THE EFFECT OF FINANCIAL AND NON-FINANCIAL INCENTIVES ON STAFF PRODUCTIVITY

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 INTRODUCTION

There are many studies in the literature, which examine the financial and non-financial incentives and their effects on several variables. For example, Al-Nsour (2012) examined the effects of financial and non-financial incentives at Jordanian university in terms of organizational performance. A significant relation was observed between financial and non-financial incentives and organizational performance in accordance with the data obtained from this study. Moreover, the study showed that financial incentives were highly regarded than non-financial incentives. Naldöken et al. (2011) examined the financial incentive application on the motivations of employees at a state hospital in terms of their performance. It was concluded in the study that the medical employees, who benefited from these financial incentives were positively motivated by this application. Scheepers (2009) also examined the extent to which incentive systems affected the motivations of employees at information and communication technology firms. In accordance with the results of the study, an entrepreneurial reward system tends to focus on formal acknowledgement, social incentives and organizational freedom of employees to encourage corporate entrepreneurship. Pouliakas (2008) tested the non-monotonic effect of monetary incentives on job satisfaction. In the study, 1998-2005 of the British Household Panel Survey was used to investigate the ceteris paribus association between the intensity of bonus/profit-sharing payments and the utility derived from work. According to the findings of the study, small amounts of financial incentives resulted a highly important effect on employee satisfaction, whereas large amounts of financial incentives affect them positively. Therefore, the researcher suggested no financial incentive unless sufficient amount of financial incentives were provided. Pınar et al. (2008) conducted surveys to 796 blue-collar employees at several institutions in order to determine the elements, which affect the job satisfaction of employees. According to the findings of the study, the most affected dimension in terms of job satisfactions of blue-collar employees was the job itself, and the second dimension was the payment and promotions. Arnolds and Venter (2007) made an effort to determine the factors, which affected the motivations of blue-collar employees at manufacturing and clothing retail firms. According to the findings of the study, the most important individual motivational reward for blue-collar employees is paid holidays and for frontline employees, retirement plans. The most important motivational reward category for both blue-collar and frontline employees is fringe benefits (paid holidays, sick leave and housing loans). McDonald et al. (2007) examined the effects of financial incentives on the quality of care on practice organization, clinical autonomy, and internal motivation of doctors and nurses working in primary care. Alwabel (2005) examined the role of financial and non-financial incentives in terms of increasing the performance of security officers during pilgrimage in their points of view. Kaya (2007) determined the factors affecting job satisfaction levels of employees at hotel managements. According to the results of the study, the most important factors affecting the job satisfaction levels were determined as the officers, physical and non-physical factors of its own nature and communication and integrity respectively. Based on these findings, the conclusion was that non-financial incentives were more effective then financial incentives in terms of the attitudes of employees. According to the results of Career and Qualification Principles Survey conducted by the United States of America Career and Qualification Principles in 2005, it was determined that the most important element motivating both the employees and employers were job satisfaction and personal satisfaction for both groups. According to the results of the study, the financial incentives are placed as 8th and 12th in the sequence of elements affecting the motivation. In other words, non-financial incentives are given much importance than financial incentives (Coşkun & Dulkadiroğlu, 2009: 89). Ağırbaş et al. (2005) examined to what extent the head physicians assistants working at hospitals are satisfied by the motivational tools applied in the hospitals and if available motivational tools have an important effect on job satisfaction. In the study, it is seen that no motivational tool provides the expectations of physician managers. It is also concluded in the study that such factors as the decrease of dismissal risk, improving the situations like promotion and appreciation and improving work place opportunities have significant and important effects on job satisfaction statistically. Burgess and Ratto (2003) reviewed the incentive pay to improve public-sector efficiency and the evidence on its effects. The researchers concluded how optimal incentives for public sector differ from private sector and which types of incentives are the most appropriate for public sector. Moreover, the researchers commented on the design of new policies being introduced in the UK public sector in the light of the theoretical arguments and the evidence. Öztürk and Dündar (2003) made an effort to determine the relation between the factors, which motivate the public employees and professional variables at those institutions. According to the findings obtained in the research, it is seen that managers are more motivated by non-financial incentives than financial incentives in public employees; and employees are more motivated by financial incentives than non-financial incentives. Almost all of the public employees state that the appreciation of the actions completed create a feeling of satisfaction and give a positive motivation towards their job. It is also stated that giving an opportunity for promotion of employees and getting their opinions of their area of interest are among the important factors to motivate them for their jobs. Kitapçı and Sezen (2002) investigated the variables, which affect job satisfaction of employees according to their career period. Based on the results of the study, it is seen that the employees with different career periods have also different job satisfaction levels in terms of different variables. According to the findings of the study, the job satisfaction levels of employees in pre-professional trial period (18-24 age group) are affected by working conditions, training given by the premise and payment. Besides, according to the results of the study, the job satisfaction levels of employees in starting and progressing professional period (26-44 age group) are affected by working conditions, connections with colleagues and manager and in the stationery period (45 and above age group) by connections with managers and participatory management. Al-Angari (1999) examined the effects of incentive applications on the performances of employees in Riyadh Region Governorate. The researcher emphasized in the study that positive financial incentives do not satisfy the employees. Al-Wathnani (1998) also examined the impact of incentives on the efficiency of work performance and job satisfaction in security organizations. According to the findings of the study, the most valued incentives by the employees are promotions, financial allowances, leaves, allowances for medical treatment and participation in decision making. The least valued incentives by the employees are verbal appraisal, letters of thanks and financial allowances for work at distant and isolated areas. Again, according to the results of the study, the most important incentive among all is the financial ones. Besides, non-financial incentives are also determined to be effective on the increase of performance and job satisfaction. Al-Johani (1997) made an assessment on the incentive system used at their institutions including the opinions of employees at Jeddah Migration Office. According to the findings of the study, it is emphasized that there is no great difference among the opinions of employees in terms of incentives and the most important incentives are financial incentives and then promotion. Hermalin and Weisbach (1991) examined the effect of administrative structure and direct incentives on company performance. Hilman (1987) examined the effects of financial incentives at medical institutions in terms of attitudes of doctors and their service. The researcher determined as a result of the analysis by taking the opinions of 302 doctors into consideration that financial incentives have important effects on the attitudes of doctors and service quality. Ryan et al. (1986) examined the effects of financial incentives in terms of controlling expenditures. Solt and Miller (1985) examined the effect of administrative incentives on financial performance in terms of real-estate investment partnerships. Grossman and Hart (1982) determined that the incentive effects of the threat of bankruptcy on the quality of management in a widely held corporation.

