The purpose of this research is to explore the most effective and best rewards to get the maximum performance from the employees’ working in ABC in London. Extensive research will be conducted to determine the motivational rewards types to boost up the motivation of employees at work. Further to identification of major reward types; the advantages and disadvantages of each reward type will be highlighted to understand the rewards in broader spectrum.
The purpose of this research is to determine the best motivational reward which can help in boosting the employees’ performance to another level. The data can be collected either through primary data or by secondary data; combination of both data types are usually adopted to conduct an extensive research. The most effective and best reward type which helps to motivate the employees will be discussed in literature review (secondary data). Also the limitations related to each motivational reward type affecting the employees’ motivation will also be discussed in the literature review of the research. Once the data is collected through secondary means; the next step is to determine the problems prevailing at ABC which are limitations in motivating the employees to perform well.
Once data from both means (primary and secondary); the information will then be evaluated which will help in understanding the motivational factor and the reward to motivate employees at ABC. The outcome of this research will facilitate in recommending which reward effective for motivating the employees based on the analysis of data. The main objectives and questions of research are listed below.
Contents
Abstract
Chapter: 1
Research Introduction
1.0 Research Background
1.1 Objectives of research
1.2 Question of research
Research questions in detail
1.3 Rational Study
1.4 About ABC
Chapter 2
Review of Literature
2.0. Introduction
2.1. Relationship between Rewards and Employees’ Motivation
2.2 Theories of classical motivation
2.2.1 Maslow’s theory of needs
2.2.2 Theory of extending drive
2.2.3 Theory of self - identification
2.2.4 Herzberg’s theory of two factors
Herzberg theory of two factors and its significance
Importance of Herzberg theory in this research study
2.3 Rewards of extrinsic nature
2.4 Rewards intrinsic in nature
2.5 Impact of extrinsic rewards on performance of employees
2.5.1 Impact of money on employee performance
2.5.2 Impact of relationships at work on employees’ perform
2.5.3 Job security on the performance of employees
2.5.4 Impact of working environment on the performance of employee
2.5.5 Impact of empowerment on performance of employees
2.6 Intrinsic motivation and its impact on the performance of employees
2.6.1. Impacting of interesting tasks on the performance of employees
2.6.2. Opportunities of development of career and personal growth
2.6.3. Training facilities and opportunities of skill development
2.6.4. Sense of recognition
2.7 Literature tells us what?
2.7.1. Money and issues related with money
2.7.2. Factors of utmost importance
2.7.3. Inter – relation of intrinsic rewards and extrinsic rewards
2.7.4. Significant reward for performance of employee
Chapter 3
Methodology of Research
3.0. Introduction to research methodology
3.1. Research philosophy
Social constructionism
3.2. Research approach
Why to adopt inductive approach?
3.3. Research strategy
Why on should proceed with survey strategy?
3.4. Primary data
What is primary data?
Why Primary data is collected?
Sample size
3.5. Secondary data
What does secondary data means?
Why secondary data should be used
3.6. Research ethics
Ethics followed for this study
3.7. Study limitations
Chapter: 4
Data Analysis
4.0 Introduction
4.1 Responder common characteristics
4.2 Analysis of different Rewards
4.2.1 Analysis of Extrinsic Rewards
Money
Relation on workplace
Physical working environment
Job security
Empowerment
4.2.2 Analysis of Intrinsic Rewards
Interesting task
Personal growth
Skill development
Recognition
4.3 Analysis of Some Important Required Rewards at Select Company Workplace
4.3.1 Financial Rewards
4.3.2 Physical work environment
4.3.3 Relation on work
4.3.4 Personal growth
4.3.5 Self respect
4.3.6 Skill development
4.4 Data analysis findings
4.4.1 Reward kinds
4.4.2 Problems related with extrinsic rewards
4.4.3 Intrinsic rewards’ impacts
4.4.4 Rewards considered suitable for Author House
4.4.5 Intrinsic Vs Extrinsic
CHAPTER NO. 5
Conclusion and Recommendation
Conclusion
5.1 Necessary rewards
5.2 Money Problems
5.3 Rewards supportive in nature
Empowerment
Recognition
Friendly working environment
5.4 Intrinsic and Extrinsic combination
5.5 Recommendations
References
Abstract
Main objective of conducting this research is to identify that what is most appropriate reward system for ABC caring house in UK. Extrinsic and intrinsic are the basic types of rewards which organizations use to boost up the morale of the employees to increase their productivity. Extrinsic rewards are found in terms of payment, environment of work place, employee relationships, and job security; while intrinsic rewards include individual recognition at work place, activities which increase their understating, and providing more opportunities for development in professional life. According to results and findings of research, it is clear that both intrinsic and extrinsic rewards can be helpful for the organization in order to motivate employees and increase their productivity; side by side it is also concluded that some rewards are most important, essential, and effective for the firm. These important rewards include cash payment and healthy and safe working environment which employees highly demand and considered as vital rewards in the organization which cannot be ignored. Other intrinsic or extrinsic rewards have their significant importance and impact on other rewards like less job security can be reduced by providing training and development opportunities to employees. Similarly, empowering the employees and their individual recognition rewards are supportive factors which just do not increase the performance of individuals rather these rewards have great positive impact over other rewards as well.
