CHAPTER TWO

LITERATURE REVIEW

INTRODUCTION

Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps. Precisely, the chapter will be considered in three sub-headings:

• Conceptual Framework
• Theoretical Framework
• Empirical Framework

2.1 CONCEPTUAL FRAMEWORK

Work Place Motivation

As per the study of Mikkelsen et al. (2017), “the motivation concept referred to internal factors that impel action and to external factors that can act as inducements to action”. They further suggested that direction, intensity, and duration are the three-action influenced by motivation. Thus, understanding different employees’ motivational style will help to explain and predict the affect, cognition, and behavior patterns that are displayed by different employee (Hsiung & Tsai, 2017). Kanfer et al.(2017) argued that some common words like goals, incentives, needs, aims, wishes, wants or desires are included in motivation. According to Cameron and Green (2019) the inner force which gives energy to the individuals for the accomplishment of organizational and personal goals is known as motivation. Hence, work motivation has been referred as the process that contributes to the initiation and maintaining goal-directed performance(Larsson et al., 2018). The importance of achievement motivation in work is seen as focusing in intrinsic motivation, the level of the “motivational state in which individuals is attracted to and energized by the task itself might be obtained (Beal, 2017). This was supported by Jacoby (2018) who suggested that people can be motivated by the nature of work itself. According to the Cameron and Green (2019) the acquisition of abilities and skills of people can be affected by the motivation. Thus, through mastery and performance goals, motivation will prompt a focus on self rather than on task (Durodolu, 2016). As per the study of Breaugh et al. (2018) employee motivation can be of two types the first type is Extrinsic and the other one is intrinsic motivation. The people who have extrinsic motivation are the one who never interested in doing any kind of odd jobs, but they get ready just for the sake of getting some extra incentives such as wages or promotion, some praises and appreciations (Larsson et al., 2018). Whereas the people with intrinsic motivation are internally motivated or are self-motivated people, and for the performing their job well they just don’t need extra praise wage or any other rewards. They actually enjoy doing the challenging jobs and complete their targets efficiently (Jacoby, 2018). Though the best form of motivation is intrinsic one because it has long term and strong effects on employees because according to the (Vanek, 2017) the intrinsic motivation cannot be imposed by the management on employee as it is inherited in employees. According to another study of Froese et al.(2016), the turnover intention of the employees is also depending on effects of individual background. Through the motivation the employee turnover can be decreased.According to the Cook and Artino Jr (2016) the goals, incentives, needs or wants, aims and wishes or desires are the common enclosure of words that motivation have. So, for the achievement of goals the individual must be energetic and motivated effectively and focused on accomplishing their goals, and for the realization of objectives they agree to utilize their energies for long time period. Moodley and Hove (2018) have found that the employee turnover can be affected by the employee motivation, and they also stated that the demotivated employee tends to leave the organization. The organizational commitment job satisfaction and the employee motivation are the important factors which plays an important role in employee turnover. In an organization the most dedicated employees can give the best performance. There are different factors which effects the employee performance such as structure of organization, job security, trainings, compensations, employee satisfaction and motivation and appraisals, but the current study will focus on employee motivation as the employee performance can be highly affected by the employee motivation. According to the Froese et al. (2016) in an organization the managers can increase the effectiveness of job administration among other employees by having the employee motivation as procedure.

