THE INFLUENCE OF EMPLOYEE MOTIVATION AND ITS RESULTING EFFECTS ON THE ORGANIZATION PERFORMANCE

1.0 Introduction

This chapter identifies and explains the basic information on which the entire research work is based. It identifies the background to the study, statement of research problems, the research questions, objectives, hypothesis, significance of the study, scope of the study, operationalization of research variables, historical perspectives of the study and definition of terms used in the body of the research work.

1.1 Background to the Study

Today in a world of competitive corporate environment, every company – regardless of scales and markets is striving to gain competitive advantage(s), to perform better and to achieve productivity and effectiveness. In order to do that, it is important for an organization to clearly define its objectives, and to know how to do it well with the use of available resources. However, mentioning an organization’s resources, it is the human resources that fill all the gaps between each step to success. Personnel are the one who use their competencies and knowledge to provide support to the company as the way of achieving goals. Organizations across the globe that consider their human resources as a central core of the business and continuously increase the level of their employees’ motivation and performance tend to be more effective (Adi, 2000, Anka, 1988, & Rothberg 2005). When one thinks about it, the success of any facet of the business can almost be traced to motivated employees. This is especially true and important in today’s turbulent and often chaotic environment where commercial success depends on employees using their full talents. The ability to attract, retain and develop talented employees is a key feature of a successful business.

In today’s world, most businesses, organizations and their managers are faced with numerous challenges. One of such challenges is in the area of management which refers to the utilization of resources effectively and efficiently in order to achieve an organizations goals and objectives. Some of these managerial challenges are obvious in matters concerning employees such as reimbursement, recruitment, performance management, training and career development, health and safety, benefits and motivation amongst others. The human resource is the most vital of all resources among other factors of production and the human capital is what distinguishes one organization from the other (Maimuna & Rashad, 2013). Therefore, for organizations to survive and remain relevant and competitive, it is essential for them to be able to entice and maintain efficient and effective employees in a bid to enhance performance (Sunia, 2014). This study however is centered on the aspect of motivation and focuses on the effects of employee motivation on organizational performance.

Organizations require a number of resources, strategies and techniques in order to succeed. From capital, to a business site and to employees, all of these are essential for a business to work. While these components are significant, values, particularly motivation, is also recognized as a vital business element, especially in enabling organizational transformation and enhancement. Motivation permits the business owners and employees to be resourceful, responsible and productive in performing daily business tasks, which in turn helps in uniting the business with its consumers. By means of motivating the employees, managers are able to encourage them to work towards a common goal. This principle also helps the employees to become more productive, enabling enhancement and transformation to take place.

In Africa, Ouchi (2001) opined that, organizations would be more effective, efficient, flexible, committed and profitable as a result of an emphasis on trust, which goes hand in hand with productivity; less hierarchical and bureaucratic structure; a high level of worker involvement; all of which would create an employee and organization management. The overall success of an organization in achieving its strategic objectives relies heavily on the performance level of employees. Organizational performance is a function of ability and motivation, where ability is comprised of the skills, training and resources required for performing a task and motivation is described as an inner force that drives individual to act towards something. According to Flippo (2001), Organizational performance in institutions results in a more motivated work force that has the drive for higher productivity, quality, quantity, commitment and drive. He also concurs with Mondy (2007), who was of the opinion that it results in more positive approaches and benefits than other managerial perspectives.

According to Maurer (2001), the motivation of employee is an essential factor in enhancing employee job satisfaction and work performance which is directly associated to organizational achievement. Employees are a company‘s livelihood. How they feel about the work they are doing and the results received from that work directly impact an organization’s performance and, ultimately, its stability. For instance, if an organization’s employees are highly motivated and proactive, they will do whatever is necessary to achieve the goals of the organization as well as keep track of an organization performance to address any potential challenges. This two prong approach builds an organization’s stability. An organization whose employees have low motivation is completely vulnerable to both internal and external challenges because its employees are not going the extra mile to maintain the organization’s stability. An unstable organization ultimately underperforms.

In Nigeria, interest in effective use of rewards to influence workers performance to motivate them began in the 1970’s. So many people have carried out researches in this area, some of which are Kayode (2003), Nwachukwu (2009), Meyer and Nguyen (2005) and Egwurudi (2008), which will be discussed in the subsequent chapter in this research.