Chapter: 1 Research Introduction
1.0 Research Background
The purpose of this research is to explore the most effective and best rewards to get the maximum performance from the employees’ working in ABC in London. Extensive research will be conducted to determine the motivational rewards types to boost up the motivation of employees at work. Further to identification of major reward types; the advantages and disadvantages of each reward type will be highlighted to understand the rewards in broader spectrum. The purpose of this research is to determine the best motivational reward which can help in boosting the employees’ performance to another level. The data can be collected either through primary data or by secondary data; combination of both data types are usually adopted to conduct an extensive research. The most effective and best reward type which helps to motivate the employees will be discussed in literature review (secondary data). Also the limitations related to each motivational reward type affecting the employees’ motivation will also be discussed in the literature review of the research. Once the data is collected through secondary means; the next step is to determine the problems prevailing at ABC which are limitations in motivating the employees to perform well. Once data from both means (primary and secondary); the information will then be evaluated which will help in understanding the motivational factor and the reward to motivate employees at ABC. The outcome of this research will facilitate in recommending which reward effective for motivating the employees based on the analysis of data. The main objectives and questions of research are listed below.
1.1 Objectives of research
Determining the best effective reward approach to motivate the employees to perform well.
Overview of research objectives
- To determine the reward types and their impact of the performance of employees
- To determine the pros and cons of different types of rewards on the performance of employees
- To analyze the current reward system adopted by the company ABC and its effect of the motivation level of employees
- To rationalize the best and most effective reward approach which must be adopt at ABC in motivating the employees to perform well
1.2 Question of research
How the performance of employees can be enhanced by adopting an effective reward system at ABC?
Research questions in detail
- What are the common rewards which can boost employees’ performance at workplace?
- How the motivational rewards affect the employees’ performance?
- Is the company using right reward approach to motivate the employees?
- How to catch up between the prevailing reward system at ABC and expected rewards by the employees?
1.3 Rational Study
According to Armstrong (2006); the performance of the employees is related directly to the motivational approaches adopted by the company in motivating the employees so that the employees can perform well. Armstrong also claimed that there are several factors having their effects on the performance of employees but one needs to determine and select the best factor in motivating the employees to improve the performance of the employees.
According to Armstrong and Baron (2004); in order to achieve the certain performance level; company needs to adopt the best reward approach because it will have an effect on the performance of employees directly. According to Pink (2010); majority of the organizations are still using the traditional reward system to motivate the employees however Pink believed that these traditional reward system needs to be updates as these reward system are outdated that’s why the organizations are finding it difficult to improve the performance of employees as required. According to Ambile (1996); two types of rewards are intrinsic rewards and extrinsic rewards. His belief was that the intrinsic rewards have more impact on the performance level of employees as compared to the extrinsic rewards impact of the performance level of employees. According to Pink (2010); extrinsic rewards are the ones out of date and have negative effect on the intrinsic reward’s effectivity. Many researchers like Mani (2010), Jun, Cai and Shin (2006), Quratul (2011) and Kamalian, Yaghoubi and Moloudi (2010); believed that adopting only one reward approach will not be sufficient in motivating the employees as by using only one reward approach will always result in same results every time in different situations. Furthermore is was claimed by Quratul (2011); different types of rewards have different kinds of impact on the performance of employees because of the presence of variables like job nature, job responsibilities, culture or the organization itself. Hence there is a need to restructure the reward system of organizations to achieve the performance level organizations require.
