THE EFFECT OF MOTIVATION ON EMPLOYEE PRODUCTIVITY IN KNIGHT FRANK, UGANDA

ABSTRACT

The study was carried out at Knight Frank, Uganda with the main purpose of examining the effect of motivation on employee productivity. The specific objectives were; to establish the methods used to motivate staff, to examine the relationship between staff motivation and employee performance and to examine the factors influencing employee performance. Literature was reviewed based on the objectives of the study.

A cross- sectional survey research design, combined with quantitative and qualitative research methods were used in the study. The survey sample consisted of 40 respondents selected from staff, clients and management. These were selected using scientific and non- scientific techniques. Primary data was collected using questionnaires and interviews. Tables and percentages contributions aided in the data presentation using statistical packages like Microsoft excel.

The study established the methods used by Knight Frank, Uganda to motivate employees were; staff bonus schemes, salaries, profit sharing plans, gain sharing plans, delayed benefits, merit pay plans symbolic rewards, non- monetary allowances, staff training and development and the piece rate system of payment. The influence of motivation on employee performance included staff efficiency and effectiveness, increased work effort, improved customer service, increased staff loyalty, employee recruitment, management empowerment, controlling fraud risk, performance appraisal, employee training, internal employee relations and savings growth among others. The other key determinants of employee performance were organisational mission, performance goals and targets for employees, performance planning and management, performance appraisal, employee weaknesses and strengths, technology, employee training and skill development, attitudes and character, management, working conditions, career level, team work and relation skills and experience and demographic features.

The study forwarded recommendations for the employees and management of organizations, the government and other policy makers to take steps to ensure effectiveness of employee motivation and performance. The study also identified key areas of interest related to the study hence them but not directly addressed in the current study such that further studies can be conducted.

CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter presents the background, problem statement, study objectives, research questions, study scope and significance.

1.1 Background to the Study

According to Keijzers (2010), motivation is derived from the word “motivate”, meaning to move, push or persuade to act for satisfying a need. Broadly, motivation is a set of processes concerned with a kind of force that energizes behavior and directs it towards achieving some specific goals. It includes psychological processes that cause stimulation, persistence of voluntary goal directed actions, direction of destination, and determination. Motivation to work includes a set of energetic forces that originate both within and beyond an individual’s being, to initiate work-related behavior, and determine its form, direction, intensity and duration. People are motivated when they expect a course of action to lead to attainment of a goal and a valued reward that satisfies their needs.

According to Owusu (2012), motivation is “the cognitive decision making process through which goal directed behavior is initiated, energized. directed and maintained in an organization”. It has two dimensions, one being making employees work better, more efficiently and effectively from the point of view of managers, the other being enabling employees to do their jobs in the best way with enjoyment and desire from the point of view of employees. Motivation can be intrinsic or extrinsic. Ude& Coker (2012) define intrinsic motivation as self-gen crated or internal motivation. It is that sense of satisfaction and achievement one feels when he/she spends time on activities that reflect what drives them, and activities that they enjoy. It includes: being creative, solving problems, using skills and talents, completing important or challenging work, work that gives one power, authority, autonomy makes one feel important, appreciated, accepted, or advance their careers. Saleem (2011) adds that, individuals are intrinsically motivated when they seek enjoyment, interest, satisfaction of curiosity, self-expression, or challenge in work. Intrinsic rewards are psychological or intangible like appreciation, meeting new challenges, positive and caring attitude from employer, and job rotation.

On the other hand, individuals are extrinsically motivated when they engage in the work in order to obtain some goal that is apart from the work itself. Extrinsic rewards are tangible rewards that are external to the job or task performed by the employee; like salary, incentives, bonuses, promotions, or job security (Srivastava & Bannola. 2011). External motivators are given by others, like a salary, bonuses, incentives, security, praise, recognition, promotion or even punishment or withdrawal of privileges. Extrinsic motivators are determined at the organizational level and outside the control of individual leaders and managers. If withdrawn, motivation declines, (Prantheepkanth, 2011).

There is a strong relationship between intrinsic and extrinsic motivation. In some cases extrinsic motivators can decrease intrinsic motivation. For example, if money is administered contingently, it decreases intrinsic motivation. Extrinsic and intrinsic motivation can have a reinforcing effect: once extrinsic motivation is taken care of intrinsic motivation can lead to high levels of satisfaction and performance. Both intrinsic and extrinsic values can motivate employees to work, but they can have very different effects on employees. Not all people are equally motivated; some employees are more intrinsically and others more extrinsically motivated (Chaudhary& Sharma, 2012).