Working Environment

For the explanation of work environment, a lot of studies were conducted in different aspects like employee retention job satisfaction organizational commitment employee turnover and job involvement. According to the Kim and Yun (2015) in employee retention the most important factor is the work environment. As per the study of Abhigna and Subramanyam (2017) we generally discuss the work environment in industrial point of view and focused on different aspects like heavy lifts the exposure of toxic substances and noise. The different characteristics of work environment in production and service sector are different which is quite interesting because in service sector the organizations staff directly deals with the customers or consumers. Interaction with customers depends on the nature of business or job it may increase or decrease accordingly. And these interactions of employees and clients ultimately move from physical dimension to psychological. The psychological work environment contains decision and latitude, stress, support and workload. In an organization for keeping the employee committed it is very important to recognize the employee needs and give them healthy work environment. Brum (2007)has stated that when people feel that they are making contribution in the performance of organization then they stay for long in an organization and strive to work because of positive work environment. The talented employees of these organizations drag together for achieving the organizational goals. According to the study of Kim and Yun (2015) in the decision making of employee either to stay in or leave the job there is an important role of work environment which is also an important factor in employee retention. For example, for the physical and psychological health of employees the noisy work environment is harmful and reduce their productivity. The speech isolation shorts are the abundant audio complains like over hearing the discussion of people and feel the same. Reduction in stress and anxiety are helpful for the environment of an organization. Recognition of responsibilities, work clarity involvement in making different decisions, work challenges, coworkers support and efficient managers are included in work environment. The employee leads to look forward for the new opportunities because the lack of such environment. In this environment the employee feels connected with organization in all aspects. The employees need an environment where they have continuous learning, improvement in their skills provision of certification and higher studies etc. The work life balance includes wellness of employees, free vacations, alteration of work schedule telecommunication and flexible hours, which can be provided by the organization.

Training

According to Cloutier et al.(2015) employee retention the most important factor is investment in training the employee. There is an incentive for the organization to invest for training of those employees who can contribute in increasing the output of organization. For the talented employees’ organizations are the development escalation,with the help of proficiency analysis, input of employee interest, and for the formulation of actions and plans the multisource capabilities appraisal and development s required. According to Riley et al. (2017) in the form of trainings individuals and firms make investments on human capital. The employee skills can be increased with the help of trainings. After hiring of new employees, the organization must start a training program to increase their skills. Kim and Yun (2015) has stated that there is perception that employees want to acquire new knowledge skills for the job application and share with their colleagues. According to the study of Abhigna and Subramanyam (2017) employees can get specialized skills and different techniques from trainings which help them in rectifying the performance deficiencies. Whereas the abilities and skills provided by the development are the one which organization will need in future. Improvement in basic literacy, problem solving, technological knowledge and interpersonal communication all are the part of skill development. According to the Riley et al. (2017) in market for meeting the global challenges of market, it is important for organizations to provide modern knowledge to their employees to increase their performance. According to the survey of Kim and Yun (2015) regarding training large manufacturing firm have high tendency to provide trainings as multinational firms train their employees with high performance or with approach of flexible production. According to the literature the organizations or companies which spends more on human resources for the establishment of high performance can easily retain their talented staff. The firms which are more trained to tackle the advanced technical changes have shown progress in their output as compare to the firms who never face any competitors in past. Abhigna and Subramanyam (2017) has stated that when organizations give more benefits and adopt the innovative techniques to train its employees as compare to other firms in the market, they retain their staff for long time period. According to Achieng’Nyaura and Omwenga (2016), for employees, training is basically a sign of organizational commitment. It’s the part of agreement in leading firms’ that career and skill development, and an inclusive range of trainings are the important factors for retention and attraction to form a flexible strategy of firm for the success of technological and sophisticated employees in an automatic economy. According to the Brum (2007) trainings are inversely related with the employee turnover ratio means if number of training increased it will lower the turnover rate. Its means that if a worker stay long in organization will acquire number of trainings. As per the opinion of workers productivity can be increased with the help of skill related trainings. Organization will increase employee wages if they have high productivity which ultimately help in employ retention. In employee retention the main factor is training because it is helpful in reducing the turnover rate. Organizations should give a chance to their employees to enhance and improve their skills with the help of trainings. A lot of firms be afraid that when their employees will be well trained, they will start searching other opportunities and quit their job. The resources on which the organizational success depends should not be limited. Development and carrier growth are the important part of every one’s career. In employee growth the key factor which an employee looks for himself or herself is work profile, which must not be too high or too low. With the help of trainings, the employee can increase their performance with advanced skills (Dhar, 2015). Whereas the development is a process to provide different capabilities that can be helpful for employees and organization in future (Teece et al., 2016).

Employee Commitment:

Employee commitment it is an attachment where the employee has for their own organization from their experiences. It will indicate the level of satisfaction, and engagement among employees. It is also a crucial to assess employee commitment since it is a key element in organizational success. The commitment is defined as the steadying strength which is acts to retain the behavioral move toward in the fairness conditions and the psychological condition of the commitment are the bonds of individual towards organization (Allen, 1990).