2.2 PURE FINANCIAL INCENTIVES

Pure financial incentives are better known as pay for performance (P4P). In theory, P4P is a simple instrument that appeals to a straightforward human response, informed by the relative price mechanism of standard economic theory: i.e. if you pay someone to do a particular thing, they are more likely to do it. Unfortunately, the effectiveness of P4P in applied settings, let alone its cost effectiveness, is less clear cut – Tanenbaum (2009) cites evidence that gives a mixed picture of the effectiveness of P4P. For instance, Rosenthal and Frank (2006), in a review of applications both inside and outside health care, found little evidence of positive effects on quality. Moreover, and more specifically, although Levin-Scherz et al. (2006) found that, under a P4P contract, Partners HealthCare System in Boston significantly improved on its performance indicators for diabetes care compared with Partners and non-Partners plans in other locations, these improvements were not replicated for performance in pediatric asthma care. Many P4P applications might, however, have been insufficiently powered to show much effect. If people are paid enough to do something, we can probably have quite a reasonable degree of confidence that they will do it, a powerful illustration of which has been observed in NHS primary care. In 2004, the government introduced an element of P4P into the contract for paying general practitioners (GPs), by making part of their remuneration dependent on performance against (initially) 146 indicators of clinical quality, practice organization, and patient experience – i.e. the quality and outcomes framework, or QOF. The new P4P incentives were comprised of mostly additional payments, worth up to £1 billion per year in total, 20 percent of the total GP budget at that time (Roland, 2004). Thus, presumably in order to get the acquiescence of the GPs, there were no immediate losers (99.6 percent of GPs signed up for the new contract, even though participation was voluntary (Campbell et al., 2009)). Doran et al. (2006) observed that during the first year of this P4P mechanism, across the quality indicators, an average of 83.4 percent of patients were assessed against them. GP practices earned an average of £76,200 from the performance mechanism, which greatly exceeded what the government had anticipated. Prior to the 2004 contract, each GP typically earned £70,000 – £75,000 per annum; after the introduction of P4P, their average income rose by £23,000. The GPs clearly responded to the incentives, which, if the chosen quality indicators genuinely improved the quality of care, and there was not substantial gaming activity by GPs, presumably improved primary health care delivery, at least over the period studied. Although Doran et al. (2006) did not find significant evidence of GPs gaming the system by inappropriately excluding patients who have missed the targets, other forms of gaming cannot of course be ruled out. For instance, pay for performance may still encourage a focus on relatively healthy patients – e.g. if one of the targets is to control cholesterol below a particular level for a certain proportion of patients, one might concentrate on reducing cholesterol in those who are just above the threshold (with a possible increased readiness to prescribe cost-ineffective care), even though population health might be better served by trying to reduce cholesterol for those with levels far above the threshold. Similarly, performance incentives may take time away from sicker or less compliant patients, whose indicators are harder to improve. It is possible that more blatant forms of cheating will also occur, such as doctors recording lower blood pressure measurements than their patients actually have, perhaps necessitating a process of aggressive monitoring and inspection, which inevitably adds to costs. Moreover, regarding the apparent effectiveness of the GP contract, Campbell et al. (2007) struck a note of caution by pointing out that a range of initiatives that had been implemented before the introduction of P4P, including national standard setting for the treatment of major chronic diseases, were already contributing to improvements in process quality. They found that, for asthma, diabetes and coronary heart disease, care had improved significantly better than the longer-term trend for the former two illnesses between 2003 and 2005, but not for the latter. Campbell et al. (2009) reported