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Acknowledgement

I would like to thank Miss.Shumara Fernando for her wonderful lecturing and for
giving support to complete this assignment. It would have been hard to do this
assignment without her invaluable supervision.

And also I would like to thank Asia Pacific Institute of Information technology for
providing a lovely environment and excellent facilities to study.

Then I would like to dedicate this study to my parents for giving me a lovely
opportunity to study and giving me support all the time.

Finally I am responsible for the mistakes that I have made in this assignment

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Table of contents

Acknowledgement.......................................................................................................1
HNB’s Current Motivational Methods......................................................................6
Motivational Theories....................................................7
Goal- Setting Theory.....................................................................................................10
Equity Theory................................................................................................................12
Three Needs Theory- David McClelland.....................................................................13
Need for achievement ................................................................................................................13
Need for affiliation .....................................................................................................................14
Need for power ...........................................................................................................................15
Proposed Motivational approach and Justification................................................16
Conclusion................................................................................................................17
References.................................................................................................................18
Mindtools (n.d,) Locke's Goal Setting Theory: Understanding SMART Goal
Setting [Online] Available:
http://www.mindtools.com/pages/article/newHTE_87.htm#topofpage (Accessed
date: 12/05/2009)......................................................................................................18

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Introduction to the Company

Hatton National Bank PLC is Srilanka’s fastest growing commercial-bank. “It was
incorporated in Srilanka in March 1970” (HNB.net, n.d.).

A bank called “Hatton-Bank” commenced business in Hatton, to serve tea-industry

in 1988. It was established to cater to the investors and for the small savers amongst
the plantation-workers. After the Independence of Ceylon, Brown & Company Ltd,
a leader in the engineering-business, restructured the bank with greater Sri Lankan
participation (Source: HNB.net, n.d.).

From here the Life journey of HNB started to become a truly national bank which
would reach to the recognition as Srilanka’s flagship among commercial banks. And
now the company has expanded its operations with “177 Customer-Centers, 260
ATMs, and 2 HNB Mobile-Banking-Centers around the country. HNB also has
relationship with more than 80 countries in the world as Global-Correspondents. It
has 2 Overseas Representative-Offices in India & Pakistan” (HNB Annual Report
2008).

Vision
To be the acknowledged leader and chosen partner in providing financial
solutions through inspired people.
(Source: HNB.net, n.d)

Mission
Combining entrepreneurial spirit with empowered people and leading edge
technology to constantly exceed stakeholder expectations.
(Source: HNB.net, n.d)

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HNB’s functions are divided into four categories. They are as follows:
• Personal Banking
• Corporate Banking
• Development Banking
• International Banking

Values of HNB

• Treasure professionas and personal integrity at all times

• Demonstrate mutual respect in all our interactions
• Passionate in everything we do
• Committed to being customer centric
• Courage to change, challenge and be different

(Source: HNB.net, n.d)

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Relationship of HNB with their Employees

HNB’s Sustainability-Strategy is the foundation on which their overall business

strategy is based, and provides a framework to develop HNB’s priorities and action-
plans. (HNB Annual Report 2008)

Board of Directors

MD/ CEO

DGM
Chief DGM HR Personal DGM
Sustainability Committee
banking & Risk
Financial & Admin Network Committee corporate
Officer Secretary Managemen Banking
t

Customer Employee Environment

service & Sub Committees&Community
Liaison Advisory
Investor
group
group Group

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[Figure 1: Sustainability-stewardship (Source: HNB Annual Report 2008)]

Sustainability-Committee is responsible for the employees. They oversee the

progress and create two way relationships that inculcate team spirit within the
“Hatna-family” concept (HNB Annual Report 2008). They also motivate their
employees by inspiring and encouraging them. And now HNB has around “4,395
empowered employees” in their family (Hatnamag, 2008).