Employee Productivity

One of the key issues that most organizations face nowadays is the need to improve employee productivity. Employee productivity is an assessment of the efficiency of a worker or group of workers. In actual terms, productivity is a component which directly affects the company’s profits (Gummesson, 1998; Sels et al., 2006). Productivity may be evaluated in terms of the output of an employee in a specific period of time. Typically, the productivity of a given worker will be assessed relative to an average out for employees doing similar work. It can also be assessed according to the amount of units of a product or service that an employee handles in a defined time frame (Piana, 2001). As the success of an organization relies mainly on the productivity of its employees, therefore, employee productivity has become an important objective for businesses (Cato & Gordon, 2009; Gummesson, 1998; Sharma & Sharma, 2014). Many studies have focused on one or two ways to measure productivity and since many different approaches are taken, it can be challenging to compare the results (Nollman, 2013). Overall, there is a lack of an effective and standardized way to assess productivity. According to Sharma and Sharma (2014), employee productivity is based on the amount of time that an employee is physically present at his/ her job, besides the extent to which he/ she is “mentally present” or efficiently working during the presence at the job. Companies should address such issues in order to ensure high worker productivity. Ferreira and Du Plessis (2009) indicated that productivity can be evaluated in terms of the time spentby an employee actively executing the job he or she was hired to do, in order to produce the desired outcomes expected from an employee’s job description. Previous literature has clearly discussed the advantages of employee productivity which would lead to organizational success. According to Sharma and Sharma (2014), higher productivity results in economic growth, higher profitability, and social progress. It is only by increasing productivity, employees can obtain better wages/ salaries, working conditions and larger employment opportunities. Cato and Gordon (2009) also demonstrated that the alignment of the strategic vision to employee productivity is a key contributor to the success of an organization. This alignment as a result would motivate and inspire employees to be more creative, and this ultimately can improve their performance effectiveness to accomplish organizational goals and objectives (Morales et al., 2001; Obdulio, 2014). Moreover, higher productivity tends to increase the competitive advantage through reduction in costs and improvement in quality of output. The above discussion has clearly discussed the concept of employee productivity. It indicates that employee productivity is a key determinant of organizational profitability and success. In the following section, work engagement as key human resource practice and its effect on employee productivity is presented.

Work Engagement

Employee work engagement is one of the main business priorities for organizational executives. According to McEwen (2011), engagement depends on employees’ perceptions and evaluations of their working experience, including their employer, organizational leaders, the job itself, and work environment. Echols (2005) advised that in order to enhance employee engagement, managers should pay attention to the skills, knowledge and talents of their staff. The author added that when employees are aware of their strengths and talents, their level of engagement will be higher, and this ultimately leads to better performance. Rothmann and Storm (2003) demonstrated that work engagement can be reflected through the energy, behavioural satisfaction, efficacy and involvement. Swaminathan and Rajasekaran (2010) also concluded that engagement results from employee satisfaction and work motivation. Several definitions of employee engagement exist in the literature. Fleming and Asplund (2007, p. 2) describes employee engagement as, “the ability to capture the heads, hearts, and souls of your employees to instil an intrinsic desire and passion for excellence”. Certain scholars also viewed employee engagement as a construct which consists of cognitive, emotional, and behavioural elements that are related to the role of employee performance (Shuck et al., 2011). It reflects the commitment and involvement of an employee towards his/ her work that is aimed to improve organizational performance (Sundaray, 2011). Furthermore, Bakker and Demerouti (2008) defined engagement as “a positive, fulfilling, work-related state of mind that is characterized by Vigor, dedication, and absorption”. According to Bakker and Demerouti (2008), Vigor can be described in terms of an employee’s levels of energy and the mental resilience while doing his her work. Shirom (2003) indicated that Vigor refers to the mental and physical health of an employee. On the other hand, Harpaz and Snir (2014) expressed dedication in terms of being highly involved in the work and is reflected through the feelings of enthusiasm, challenge, and significance. The other dimension of work engagement which is known as absorption was previously described by being fully focused and happily attached in one’s work, whereby the employee feels that time passes quickly and has difficulties with detaching himself from work (Truss et al., 2013). Employee engagement is a key organizational issue that should be strictly given enormous consideration by organizational management in the current scenario of challenging business environment (Saxena & Srivastava, 2015). This is because highly engaged and motivated employees reflect the core values of the organization, and this resultantly reinforces overall brand equity (Ramanujam, 2014). The review of literature reveals that engaged employees yield positive organizational outcomes. In the rapidly changing markets, business leaders recognize that highly engaged employees can increase their productivity and firm performance (Bakker & Demerouti, 2008; Markos & Sridevi, 2010). In other words, engaged employees feel passionate about their work, happy to work in their organization, and have the enthusiasm to go to their work every day (Ramanujam, 2014). Besides that, employees who are engaged in their work are deemed very important for their organizations in maintaining competitive advantages; coping with changes, and ensuring work innovations. Past studies (Abraham, 2012; Anitha, 2014; Echols, 2005; Haid & Sims, 2009) found that work engagement had a significant positive effect on employee productivity. According to Zahargier and Balasundaram (2011), a successful and highly productive business can be achieved by engaging its employees in improving their performance. Similarly, Harter et al. (2002) conducted a meta-analysis of data on 7,939 business units from 36 firms that represent different sectors and found out employee engagement had a significant positive impact on increased productivity. In line with the study of Markos and Sridevi (2010), employers should consider investing in workforce engagement because it has a positive impact on performance outcomes such as employee productivity