1.2 Statement of the Problems

Motivation has been the focus of intensive research effort in recent times as a result of its contribution in enhancing employees’ performance towards organization performance. How well an organization motivates its workers in order to achieve their mission and vision is of paramount concern. It is obviously worrisome that organizations have encounter incessant insubordination and negative attitude to work by the employees. This nagging and distressing reality is not entirely regularly caused by employees. The managers of organizations do play a part to this worrisome reality which has seen some organizations lose their most enterprising employees, or seen their loyal workforce turn to recalcitrance, the development that has negatively affected the timely and sustained achievement of organizational objectives.

In Nigeria, the issue of motivation is not well incorporated into many organizations which have seen their performance and general output reduced drastically. Aluko (2014), organizations operating in Nigeria have not done enough to motivate its employees in areas of their welfare and incentive packages. The end result of this shows a negative attitude to work by employees which significantly affect the overall performance of the organizations. The expectation of motivational factors by employees from organizations has become very high in Nigeria especially in the Insurance, Manufacturing and Banking sectors and the negligence of these expectations by those organizations has resulted to a very turbulent environment for them, which has resulted in a negative work environment.

Jibowo (2007), organizations that wants to have a competitive advantage over its rival firms should give priorities to its employees. He stated that, improving the working condition reduces complaints and avoid negativism at work while increasing productivity towards organizational performance. Many organizations today in Nigeria, only give priority for profit making and general performance of the organization, while they neglect the working condition of its employees. Organizations solely with the aim of making profits without putting in place a good working condition for its employee will find it hard coping with other rivals who make employee a priority. This will result in a low productivity output by employees and thereby resulting in a negative effect of the overall set objectives of the organization. A negative working condition by organization will affects the quality of service from employee with a consequent effect on the degree of organizational performance and general output of the employee involved. Therefore, efforts to improve employee working condition will create satisfied employees with a positive effect on organizational performance and general output of the employee.

Adi (2000), in recent times, it is seen that motivation of employee is the key to organizational performance. Many organizations that are successful are traced down to how well their employees are being motivated. The ultimate goal of every organization in today’s world is profitability, while neglecting the human capital involved as the drivers to the accomplishment of organizational goal. Promotion is a vital motivational factor that is lacking in many of today’s organization. It has its own importance due to the fact that it carries with it a significant change in the wage package of an employee. Failure by organizations to incorporate promotion as a motivational factor will lead to a decrease in employee job satisfaction which will negatively affect the overall performance of the organization. When employees perceive that there are golden chances for promotion they feel satisfied for the respective place in the organization.

Finding ways to motivate employees can be a challenging prospect for employers, but it is also a necessary component of any successful business. When employees have an increased sense of motivation, they will often have greater job satisfaction and improved work performance and ultimately, when employees are highly productive, the entire organization reaps the rewards. This study therefore, sought to establish influence of employee motivation and its impact on organizational performance in Anchor Insurance Plc, Lagos State.

1.3 Objectives of the Study

The primary objective of this study is to acquire a deeper comprehension of how employee motivation influence performance of workers in Anchor Insurance Plc as well as recognize the influence on organizational performance.

This research therefore seeks to:

1. To determine the effect of promotion on employee service delivery.
2. To determine the effect of work environment and employee involvement in Anchor Insurance.
3. To determine the relationship between working conditions and employee job satisfaction.

1.4 Research Questions

Based on the problem statement and the aim of this study, the following research questions are posed:

1. What effect does promotion have on employee service delivery?
2. How does work environment affect employee involvement in Anchor Insurance?
3. What is the relationship between working conditions and employee job satisfaction?

1.5 Research Hypotheses

Based on the objectives, the following hypotheses were developed in order to make valid conclusions on the subject matter.

The hypotheses are expressed in their null form:

H01: Promotion have no significant effect on employee service delivery.

H02: Working Environment does not significantly effect employee involvement in Anchor Insurance

H03: There is no significant relationship between working conditions and employee job satisfaction

1.6. Operationalization of the Variables

The dependent variable is organizational performance, represented by employee service deliver (ESD), Employee involvement (EI), Employee satisfaction (ES). On the other hand, employee motivation, being the independent variable, is proxied by Promotion (P), Work environment (WE), Work conditions (WC).

Y= f (y1, y2, y3)

Y= Organizational Performance (OP).

y1= Employee service delivery (ESD).

y2= Employee involvement (EI).

y3= Employee satisfaction (ES).

X= f ( x1, x2, x3)

X= Employee Motivation (EM).

x1= Promotion (P).

x2= Work environment (WE).

x3= Working condition (WC).