As already mentioned above that people have different views on different types of rewards. One reward type is supported by one and criticized by other; hence in this research we are going to determine the most effective reward to enhance the performance of employees at ABC. The aim of this research study is to measure the effectiveness of each and every reward type under discussion and to come up with the appropriate reward system to be implemented as reward approach in ABC to boost performance of employees. The purpose behind selecting this topic is that the researcher aims to work for the organizations HR department that’s why researcher has interest in this topic. Furthermore the topic in itself is very interesting that’s why there are ongoing discussions between researchers about importance and selection of particular rewards. This study is only conducted for ABC to find out the best suit of reward approach to improve the employees’ performance.
1.4 About ABC
ABC is providing quality services in London for the residents, the ABC offer many care services so the customer can choose as per their requirement as best suite them. The Author House is well decorated and organize house for the residents of 15 beds to fulfill the customer requirement. The company hired well educated and skilled employees to satisfy the customer requirements and to successfully stay in the competition.
Chapter 2 Review of Literature
2.0. Introduction
This research study is going to explore the best effective rewards to boost up the performance of employees’ at ABC based in London. Second chapter of this research papers is going to discuss the secondary data related to research topic and will shed light on the contribution of rewards on the performance of employees. This chapter is also going to shed light on the different types of rewards which can be adopted to motivate the employees. Moreover issues and limitations related to each reward type will also be discussed in broader spectrum. This particular chapter only related to the secondary data hence different reward systems will be explored in this part and then will be implemented on the organization under discussion which is ABC by collection of primary data. The research aims to explore the different limitations related to the different types of rewards and then these problems will be tested on the company ABC by implementing primary data of research. It will be easy to explore the better rewards system for ABC through secondary data.
2.1. Relationship between Rewards and Employees’ Motivation
According to Allen et al (2004) and Tella et al (2007); for maintaining the effective and best relationships with employees; managers need to ensure that the employees are constantly motivated and for this purpose managers needs to provide them chances to do more interesting jobs which they are willing to do. This illustrates that it is the responsibility of the managers to give interesting jobs and duties or by motivational programs to the employees to keep them motivated so that employees can achieve the performance level managers require from them. According to Armstrong & Stephen (2005) and Rukhmani et al (2010); it is essential for the managers to make a combination of interesting jobs and motivational programs so that the employees of the company constantly stay motivated and perform as required from them.
According to Oluseyi and Ayo (2009); at the time of need and when the company is going through bad times; having effective relationships with employees help the company to survive. According to Roya and Dugal (2005); effective and strong relationships with the employees help the company to enhance its level of productivity.
According to Rukhmani et al (2010) and Armstrong and Brown (2005); performance of employees is directly linked to the motivational level of employees. Furthermore it is true to say that the employees performance is actually the performance of the organization. It is believed that to get the maximum out of employees; managers of the organization need to determine an appropriate reward system to keep the employees motivated. Over the years; several theories have been proposed debating on which steps to be taken in motivating the employees. According to Rukhmani et al (2010); several theories have been proposed by researchers that how employees can be motivated by the management and what needs to be done at the part of managers for example Maslow’s hierarchy of needs, ERG theory of Alderfer which were proposed to come up with best possible reward approaches. Also theory of expectancy proposed by Vroom and the theory of goal setting by Lock were also proposed related to this topic.
According to Roy and Dugal (2005) and Dewhurst et al (2010); in order to motivate the employees the monetary incentives contribute a lot for this regard. For example bonuses, appraisals, provisions or stock options etc. As also discussed in Taylor’s scientific theory; money plays an important role in motivating employees and it is true to say that money is one of the most important motivational factor. That’s why over the years; money has been the traditional mode of motivating the employees by the organizations.
According to Stewart and Beaver (2003); the purpose of motivation is to lead and direct the employees to work towards the manager’s provided direction by getting the best out of employees’ efforts. According to Budhwar (2004); organizations which intends to motivate its employees with any reward approach should adopt both monetary and non-monetary reward approaches. It is extremely sensitive and crucial part of manager’s job to choose the most effective rewards for the employees to motivate them to perform well. There have been different opinions regarding the rewards selection as it may vary from gender to gender, hierarchical position to position, job to job etc. etc. According to Forsyth (2006) and Burke and Cooper (2006); several motivational theories are available in literature which can be used to choose the best reward type for the employees to motivate them to perform well.