According to Ismawan (2007) employee productivity is often defined simply in output term that is needed for achievement of pre-decided goals. Performance is concerned what job is done, how it is done and what has been achieved. Performance refers to the degree of accomplishment of the task that makes an employee’s job reflects how well employee is fulfilling the requirement of the job.

Knight Frank LLP is a residential and commercial property consultancy founded in London by John Knight, Howard Frank and William Rutley in 1896. Knight Frank together with its New York-based affiliate Newmark Grubb Knight Frank is one of the world’s largest global property consultancies. Its global network encompasses 370 offices in 55 countries and more than 12,000 employees handle in excess of US$817 billion (£498 billion) worth of commercial, agricultural and residential real estate annually. It has since taken a smooth path towards growth and expansion by attracting and retaining a large and diverse base of skilled human resources. It has also introduced numerous motivation tools to boost staff performance. This suited the study to assess how its motivation schemes affect the level of productivity of employees.

1.2 Statement of the problem

The human resource function is the most important of all in Organization just like other organizations, as employees are wholly responsible for managing other resources to meet organizational goals. The overall performance of Organization is a function of the efforts of its employees. Currently, Organization focuses on strategic human resource management as a way of improving employee performance and to meet social and financial organizational goals. It is widely accepted that a well-motivated, committed, loyal and productive staff will help Organization achieve both satisfactory outreach and financial performance. Properly designed motivation schemes will ensure optimal staff performance, commitment, loyalty, job satisfaction, teamwork, and innovativeness. Yet motivation schemes have been criticized for bending more towards physical and not mental outcomes; causing conflicts and disgruntlement among staff, undermining team work, and promoting inequality, let alone associated monetary costs and thus unmotivated employees lead to low productivity in the organization. Given this contradiction, it was necessary to conduct a thorough analysis of the relationship between motivation and employee productivity in Organization.

1.3 Objectives of the Study

1.3.1 General Objective

To establish the effect of motivation on employee productivity in Organization, with specific reference to KNIGHT FRANK, UGANDA.

1.3.2 Specific Objectives

1. To establish the methods used to motivate staff in KNIGHT FRANK, UGANDA.
2. To examine the relationship between staff motivation and employee performance in KNIGHT FRANK, UGANDA.

• To examine the factors influencing employee performance in KNIGHT FRANK, UGANDA.

1.4 Research Questions

1. What methods are used to motivate employees in KNIGHT FRANK, UGANDA?
2. What is the relationship between staff motivation and employee performance in KNIGHT FRANK, UGANDA?

• What are the factors influencing employee performance in KNIGHT FRANK, UGANDA?

1.5 Scope of the Study

1.5.1 Content Scope

The study analyzed the relationship between staff motivation and employee performance in Organization. It also explored the different tools used in Organization to motivate employees, and other determinants of employee performance in Organization all integrated in an attempt to answer the research questions.

1.5.2 Geographical Scope

The study was conducted at KNIGHT FRANK, UGANDA. It was chosen for the study due to its convenience and possible accessibility data. More importantly, it was a regulated organization with sound human resource policies and procedures, including staff motivation.

1.5.3 Time Scope

Primary, data was collected from February-May 2017.

1.6 Significance of the Study

The study shall enhance the researcher’s volume of knowledge and experience not only relating to the topic of study but also to the field of research in general.

To future researchers, the study will provide a body of knowledge that can help enrich their study and contextualize their findings.

The study will provide an insight to Organization in particular and business firms in general on how to design staff motivation schemes that can contribute to employee performance and their overall financial and social performance.

The study will also help employees and employers to know both positive and negative effects of motivation schemes and to develop appropriate and acceptable as performance indicators upon which motivation can be based to stimulate employee performance

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This chapter presents a review of related literature through identification, selection, and extensive study of existing information from credible sources, like dissertations, theses, journals, reports and monographs, to clarify and contextualize the study. It addresses the tools of employee motivation, their effects on employee performance; and determinants of employee performance in an organization.

