Employee Motivation Factors in Banking Sector

The early approaches of motivation emphasize on the needs of the individuals explaining their tendency to be motivated and the efforts exerted in order to satisfy those needs. There were some other approaches which highlighted on the employees’ goal setting. Simons and Enz (2006) says now the employees perform the task not only to fulfill the basic needs but also to increase their values, become successful and satisfied from their performance.

In the banking sector in which I am employed in, the success of the organization mainly reflected by the hard works of employees. Therefore, to achieve the organizational goals employee should be motivated by the external and internal factors.

According to Kumari, et. al (2020) was to investigate motivation factors, and variation of the impact of demographic determinants on job satisfaction across public and private banking sectors in Sri Lanka. The results indicated that the majority of the employees considered job satisfaction as the top motivator among bankers. A number of dependents, education level and distance to the workplace are significant factors on job satisfaction of private sector bankers whereas age and experience had a significant impact on job satisfaction of public sector employees which implies that demographic determinants on job satisfaction vary with the banking sector

Ahmad, et.al (2014) suggest Ways of motivating employee to ensure better performance as illustrated figure 1.0

figure 1.0: Ways of motivating employee to ensure better performance

Source: (Ahmad, et.al (2014)

Communication

Communication is always an effective way to improve motivation and enhance productivity. There should be two-way communication between managers and staff that generate feedbacks on the performance (Ahmad, et.al,2014).

Participation scheme

Participation scheme enables staff to become a member of decision-making team and express their Job views on organizational decisions. This leads staff to be responsible to increase their efficiency and productivity at work (Ahmad, et.al, 2014).

Fringe benefit

If an organization can retain the employees by providing them with the fringe benefit. This prevents turnover if effectively use and increase the productivity (Ahmad, et.al, 2014).

Job satisfaction

job satisfaction refers to employee’s satisfaction with the general work characteristics and it affects the morale of workers. It also relates to the expectations of an employee on the job, the degree of happiness derived from the condition of service. Employee satisfaction is major among several factors that determine the effectiveness of an organization. Employee satisfaction is primary to organizations that are effective (Ademodi & Akintomide 2015; Benrazavi & Silong 2013; Bhatti & Qureshi 2007; Bibi et.al 2012; Bockerman & Ilmakunnas 2012; Dauda et.al 2013; Maithili & Navaneethakrishnan 2014; Parvin & Kabir 2011; Sageer et.al 2012; Yaya et. al 2016; Idiegbeyan-ose et.al 2018).

For the success and survival of company in the competitive market, the most prioritized work of managers is to retain the skilled employees and motivate them to give their best performance. Nevertheless, employees are more interested in doing different jobs at the same time and are not willing to keep long term relationships with organizations. To add up, they are unlikely to be motivated as they use to be before (Ahmad, et. al 2014).

Most of the empirical studies found motivation and job satisfaction to be positively correlated, while hostile work environment is seen as a demotivational factor in the work place (Babalola & Nwalo 2013; Kian et al 2014; Oni-Ojo et al 2015).

The result of the research on: Factors Affecting Employees Motivation in Banking Sector of Pakistan: Akhtar, et.al (2014) provide an innovative attempt investigate the Factors Affecting Employees Motivation in Banking Sector as illustrated figure 2.0

figure 2.0: Factors Affecting Employees Motivation in Banking Sector

                                                                      

                                                            Source :(Akhtar, et.al 2014)

The result suggests that there is positive relationship between financial rewards and employee’s motivation. The firms with higher level of financial rewards are more motivated than others. The results also suggest that the relationship between job design and employee’s motivation is also significant. There is a relationship between supervision and employee’s motivation which is further tested by applying regression analysis. The significant result shows a positive relationship between them. There is relationship between good pay and employee motivation which is tested and proved by statistical analysis. With the help of significant results of regression, it was shown that there is a relationship between personal characteristics and employees’ motivation.