2.2 Theories of classical motivation
2.2.1 Maslow’s theory of needs
illustration not visible in this excerpt
Source: http://www.broadreachtraining.com/articles/armaslow.htm
According to Cooke (2004); in his theory of needs Maslow (1970) stated that five needs are in each and every human in hierarchical form from physiological needs to needs of self – actualization. Hence to satisfy a human; their needs should be satisfied from bottom level to top level only by satisfying the needs of first level first and then to move towards next level. According to Cooke (2004); hence keeping Maslow theory of needs; organization can choose rewards to satisfy the employees on the base of their needs like offering monetary rewards to meet the physiological needs of employees and offering job security to satisfy security needs of employees.
Maslow theory of needs – Criticism
According to Cooper and Dewe (2004); no wonder that Maslow theory of needs gives the idea about the satisfaction level of humans which make it convenient to select the rewards accordingly however it is not practically possible that these needs exist in same hierarchy in organizations. According to Khosrow and Mehdi (2006) and Armstrong (2001); needs and the preferences of people change from situation to situation like it varies from culture to culture, hierarchical level to hierarchical level, job to job and many more. Needs varies hence Maslow’s theory of needs does not fit in all situation. Some researchers claim that Maslow’s theory of needs is best suit for organizations however other researchers believe that the needs vary. Maslow has given an idea about the needs level which can be satisfied through different means. However as the needs vary; it is one of the major criticism Maslow theory has faced. Some of the researchers (Khosrow and Mehdi 2006, Sharpiro, Glinow and Cheng 2005, Harkins, Giber, Sobol, Tarquinio and Carter 2005); criticized the Maslow theory of hierarchy as they claimed that need of top level are more important than the bottom level needs.
2.2.2 Theory of extending drive
The drive theory is actually the extension of many succeeding theories. One of such extension attempt was explained on the base of anxiety avoidance by Deci and Ryan (2008). It depicts that anxiety can be minimized with the extension of avoiding the pain.
Drive theory can also be extended by secondary reinforcement. According to Deci and Ryan (1987); it the exploratory behavior is combined with the minimum level of primary drive then such behavior will become secondary reinforcement. However according to Butler (1953); exploratory behavior’s effect is kind of more primary as claimed by Butler that exploratory behavior should not be combined with primary drive. Further on the basis of anxiety reduction – pain avoidance to extend the drive theory was voted by several researchers. According to Deci and Ryan (1987); such drive had been named as an exploratory drive by Montgomery however it was named as a drive for visual exploration by Butler; also called as sensory drive by Isaac and boredom drive by many others.
Calling the drives with additional names was strongly criticized by White (1959). He believed that when additional drives are added these must have same attributes like primary drives. Minimizing the drive is the main aim to be achieved which is actually true about exploratory drive as White (1959) stated that animals look out for stimuli to enhance the exploratory drive by drive account. According to Deci and Ryan (1987); the idea behind these theories is that the extrinsic rewards have an influence in changing the person’s way of thinking towards the solution required to put him in direction as required (Carson, 2005). It is the first topic which must be considered to have a negative impact of the rewards over intrinsic motivation. The impact of rewards on the people have been argued like how the rewards can alter the focus of a person from job task assigned to him towards the reward and how the rewards can act as a controlling or influencing factor. Reward as a controlling factor directs to a new discussion as it helps to change the focus of people and how the creativity of people which can be destabilized by incorporating the rewards. Further there is another discussion which cannot be neglected that if the rewards and the penalties are part of extrinsic rewards or if these rewards and penalties can be carried to either have short term impact of long term impact. It was stated by Beck (2000); that intrinsic and extrinsic motivations are not linked with employees’ levels but it is actually linked with the nature of employees working for an organization at different levels. Furthermore he stated four different types of nature existing in each and every individual. According to Beck; rational economic person is an individual who is always motivated by external means which are motivational elements extrinsic in nature; as the individuals are mostly more worried about the financial benefits and rewards. Social person is an individual who likes to socialize and feels comfortable at job due to the environment of work place. However the self - actualization people are mostly motivated by the intrinsic means in order to attain success. These individuals are willing to give their maximum efforts towards the tasks assigned to them. Complex person in an individual who is never motivated by no means. Motivational level of such person always vary with time hence different approaches are always required to keep him motivated.
