A Case Study on Employee Motivation

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1. UNIVERSITY OF NAIROBI Lower Kabete Campus-School of Business 2. DHR 301: ORGANIZATION BEHAVIOR A Case Study on Factors that Motivate Employees of Standard Chartered…
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  • 1. UNIVERSITY OF NAIROBI Lower Kabete Campus-School of Business
  • 2. DHR 301: ORGANIZATION BEHAVIOR A Case Study on Factors that Motivate Employees of Standard Chartered Bank to Stay Longer in the Bank
  • 3. Submitted by: Kiumba John Irungu D33/2749/2013
  • 4. Introduction Motivation can be defined as the action of orienting ones behavior to a specific goal. One of the most important uses of motivation is in a company. Organizations employ workers to perform certain tasks; these workers need to be motivated in order to perform their tasks with maximum productivity. To keep employees in the organization for a long period of time, the process of motivation is once again responsible. The traditional motivator for a worker is his salary, but in many cases that isn`t enough. Companies use a lot innovating tactics to keep their productivity at a maximum level.
  • 5. Introduction (Cont..) Kenya's banking industry is growing and expanding every day with the entry of new firms. Currently, the industry has more than 43 license commercial banks and a good number of SACCOS that are offering banking services. This number of banks indicates clearly the intense competition that is in Kenya's banking industry. This competition calls for firms within the industry to ensure they position themselves competitively.
  • 6. Introduction(Cont..) To meet customer expectations, the banks need to have permanent and stable employees who have a deep understanding of what the customers they serve need. However, there is the high rate of employee turnover in some banks that may see some of these banks struggle to keep up with the competition.
  • 7. Case summary  This case study, therefore, seeks to address the problem of high rate of labor turnover by examining what Standard Chartered Bank of Kenya is doing to ensure a longer stay of employees in the bank so as other banks can benchmark from them.  In doing so, the case will concentrate on the motivating factors in the bank that the employees find attractive.
  • 8. Case Summary (Cont.…)  The case will also consider other factors like the type of leadership in the bank and the effect the latter has on employee motivation  Another factor in consideration in this case is the effectiveness of communication in the bank and if it affects employees motivation or not.
  • 9. Relevance of the Case The case is relevant in that it can help banks that are struggling with a problem of high rate of employees' turnover solve this problem. Moreover, the case can be used by human resource managers in enhancing motivational factors within their organization by putting into consideration the factors discussed in the case.
  • 10. Profile of Standard Chartered Bank of Kenya Below are some of the facts about the bank:  The bank is foreign owned with only 26% local shareholding  The bank has been in existence in Kenya for more than 100 years having been established in 1911  It has 33 branches countrywide, has 1693 employees, and it is the fourth largest bank in terms of market share as indicated by Business Daily Africa
  • 11. The bank has received the following recognitions  It was the first bank to receive ISO 9002 certification in Kenya  Best Bank, Customer Satisfaction, Think Business Awards- 2015  ICPSK Champions of Governance Award -2014  Best Foreign Bank in Kenya-EMEAAwards- 2014
  • 12.  Best Consumer Internet Bank in Kenya-Global Finance Magazine - 2013  Best Foreign Exchange Bank in Kenya-2013  Overall Winner Corporate Governance Excellence in Financial Reporting Awards-2013 Indeed, such kind of achievement cannot be attained without well motivated, committed, and dedicated workforce. Also, this kind of outstanding performance cannot be realized if employees get employed and leave within the shortest time possible.
  • 13. Organization Behavior Questions and Practices Addressed by the Case  Factors that motivate workers at the bank  The type of leadership available in the bank, supervisor's behavior towards employees and the effects the latter has on employee motivation  How effective is communication in the bank and if communication has any impact on employee motivation
  • 14. Theoretical Background The case is based on the following theories  Frederick Taylor theory of scientific management management that focuses on wage incentives. Taylor argued that people are economical beings and that they are only motivated by money.  Abraham Maslow’s Theory of Hierarchy of Needs that proses that there exist five levels of needs namely psychological, safety, social, esteem, and self-actualization. He noted that low level needs (psychological, security and social) are catered for by extrinsic motivators whereas esteem and self-actualization needs are met by intrinsic motivators.
  • 15. Herzberg Two-factor theory that argues that there are two factors that affect employee motivation namely:  Hygiene factors. The conditions contained here include type of supervision, pay, company policies, physical working conditions, relationship with co-workers, and job security. These conditions are also referred to as extrinsic motivators as they are not directly related to the type of job. If they lack in a company, they cause dissatisfaction hence they are also referred to as dissatisfies. According to Herzberg, these factors are necessary to ensure that an employee reports to work daily and performs at minimum level
  • 16.  Job Related Factors such as promotional opportunities, personal growth opportunities, recognition, added responsibility and achievement. These factors are referred to as intrinsic motivators as they are directly related to the job (Work itself) . These factors are also called motivators. These factors are necessary in providing energizing and directing effort and behavior above minimum levels. Self-Determination Theory. The theory proposes that people prefer to feel they have control over their actions. Therefore, anything that makes previously enjoyed task more of an obligation than a freely chosen task will undermine motivation.