The analysis of the study Drivers of Employer Motivation in Banking Sector - A Radar Design Approach  Subramanyam (2019) shows that factors namely “Fair wages and Promotion”, “Health and other services” , “Work environment” , “Job Specification”, “Prestige and Request” , “Management Policies and Style” , “Non-Cash Benefits”, “Sports” and lastly “Setting and Defining Goals”  “Company Policy” , “Quality Supervision”, “Relation with worker” , “personal life”, “rate of pay”, “job security” and working conditions”  play a significant role in motivating employees in the banking sectors. The result of this study correlates with the previous conducted study such as Ruthankoon and Ogunlana (2003), Mc Clelland (1975), Naylor (1999), Leach and Westbrook (2000) according to whom the factors cited above motivate employees to perform better thus helping banking sectors to direct their attention to the above motivating factors in order to achieve organizational success.

List of References

Ahmad, N, Ahmad, RR, Mangi, R, Paleishah and Susan, A 2014, ” Factors Motivating Employees in Public Sector Banks", European Academic Research, 2(5), pp 6005-6021.

Akhtar, N, Aziz, S, Ali, A and Salman, M 2014, ” Factors Affecting Employees Motivation in Banking Sector Pakistan”, Journal of Asian Strategy, 4(10), pp.63-81.

Baldoni, J 2005, Motivation Secrets. Great Motivation Secrets of Great Leaders. [Online] http://govleaders.org/motivation_secrets.htm

George, JM & Jones, GR 2005, “Understanding and managing organizational behavior”, (4th ed.). Upper Saddle River, NJ, Pearson Prentice, New York: McGraw-Hill.

Graham, S 1999, what employers must do to Motivation. in African Americans.

Idiegbeyan, J, Aregbesola, A, Owolabi, SE and Eyiolorunshe, T 2019, “Relationship between Motivation and Job Satisfaction of Staff in Private University Libraries, Nigeria.”: Academy of Strategic Management Journal,18(1).

Kumari, KWSN, Jayasinghe, GJMSR and Sampath, JKH 2020,” Employee Motivation Factors in Banking Sector: A Study on Qualitative and Quantitative Analysis”, Journal of Social and Political Sciences,3(1).

Subramanyam, MJ 2019, “Drivers of Employer Motivation in Banking Sector - A Radar Design Approach”, International Journal of Business from Bharatiya Vidya Bhavan's M P Birla Institute of Management, Bengaluru.13(1) pp 48-78.

 

Role of employee motivation on employee’s commitment in the context of banking sector

Introduction

In this era of globalization and competition motivation is considered to be the key factors for success and excellence of organizations. Organizations are facing many fluctuations and pressures in today's world in order to carry on organizational life. They have taken employee commitment into their development processes and with understanding the effective changes that will give them desired results.

Commitment: Beckeri, Randal, and Riegel (1995) defined the employee commitment in the three dimensions: the 1^st one is a strong goal to remain a member of a particular organization; the 2 ^nd one is a willingness to utilize high levels of struggles on behalf of the organization; and the 3^rd one is a describe belief in and appropriateness of the values and goals organization. Sajid (2016) quoted that organizational commitment generally refers to the following, “It is the general experience of employees with their institution in order to understand organizational goals as well as objectives”.

Management should understand the importance of job involvement because it is most important and essential component of work behavior among the workforce as prior research proved this phenomenon (Manojlovich, Laschinger & Heather, 2002; Soong, 2000). It was highlighted that by giving employees power over their work content i.e. decision regarding swiftness of work, quality of product and job-related abilities and resources can motivate the employees to enhance their job involvement.

Also, there must be consideration: demographic factors which are age, gender, marital status, education level and work experience must find to be considerably related to organizational commitment (Mannheim et. al 1997).