a follow-up study, and found that by 2007 the rate of improvement had slowed down for all three conditions, to the point where the improvements were increasing at only the pre-2004 rate. The authors suggest several possible reasons for why the improvement in performance slowed down, including the fact that near-maximal performance scores had already been achieved against at least some of the criteria, and that the structure of the incentive mechanism did not reward improvements that exceeded the initial targets. This demonstrates that P4P mechanisms have to be cleverly designed in order to try to secure a sustained effect, but also places a cautionary mark against relying on evidence of short term effect as support for advocating strongly for any behavioural change initiative. On balance, it appears that P4P can be effective in motivating people to perform incentivised actions, if the incentive is meaningful to them and outweighs the inconveniences that a change in behaviour entails, at least for as long as the incentive remains meaningful to them and there is sufficient scope for them to change their behaviour (e.g. if they are doing the best that they realistically can against a performance indicator, then they are unlikely to be able to improve further). The design of the incentive is therefore a key consideration. Moreover, it may be the case that P4P is potentially most effective when targeted specifically at individuals (e.g. GPs) in relation to tightly specified discrete actions, rather than at the level of general organisational-level change. For pure financial incentives to be meaningful, however, comes with considerable cost implications, which places a question mark against the cost-effectiveness of this instrument. Even if they were found to represent good value for money, their impact on the health care budget remains a highly relevant consideration in a cost-constrained environment. We might therefore find it fruitful to turn to other forms of performance management where effectiveness might not depend on such a substantial monetary input.

2.3 NON-FINANCIAL REWARDS

A reward is defined as all of the monetary, non-monetary, and psychological payments that an organization provides for its employees (Bartol and Locke, 2000). A reward is presented after the occurrence of an action with the intent to cause the behaviour to occur again. This is done by associating positive meaning to the behaviour and it represents what the individuals want to obtain from work or what they perceive. A job reward has been found to be a strong determinant of job satisfaction and also rewards are significantly related to professionalism. Non-financial rewards are the non-monetary gains that influence people through non-material rewards like; giving more responsibility, promotion, praise and recognition in public (Musaazi, 2002). Maicibi (2007) in his definition of the same includes indirect financial rewards arising from work itself, such as; achievement and autonomy. Such non-monetary rewards are believed in one way or the other to affect job commitment either negatively or positively. Non-financial rewards tend to attract highly qualified and competent people who are likely to be highly committed to the achievement of organizational goals. According to Armstrong (2009) talking on the role of non-financial rewards in enhancing employees‟ commitment and performance on the job observed that “essentially the notion of total reward says that there is more to rewarding people than throwing money at them”. Non-financial rewards can make workers more comfortable on the job. It encourages them to contribute extra effort by developing a deal that addresses a broad of issues. Armstrong (2009) adds that creating a fun, challenging and empowered work environment in which individuals are able to use their abilities to do meaningful jobs for which they are shown appreciation is likely to be a more certain way to enhance motivation, commitment and performance. Maicibi (2003) identified three main types of non monetary rewards that is, the need for power, need for affiliation and need for achievement. If an organization is to make its employees committed on the job the need to give them power in form of promotions and too they should be accepted on the job through recognition, Musaazi (2002) observes that absence of effective reward strategy that considers the needs of employees and their aspirations demoralizes them leading to low job commitment.