The three specific objectives are operationally expressed as:

Promotion and Employee Service Delivery

y1= f (x1)

y1= b0 + b1x1 + u

Work Environment and Employee Involvement

y2= f (x2)

y2= b0 + b1x2 + u

Working Condition and Employee Satisfaction

y3= f (x3)

y3= b0 + b1x3 + u

1.7. Scope of the Study

This study examines the influence of employee motivation and its resulting effects on the organization performance. The scope of this study is limited to Anchor Insurance Plc in Lagos State, Nigeria, whose deployment is nationwide, and has the responsibility of rendering insurance services to the general public, where the study is being conducted. The Insurance industry is being considered because research has not been done on this area prior to now. Anchor Insurance Plc, Lagos State was selected because it is one of the very first insurance companies in Nigeria and is one of the fastest growing insurance companies currently situated in Lagos state, Nigeria.

1.8. Significance of the Study

The findings from this study will help to highlight those areas where there are problems among employees and thus will be of great benefit to the management of organizations, industry, government and society at large. The results of this study would hopefully be significant in the sense that it would enable both the management and the labour union to better understand how the various incentive packages could be harnessed to inspire staff to increase and sustain productivity. However, this study will be significant to the following;

Management:

It will assist management in designing and putting in place together welfare incentives for the workforce, enable the organization identifies various types of needs and expectation of people at work, outline different approach to work motivation and explain the meaning and underlying concept of motivation.

Industry:

It is of significance to the industry in a way that the industry management would have a structured and policy in place that will be of benefit to both organization and employees betterment.

Government:

This study would be of immense benefit to the government when making policies, so they can formulate policy that will be of positive interest to employers of labours in organizations, and also labour union officials and representative at the negotiation meeting will find it useful when putting together their “basket of needs”.

Society:

It will enlighten the general society on why employee motivation is a prerequisite for any organization that wants to achieve performance.

1.9. Historical Background

Anchor Insurance Company Limited was licensed in October 1989 as a General Business (Non-life) Insurance outfit and started operations in November of the same year. It had its Head Office at 7/13 Aka Road, Uyo, Akwa Ibom State.

In January 1992, the Company added Life/Pension class of Insurance to its business portfolio thereby attaining the status of a Composite Insurance Company. In 1998, Anchor Insurance Company Limited was re-registered by National Insurance Commission (NAICOM) in the status of a general insurance company under Registration Number RIC-072. In 2003, new investors, headed by Dr. Michael Ntuk acquired substantial part of the Company’s equity as part of the privatization programme of the former owner-state government. As a result of the regulatory induced recapitalization and consolidation the shareholders fund of the company was raised to over N3 billion which placed the company amongst the recapitalized insurance institutions under the General Insurance & Special Risk business.

To be the most innovative and preferred provider of General and Special Risks Insurance Services in Nigeria. To institutionalize the Anchor brand as a world-class security Company, providing superior, efficient and dynamic insurance services anchored on state-of-the-art technology, accountable and well motivated staff to meet the expectations of our stakeholders.

The new Anchor Insurance Company Limited sees her customers and clients as reason they are in business which makes customer satisfaction a priority in the company. The Anchor Insurance Company’s promise is “All stakeholders will surely enjoy a pleasant experience”. As one of the biggest names in the Insurance sector in the country, we continually provide the platform for young and intellectually savvy individuals, bright minds and the upwardly mobile seeking for the right place to kick-start and build a noble career in the insurance and financial space. And in this quest to mine the best talents around, we offer different career opportunities to those who will distinguish themselves and be bold enough for the challenge.

1.10. Definition of Terms

Organization Performance:

Is the stability and growth of the organization that have been secured through the quality of goods and services and the protection of financial resources.

Employee Service Delivery:

Is the provision of service to customers before, during and after a purchase. (Business Dictionary)

Employee Involvement:

Is creating an environment in which people have an impact on decisions and actions that affect their jobs, (Freeman & Kleiner, 2005)

Employee Satisfaction:

Is the extent to which an individual is happy with their job and the role it plays in their life. (Business Dictionary)

Motivation:

Is a process which starts with a physiological or psychological or psychological deficiency or need that activates behavior at a drive that is aimed at a goal incentive’ Luthan (1998).

Promotion:

Is the transfer of an employee to a job which pays more money or one that carries some preferred status (Rusen, 1981)

Work Environment:

Is used to describe the surrounding conditions in which an employee operates. (Kotler, 2000)

Work Conditions:

Refers to the working environment and all existing circumstances affecting labor in the workplace, including job hours, physical aspects, legal rights and responsibilities (Srivastava, 2008).