2.2 Methods Used in Motivation of Employees in Organizations

There are many ways in which employees can be motivated. These motivation tools can be financial or non-financial, short term or long term, performance based or non-performance based, and group or individual motivations. Broadly, the tools of employee motivation include intrinsic and extrinsic motivation. AH these broad categories of motivation as discussed as follows;

2.2.1 Intrinsic Motivation of Employees in Organizations

According to Holtamnn & Wright (2006), Organizations offer promotional opportunities to motivate staff. Most people work harder if they have the prospect of moving on to a higher rank in the organization. Ikeanyibe (2009) notes that some Organizations have a policy of filling all vacant positions from within the company; they do not to hire outsiders. This is intended to give a clear signal to employees that it pays to work well since the best employees can move up through the ranks.

Effective communication is one of the new tools used to motivate employees in some organizations. Managers need to be clear when talking to their employees and let them know that their opinion or views are important in building a viable company. Strong communications skills are necessary when assigning tasks to the employees so that tasks are clearly defined and understood (Saleem, 2011).

Non-monetary allowances or employee benefits also form a key part of motivation in Organizations. This involves providing free medical cover for employees and their immediate family, sick leave, work leave, rest on public holidays, maternity and paternity leave, and passionate leave when employees lost their dear ones, (Ekka. 2010). Such privileges can induce employees to increase their productive capacity as it gives them a sense of belonging to the organization, (Mugwanga, 2011).

Staff training and development opportunities are also used to motivate Organizations. Whatever new skills staff members already bring to the job, there is always a need for considerable additional training. Organizations motivate their workers by offering special training in needed skills like loan analysis, savings mobilization, planning and control skills (Saleem, 2011). Aubertet al (2008) add that training, though non-monetary, helps to transfer skills, socialize new staff in the organization, helps newcomers to understand and to assimilate the organization’s basic values as well as its mission. In the view of Ikeanyibe (2009) employee training is an essential and indispensable part of HRM and HRD to prepare and develop staff to do their current jobs well. It is the acquisition of knowledge, skills and attitudes that improve performance in the current job. For Organizations, training transfers information and knowledge to staff; equips them to translate that information and knowledge into practice to enhance organization effectiveness and productivity, and quality of people management.

Employee Performance Appraisal (EPA) is also a distract tool used by Organizations to motivate staff. It is the process of identifying, evaluating and developing the work performance of the employee in the organization, so that organizational goals and objectives are effectively achieved while, at the same time, benefiting employees in terms of recognition, receiving feedback, and career guidance, (Ude& Coker. 2012). EPA is used for three purposes: as a basis of reward allocation like salary increments, promotion and other rewards; to point out the weaknesses of employees and will spot areas where development efforts are needed; and for selection and development. It helps management perform functions relating to selection, development, salary, promotion, penalties, lay-off and retrenchment, and strengthens the overall employee performance management, (Saleem, 2011).

2.2.2 Extrinsic Motivation of Employees in Organizations

Bonus schemes are the most common tool of motivation. Bonuses can be accrued and paid out at different intervals, like monthly, quarterly or annually. Monthly bonuses are mainly given to loan officers and vary from 10%-50% of .the total pay. The spot bonus is awarded to an employee for an achievement not measured by any regular performance standard. According to McKim (2007),bonuses are paid monthly and are determined by individual performance in areas like the number of disbursed loans, the portfolio quality and the number of active clients in the loan officers’ portfolio.

According to Wright & Holtmann (2006), organizations use profit-sharing plans to motivate staff. Here, the employees receive a certain portion of the annual (or semi-annual) profit. The profit pool allocated to the employees is then distributed equally between all staff members, or according to some form of allocation criteria like base salary/individual performance. Aubert et al (2008) note that it increases the sense of identification with the organization, and a reduction of the barriers between employees and owners. But they weaken connection between the performance of the individual and his reward.

Gain-sharing plans are another key tool of staff motivation. It is similar to profit sharing plans, but here the basis for the distribution pool is different. Here, staffs are entitled to a certain percentage of the productivity gains achieved in a given period, (Ismawan, 2007). Payout-intervals are shorter than profit-sharing plans. Employees are entitled to a bonus depending on improvements in performance and its advantage compared to profit plans is that the payouts are usually made more frequently.

In Organizations, merit pay plans are increasingly becoming a common way of rewarding employees. It does involve salary increases for employees who have produced the best performance during a certain period of time (often one year). Annual salary increases range from 0% for weaker performers and 5% for average performers to 10% for strong performers. (Mugwanga, 2011). Merit pay schemes are performance based and tenure based. Based upon scheduled performance appraisals, staff can increase their regular salary by up to two levels. The increments are determined by the employees’ individual performance which is assessed twice a year by the direct superiors, (McKim, 2007).