HNB’s Current Motivational Methods

HNB-culture is based on caring for their people. For that they progress and develop
the careers and lives of Hanta-Team. “HNB’s guiding principal is to develop the
best people in the industry, a process that involves seeking, developing and retaining
the best talent in a competitive industry” (HNB Annual Report 2008). Therefore
the employees are driven by motivation.

HR-Objectives
• Ensure fair and lawful treatment of all staff and implementation of non
discriminatory work practices.
• Create an exciting work environment for our team where rewards are
performance-driven and individual potential realized.
• Ensure excellence of our HR processes to retain our position as a preferred
employer.
• Foster creativity and learning to develop a highly skilled, service oriented
and efficient team that thrives on new challenges
• Ensure that each and every staff is embraced into the Hatna Family and
inculcate the culture of unity in diversity.
(Source: HNB Annual Report 2008)
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Motivational Theories

Motivational Theories

Early Theories of Motivation Contemporary Theories of Motivation

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Early Theories of Motivation

1. Maslow’s Hierarchy of Needs:

This theory addresses employee needs. 2. MacGregor’s Theories X and Y:

There is a hierarchy of 5 human needs.
Lower level external needs: safety &
physiological. Higher level internal
needs: Social, esteem, self-
actualization.
It says that motivating a person depends
on knowing at what level that person is
on the hierarchy.
It talks about 2 sets of assumption
about human nature.
Theory X: Assumes that these types of
workers need close supervision to work
well, they avoid responsibilities
because they have little ambition &
dislike work.
Theory Y: It offers a positive view.
Assumes that these types of workers are
creative, enjoy-work, seek
responsibility & can exercise self-
direction.

3. Hertzberg’s two-factor Theory:

It says that different factors drives job satisfaction and
job dissatisfaction.
Motivators: Job satisfaction is created by intrinsic
(psychological) factors. (e.g. Achievement, growth,
responsibility, advancement, recognition etc…)
Hygiene factors: extrinsic (environment) factors create
job dissatisfaction. (e.g. Supervision, company policy,
salary, working conditions, personal life, relationship
with supervisors etc…

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Contemporary Theories of motivation

Three-need Theory (McClelland): It talks about 3 major acquired needs that

motivate workers.
Need for achievement: The drive to excel and success
Need for Power: The need to influence the behaviour of others
Need for affiliation: The desire for interpersonal relationships

Goal-Setting Theory: It says that accepted, specific, challenging & achievable

goals will result in higher performance. So goals are superior motivating forces.
Participating in goal-setting is important because it increases the acceptance of
goals, encourages the commitment of to difficult public goals and provides for
self-feedback that motivates performance.

Reinforcement Theory: The theory is a desired behaviour is a function of its

consequences, is externally caused, & if reinforced it’s likely to be repeated.
People will most likely engage in desired behaviors if they are rewarded and
it’s known as positive reinforcement.
Punishing undesired behaviors may create additional dysfunctional behaviors,
so ignoring them is better.

Equity Theory: Employees perceive what they get from a job in relation to
what they put in and then compare their inputs-outcomes ratio with the inputs-
outcomes ratios of relevant others.
If the ratios are equal then a state of equity exists
If they are unequal then inequity exists & the person feels under or over
rewarded.
When inequities occur, employees do something to balance the ratios.

Expectancy Theory: It states that an individual tends to act in a certain way

based on the expectation that the act will be followed by a given outcome and
one on the attractiveness of that outcome to the individual.

Individual Individual Organizational Individual

Effort Performance Rewards goals

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Application of Motivational Theories

Goal- Setting Theory

Goals are superior motivating forces and influence an individual’s performance

because it can govern human’s behaviour. As a result it increases productivity,
enhances performance and reaches success.

Therefore the vision, mission, values and objectives of HNB are cascaded to all new
recruits. A code of Ethics is issued with the letter of appointment to ensure that new
recruits understand and are willing to abide the ethics and values expected of them
by the bank (HNB plc Annual Report, 2007). So the employees understand about
the company and are well prepared before they join the company. This motivates
them to work effectively.

