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Tuesday, May 3, 2011



The core purpose of this paper is to understand the role and effectiveness of both extrinsic and intrinsic motivation technique in the context of Nepal. What really motivates employees of the least developed countries like Nepal?  The findings of this paper will be helpful tool or mechanism to the employer who are applying common approach or mass motivation technique to motivate their employees and which is failed so far. Beside this, the result of this research also clarifies the role of extrinsic vs. intrinsic motivation and encourages employers to tackle the motivational problem and helps them to minimize the employee’s turnover in the organization which is one of the threatening problems of corporation, no matter big or small in the countries like Nepal.
Why we chose this topic?
Employee’s motivation is very important in the countries like Nepal where even operational level employees are underperforming due to the lack of proper tools or technique to motivate them. One of the major reasons why employers or the organization are not able to properly motivate their employees is that they don’t know what exactly motivates their employees of different level or hierarchy in the organization. Therefore, this study or the research will explore the key motivators (either extrinsic or intrinsic) which will motivate employees leading to the increase in the overall outcome the organization.
Employee Motivation in the workplace is one of the important factors that directly affects upon the performance of the employees. The organization's reward system is the basic structural mechanism that an organization uses to motivate workers. The reward system includes the formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded. An organization's primary purpose in giving rewards is to influence employee behavior. Motivational rewards can affect individual attitudes, behaviors, and motivation. Edward Lawler describes four major generalizations about employee attitudes toward rewards.
1.      Employee satisfaction is affected by comparison of the rewards they receive with those received by others.
2.      Employees often misperceive the rewards received by others.
3.      The system recognizes that different people have different needs and choose different ways to satisfy those needs.
4.      Performance-based systems
Generally, we can define the motivational reward system into two categories. They are Extrinsic and intrinsic rewards. An extrinsic reward refers to the tangible rewards such as increase in salary,   benefits, promotions and so forth. On the other hand an intrinsic reward refers to the value on outcomes that are sourced intangibly. For instance, the feeling of being appreciated, satisfaction with the work or accomplishments, re-enforcing self esteem, treated with care and considerations and so forth.
Assumption of the this Study
In this research we consider two kinds of motivation technique extrinsic or intrinsic reward system are the key to the employee’s motivation. Other thing remaining the same, these are the only factors which come in a play to motivate employees. Therefore, we assume that to be fully motivated towards their work every employee wants either extrinsic rewards or intrinsic rewards or combination of both.
Limitation of the study
One of the major limitations of this study is that though there are some other factors which are important in motivating employees; we just consider extrinsic and intrinsic rewards in our research study. Another limitation is that due to the time constraints we are just taking few company’s employees randomly in our sampling and we will draw result according to the response of those employees of the selected company which may not give a 100 percent accurate result.
Statement of Problem
Employee’s productivity in the organization to the large extent determined by the rewards they expect to receive from the organization. Employees with low productivity are the result of the in adequate or improper rewards given to him/her. Therefore, this is fueling the researchers to conduct the research the role and effectiveness of the extrinsic vs. intrinsic rewards in the work place. Here, the problem of statements to be studied by this research includes:
1.      The role and effectiveness of the extrinsic reward factors such as pay, working conditions, perceived fairness of the internal revenue rules and regulations and reward policy of the organization on the motivation of the employees.
2.      The effect of intrinsic rewards system such as achievement, recognition, authority and responsibility, nature of the work on the employee’s performance and degree of motivation.
3.      Are people mostly motivated with the extrinsic rewards rather than the intrinsic rewards?
4.      Finding the role of “Equity in Rewards” in the performance of the employees and motivation.
5.      What are the measurement criteria?
Literature Review
According to Remez Sasson, “Motivation is the inner power or energy that pushes toward acting, performing actions and achieving. Motivation has much to do with desire and ambition, and if they are absent, motivation is absent too’. Carol Bainbridge defines extrinsic motivation as a motivation that comes from outside an individual. The motivating factors are external, or outside, rewards such as money or grades. These rewards provide satisfaction and pleasure that the task itself may not provide. On the other hand she defines intrinsic motivation as a motivation that comes from inside an individual rather than from any external or outside rewards, such as money or grades.
There is not much research done regarding the role of intrinsic and extrinsic motivation in the context of Nepal to motivate the employees. Most of the organization apply both kinds of motivation technique but they fail to motivate their employees because of the lack of understanding between employee and management or employer in terms of what motivates them well. Nepal is one of the poor countries of the world and most of the employers (domestic or foreign) randomly believe that extrinsic motivation technique is the best to motivate them. But the fact is that not all people are extrinsically motivated. Some of them are motivated with their hidden needs like recognition or self actualization, or social prestige etc. Another shortcoming regarding the technique of motivation in the context of Nepal is that most of the employers or the management is try to motivate the employees at mass. Meaning, they don’t apply or try to understand what particularly motivates an individual employees rather than using one single technique to whole lot of employees at a time. Therefore, most of the employees are not properly motivate and as a result there is huge employee turnover in most of the organization. And the employers falsely blame something else for the higher employee’s turnover. People have different kind and different amount of motivation. Therefore, we cannot use one single technique to motivate all the employees but we have to identify what motivate them and we should also understand how much rewards or motivator they need to gain given amount of motivation. Therefore, this research will help the employers to understand what’s really going on in the different layers of organization in terms of employee’s motivation and what they need to do to improve their efforts to motivate employees to improve the productivity and the performance.
In order to measure the statement of problem described above, we need to plan the specifics of the study. Therefore, we have laid down the basic methods from which we can get the solutions from the concluded answers. We can adopt the statistical or descriptive research and apply the survey method using the set of questionnaire in order to generate the data and information.
We are expecting participation of more or less 200 employees of different company working in different hierarchy or the layers of the organization. Percentage of male and female workers or employee’s involvement is determined on the basis of national composition of male and female employees in the corporation. At least one company will be chosen from each development region for the greater demographic mix in the survey.
At least 16 different questionnaires will be developed with some yes/no question and some strongly agree to strongly disagree kind questions to generate the data for the study. Similarly, there are yes/no questions and we can form the space so that they can write the specific reasons or other options so that we can take out the valid and specific reasons which helps in the reasoning of our decision making process.
We will visit the companies which are in the sample population of 200 participants to administer the survey. We will ask them to answer the questionnaires within a certain period of time/they can even take it to their home so that they do not feel hectic within their work and personal life. Both operational level employees and the lower and middle level managers are the participants of the research study. We can collect the data from the offices within a week and that should be at the convenience level of our respondents i.e. employees. We collect all those questionnaires and address them, analyze them and represent them statistically so that we can make a sound decision making for our problem.
Primary data
Primary data can be collected by preparing the questionnaires and taking the survey from the employees of different organizations. These questions may be asked verbally in writing or via computer and the responses may be obtained in any of these forms. Typically, this is a structured data collection.
Secondary data
We can use the data that have been acquired from the reports of other developing countries or least developed countries where employees consider extrinsic vs. intrinsic reward systems in their organization and simultaneously we can compare with graphical charts in our analytical part of our research.
Sample or participants
Sampling design begins by specifying the target population. The target population should be defined precisely. Defining the target population involves translating the problem definition into a precise statement of who should and should not be included in the sample. Here, the target population sample mean are all the participants or the employees with whom we target to survey upon the questionnaires we have formulated. They may be from certain or limited organizations we have been focusing with the employees performance and their organizational success. Since, we are focusing upon the exploratory research design and our companies are limited where we have generally focused upon the organizational growth, our sample size is small.
Measurement and Scaling
Measurement means assigning numbers or other symbols to characteristics of objects according to certain predefined rules. The most important aspect of measurement is the specification of rules for assigning numbers to the characteristics.  On the other hand Scaling may be considered an extension of measurement. It involves continuum upon which measured objects are located. We should be aware of the scaling techniques i.e., Comparative or non-comparative scaling techniques. The scale measurements should be based upon the nominal, ordinal, interval or ratio scale to make simpler form of questionnaires to the respondents or employees.
Data Analysis
The analysis of data can be done with the help of formulation of mean, standard deviation, square root of the sample size from the survey responses drawn from a database of our sample size. Similarly, for a clearer view, we can choose the graphical representation of data that would make our conclusive data more visible. They may be represents through the bar chart, histogram and so forth. Given that the model presented here has not undergone any prior empirical scrutiny; exploratory factor analysis with maximum likelihood extraction can be used first to determine whether the items of the scales are tapping the same constructs.
In order to examine the structural relationships and impact of rewards, importance of reward and talking on referral strength, a full model that includes all direct and indirect effects can be specified and when estimated  produce a chi-square statistic of degree of freedom. Therefore, we can conclude all error terms, residuals and indicator variables which are to be removed from the model for ease of interpretation and can obtain the significance of intrinsic and extrinsic rewards system.