Pınar Güngör (2011) says “Motivation is the competency or capability of a person to change behavior”.Motivation is a driven force that leads and directed a person toward some specific goals. Employee commitment can improve the performance of an organization but some time it is not delivering the benefit in many cases like when organization not given them the incentives and involve them in their jobs. That gap is fulfilled when organization characterize employee work-place climate and trust between colleagues (Care,2007). Meaning of job involvement, motivation and employee commitment is clear. The consequences of work will be affected when employees are motivated and committed (Lawler,1986). The more motivated employees are typically placed additional exertions because they are more committed and involve in their jobs (Blau, 1986; Blau & Boal, 1987).

(Iqbal et al, 2013) determined that there are the two determinants of Motivation which are job involvement and Incentives as illustrated in Figure 1.0

Figure 1.0: Two determinants of Motivation

                                                                

                                                                 (Iqbal et al 2013)

Job Involvement: Alliger and Stone-Romero (1994) defined the job involvement as ‘‘The degree to which one is cognitively preoccupied with, engaged in, and concerned with one’s present job’’  Reitz and Jewell (1979) believed that the meaning of work in person’s predictable or day-to-day existence is called as job involvement. That shows if an individual contributes his attention towards his or her work efficiently then that person is become trustworthy with his or her association.

Incentives:  The National Commission of Labor defines incentive as follows: ‘wage incentives are extra financial motivation. They are designed to stimulate human effort by rewarding the person, over and above the time rated remuneration, for improvements in the present and targeted results. Additional amount other than the work which a worker does is known as incentives:  Different banks are offered different incentives systems(Iqbal et al, 2013).

1.     1.  Performance system definite objectives are allocating in the beginning of year checked periodical when employees are expressed where they stand and in what way they can develop themselves

2.    2.  Career planning is a fundamental incentive, for this determination different options, workshops are planned and the bank also stand for educational expenditures of employees if they have lack of education. When workers get more education, they are encouraged according to their innovative knowledge.

3.    3. Job rotation is a different incentive system offered at banks. It not only rises the talent and awareness of the employees but also not to make them lazy.

4.    4.Certain insurance programs are also providing to employees like lifetime insurance, health insurance. Loans on informal payments are providing to employees for the car, home etc.

5.     5.The bank offers regular bonuses, that differs permitting to the productivity of the bank and other two

6.   6.Certain rewards are agreed on the performance of supervise these are economic as well as non-monetary payments like diplomas, cell phones, small donations, feast with officers etc.

The implications of Maslow’s Hierarchy of needs: An incentive program should be directed at a person's psychological income needs. Money can be inexplicable because it may drive to financial needs. Select prizes that are exceptional and applicable to the sponsor, so they may increase physical evidence of their success and achieve their requirement for recognition, acknowledgement and individual or self-esteem.

The results of research conducted Wasito (2014) explains the influence of material incentives on motivation has a significant influence, where the higher the incentive given the company, the higher the motivation of his work. Material incentives are one of the company's financial compensations beyond the basic salary that employees receive on their performance. The Company believes that the system of compensation in general and the material incentive system, in particular, affects the motivation of employees in doing their work.

The research “Role of Employee Motivation on Employee’s Commitment in the Context of Banking Sector of D.G. KHAN, Pakistan” emphases on the relationship between Motivation and employee’s Commitment. The attained results show the direct relation exist between Motivation and employee’s Commitment and motivation have two determinants job involvement and incentives both shows the direct and positive correlation with one another.

The study can provide advantage banks (both public and private) for improving their employee’s motivation level through incentives and job involvement. Divisional banks can use the motivation as their key element to improve the performance of their employees.

Human resource managers and organizational development practitioners should focus on the culture, design and environmental factors which foster the job involvement of the employees.

This study will also be useful for the HR practitioners because motivation and employee’s commitment are the functions of HR management. The citizens of any country who are interested to implement the motivation this study can also be beneficial for them. Finally, the study will help other researchers who might want to start research in the area of employee’s commitment and motivation.