HNB has an Open-communication-culture with their employees, especially when

planning organizational changes. They aim to explain the business rational for
changes, clarify how they plan to implement it and also outline what the change
means to the employees involve, both from a team and individual perspective (HNB
plc Annual Report, 2007). The changes are made public so that, it increases the
acceptance of changes among the employees and increase performance of
productivity.

HNB has an open-door-style management, so the executives and managers have an

open discussion oriented relationship with the Hatna-Team. Therefore the ideas,
suggestions and constructive criticism are welcomed, discussed and acted upon as
relevant (HNB plc Annual Report, 2007). Also HNB has a suggestion scheme
called “search” which encourages team members to give their ideas & suggestions
for the improvement of the Bank. These are discussed and analyzed periodically and
implemented according to practicality (HNB plc Annual Report, 2008). So
whenever a goal is set the employees believe that they are capable of performing the
task. Therefore it increases their self-confidence.

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The in-house-magazine “Hatnamag” is issued quarterly with management and staff

contributing towards the content. A “HR-Newsletter” issued quarterly to give an up-
to-date latest HR News and also a “Marketing-Newsletter” (HNB plc Annual
Report, 2008) issued to their employees to add more value to the open
communication process of the bank. Monthly staff meetings are mandatory in each
branch of the bank (HNB plc Annual Report, 2008). As a result it creates a good
relationship between the management and staff members of HNB. So whenever a
goal is set the management informs their staff members through the above
mentioned ways and start on working together as one family. This motivates the
employees to work better.

So that, even if the goals are difficult it results in higher performance than do easy
goals because they are implemented after informing and got the feedback from the
employees of the company. It ensures positive out-comes.

The Hatna-Team knows the reason for selecting the goals because all of them have
participated in Goal-setting and they all know that they can attain them. It avoids the
misunderstandings in the work of the employees. By this employees are motivated
to perform better and put in maximum effort. So HNB can accomplish its goals
easily through empowered employees.

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Equity Theory

“Employees perceive what they get from a job situation in relation to what they put
in and they compare their inputs–outcomes ratio with the inputs–outcomes ratios of
relevant others” (Lecture slides, 2009).

HNB treat their people equitably and with fairness. This is reflected in the way they
reward and recognize achievements. The remuneration policy, which is
administrated by the HR department, is centered on 2 key factors:
• Collective bargaining, which is enumerated in the collective agreements
pertaining to clerical, allied and supervisory staff.
• Base pay and performance related pay being the key factors in
compensation for executive and managerial levels, based on market
conditions and individual performance worked on the Balance-Score-board.
(Source: HNB plc Annual Report, 2007).

From 2008 the “entire-payroll-process” of the employees is online, so all are able to
view and claim allowances and other benefits through this fully automated-process
(HNB plc Annual Report, 2008). By this the management openly shares on how
allocations of rewards are made and inform their employees that the organization is
following a consistent and unbiased procedure.
Also HNB doesn’t concern the gender or age of employees; they give opportunities
for everyone who has talents.

So the employees know that HNB treats them equally and fairly. This increases the
perception of procedural justice of their employees. So the Hatna-team views their
organization as positive even if they are dissatisfied with pay, promotions etc…
This motivates them to work more efficiently and effectively.

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Three Needs Theory- David McClelland

There are three types of motivating needs.

Need for achievement

People with a nAch are driven by the challenge of success and the fear of failure.
For these kind of employees HNB provides various training and learning processes
to develop themselves and build self-confidence within them.

Learning and development culture of the bank drives the team to constantly imbibe
their knowledge. (HNB plc Annual Report, 2008) This is driven upwards, with the
Annual-Training-Needs-Analysis and Annual-Training-Plan forming the basis of
continuous development. It focuses on the areas developing-leadership, executive
skills including IT, Self-development, International/trade related-operations (HNB
plc Annual Report, 2007). And recently HNB has included some new modules
such as effective-communication, Management-development-programs, omega-
credit-skills assessment etc… (Hatnamag , 2008). Also HNB provides online
training programs for their employees. This motivates the employees to achieve
their aims and as well as the organizational goals.

