Work is an important event, a fact that is inevitable in the life of an individual in whatever form it is

done, it is an activities and source of satisfaction one needs.

Employee try to find satisfaction in what they do and as a result the manager should be able to
understand the problems faced by his employees and find a way of satisfying their needs and
aspiration. The general assumption is that an adequately motivated worker will in turn give in his or
her best towards the attainment of a general consensus.

Consequently when a worker is motivated the question of poor performance and inefficiency will be
a forgotten issue in an organisation. Managers who are successful in motivating employees are
made often providing an environment in which appropriate or adequate goals called incentives are
made available for the needed satisfaction of the employee.

A good number of employees are adequately paid in their jobs so as to work hard and maintain a
high standard of productivity while some even work hard but do not receive much material gains to
show for it. The issue under consideration is how does a worker in an organisation with a particular
set of needs achieve the reward he desires?

Today managers cannot rely solely on the manipulation of pay, benefit or working conditions to
encourage workers to perform effectively and efficiency. It is the duty of the manager to create and
develop an effective environment in which employee will be motivated to become productive
members of the organisation by striving for what will bring them reward.

This chapter shall attempt to look at how the subject of incentive package as motivational tools has
evolved over the years and some known literature that have been written and that have relevance
to the subject.

Motivation

The term ‘Motivation’ is derived from the word ‘motive’, which means an inner

state of our mind that initiates or sustains activity. It is an important function to

be performed by the managers of an organization for enthusing people for work

to accomplish the predetermined organizational goals and objectives. “You can lead a horse to water
but you can’t make it drink.” Meaning of this famous proverb is that, you can show a path to an
individual but can’t make him walk without his own will. Similarly, in an organization the core of
every activity is human activity. It depends on human will to act or not. Will to work is more
important than the capacity or power to work. One can purchase man’s time and his physical work
but not his enthusiasm or loyalty. So, motivation helps to bridge this gap by energizing, directing and
sustaining human behavior towards the organizational goal. Effective motivation helps in directing
an employee’s desire to do the best possible job and exert his maximum efforts to perform the tasks
assigned to him. Motivation, refers to the way in which urges, drives, desires, aspirations, strivings or
needs direct, control or explain the behaviour of human beings

4.1 IMPORTANCE OF MOTIVATION

Motivation is the core of management2 , so is very important for every organization because of its
following benefits:

1. Increase in Productivity:- When workers are motivated continuously from within or outside, they
become more passionate in doing their job and perform much better. This passion of doing work
improves the productivity and quality of the work hence, secures best possible utilization of
resources.

2. Improved Morale of Employees:- If, motivation provided on a continuous basis to an employee he

tends to work hard and accomplish the challenges, which in turn improves his morale level amongst
himself.

3. Helps in achieving the organizational goals:- To achieve an organizational goal, environment of co-
operation and co-ordination is required within an organization, which can be effectively done
through motivation. Motivated employees are more loyal to the organization and have cordial
relations with their superiors and subordinate.

4. Helpful to Managers:- It is seen that a motivated employee is generally more quality oriented. So,
a clear cut knowledge and understanding of how the motivation works helps a manager to make his
employees quality oriented and hence increase organizational effectiveness.

5.More Creative Work force:- Motivated employees perform the task assigned to them more freely
and passionately. This helps them to improve their work and show better levels of creativity and
imagination in their work.

6. Stability of workforce:- The more the employees are motivated, the more they become loyal to
their work and the organization. The feeling of participation in the organization makes them more
loyal to the organization.

The loyal workers tend to be more satisfied and comfortable with their job.

The term motivation is derived from the Latin word ‘movere’ which means to move (Baron, Henley,
McGibbon and McCarthy, 2012). Certo (2016) describes motivation as giving people incentives that
cause them to act in desired ways. Motivation has also been described as the process of arousing
and sustaining goal-directed behavior (Nelson, 2013). It is commonly agreed that there are two types
of motivation, namely extrinsic and intrinsic. Intrinsic motivation is that behavior which an individual
produces because of the pleasant experiences associated with the behavior itself (Mosley, Pietri and
Mosley Jnr, 2012). They stem from motivation that is characteristic of the job itself. Examples are
receiving positive recognition, appreciation, a sense of achievement and meeting the challenge.
According to Beer and Walton (2014), intrinsic rewards accrue from performing the task itself, and
may include the satisfaction of accomplishment or a sense of influence. Mosley, Pietri and Mosley
Jnr. (2012) describe extrinsic motivation as the behavior performed, not for its own sake, but for the
consequences associated with it. Examples include salary, benefits and working conditions. Extrinsic
rewards come from the organization as money, perquisites or promotions from supervisors and co-
workers as recognition (Beer and Walton, 2014). Employees are motivated by a combination of both
factors at any given point in time (Riggio,2013)
Traditionally, the study of job performance has been based on two somewhat independent
assumptions: that performance can be understood in terms of the individual's ability to perform the
tasks, and that performance depends solely upon the level of motivation (Chung, 2013). Motivation
is generally defined as the psychological forces that determine the direction of a person's level of
effort, as well as a person's persistence in the face of obstacles (Stanley, 2012). The responsibility for
motivation is three-fold: it falls on the senior leadership, the direct manager and the employee
(Bhuvanaiah and Raya, 2015). Numerous factors are involved, from trust, engagement and values
(individual and organizational) to job satisfaction, achievement, acknowledgement and rewards.
Motivation is essential for working autonomously, as well as for collaboration and effective
teamwork (Stanley, 2012). Motivating employees for better performance encompasses these critical
factors: employee engagement, organizational vision and values, management acknowledgment and
appreciation of work well done, and overall authenticity of leadership (Neeraj, 2014).