2.4 EMPLOYEE COMMITMENT

Newstrom and Davies (2002) define employee commitment as the degree to which an employee identifies with the organization and wants to continue actively participating in it. Like a strong magnetic force attracting one metallic object to another, it is a measure of the employees' willingness to remain with a firm in the future. It often reflects the employees' belief in the mission and goals of the firm, willingness to expend effort in their accomplishment, and intentions to continue working there. Commitment is usually stronger among longer-term employees, those who have experienced personal success in the organization, and those working with a committed employee group. Madigan, Norton and Testa (2009) posit that committed employees would work diligently, conscientiously, provide value, promote the organization's services or products and seek continuous improvement. In exchange, they expect a work environment that fosters growth and empowerment, allows for a better balance of personal and work life, provides the necessary resources to satisfy the needs of customers and provides for their education and training. Employee‟s commitment increases the employee‟s performance and reduces turnover, and thus loyalty of employees depends on the satisfaction of their wants and desires. In organizations, committed employees have been found to be willing to build and maintain long-lasting relationships with their employer. Osterman (2000) posit that employees may be highly skeptical of the management initiatives and both actively and passively resist to the changes, resulting in unsuccessful change efforts, decrease in morale or productivity, and increases in turnover or subsequent organizational failures. Effective management teams need to recognize that positive employee attitudes are often vital to achieving organizational goals. When employees believe that they have the ability to participate in decisions, research suggests there will be a positive impact on the work environment (Lawler, 2008).

2.5 THEORETICAL FOUNDATION

Kilbourn (2006) posits that the theoretical perspective in a research reflects the researcher’s theoretical orientation, which is crucial to interpreting the data in a qualitative study, irrespective of whether it is explicitly or implicitly stated. Several theories are considered to be underpinning the study and include the expectancy theory and the equity theory.

Expectancy Theory

The expectancy theory, suggests that employees are more likely to be motivated to perform when they perceive that there is a strong link between their performance and the reward they receive (Mendonca, 2002). According to Robbins (2003), expectancy theory refers to the strength and attractiveness of individual’s expectation of the outcome produced by performance. The attractiveness of expected reward for given input will determine one’s motivational soundness according to this theory and whether that reward responds to individual’s personal goals. Robbins (2003) explained that there are three relationships; effort – performance, performance – reward and rewards – personal goals which will direct one’s behavior. Expectancy Theory predicts one’s level of motivation depends on the attractiveness of the rewards sought and the probability of obtaining those rewards (Bohlander & Snell, 2004). If employees perceive that they may get valued rewards from the organization, they tend to put greater effort into work. Expectancy Theory includes three dimensions, say, expectancy, instrumentality and valence, the level of all of which must be high if desired behaviors are looked forward to in employees‟ work. Expectancy theory of motivation explains the link between motivation and performance. The theory proposes that performance at individual level depends on high motivation, possession of the necessary skills and abilities and an appropriate role and understanding of that role (Savaneviciene & Stankeviciute, 2010). It is a short step to specify the human resource management practices that encourage high skills and abilities, for example careful selection and high investment in training; high motivation, for example employee involvement and performance-related pay; and an appropriate role structure and role perception, for example job design and extensive communication and feedback. According to Vroom (1964) “the effects of motivation on performance are dependent on the level of ability of the worker, and the relationship of ability to performance is dependent on the motivation of the worker.” The effects of ability and motivation on performance are not additive but interactive. In an organizational context employees are often evaluated by their performance. If an employee believes that the effort given will lead to performance which is acknowledged by the management they will try to put their best efforts into practice. This leads to the expectancy that great effort will lead to performance which is noticed and rewarded. Instrumentality is used to explain the suitability of the rewards to performance. If the outcome (rewards) is corresponding to individual‟s personal goals a positive emotional attitude towards the outcomes (rewards) will be developed. Ramlall (2004) explained that an individual estimates an outcome to be positively valence once the outcome is considered wanted in other words once the reward matches one‟s personal goals. Robbins (2003) said that the expectancy theory gives good explanation why employees are not motivated; they might feel that the excellent performance is not acknowledged in the organization due to several reasons. If the organization‟s performance appraisal system is created to evaluate non-performance related factors such as tenure, an individual may feel that no matter how much they work they will not be rewarded. Employees may also feel that the supervisor doesn’t like them and therefore they are not given fair appraisals. Employees may think that they don’t have the needed competencies to gain high performance levels which will be rewarded. The most pessimistic view is that the great performance will never be acknowledged in the organizational context