HNB also encourages their people to balance their work and personal life. They
publish the achievements of their staff in sports, academic and other recognitions in
“Hatnamag” to wish and encourage them more. Also the company is proud to
employ nationally and internationally recognized sportsmen and women.

So that now the employees of HNB can set difficult tasks for their need of
achievement confidently. And they see lot of chances of success within them and
are motivated to perform well.

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Need for affiliation

“HNB has always espoused the advantages of team-spirit and togetherness as the
winning recipe of success” (HNB plc Annual Report, 2008). HNB encourages
team-sports, extracurricular-activities, recreational-activities and talent–spotting.
They organize sports-meets, family-days, religions-events, festive and excursions to
give families and team-members times of enjoyment (HNB plc Annual Report,
2008). Excellence and achievement in these activities are rewarded and recognized.
This nurtures and strengthens the bond of Hatna-team.

Team welfare is built to ensure a more conductive and productive work environment
which ensures a happy contented-workforce. The bank provides ergonomically
designed lightning, furniture, fittings, sanitation-facilities, restaurants, drinking
water, holiday-bungalows, and staff-quarters for their employees. They also provide
transport and accommodation facilities for those serving in rural areas (HNB plc
Annual Report, 2008). This gives a lovely environment for the employees and
motivates them to work better.

In addition HNB financially support staff and their family who have been affected
with serious illness. HNB also initiated a scheme for employee’s children where, on
the demise of the employee, children’s education is funded up-to Advanced level.
(HNB plc Annual Report, 2007) This shows that HNB cares their employees and
as-well-as their family-members. By this the company is driving their employees
with love and faith. This motivates them to work happily and honestly towards the
company.

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Need for power

People for nPow are inclined towards influence and control. They like to organize
the work of others and direct them. These kinds of employees can be motivated to
perform if they get power or key positions of the organization.

The company is investing in the development of its current and future leaders.
HNB’s “Leadership-Philosophy” is built on the understanding that successful
organizations do not wait for leaders to appear, but they identify leadership potential
early and develop the individuals (HNB plc Annual Report, 2007). So HNB
invests lot money to provide training for both local and overseas programs to their
employees. This motivates the staff with the nPow.

Also as I mentioned before HNB has an Open-door-style management system so all

the employees are given the freedom to suggest their ideas to the management.
Therefore no one in the company discriminate their-selves because everyone has the
power to give their ideas and suggestions for the development of the company. So
that the employees corporate with their leaders. This positive impact will motivate
the employees and increases productivity and performance of HNB.

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Proposed Motivational approach and Justification

“Any violation of professional and personal ethics is dealt with seriously by the
management and appropriate punishments sometimes culminating in the termination
of employment meted out” (HNB plc Annual Report, 2008).
According to reinforcement theory, ignoring undesired behaviour is better than
punishment which may create additional dysfunctional behavior. Therefore the
management should ignore and not punish unfavorable behaviour of their
employees but practically the management can’t work out it. So to avoid undesired
behaviour of the employees the company can appoint an infiltrator to watch them.
If the infiltrator finds mistakes on any staff then the company can correct it without
spreading the news. And if that staff make mistakes again the management could
take severe-action. It reduces the misunderstanding in the workforce and motivates
the Hatna-team to work successfully and peacefully.

And as I mentioned before an official Code-of-Ethics is presented to new entrants

with their letter of appointment.
So that the new entrants will assume that the company is very strict. Therefore they
may behave less-friendly with their co-workers and will concentrate only on their
work. This may lead to the breakdown of total work-force, employee-turnover,
absenteeism and undesired-behaviour. I think it’ll be much better if the company
explains about ethics and values expected of them by the bank than giving the code
of Ethics with their letter of appointment.