2.2 THEORETICAL FRAMEWORK

Theories of Motivation

It is adequately documented in the literature that several thinkers from Adam Smith to Abraham Maslow and others have studied human behaviour from different perspectives – economic, psychological, behavioural, etc., to understand what motivate people to do the things they do. In the process, they developed several theories of motivation. This section presents a brief review of some of the theories and empirical evidences on the relationship between motivation and productivity. Broadly speaking the theories of motivation can be classified in to content theories and process theories. The former deals with what motivates and are concerned with identifying people’s needs and their relative strengths, and the goals they pursue in order to satisfy these needs. The main content theories include Maslow’s hierarchy needs; Herzberg’s two factor theory and McClelland’s achievement motivation theory. Process theories on the other hand, place emphasis on the actual process of motivation. These theories are concerned with the relationships among the dynamic variables which make up motivation and with how behaviour is initiated, directed and sustained. Examples are expectancy –based models, equity theory goal theory and attribution theory (Uzonna, 2013). The most popular theory of motivation in the classical literature is perhaps that of a United States psychologist, Abraham Maslow’s Hierarchy of Needs Theory. Maslow (1943) discussed five levels of employee needs: physiological, safety and security, social, esteem or ego and self- actualizion. According to this theory, people have many needs which motivate them to work, that those needs are arranged in a hierarchical manner in such a way that lower level needs (physiological and safety) had to be satisfied before the next higher level social need would motivate employees to work hard and increase productivity. The second theory of motivation is the two factor theory or motivator and hygiene theory developed by Frederick Herzberg (Herzberg, 1966). Motivators or intrinsic factors such as drive for achievement and advancement, being treated in a caring and considerate manner and receiving positive recognition are inherent in the job itself and which the individual enjoys as a result of successfully completing the task, produce job satisfaction and motivate employees to work harder. Hygiene or extrinsic factors, such as salary, benefits and job security are external to the task and often determined at the organizational level can lead to dissatisfaction and lack of motivation if not present in positive degrees. Uzonna (2013) argues that one important element of Herzberg’s theory is that knowing employee needs can help us motivate today’s young, ambitious and knowledge and technology-based workers. Given the fact that these workers already command high paying jobs, we can infer that money or cash rewards alone does not provide enough of an incentive as a motivator for performance. This implies that to motivate workers, organizations need to look beyond monetary rewards. Victor Vroom developed the expectancy theory based on the belief that employee effort will lead to performance and performance will lead to rewards. Rewards may be either positive or negative. The more positive the reward the more likely the employee will be highly motivated. Conversely, the more negative the reward the less likely the employee will be motivated to work harder (Vroom, 1964, as cited in Malik, et al, 2011: 39). This theory was further developed by Porter and Lawler (1968). Another theory is the equity theory of motivation developed in the early 1960’s by J. Stacey Adams, a psychologist. The theory proposes that a person's motivation is based on what he or she considers being fair when compared to others (Redmond & Housell, 2015). It recognizes that motivation can be affected through an individual's perception of fair treatment in social exchanges. When compared to other people, individuals want to be compensated fairly for their contributions to the organization. A person's beliefs regarding what is fair and what is not can affect his motivation, attitudes and behaviours which will in turn affect subsequent performance. When applied to the workplace, equity theory focuses on an employee's work compensation relationship or "exchange relationship" as well as that employee's attempt to minimize any sense of unfairness that might result. According to the theory, underpayment inequity induces anger and distress while over payment induces guilt. (Redmond & Housell, 2015). Lastly, B.F. Skinner's reinforcement theory states that those employee behaviours that lead to positive outcomes will be repeated and behaviours that lead to negative outcomes will not be repeated (Skinner, 1953, as cited in Malik, et. al., 2011:39). A reinforcer can therefore be seen as a reward or incentive to behave in a certain way. Reinforcers may be tangible like food or money and they can be intangible like approval or praise. The implication is that organizations should reinforce employee behaviours that lead to positive outcomes and discourage those behaviours that lead to negative outcomes. This can be achieved through staff training and development, among other strategies.