According to Holtmann & Wright (2002), organizations use symbolic rewards to motivate staff. Examples include commendation letters, branded gifts, trophies, joint dinners, or trips. Chaudhary & Sharma (2012) note that, while the monetary value of this reward may not enhance staff performance, their provision can be valuable supplementary tools to support staff motivation. The rewards are of small monetary value and emphasize recognition of staff work effort.

Organizations use delayed benefits to motivate staff. As Organizations grow and mature, the average age of staff also increases. Most Organizations only make the obligatory contributions to the national pension and social security plans. Some Organizations provide staff with an incentive to remain in the organizations, (McKim, 2007). As pension benefits rise, they can help to reduce turnover and to attract a more stable workforce. Many people might be willing to forego short-term monetary benefits.

Basic salaries are the commonest form of motivation in Organizations calibrates basic salaries in such a way that the employees can cover basic monthly needs from this source of income. If base salaries fall significantly below this level, employees will be subjected to considerable financial risk and lead to low morale and increase staff turnover (McKim. 2007). It is the inadequacy of basic salaries in motivating staff that has paved way for the use of a mix of other incentives.

The piece rate scheme is a one where a uniform price is paid per unit of production. Employees may be compensated according to the number of pieces they produced or processed. Compensation is direct proportional to level of productivity. It is easy to calculate and employees may determine or predict their rewards in the short term and regulate their pace of work in accordance with the level of compensation they want to attain, (Pratheekanth, 2011).

2.3 Effects of Motivation on Employee Performance in organizations

An employee is any person employed for wages in any kind of work, manual or otherwise, and who gets his wages direct or indirectly from the employer, and form part of human resource function of Organizations. Human resources include knowledge, skills, creative abilities, talents, and aptitudes obtained in the population. They represent the total of the inherent abilities, acquired knowledge and skills as exemplified in the talents and aptitudes of its employees, (Ikeanyibe, 2009).

It is widely held that motivation results in increased work effort of staff in Organizations. This is out of the fact that employees work harder and achieve greater output which can be measured by the speed of credit disbursements, number of active clients, number of new clients, portfolio size, number of groups and teller transactions. Aubert et al (2008), show that employees who are motivated achieve higher increase in work performance compared with people who are not motivated.

Motivation enhances competiveness among employees. Given its competitive structure and that of the motivation system where only high performers get incentives versus programs where everyone who increased performance receives, it encourages internal staff competition. Ikeanyibe (2009) argues that in some motivation schemes, there are a limited number of incentives, and not everyone who meets a particular performance standard will necessarily obtain the incentive.

Motivation enhances staff training and development by identifying employee’s specific needs for training and development. By identifying weaknesses that affect company performance, Organizations can design training and development programmes that permit individuals to build their strength so as to boost performance. (Grammling & Holtmann, 2006) Motivation provides training opportunities for on the -job training that teaches junior staff (he specific details of operations, creates social ties between staff members, and strengthens the institution’s corporate identity, (Pratheepkanth, 2011).

According to McKim (2007), motivation leads to excellent service delivery to customers as regular mystery shopping exercises, customer feedback surveys and supervisors’ appraisals on the customer service quality in its branches are constantly conducted. This helps to attract and retain clients upon which growth and profitability of Organizations do rest. Ikeanyibe (2009) adds that customer attraction and retention in Organizations is highly dependent on motivation. If staffs are to increase the number of savings accounts or loan portfolios of their branch, they have to deliver good customer service.

According to Nandawar et al (201 1) motivation aids in recruitment and selection of employees. The existing schemes may help in predicting the attitudes, satisfaction, and performance of applicants. Organizations operate in environments and it is difficult to find well-educated graduates, socially motivated and willing to work with the informal sector. SIS aids to attract highly skilled and efficient staff.

Motivation helps Organizations in fostering commitment and loyalty among employees. Staff members who feel like they are part of the organisation, who identify with their organization or program, will be more productive and to produce higher quality output. (Aubertet al 2008). Isamawan (2007) defines employee commitment as a “high degree of dedication to the organization, readiness to put high level of effort, similarity of objectives and values and a strong desire to be a part of the organizations”.

Staff motivation is an important tool to empower management to help performance of the individuals or employees and to reveal problems restricting employees” progress and causing inefficient work practices. Pratheepkanth (2011) argues that, in assessing an institution’s human resource, data must be available that describes the potential of all employees in terms of promotion, career development especially for the top executives. Motivation schemes provides a profile of the organization’s human resource strengths and weaknesses to support its operation or functions.

