi/full/10.1027/1866-5888/a000182
Mhlanga, O. (2018). Factors influencing employee motivation in hotels. African Journal of Hospitality, Tourism and Leisure.
https://openscholar.ump.ac.za/handle/20.500.12714/121
Monnot, M. J. (2018). The effect of incentives on intrinsic motivation and employee attitudes: A multilevel study across nations and cultural clusters. Thunderbird International Business Review, 60(4), 675-689.
https://onlinelibrary.wiley.com/doi/abs/10.1002/tie.21949?casa_token=a9n__N1cLVgAAAAA:rydUsy1wlqJgwhEPquxy2rfVfpgj7aeh1cLQnCCKlfpZIxJedxz21W2ScxJz18HlTQS-A1cStQCnFfcmJA
Novianty, R. R., & Evita, S. N. (2018). Financial incentives: the impact on employee motivation. Academy of Strategic Management Journal, 17(6), 1-8.
Nurlina, N., & Jumady, E. (2021). The Role of Motivation as Mediating Relationship Between Incentives and Employee Performance. Jurnal Economic Resource, 3(2), 44-51.
Oztemel, E., & Gursev, S. (2020). Literature review of Industry 4.0 and related technologies. Journal of Intelligent Manufacturing, 31(1), 127-182
Pang, K., & Lu, C. S. (2018). Organizational motivation, employee job satisfaction and organizational performance: An empirical study of container shipping companies in Taiwan. Maritime Business Review.
https://www.emerald.com/insight/content/doi/10.1108/MABR-03-2018-0007/full/html
Ponta, L., Delfino, F., & Cainarca, G. C. (2020). The role of monetary incentives: bonu
s and/or stimulus. Administrative sciences, 10(1), 8.
Quan, P. L., Sauzade, M., & Brouzes, E. (2018). dPCR: a technology review. Sensors, 18(4), 1271
Ramchandani, M. S., Litvack, J. R., & Marra, C. M. (2020). Otosyphilis: a review of the literature.
Ritala, P., Vanhala, M., & Järveläinen, K. (2020). The role of employee incentives and motivation on organisational innovativeness in different organisational cultures. International Journal of innovation Management, 24(04), 2050075.
Vlaev, I., King, D., Darzi, A., & Dolan, P. (2019). Changing health behaviors using financial incentives: a review from behavioral economics. BMC public health, 19(1), 1-9.
https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-019-7407-8