Motivation is a critical ingredient in employee performance and productivity. Even when people
have the right skills, clear work objectives, and a supportive work environment, they would not get
the job done without ample motivation to meet those work objectives (Mullins, 2006). He
elaborates that motivated employees are enthusiastic to exert a certain level of effort (intensity), for
a certain amount of time (persistence), toward a distinct goal or direction (Mullins, 2006).

Productivity

Productivity is defined as “the relationship between the output generated by a production and
service system and the input provided to create this output” (Kişoğlu, 2004: 29, Başaran, 1992: 156,
Prokopenko, 1991: 55). Productivity is a phenomenon that carries weight with very different groups.
For instance, when looking from the viewpoint of business enterprises, productivity increases
profitability and constitutes the optimal resource component. At the same time, it is a control tool.
For customers, productivity reduces prices; improves quality. As for employees, productivity is the
most effective source of pay increase; improves income distribution and ensures job security (Uğur,
2003: 10-15).

Undoubtedly, the primary objective of every organization is to increase productivity. Organizations

achieve this objective by using advanced technologies, raising the productivity of inputs, creating a
better organizational structure and making the workforce efficient. The most important effort
towards improving productivity is to ensure efficiency of the workforce (Bingöl, 2006:15). Today,
productivity, in general, refers to “workforce efficiency”, without a specific distinction (Biçerli, 2003:
385; Ekin, 1997: 151). Workforce productivity is an issue that should be overemphasized by the
management of enterprises. The reason is that low workforce efficiency is an indicator of other
inputs (technology, capital), which, thus, leads to the reduced total factor productivity. This denotes
that workforce productivity is the engine of all other productivity results (Uğur, 2003: 46). In
organizations, workforce productivity largely depends on motivating employees for the achievement
of organizational objectives. Besides, it is known that factors such as work environment factors and
discipline practices also affect workforce productivity. Available studies point to almost the same
factors affecting workforce productivity. In this sense, factors affecting workforce productivity can
be grouped as follows (Davis, 1989: 50):
Managerial and Organizational Factors: Pay, working hours, promotion system, authority and
responsibility, managerial behaviors and participation in management, personnel status,
communication, reward and penalty, work design, education and self-development.

Physical Factors: Lighting, color, noise, thermal comfort, ventilation and humidity.

Technical Factors: Workplace design, technology, hygiene and cleaning services, machinery, devices
and materials.

Social Factors: Transportation, social activities and facilities.

Effects of Motivation on Productivity

Productivity in general has been defined in the Cambridge International and Oxford Advance
Learner’s dictionaries as the rate at which goods are produced with reference to number of people
and amount of materials necessary to produced it. On the other hand, productivity has been defined
as the utilization of resources in producing a product or services (Gaissey, 1993). It has further been
defined as the ratio of the output (good and services) and input (Labour, capital or management).
The definition of productivity is utilized by economists at the industrial level to determine the
economy’s health, trends and growth rate whiles at the project level, it applies to areas of planning,
cost estimating, accounting and cost control (Mojahed, 2005).

Several factors affect labour productivity and prominent among them is the basic education for any
effective labour force. In addition to the above is the diet of the labour force and social overhead
such as transportation and sanitation (Heizer and Render, 1999). Furthermore, motivation, team
building, training and job security have a significant bearing on the labour productivity. Coupled with
the afore-stated factors, labour productivity cannot be achieved without maintaining and enhancing
the skills of labour and human resource strategies. Better utilized labour with stronger commitment
and working on safe jobs also contribute to affect labour productivity (Wiredu, 1989).

It has been studied many times and proven that with increased motivation you will increase

productivity. So my question is why are so many businesses taking away items that provide

motivation and can directly effect productivity? I have seen this done not only in the payroll area

of reducing peoples pay, requiring furloughs, and freezing salaries, but also in employee

appreciation. It is understandable that companies are looking for any way to cut costs but are

they truly calculating the true cost of making these cuts?

“Motivation and productivity are twin concepts in organizational development. First, motivation

works as the means toward attaining productivity as an end. Another point: Motivation is the best

cause to reach productivity as a favorable effect. Lastly, motivation is the stimulus to trigger

productivity as a response. All these are concrete connections between the two factors.”

~http://www.brighthub.com/office/home/articles/83187.aspx

There are two basic ways to motivate a person. One is through extrinsic motivation or material

satisfaction, and the other is through intrinsic motivation or providing intangible rewards. With the
 economy the way it is and the companies goals of cutting costs, it would make more sense for the

companies to reduce their costs by developing an intrinsic strategic, instead of obliterating all costs

to scrap all motivation strategies. I believe that removing all methods of motivation and thus

reducing overall productivity can have a more costly effect on the company’s bottom line than if

they maintained a small level of intrinsic motivational strategies.

Here are a few examples of how you can reward your employees through intrinsic means:

 Verbal or Written Recognition of Achievements

 Say “Thank You”, “Great Job”, or “Well Done” to show you appreciate their hard work.
 Promote from Within Your Company
 Create Informal Leadership Roles
 Consistently Provide Development Opportunities

There are some additional benefits to increasing motivation than just increased productivity. You

can also benefit from the following results:

 Improved Morale
 Lower Absenteeism
 Higher Retention Rates
 Improved Bottom-Line Results