List of References

Becker, TE, Randal, DM and Riegel, CD 1995, "The multidimensional view of commitment and theory of reasoned action: A comparative evaluation.” Journal of Management, vol. 21, No 4, pp. 617-638.

Blau, GJBKB 1987, "Conceptualizing how job involvement and organizational commitment affect." Academy of Management Review, 12(2): 288-300.

Faisal, A 2017,  The Impact of Employee Motivation on Organizational Commitmen European Journal of Business and Management.

Nadeem, I, Naveed, A, Muhammad, M, Muhammad, N, Komal, J, Afsheen, Z and Muhammad, A 2013, “Role of Employee Motivation on Employee’s Commitment in the Context of Banking Sector of D.G. KHAN, Pakistan”, Journal of Human Resource Management, Vol. 1, No. 1, pp. 1-8.

Reitz, HJ & Jewell, LN 1979,"Sex, locus of control, and job involvement a six-country investigation."Academy of Management Journal, 22(1): 72-88.

Wasito, E 2014, The effect of material incentives on work motivation and employee performance of STIE Ekuitas Bandung.

 Maslow’s Hierarchy of needs

According to McLeod (2020), the way Maslow’s theory is explained relies on the fact that (a) human beings are motivated by a hierarchy of needs.(b) needs are organized in a hierarchy of prepotency in which more basic needs must be more or less met (rather than all or none) prior to higher needs.(c) the order of needs is not rigid but instead may be flexible based on external circumstances or individual differences.(d) most behavior is multi-motivated, that is, simultaneously determined by more than one basic need.

1.Physiological or Basic Needs – These include the basic physiological needs of a human. Hunger, thirst, sex, shelter, and other bodily needs  (Kaur, 2013). Maslow considered physiological needs the most important as all the other needs become secondary until these needs are met.

Figure 1.0: Maslow’s hierarchy of needs

(Source: McLeod ,2020).

2.Safety needs - People want to experience order, predictability and control in their lives. These needs can be fulfilled by the family and society. For example, emotional security, financial security (e.g. employment, social welfare), law and order, freedom from fear, social stability, property, health and wellbeing (e.g. safety against accidents and injury) (McLeod, 2020).

3. Love and belongingness needs - - The need for interpersonal relationships motivates behavior Examples include friendship, intimacy, trust, and acceptance, receiving and giving affection and love. Affiliating, being part of a group (family, friends, work) (McLeod, 2020).

4. Esteem needs Maslow classified into two categories: (i) esteem for oneself (dignity, achievement, mastery, independence) and (ii) the desire for reputation or respect from others (e.g., status, prestige) (McLeod, 2020).

5. Self-actualization needs- Refer to the realization of a person's potential, self-fulfillment, seeking personal growth and peak experiences. The urge for this need only arises and only after all the above four categorical needs are consistently and adequately fulfilled (Jerome, 2013). 

Implications of Maslow’s Hierarchy of Needs Theory for banking sector

Man is a wanting animal” (MacGregor,2003), always expect and be ready for another request for fulfilment of another need after fulfilling one need. It is a never-ending process but it is the same urge of a man which makes him to do more. That urge is the sole driving force of an employee to achieve more or simply to give the employee’s best effort for an organization (Mawere, et al., 2016). When it comes to self-verification requirements, managers can provide challenging job opportunities that take full advantage of the employees' skills and skills. Moreover, they can provide growth opportunities so that they can reach peak levels (Jerome, 2013).

