CHAPTER ONE

INTRODUCTION

1.1BACKGROUND TO THE STUDY

Although, there is general agreement among psychologists that man experiences a variety of

needs, there is considerable disagreement as to what these needs are and their relative

importance (Van Rooyen, J. 2006). One of the basic problems in any organization is how to

motivate people to work. Motivation is an energizing factor in employee performance and are

the main cause for movement of any living organism including human being. Because,

motivation will keep the workers committed to their duties and do their jobs seriously and

joyfully. Improved productivity is driven by positively motivated employees by the organization

(Oosthuizen, 2001). The awareness of the motivating factors and factors leading to increased

job satisfaction allow the implementation of targeted strategies of continuous improvement

(Unterweger et al., 2007). When workers are dissatisfied with their work they withdraw and

exhibit behaviours such as absenteeism, rebellion and attitude that affects their performance

which leads to loss of productivity and effectiveness in the organization but if they are satisfied

with their jobs they effectively utilize their skills and the organization benefits(Bolman and Deal

2008).

Employees have both intrinsic and extrinsic needs (Mustafa, 2012; Nadin, 2012). An employee

who is intrinsically motivated, undertakes tasks satisfaction, for the feeling of accomplishment

and self-actualization. On the other hand, an extrinsically motivated employee may perform

activity duty in order to obtain a reward such as salary. Nevertheless both factors influence

employee’ behavior (Din 2008; Mustafa, 2012). In today's marketplace, where companies seek a

competitive edge, motivation is key for talent retention and performance. No matter the

economic environment, the goal is to create a workplace that is engaging and motivating, where

employees want to stay, grow and contribute their knowledge, experience and expertise. (Chung
2013) continues to state that in an effort to find the determinants of motivation and performance

in industry, industrial psychologists and managerial practitioners have developed a variety of

theories of (and approaches to) human motivation. Many psychologists have developed

motivational theories in terms of human needs or motives, while most management scholars

have developed managerial theories in terms of incentives or inducements (Riggio, 2014). The

responsibility for motivation is three-fold: it falls on the senior leadership, the direct manager

and the employee (Bhuvanaiah and Raya, 2015). Numerous factors are involved, from trust,

engagement and values (individual and organizational) to job satisfaction, achievement,

acknowledgement and rewards. Motivation is essential for working autonomously, as well as

for collaboration andeffective teamwork (Stanley, 2012). Motivating employees for better

performance encompasses these critical factors: employee engagement, organizational vision

and values, management acknowledgment and appreciation of work well done, and overall

authenticity of leadership (Neeraj, 2014). Performance appraisal is one of the most important

human resource (HR) practice, administered in organizations by which supervisors evaluate the

performance of subordinates (Neeraj, 2014). Aguinis (2013) implies that the focus of the

performance appraisal is measuring and improving the actual performance of the employee and

also the future potential of the employee; it aims to measure what an employee does.

Performance appraisal is generally regarded as one of the most crucial human resource

management functions (Judge and Ferris 2013). Furthermore, a competent performance

appraisal and management system is an indispensable part of an organizations human resource

management adequacies (Guest, 1997). Employee reactions to appraisal in terms of perceived

employee fairness, accuracy, and satisfaction are important components of appraisal

effectiveness because these perceived employee reactions can motivate employees to improve

their performance (Taylor, Tracy, Renard, Harrison and Carroll 2015). That is, performance

appraisal serves as a means for providing feedback that can result in improved performance

(Tornow, 2013). Motivating employees is a challenge and keeping employees motivated an

even greater challenge (Levy, 2013). Today, organizations are under intense pressure to identify

and implement programs that will prove effective in improving employee productivity (Deci,
2013). It is no longer enough to increase salaries and expect increased performance; it is more

complex than that (George and Jones, 2013). Employee motivation affects productivity and a

poorly motivated labor force will be costly to the organization in terms of lower productivity

and performance, excessive staff turnover, increased expenses, frequent absenteeism and a

negative effect on the morale of colleagues (Jobber and Lee, 2014). It is a well-known fact that

the success of an organization largely depends on the quality of its human resource, irrespective

of the industry within which it operates (Deci, 2013). It is with this in mind that leaders and

managers must strive to ensure that their workforce is motivated and therefore productive.