2.2.3 Theory of self - identification
According to Kohn (1999); this theory have been adopted for managing the individuals’ freedom which can be controlled by rewards. The uniqueness of this theory is that it facilitates the employees to work with freedom. According to Ryan and Deci; freedom and self – identification are linked with the intrinsic and extrinsic motivation. It is of high importance that the employees are motivated either intrinsically or extrinsically by the organization’s management. According to Deci and Gagne (2005); evaluation theory is comprised of both the freedom and controlled motivation and the limitations of both cannot be visualized.
Employees who have the freedom and feels independent while doing their work tasks are also known as the ones working as per their choices. Employee who do not feel the independency as they are controlled will not be able to perform effectively as expected from them. According to Deci and Gagne (2005); the organization’s behavior of controlling the employees creates pressure in employees which ultimately results as employees less interests towards the jobs assigned to them. Theory’s greatest part is that it offers extrinsic motivation in several different ranges and varies according to the difference in employees’ experiences. According to Deci and Ryan (2000) and Deci and Gagne (2005); this helps in showing what motivation can works best for which company’s employee. Motivation resulted from employee who is working with freedom is also as per his choice. However when the employees are controlled by the company; the pressure enforced on them actually creates limitations for them as stated by Deci and Gagne (2005). According to Deci and Ryan (2000) and Deci and Gagne (2005); self – identification theory facilitates the management in judging which motivational factor can work best in what kind of employees.
The idea behind this theory is to explore the extrinsic rewards effectiveness on the employees’ motivation. This theory also supports in differentiating the intrinsic and extrinsic attributes from each other. From the below figure; it can be observed that the external means leads to external rewards. Same can be observed by the support of theory of self – identification as stated by Deci and Gagne (2005) and Deci and Ryan (2000).
illustration not visible in this excerpt
Source: healtheirtogather.info1
While discussing the relation between intrinsic and extrinsic motivation; it is observed that the relation does not have any impact on the relationship with employees however it has an impact on individual’s nature. Human behavior can be categorized into four types. First type is of rational economic person is an individual who believes in rewards which are monetary in nature. Money as a motivational factor works best for them as salary and bonuses are of significant importance for them. Second type is of social person who is an individual who get his motivation from the work environment and for such people the environment must be comfortable to keep them motivated. Third type is of self – actualization; such individual is motivated by the interesting nature of work tasks assigned him. They respect their achievements and their spirits are high which motivates them to keep on performing well. Last type of human is the complex person who is never motivated and his motivational level varies from time to time. Hence keeping different motivational levels, management needs to keep in account these difference while working on effective reward systems (Deci and Gagne, 2005) and (Deci and Ryan, 2000).
2.2.4 Herzberg’s theory of two factors.
According to Patel (2004); Herzberg presented his theory of two factors of motivation to enhance the performance of employees. Herzberg presented two factors which were motivation factors and hygiene factors in order to keep the different types of employees motivated. Below are the two assumptions of Herzberg for two factors theory.
- Satisfaction’s opposite is actually absence of satisfaction
- Dissatisfaction’s opposite is actually absence of dissatisfaction
- This can be explained with an example. For minimizing the dissatisfaction increase in salary does not mean it will increase satisfaction and vice versa
- Eradicating reasons of dissatisfaction will not increase satisfaction and vice versa
illustration not visible in this excerpt
Source: https://www.linkedin.com/pulse/herzbergs-two-factor-theory-applying-workplace-jaimee-whitehead
This theory has been criticized in many different ways as the theory is only based on assumption that employees who are happy will perform well however this theory totally neglect the individual’s attributes as one motivational factor motivating one employees will be cause of demotivation for the other employees as criticized by Gary (2013). Furthermore as per the assumption of Herzberg; the increase in salary will enhance the performance of employees as it minimizes the dissatisfaction from employees. However there has been cases in which it was observed that the additional incentives at time divert the focus of employees from one particular task to another which ultimately lead to decrease in performance level under different situations (Turnbull and Blyton; 1992).
[...]
1 see https://en.wikiversity.org/wiki/Motivation_and_emotion/Book/2013/Uninteresting_tasks_and_motivation#/media/File:OIT_Continuum.jpg, taken from Ryan, R. M., & Deci, E. L. (2000). Self-Determination Theory and the Facilitation of Intrinsic Motvation, Social Development, and Well-Being. American Psychologist, 55 (1), 68-78.
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