The bank I work for provides special loan schemes to its employees at low interest rates, such as Housing and repair loans, furniture loans, wedding loans, funeral loans, pilgrimage loans, educational loans, consumer loans, motor vehicle and repair loans, bicycle loans in order to uplift their employees and their family’s living standards. This satisfies the employee’s basic needs, wellbeing, security, love, and affection from their family’s and shelter and safety needs, which ticks the lower levels of the hierarchy of needs. Further, in general, the employees receive their monthly salaries which align with the industrial benchmarks, and allowances which are considered as monetary such as cost of living allowances, medical reimbursements, traveling/food/lodging reimbursements, fuel allowances, gas allowances, spectacle, and hearing aid reimbursements, surgical and hospitalization reimbursements, Entertainment and holiday allowances, annual bonuses, servant and drivers allowances, risk allowances, telephone bill reimbursements, which varies between individuals rank and position in the bank. Social needs may be satisfied by having a friendly environment and providing a workplace conducive to collaboration and communication with others. Company picnics and other social get-togethers may also be helpful if the majority of employees are motivated primarily by social needs (but may cause resentment if they are not and if they have to sacrifice a Sunday afternoon for a company picnic).

The institution rewards with monetary and non-monetary rewards for the achievement of various targets and goals, such as party financing of staff annual trips, foreign tours. And even the institution rewards to the highest-ranked corporate personnel   with luxury vehicles which is borne by the bank for their esteem needs and self-actualization needs. The banking institution claims to be one of the leading banks in the island and been awarded in many esteem rewards from reputed bodies and sustains in the industry by its competitive advantages where “people” are being involved.

The “hierarchy of needs” concept as illustrated in figure 2.0 is a useful way to look at the banking process: product and customer. At the bottom of the hierarchy is security, in the middle is (money) movement, and at the top level, performance (Shevlin, 2014).

Figure 2.0: Hierarchy of needs

                                                                                                              (source: Shevlin, 2014)

In the past years, consumers had a need for security–they wanted to know that when they put their money in a bank on Monday, that money would be there on Tuesday. With deposit insurance, and a highly regulated industry, that level of need s satisfied, and has been for a while now (Shevlin, 2014).

In the past years, consumers had a need for money movement–they wanted to know that when they wrote a check on their banking account, the money would be moved to whomever they wrote the check to. And they wanted to know that when they deposited a check into their account, that the money would be moved there (although the long wished that movement happened faster than it does). These needs have been long met, as well (Shevlin, 2014).

In the past years, consumers had a need for account performance–they wanted to know that they were getting the best rates, and paying the lowest fees. This is a relatively newer level of need, as consumers (especially, and predominantly, in the US) have become more affluent over the past 50 years. The Internet has contributed strongly to helping meet this need (Shevlin, 2014).

With the advent of electronic, mobile, and alternative payments, the security of transactions and the efficient/effective movement of money is being challenged. At the top of the pyramid, the increasing complexity of managing one’s financial life makes managing performance far more complicated than just tracking rates and fees. Sixscape Communications and Ensygnia address the changing security needs. Sixscape replaces insecure username/password authentication with certificate-based authentication, while Ensygnia’s technology improves identity verification  (Shevlin, 2014).

List of References

American Banker 2018, what banks can learn from Maslow’s hierarchy of needs,[online] Available from https://www.americanbanker.com/opinion/what-banks-can-learn-from-maslows-hierarchy-of-needs [Accessed 25 October 2020]. 

Jerome, N 2013, Application of the Maslow’s hierarchy of need theory. International Journal of Business and Management Invention, 2(3), pp. 39-45.

Korzynski, P 2013, Employee motivation in new working environment. International Journal of Academic Research, 5(5), pp.184-188.

Pinder, CC 2008, Work Motivation in Organizational Behaviour. London: Psychology Press.

Ramlall, S 2004, A review of employee motivation theories and their implications for employee retention within organizations. Journal of American Academy of Business.

Weitz, B, Sujan, H and Sujan, M 1986, Knowledge, Motivation, and Adaptive Behavior: A Framework for Improving Selling Effectiveness. Journal of Marketing, 50(4), pp.174-191.

 

INTRODUCTION

Motivation is crucial for good performance of employee in any sector and therefore it is increasingly important to study what motivates employees for better performance. It is said that one of the important functions of human resource manager is to ensure job commitment at the workplace, which can only be achieved through motivation (Petcharak, 2002).