Motivation is seen as one of the most important factors in issues related to human resources

management (HRM) and organizational behavior management (Nelson, 2013)

Theories of job performance offer that motivation is a key determinant of performance The role

of motivation in the work context has been studied to understand what causes employees to try

hard to do well, or more specifically what causes the arousal, direction, and persistence of

voluntary actions that are goal directed (Mitchell and Linden, 2012). It is therefore imperative

that managers understand what motivates employees and also how to motivate them effectively

(Deci, 2013). There have been numerous researches done on motivation and employee

performance. Many scholars have postulated theories to try and understand what motivation is,

and how it affects individuals (Fincham and Rhodes, 2015). One particularly significant theory

was developed by Abraham Maslow and is known as the hierarchy of needs (Riggio, 2014). At

the core of Maslow’s theory is a hierarchy of five categories. They are psychological, security,

social, esteem and self-actualization needs (Kreitner and Kinicki, 2016).

Frederick Herzberg is another renowned motivation scholar. According to his two factor

theory, dissatisfaction results from the absence of hygiene factors which include salary and

relationships with others, while satisfaction results from the presence of motivating factors such

as job opportunities and recognition (Kinicki and Kreitner, 2016). Expectancy theory of

motivation by Vroom is a more recent theory. It says that people are most motivated to seek

results they value highly and think they can achieve. It is based on employees’ perceptions of
rewards and whether they are able to achieve them (Certo, 2016). This study examined the

effect of motivational factors on the employees’ performance at c ustodian and allied

insurance limited, and Custodian Life Assurance Plc. Custodian’s mission statement is:

“To develop and deliver innovative insurance products that best satisfy customer needs, whilst

operating a highly profitable, efficient, resourceful and ethical organization” and the company’s

vision is to be Africa’s insurer of choice.

1.2 STATEMENT OF THE RESEARCH PROBLEM

In a highly competitive, global environment, organizations are constantly under pressure

to retain their workforce (Deci, 2013). Highly skilled, reliable and experienced

employees are a valuable asset for any organization. It is evident that highly motivated

employees are more likely to have high productivity. However, according to Certo

(2006), good performance is not as a result of motivation only, but also includes ability

i.e. skills, equipment, supplies and time. Motivation is a psychological concept so

therefore organizations should consider some of this problem which leads to lack of

employee performance.

Some of the problems that an organisation could face is how can motivational goal

setting affect the performance of employees at Custodian and Allied Insurance Limited

and Custodian Life Assurance Plc? What are the relationship between Employee

motivation and Employee performance? Delay in payment of salary, under paying of

staffs or no increment in salary is big problem affecting organizations. Understanding in

the organisation as well utilizing motivational factors to increase employee performance

is another problem faced by organizations. Wrong apportionment of job task to an

employee often does not motivate employee and in turn leads to low performance in an

organization.How do recognition and reward programs affect the performance of

employees at Custodian and Allied Insurance Limited and Custodian Life Assurance

Plc?

1.3 AIM AND OBJECTIVES OF THE STUDY

The major aim of this study will focus on examining the effects of motivational factors

on employee performance. This research study is designed to address the following

objectives such as to:

i. Access motivation factors and employee job performers in Custodian and Allied

Insurance Limited and Custodian Life Assurance Plc.

ii. Examine the various factors that creates motivation amongst employees as it

motivates employees to improve job performance in Custodian and Allied

Insurance Limited and Custodian Life Assurance Plc.

iii. Investigate how intrinsic motivational factors are having significant relationship

with employee job performance in Custodian and Allied Insurance Limited and

Custodian Life Assurance Plc.

iv. Examine how hygiene (extrinsic) factors are not having significant relationship

with employee job performance Custodian and Allied Insurance Limited and

Custodian Life Assurance Plc.