According to Grammling &Holtmann (2006), where motivation is group team based, incentives can generate better team spirit, social cohesiveness, good cooperation and team effort, loyalty and staff retention. They also ensure that staff work in a collaborative manner and do not compromise social goals for personal financial benefit. Ohaudhary& Sharma (2012) add that, rather than rewarding individual performance-which is difficult to measure and to match with results for a given period-it is more useful to appraise employees in groups and also pay incentives based on team results.

2.4 Factors Influencing Employee Performance

Employee performance depends on the work environment and working conditions. The organization must try to create supportive, pleasant lull working environment internally, to satisfy the staff and work with efficiency. Employees should be trained according to the present content of the environment. The facilities provided to the employees can enhance their motivation and job abilities, (Saleern, 2011). I’de & Coker (2012) add that, workplace features and good communication network have effect on worker’s welfare, health, morale, efficiency, and performance.

Employee performance depends on employee Performance Appraisal (EPA). Objectives, goals and performance standards should be fixed through mutual discussion, and communicated to employees and guided and trained on the job for better performance. It is necessary- to measure performance during the year (Keijzers, 2010). The supervisor should conduct EPA in mid and end of the year. Quality, quantity, cost, involvement competencies exposed, initiatives taken for problem solution and leadership quality shown in guiding or helping the others during work should be measured.

According to Srivastava & Barmola (2011), performance planning is neglected at the department and individual levels, yet it affects employee performance. The management should meet he employees at regular interval and discuss regarding their performance, difficulties faced during the work and get the other inputs. This can motivate staff to take the responsibility to meet the standards for achieving the goals. Employees should be counseled, coached and feedback given. Performance planning and review should be carried out to pin point deviations in performance, (Ikeanyibe. 2009).

Employee attitudes towards their job and character affect their performance. By increasing workers efforts the productivity can be increased significantly in long run. Human resource is the most important resource that affects productivity. But manpower without interest in work, dedication, and commitment to duty cannot give expected performance. McKim (2007) adds that, job performance depends on their competencies and motivation. The management should consider manpower as the most important resource and should be taken care of properly.

According lo Grammling &Holtmann (2006).the nature of management of Organizations affects employee productivity. Management approach affects the working of persons. Productivity can be improved through different management processes like, production planning, and control, production cost, inventory control, operation research, specialization, cost control, budgetary control, marketing research, matching demand and supply, replacement of old technology affect performance.

According to (Grammling &Holtmann 2006) the level of staff training and development affects their performance. Training is the process of imparting the knowledge and skills to the persons. It gives knowledge and skills to give confidence to the person performing the job. Pratheepkanth (2011) adds that, if the persons are not trained on the job then they do not know the basics of the jobs. Many difficulties are to be faced in understanding the doing the jobs. The employees should be trained on the job and they should be provided training for improvement of performance.

Employee performance depends on mission of the organization. It gives the clarity regarding the objectives of the organization which is very important. If it is clear in the mind of employees what for the organization is in the business and where it wants to reach in due course of time, accordingly the employees will understand and work, (I ‘de & Coker, 2012). The goals are to be finalized in a meeting of management and employees. It enhances mental preparation of employees, provides clear guidelines to them, and the sense of commitment would develop.

According to Ikeanyibe (2009), employee performance highly depends on set goals and performance standards for employees. Once the company’s mission and objectives are set then these are to be achieved. The organizational objectives would be divided in to divisional or departmental objectives. Nandawar et al (2011) add that, individual goals are decided in consultation with the employees and their acceptance is necessary because they must achieve goals they agree. Performance standards include quality and quantity, cost, responsibility, leadership quality, initiative and discipline.

Identification of strengths and weaknesses of employees can, influence future performance, in almost every organization the demographic situation of employees is changing with the time. People have different creed, region, religion, language, sex, (Owusu, 2012). The diversified workforce is now available in most of the companies with their own strengths and weaknesses. The strengths can be utilized and weaknesses can be overcome by timely remedial actions, (Mugwanga, 2011).

The technology used impacts on performance of staff. With growth of technology-based opportunities to enhance service standards and delivery processes, technology has to be an important part of any forward -thinking Organizations strategy. Organizations should therefore constantly examine options for technology-based solutions but subject them all to rigorous cost/benefit and risk analysis. Ikeanyibe (2009) adds that, technology, innovative communication methods, e-market improvement and alternative work patterns increase employee efficiency, effectiveness, and overall performance.