  • 17. Simply put, the theory proposes that organizations should employ democratic type of leadership and supervision so as to make employees feel independent, trusted, and respected so as to motivate them. The theory implies that extrinsic rewards can improve intrinsic motivators if the organization uses extrinsic motivators while allowing employees to control their behavior. However, if the organization uses extrinsic rewards coercively, this scenario will lead to demotivation.
  • 18. Methods of Data Collection Data was gathered from both primary and secondary sources. Primary data was obtained through the administration of questionnaires and direct interviews with some employees and interns of the firm. The sample chosen centered on junior and senior employees of the company. For secondary source, website was the source used.
  • 19. Findings/Issues being discussed Factors that motivate employees at the bank Data collected indicated that various factors motivate employees in the bank. The factors are stated in the order of their importance, from the factor viewed as most important to the least one.  Salary and other fringe benefits  Job security  Training and development opportunities
  • 20. Issues being Discussed (Cont.)  Respect and fair treatment received from superiors  Possibility of future promotional opportunities  Relationship with co-workers and,  Guidance from supervisors
  • 21. Type of leadership present in the bank and supervisor's behavior It emerged that in the bank, employees are given a chance to take part in decision-making on matters affecting them as well the fact that management takes time to listen to employees ideas. Employees are also given a chance to take part in assignments beyond the core of their job which motivate them as this give them a chance to gain new skills. Employees also cited the presence of working environment full of trust and openness. However, employees noted that some supervisors use the authoritarian type of supervision. This kind of supervision according to employees was the main demotivating factor.
  • 22. How management and supervisors communicate with employees Employees indicated that there existed efficient and effective communication from the management. This efficiency in communication enabled the employees understand the nature of their assignment. Well understood assignment made employees tackle their assignment in the right way, resulting in a positive feedback that is obviously a motivator (Recognition/praise).
  • 23. Lessons learnt  Monetary benefits motivate most employees. This fact is clear since employees cited salary and other fringe benefits as their main motivating factor. This fact is in agreement with the theory of Scientific Management that noted that employees are economical beings who are motivated by money. Due to this tendency by employees to value money most, employers should consider using money related benefits as a motivating and retention factor in their organizations.
  • 24. Lessons Learnt (Cont..)  Besides, factors like job security, training and development opportunities, respect and fair treatment, and possibility of promotional opportunities indicate that Abraham Maslow's Theory of Hierarchy Needs applies in Kenya's labor market. Therefore, employers should not only cater for employees' monetary needs, but also self-esteem and self-actualization needs by providing opportunities for career growth within their organization.
  • 25. Lessons Learnt (Cont.…)  Management of these days should employ democratic leadership style since this type of style seems to attract the current generation of employees. Employees of this era do not stomach autocratic type of supervision, and if that is the case, they are ready to leave. Therefore, supervisors should create room for sharing responsibility with junior employees and refrain from being too much authoritative.
  • 26. Lessons Learnt (Cont.…)  Every organization should ensure there is efficient and effective communication in the organization. Effective communication is needed as it will ensure employees know what is expected of them and how best to execute the assigned task, something that motivates them
  • 27. Comments  From the above findings, it is clear that employees motivation and better performance of banks is positively correlated. This fact is clear since the bank under study has a both extrinsic and intrinsic motivators available to its employees. Therefore, banks and other financial institutions experiencing a high rate of labor turnover should strive to motivate their employees.
  • 28. Comments(Cont.….)  The motivation of employees will require such banks to introduce competitive pay schemes as well as creating a working environment that support career growth. In motivating their employees, banks should also choose a well-balanced portfolio of factors that provide both intrinsic and extrinsic motivation.  From the findings above, extrinsic motivators like salary, job security, respect and fair treatment as well as relationship with co-workers are taking a bigger portion of motivating factors in the bank.
  • 29. Comments (continued)  Since the aforementioned factors result to dissatisfaction should they lack in an organization, banks should ensure such factors are available to their employees to reduce level of dissatisfaction.  On the other hand, intrinsic motivators like training and development opportunities, future promotional opportunities, and being given assignment beyond one’s job scope should be used as employees retention factors to ensure the banks retains the most talented employees.
  • 30. References Karimi, M. J. (2013). The impact of communication on employee motivation in The Kenyan public service: a case study of postal Corporation of Kenya (Doctoral dissertation, University of Nairobi,). Ngigi, G. (2013). NIC Bank tops list of Kenya’s mid-sized lenders. Business Daily, p. 1. Retrieved from http://www.businessdailyafrica.com/NIC-Bank-tops-list-of- Kenya-mid-sized-lenders/-/539552/1854774/-/udsgu1/- /index.html Nyamekye, F. (2012). Impact of Motivation on Employee Retention: A Case Study of Standard Chartered Bank Ghana Limited (Doctoral dissertation, Institute of Distance Learning, Kwame Nkrumah University of Science and Technology). Sc.com,. (2015). About Us - Standard Chartered Bank Kenya. Retrieved 16 June 2015, from https://www.sc.com/ke/about-us
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