Equity Theory

Equity theory deals strongly with the aspects of organizational justice, whether the individuals feel that they are treated fairly at work or not. The felt equity or inequity will impact their level of effort given in the work environment (Arnold et al., 2010). Ramlall (2004) posits that an individual on employee – employer relationship evaluates not only the benefits and rewards he or she receives and whether the input given to the organization is in balance with the output but also the relevance of inputs given and outputs received by other employees inside or outside the employing organization. Individual inputs can be education, effort, experience, and competence in comparison to outputs such as salary, recognition and salary increases. If an individual notices an imbalance on the input - outcome ratio according to his or her own experiences and in comparison to the others, tension is accumulated. Arnold et al., (2010) noted that individuals who feel under rewarded will have stronger, negative feelings than the ones who are over rewarded. If inequity is met in the employee-employer relationship individuals are likely to change their inputs to correspond the outcomes i.e lower the work effort to equal the outcomes, change the referent to which they are comparing the felt inequity or distort perceptions of self or others.

2.6 OPPORTUNITY FOR CAREER ADVANCEMENT

Lack of opportunity for advancement or growth can cause a high turnover rate for any organization. If the job is basically a dead-end proposition, this should be explained before hiring so as not to mislead the employee. The job should be described precisely, without raising false hopes for growth and advancement in the position. Since employees generally want to do a good job, it follows that they also want to be appreciated and recognized for their work. Even the most seasoned employee needs to be told what he or she is doing is right once in a while (Shamsuzzoha, 2007). Lack of opportunity for advancement through seniority or otherwise may result in dissatisfaction that simmers in an employee‟s mind until he or she finally quits. In the case of jobs having no real future, applicants should receive a full explanation before they are hired. If an organization does not have chances for promotion of their employees, they may quickly lose this resource to others. Promotion chances are the degree of potential occupational mobility within an organization. Promotional chances reduce turnover since an employee can stay on hopefully eyeing a vacancy. Promotion of staff is a motivator in the sense that an employee is satisfied even as he performs his duties. With job satisfaction turnover is highly reduced (Cascio, 2002). Commitment to the organization is degraded if there is a perception of under handed methods in promotion activities ( Mosadeghrad et al.,2008) Al-Ahmadi (2002) established that employees demonstrate greater levels of satisfaction and commitment if they are given ample opportunity for personal as well as professional growth in their organization. According to Friday and Friday (2003), satisfaction with promotion determines employees‟ attitudes toward the organization’s promotion policies and practices. Promotion provides employees with opportunities for personal growth, more responsibilities and increased social status. Research indicates that employees who observe that promotion decisions are made in a fair and just manner are most likely to experience job satisfaction Growth and development are the integral part of every individual’s career. If employees cannot foresee their path of career development in their current organization, there are chances that they will leave the organization as soon as they get an opportunity (Bratton and Gold, 2003). The important factors in employee growth that an employee looks for himself are work profile, personal growth and dreams, and training and development. Career development is vital for both the employees and employers. Career development is mutual beneficial process because it gives imperative outcomes to employer and employees. To gain and maintain competitive advantage organizations required talented and productive employees and these employees need career development to enhance and cultivate their competencies (Prince, 2005).