Expectancy Theory

Vroom’s original presentation of expectancy theory placed it in the mainstream of contemporary motivation theory (Moorhead & Griffin, 1992). Vroom (1964) defined expectancy as “a momentary belief concerning the likelihood that a particular act will precede a particular outcome”. His formulation suggested that job performance (P) is the result of the interaction of two components, force (F) and ability (A), with ability representing the potential for performing

some task. The force to perform an act is the algebraic sum of the products of the valences of all outcomes (E) and the valence or rewards of those outcomes (V). In equation form, the theory reads: P= f(F*A) (cited in Kilgore, 1997). Vroom’s model emphasizes an individual’s capacity or ability,rather than willingness, to perform a specific task. Since it was first introduced, the model has been

refined and extended. An exception is the version of expectancy theory presented by Porter and Lawler (1968, as cited in Moorhead & Griffin, 1992), which takes a novel view of the relationship between employee satisfaction and performance. Although the conventional wisdom was that satisfaction leads to performance, Porter and Lawler argued the reverse: if rewards are adequate,high levels of performance may lead to satisfaction. The Porter-Lawler extension includes abilities,traits, and role perceptions (how well the individual understands his or her job). At the beginning of the motivation cycle, effort is a function of the value of the potential reward for the employee (its valence) and the perceived effort-reward probability expectancy).

2.3 EMPIRICAL FRAMEWORK

Studies using data collected in the United Kingdom also attests to the role of nonfinancial incentives in motivating employees to high productivity. In a 2009 McKinsey Quarterly survey of 1,047 executives, managers and employees from a range of sectors in the United Kingdom (Vrancic, 2015), the respondents view three non-financial motivators: praise from immediate managers, leadership attention (for example, one-on-one conversations) and a chance to lead projects or task forces as no less or even more effective motivators than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options. In addition, it was also found that the survey’s top three nonfinancial motivators play critical roles in making employees feel that their companies value them, take their well-being seriously and strive to create opportunities for career growth. According to these researchers, these themes recur constantly in most studies on ways to motivate and engage employees (Vrancic, 2015).

Another study conducted by Ng, et. al. (2010) as cited in Singh, et. al. (2012) sought to study the expectations and priorities of young employees. They found that this category of workers rated opportunities for career advancement as the most desirable work related attribute followed by good people to relate to and opportunities for good training and development. According to these researchers, surprisingly, pay, benefits and job security were ranked in the middle behind career advancement. In Pakistan, Tausif (2012, as cited in Haider, et al., 2015:348) conducted a survey among public school teachers and found that non-financial rewards were essential in developing employees’ job satisfaction and motivation. Similarly, Barton (2006, as cited in Haider, et al., 2015: 348) found that employee recognition is the most important factor among non-financial rewards in enhancing job satisfaction. Bull (2005, as cited in Haider, et al., 2015: 348) conducted a study and concluded that challenging jobs enhanced employee job satisfaction.