 

^{DEFINITIONS FOR MOTIVATION}

Motivation is defined as “a human psychological characteristic that add to a person’s degree of commitment. It is the management process of in ‚nuancing employees’ behavior” (Badu, 2005).

Conversely, Bartol and Martin (1998) relate motivation to the force that stimulates behavior, provide direction to behavior, and underlies the tendency to prevail. In other words, individuals must be sufficiently stimulated and energetic, must have a clear focus on what is to be achieved, and must be willing to commit their energy for a long period of time to realize their aim in order to achieve goals.

However, other than motivation being a force that stimulates behavior, Vroom (1964) emphasized on the ‘voluntary actions. Supported by Steers et al. (2004), Vroom (1964) defined motivation as “a process governing choice made by persons among alternative forms of voluntary activity.” Similarly, Kreitner and Kinicki (2004) assumed that motivation incorporate those psychological processes that create the arousal, direction and persistence of voluntary actions that are goal oriented.

Quite differently from the other definitions, Locke and Latham (2004) identified that motivation influence people’s acquisition of skills and the extent to which they use their ability. According to the authors “the concept of motivation refers to internal factors that impel action and to external factors that can act as inducements to action. Motivation can affect both the acquisition of people’s skills and abilities; and also, the extent to which they utilize their skills and abilities” (Locke and Latham, 2004).

Different authors have put forward the concept of motivation differently but these definitions have three common aspects when carefully studied, that is, they are all principally concerned with factors or events that stimulate, channel, and prolong human behavior over time.

Figure 1: 03 Main Components of Motivation

(Source: Nandy, 2019)

The degree of each of these components of motivation can impact whether or not to achieve goal. Strong activation, for example, means that are more likely to start pursuing a goal. Persistence and intensity will determine to keep working toward that goal and how much effort to devote to reaching it.

 

Types of Motivation

Different types of motivation are frequently described as being either extrinsic or intrinsic (Deci and Ryan,1985) and as illustrated in figure 2.0

Intrinsic motivation

Intrinsic motivation occurs when we act without any obvious external rewards. We simply enjoy an activity or see it as an opportunity to explore, learn, and actualize our potentials. Intrinsic motivation occurs when we act without any obvious external rewards. We simply enjoy an activity or see it as an opportunity to explore, learn, and actualize our potentials ( Coon & Mitterer, 2010).

Intrinsic motivations Means “doing something because it is inherently interesting or enjoyable” (Deci and Ryan, 1985).

Extrinsic motivation

Extrinsic motivation refers to our tendency to perform activities for known external rewards, whether they be tangible (e.g., money) or psychological (e.g., praise) in nature (Brown, 2007).

Extrinsic motivations Means “doing something because it leads to a superable outcome” (Deci and Ryan, 1985).   

Figure 2.0: Factors of Extrinsic Motivation Intrinsic motivation            

                                       

Intrinsic motivation Achievement        Growth Acceptance            Independence Power                   Change

Extrinsic Motivation Award Benefit Packages Bonuses

        

(Source: Maharjan, 2018)

List of References

Cole, GM 2004, Management Theory and Practice, vol.6, Cengage learning EMEA, Boston, Massachusetts.

Korzynski, P 2013, Employee motivation in new working environment. International Journal of Academic Research, 5(5), pp.184-188.

Pinder, CC 2008,  Work Motivation in Organizational Behaviour. London: Psychology Press.

Ramlall, S 2004, A review of employee motivation theories and their implications for employee retention within organizations. Journal of American Academy of Business.

Rybnicek, R, Bergner, S and Gutschelhofer, A 2017, How an individual needs to influence motivation effects: Department of Corporate Leadership and Entrepreneurship, University of Graz, Austria.

Weitz, B, Sujan, H and Sujan, M 1986, Knowledge, Motivation, and Adaptive Behavior: A Framework for Improving Selling Effectiveness. Journal of Marketing, 50(4), pp.174-191.