The management has given the freedom for their employees to suggest their ideas
for the improvement of the company and the goals are public, so the company
should make sure that all those information are kept secretly within the
organization. For that HNB should continue to keep-up its reputation forever. And
also according to reinforcement theory all the employees should be rewarded after
the goals are accomplished. Then the employees will be motivated to work honestly
and more-effectively towards the company.

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Conclusion

HNB strongly believes that the success of the company depends on their employees.
And they know that they can’t achieve their goals without complete co-operation
and togetherness of Hatna-Team. Therefore HNB has a people-based-culture which
encourages teamwork, individual-skills and entrepreneurial-spirit.

They motivate their people to empower, energize and encourage them to work more
effectively and efficiently. For that they provide benefits, rewards, recognition,
power, pleasant-working-environment, training-programs etc…

And that’s why the “Bank received the gold-award (Super 10) at the HRM awards
2007 for the most effective HRM methods and techniques organized by the
association of Human Resources professionals” (HNB plc Annual Report, 2007).

If HNB develop and continue its effort on satisfying and motivating their
employees, then they succeed in their vision straightforwardly.

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References
Hatton National Bank plc Annual Report (2008)

Hatton National Bank plc Annual Report (2007)

Mr.Param, Manager HNB – Kotehena branch (2009)

Anon (Oct-Dec 2008) Hatnamag ( HNB’s quarterly magazine)

Lecture slides-APIIT (2009) Motivational theories

Anon (n.d.) Goal-setting theory [Online] Available:

http://www.timethoughts.com/goalsetting/goal-setting-theory.htm (Accessed date:
12/05/2009)

Anon (n.d.) Equity theory and employee motivation [Online] Available:

http://www.buzzle.com/editorials/6-24-2006-100325.asp (Accessed date:
10/05/2009)

Mindtools (n.d,) Locke's Goal Setting Theory: Understanding SMART Goal

Setting [Online] Available:
http://www.mindtools.com/pages/article/newHTE_87.htm#topofpage
(Accessed date: 12/05/2009)

NetMBA (n.d.) McClelland’s Theory of needs [Online] Available:

http://www.netmba.com/mgmt/ob/motivation/mcclelland/ (Accessed date:
2/05/2009)

Microsoft small business center (n.d.) 4 ways to reward motivate employees

[Online] Available:
http://www.microsoft.com/smallbusiness/resources/management/pay-benefits/4-
ways-to-reward-motivate-employees.aspx#waystorewardmotivateemployees
(Accessed date: 06/05/2009)

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Appendices

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Appendix A
Age wise Analysis of employees

Over 55 1%
5%
45-50 8%
Age

11%
35-40 21%
36%
18-25 18%

0% 10% 20% 30% 40%

Percentage

Figure 1: Age wise Analysis of employees (Source: HNB plc Annual Report,
2008).

Genderwise Analysis of employees

Female
Gender

Male

0% 10% 20% 30% 40% 50% 60% 70%

Percentage

Figure 2: Gender wise Analysis of employees (Source: HNB plc Annual Report,
2008).
The above figures show that HNB provides equal opportunities for everyone and
doesn’t care about their age or gender. (Equity Theory)
Mid year awards 2008 for HNB Branches was held on 26th of September 2008,
which pay tribute to high performers of HNB branches for general & life.
(Source: Hatnamag, Oct-Dec 2008)

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Appendix B

Training programs provided to the employees of Hatton National Bank plc by them.

In-house Training
Managers & Executives
2000
Officers
1500

1000 Banking Assistants

500 Secretaries,Stenos &

Typists
0 Trainees
1
Employees Support staff

Figure 3: In-house training programs provided to the employees of HNB in the year
2008 (Source: HNB plc Annual Report, 2008).

Local Training

Corporate
250
Management
200 Senior Management

150
Managers &
100 Executives
Officers
50

0 Banking Assistants
1
Employee s Support Staff

Figure 4: Local Training programs that provided to the employees of HNB in the
year 2008 (Source: HNB plc Annual Report, 2008).