1.4 RELEVANT RESEARCH QUESTIONS

The study was guided by the following research questions:

i. Does motivational goal setting affect the employee job performance at

Custodian and Allied Insurance Limited and Custodian Life Assurance Plc?

ii. Is financial incentives/monetary factors affect the performance of employees

at Custodian and Allied Insurance Limited and Custodian Life Assurance

Plc?

iii. Does recognition and reward programs affect the performance of employees

at Custodian and Allied Insurance Limited and Custodian Life Assurance

Plc?

iv. Does the intrinsic and extrinsic motivation factors affects employees’ performance

at Custodian and Allied Insurance Limited and Custodian Life Assurance

Plc?

1.5 RELEVANT RESEARCH HYPOTHESIS

Hi: Motivation has a great impact on employee’s performances.

Ho: Motivation has no great significance on employee’s performances.

Hi: Extrinsic Motivation has an influence on the employee’s performances.

Ho: Extrinsic motivation does not influence employee’s performance.

Hi: Intrinsic Motivation has a significant influence on employee’s performance.

Ho: There is no significant relationship between intrinsic motivation and employee

performance.

1.6 SIGNIFICANCE OF THE STUDY

The study examines the effect of motivational factors on employees Performance at

Custodian and Allied Insurance Limited and Custodian Life Assurance Plc. The

motivation for the study was prompted by the low level of concentration on employee

motivation as compared to the employees of other organizations. This will serve as a

guide to researchers and to provide data upon which further studies could be concluded.

The research findings and results that will be reported in this study will provide the

management of Custodian and Allied Insurance Limited and Custodian Life Assurance

Plc. with more reliable and scientific way of motivating and evaluating the level of

their employees‟ performance

1.7 SCOPE OF THE STUDY

Employee performance is very significant to the key factor of the organizational

development in Lagos state of Nigeria. The primary focus of research was to

determine thedrivers of motivation as well as the effects motivational factors have

on employee performance. Interviews were carried out on employees at Custodian

and Allied Insurance Limited, and Custodian Life Assurance Plc. The importance of

this study is to understand how the effects of motivation can have a positive or

negative impact on the performance of an organization that tends to either improve

organizational development or retard the improving development of an organization.

 The research focused on Custodian employees working in the various department of

the insurance company such as counselling, marketing, legal, admin and finance

department. Demographic factors such as age and gender were also included in the

study in order to understand the effect they might have on motivation and

performance.

1.8 DEFINITION OF TERMS

Motivation

A persons desire to do the best possible job or to exert the maximum effort to

perform assigned tasks (Gomez-Mejia, Balkin and Cardy, 2015). Motivation is an

individual’s degree of willingness to exert and maintain an effort towards

organisational goals (Franco, 2002).

Employees’ motivation

This is the willingness to exert high levels of effort toward organizational goals,

conditioned by the effort’s ability to satisfy some individual need.” (Ramlall, 2004).

Organisation employees are employees that depend on the receipt salary

and/commission from the organisation they work for as their main source of income.

Incentives

These are reward and/or punishment that healthcare providers face from the

organisation in which they work and specific intervention they provide (WHO

Report 2008).
Intrinsic motivation

This is an inducement derived from within the person or from the activity itself and,

positively affects behavior, performance, and well-being (Ryan & Deci, 2000).

Extrinsic motivation

This is said to exist when behavior is performed for its own sake rather than to

obtain material or social re-enforcers (Ryan & Deci, 2000).

Performance is the combination of healthcare providers being available (retained

and present) competent, productive and responsive.

CHAPTER SUMMERY

This chapter gives an overview of motivation theories and how they affect employee

performance. A brief background of the organization being studied was also given.

The chapter also provided information on the background and statement of the

problem, purpose and significance of the study, the research questions and the scope

of the study. In the next chapter, the researcher has reviewed literature based on

aspects that influence employee motivation and its impact on performance with

chapter three looking at the research methodology adopted. In chapter four, the

researcher sums up the results and findings of the study and chapter five provides

discussion, conclusions and recommendations furnished by the study