2.7 EMPLOYEE COMMITMENT

Mullins (2009) view employee commitment as encapsulating by giving all of one-self while at work. They also state that employee commitment entails things such as using time constructively, attention to detail, making that extra effort, accepting change, cooperation with others, self-development, respecting trust, pride in abilities, seeking improvements and giving loyal support. Employees today are increasingly self-assured of their value to employers, and would consciously choose to work for those organizations that meet the above workplace expectations. Employee commitment is important because high levels of commitment lead to several favorable organizational outcomes. It reflects the extent to which employee‟s identify with and organization and is committed to its goals. According to Tolentino (2004) Sustained productivity improvement depends on the enterprise‟s human capital (the skills, knowledge, competencies and attitudes that reside in the individual employee of the enterprise) and its social capital (trust and confidence, communication, cooperative working dynamics and interaction, partnership, shared values, teamwork, etc. among these individuals.

2.7 NON-FINANCIAL REWARDS AND EMPLOYEE COMMITMENT

In many organizations, there‟s growing commitment gap – a widening split between the expectations of employers and what workers are prepared to do. The most common reason for this is a failure of management in some way or another. Properly managed employees can be motivated to achieve excellence in any area of business. Pickard (2003) observes that increasing business competitiveness demands that organizations have to offer the best quality products or services for the best price. This requires that organizations develop and harness the talents and commitment of all their employees. Getting the best out of people and attempting to improve job satisfaction demand a spirit of teamwork and cooperation, and allowing people a greater say in decisions that affect them at work. In order to improve business performance, managers will need to relinquish close control in favor of greater empowerment of employees. Genuine commitment requires not just recognition or understanding of what the organization expects but an emotional and behavioral response from staff. Malhotra et al. (2007) established that intrinsic non-monetary rewards are more powerful predictors of affective commitment than monetary rewards. Coetsee (2004) underscores the significance of linking rewards, which are terms the outcomes to good performance and explains that this giving of compensation to deserving employees will encourage the employee to work harder and therefore affect their behaviour by motivating them. Furthermore, social rewards, help employees develop trust and interest in pursuing organizational goals. Employees who perceived their supervisor as supportive were more affectively committed to their employer. Zingheim and Schuster (2000) argues that when supervisors are committed to their subordinates and engage in behaviours that support organizational objectives, employees experience emotional gratification and are more likely to respond by developing trust and modeling their supervisor‟s behaviors. Chiang and Birtch (2009) posit that rewards that are non-financial in nature, such as the provision of an increase in holidays, and increases in family benefits, contribute towards the employee perceiving his/her workplace as a „supporting and caring‟ organization. By providing employees with as much rewards as possible (in proportion to their work efforts), employees are able to function more efficiently. This idea is further supported by Luthan et al., (2006) who stresses that when employees are able to see that their company really values and rewards certain service behaviors, then the employees would also want to embrace or welcome such values, and they would be able to exhibit desirable behaviors based on such perceptions and the promise of rewards. According to Chhabra (2010), the perceptions that employees have with regards to their reward climate influences their attitudes towards their employees. In addition, the commitment of managers towards their organization is also shown by how the manager rewards his/her employees. In exchange for the rewards provided to them, employees should reciprocate by increasing their commitment towards their organization and their work, in addition to increasing their „socio-emotional bonds‟ with their company and their colleagues. Jensen et al., (2007) argue that it is the intangible rewards which determine why an employee would choose one company over another when tangible rewards are given the same. This is a way how companies can really stand out of the crowd by the use of the attractive rewards. Luthan et al., (2006) established and found out that there was a positive relationship between non-monetary incentives and employee organizational commitment. When employees were provided non-monetary rewards like housing, flex time, telecommunicating, vacation, learning and development opportunities, recognition of achievements, tasks for or other assignments and sincere praise their organizational commitment increased and the reverse was true. Wright (2002) in a study about the relationship among non-monetary incentives and goal level found out that non-monetary rewards positively relate with goal level commitment of employees. Employees who were praised, recognized, and promoted on the job were committed on the job than their counterparts who were not committed on the job. The workforce will be better satisfied if management provides them with opportunities to fulfill their physiological and psychological needs. The workers will cooperate voluntarily with management and will contribute their maximum towards the goals of the enterprise. Workers will tend to be as efficient as possible by improving upon their skills and knowledge so that they are able to contribute to the progress of the organization. This will also result in increased productivity as well as the rate of labour turn over and absenteeism among the workforce will be reduced to the barest minimum (Chhabra, 2010). It is true to some extent that when workers are motivated, their ability to increase productivity will be high.