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Overseas Training

80
70
60
50
40
30
20
10
0
Corporate Senior Management Managers &
management Executives

Figure 5: Overseas Training programs provided to the employees of HNB in the

year 2008 (Source: HNB plc Annual Report, 2008).

Training and Development 2006 2007 2008

Training and Development Cost (Rs Mn) 82.2 87.4 104.4
Training and Development Cost / Employee
(Rs'000) 19 20 24
T & D cost as % of Personnel Expenses 2.90% 2.70% 2.90%

Figure 6: Money spent for the employees training and development programs during
the year 2008. (Source: HNB plc Annual Report, 2008).

Training programs are provided to the employees to achieve their personal goals and
also the company’s goals. (Three Needs Theory- need for achievement)

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Achievements of HNB employees in the year 2008

• HNB Toastmasters Club was awarded the President’s Distinguished Club
award for 2007/8.
• HNB won the overall championship at the Inter Bank Student Quiz
competition.
• Mohan Chandana Gamage of HR an employee of HNB was awarded 2 Sri
Lankan Prizes by CIM UK.
• W.T.Ridmika Dep, Legal officer from the credit supervision and recoveries
department obtained the highest overall marks for the Insurance law at the
post attorney diploma in banking from the Sri Lankan Law College.
(Source: HNB plc Annual Report, 2008).

Achievements in sports
• Hockey
o Mercantile Hockey League 2008 Champions
o Mercantile Knockout Champions
o Mercantile Annual Seven A Side Hockey Tournament Runner Up
• Football
o Mercantile League Tournament Champions
• Badminton
o Mercantile Individual open Badminton Championship (Overall
champions)
o Mercantile Inter-firm Badminton Team championship (Runner
up)
o 56th National open Badminton championship
• Athletics
o Mercantile Athletic Championship 2008
 Women’s overall champions
 Amateur and veteran champions
• Netball

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o Sportsline.com challenge trophy- Runner up

o Western Province Netball Tournament- Runner Up
o Open Club Netball Tournament-Champions
o Super League Netball Tournament- Runner up
• Basketball- Men
o Mercantile Semi League Tournament- Runner Up (B Division)
o Mercantile Knockout Tournament- Runner up (B Division)
• Basketball women
o HNB sponsored Mercantile League Tournament- Champions
o Delmage sponsored Mercantile knockout Tournament- Runner up
(Source: HNB plc Annual Report, 2008).

All the achievements of the employees are published with their photos in the
Hatnamag to encourage and motivate them.
(Three Needs Theory)

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Appendix C

• The Hatna-family at Kotahena organized Navarathiri/Saraswathi Pooja on

07/10/2008 in order to get the blessing from Goddess Saraswathi which was
graced by Managing Director/CEO Mr.Rajendra Theagarajah.
• Nelliyady Branch celebrated its 4th year anniversary on 30th of September
2008 at the branch premises with all their employees.
• Dematagoda branch organized the annual trip to Diyathalawa and all the
staffs and their family members joined and had some nice time (2008).
• Bambalapitiya branch employees went on a trip to Hotel Taprospa Beruwala
on the 6th and 7th of September 2008. They say that the days were
unforgettable and filled with fun and laugher.
• Pettah branch also celebrated Navarathiri on 3rd October 2008.
• Eid celebration held at the HNB Towers on 17th October 2008.
• Also HNB branches celebrated the Christmas parties on 2008.
• A blood donation campaign was conducted by the branch with the Jaffna
teaching hospital bank at the branch premises. All the staffs and also the
customers participated with them.
• The Hatna members of the Cinnamon Gardens branch organized a door to
door marketing campaign on 14th September 2008. And the employees
enjoyed the day.
• HNB also provides Yoga classes for their employees.

(Source: Hatnamag, Oct-Dec 2008)

HNB branches around the country organize certain events to build a strong
relationship within all the employees to motivate them and enjoy their selves while
working.
(Three Needs Theory)

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