Marketing Research (2010).  Pearson (6th ed). Washington DC. Malhotra, N.K.

1. Where you work in your organization chart?
1.      Top level
2.      Middle level
3.      Operational level

2. Do you agree with this statement: “I am motivated with the reward system of my organization”.
1.      Strongly agree
2.      Agree
3.      Moderately agree
4.      Disagree
5.      Strongly  disagree
3. If you are disagree or strongly disagree with above opinion then give your reason why is so?

4. What kind of rewards your organization is offering to you?
1.      Extrinsic rewards like higher pay, bonus, working conditions etc
2.      Intrinsic rewards like achievement, recognition, authority and responsibility etc.

5. What kind of rewards you prefer?
1.      Extrinsic rewards like higher pay, bonus, working conditions etc
2.      Intrinsic rewards like achievement, recognition, authority and responsibility etc.

6. What kind of rewards your organizations apply?
1.      Performance based rewards
2.      Equity in rewards

7. What kind of rewards you prefer?
1.      Performance based rewards
2.      Equity in rewards
8. How important is rewards system to motivate employees in your level?
1.      Very important
2.      Important
3.      Moderately important
4.      Less important
5.      Not important at all

9. Do you agree that your performance will increase if your organization change d the existing reward system and provide you the rewards of your kind?

1.      Strongly agree
2.      Agree
3.      Moderately agree
4.      Disagree
5.      Highly disagree

10. In your opinion do you think your colleague or co-workers work hard
1.      Yes (   )
2.      No  (   )
3.      Other……Please specify

11. If no, what is the reason behind not working hard?
1.      Rewards system is not adequate
2.      rewards system is not their kind
3.      I don’t know.

12. How loyal you are with instruction given to you by your immediate boss.
1.      Very loyal
2.      Loyal
3.      Moderately loyal
4.      Not loyal at all
13. How is your working condition?
1.      Very good
2.      Good
3.      Average
4.      Not good

14. Do your organization and your job provide you any sense of job responsibility?
1.      Yes  (  )
2.      No  (  )
3.      Other…..Please specify

15. If yes, then do you think it motivates you to work harder?
1.      Yes   (   )
2.      No    (   )
3.      Other…..Please specify

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