THE EFFECT OF EMPLOYEE MOTIVATION ON ORGANIZATIONAL PRODUCTIVITY
ABSTRACT
Motivation is seen as the force that convinces behave and perform in a way that leads to reward, as a result, employees expect that they will be rewarded with all those reimbursement that they anticipate for themselves and their families in return
of their services and efforts. The issue of motivation has continually posed a big challenge to business organizations
around the globe especially in the banking industries where high levels of productivity affect or play a major role in
determining the profitability, growth, development, stability and future success of an organization. Therefore, the study
examines the effect of employee motivation on organizational productivity of AIICO Insurance Plc.
This study adopted a quantitative survey research design in investigating the effects of motivation on organizational
productivity. A well- structured self-administered questionnaire was used as the main tool for data collection and was
administered to 130 respondents out of which 118 were retrieved and appropriately filled. Data collected were analyzed using descriptive statistics, correlation and multiple regression analysis. From the hypotheses tested, the
result indicated among others that there is a significant relationship between employee motivation and organizational productivity.
The findings of the study revealed that; financial benefit has positive and significant effects on employee effectiveness
in AIICO Insuarance Plc; there is positive and significant relationship between training and development and
employee productivity of staff in AIICO Insurance Company; the finding reveals also that work environment has
positive and significant effects on job performance of employees of AIICO Insurance Plc; employee motivation has
positive and significant effects on organisational productivity of AIICO Insurance Plc.
The study concluded that employee motivation significantly affect organisation productivity. The study recommended
that management of organizations should take appropriate measures in figuring out those factors that motivate their
employees and seek ways of ensuring that they are adequately motivated in order to improve their productivity.
Keywords: Organizational Productivity, Employee Motivation, Financial Benefits,Work Environment,Training and
Development,Organizational Effectiveness, Job Performance, Employee Productivity
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Globally, business organizations have continued to adopt strategies to increase the amount of goods and services
that they produces (organizational productivity) in a given amount of time in order to stay relevant in the competitive
market. Oliver (2014) argued that in almost all the countries of the world including US, Europe, Asia and Africa,
challenges of productivity is in the area of management and utilization of resources effectively and efficiently, this has
been an hindrance in achieving the projected level of organizations productivity.
In US and Europe, business managements are preoccupied with improving employee’s productivity, productivity gains
of management and labor productivity growth which are seen as useful measures of the US economy’s performance.
This is observable from the fact that the major issue of productivity in US and Europe is poor management of human
resources (Lebergutt, 2012). Furthermore, Sunia (2014) argued that for organizations to survive and remain relevant
and competitive in South Africa, it is essential for them to be able to entice and maintain efficient and effective
employees and improved job performance in a bid to enhance productivity.
Moreover, it is a well known fact that the productivity of an organization is key in determining the success or failure of
that organization (Cummins, 2010). However, efficiently utilizing resources to achieve optimum productivity has
proven to be a huge challenge to business organizations all over the world and especially in Africa. Furthermore in
Africa, achieving and sustaining organizational productivity on a consistent basis has proven to be a huge challenge
to business organizations due to limited resources at the disposal of these organizations (Odera & Akerele, 2013).
Major prevalent challenges includes employee ineffectiveness, poor job performance, reduced work output, brain
drain in the service sector etc. One of the resources that has proven to be limited to organizations are the human
resources with there being a massive brain drain in Africa as intellectuals migrate from Africa to other parts of the
world due the economic hardship in most countries in Africa. Especially in Nigeria who has the highest percentage of
people with at least a Bsc Degree who are overseas among African countries (US Census, 2015). Therefore, the
challenge for organizations in Nigeria is the need to motivate the limited human resources available to achieve
optimum productivity on a consistent basis.
Many studies have shown the importance of employees to any organization in the world. Pierce & So, S (2013)
observed in France business settings that employees are vital and crucial to the organization achieving its set goals
and objectives. In US and Europe, where the level of competition among business organizations is very high,
employee effectiveness serve as a factor that can distinguish an organization from its competitors and give the
organization a competitive edge over similar organizations. However, for an organization to attain this, the employees
need to be motivated to be at their best and to achieve consistent and great results. But organizations in US and
Europe are confronted with the issues on the choice of types of employee motivation that will improve productivity in
an organization. This has made the subject of employee motivation a much debated subject as human resource
practitioners and researchers try to find ways in which employees can be motivated to increase organizational
productivity.
Furthermore, all organizations in the world face the issue of employee motivation whether they are in the public or
private sector (Chintallo & Mahadeo, 2013). According to Ackah (2014) many business managers in major companies
in countries like America face difficulties motivating employees and surveys have backed this up by showing
employee motivation is one of the top ten challenges of human resource managers in America. Furthermore, in Africa
the diversity of cultures and nationalities currently reflected in most organizations in the world has meant that no two
employees are the same and as such employees vary in their styles, personalities, their beliefs and culture which
makes it harder to figure out the best way to motivate them as a unit (Dessler, 2015). This challenge is also present in
Nigeria with studies showing that Nigeria is a diverse multicultural country consisting of over 371 tribes (Vanguard,
2017). This has made many workforces and employee base in Nigeria full of various people with different
backgrounds, beliefs, value system and motivations. This has made it difficult for many employers and managers
particularly in the insurance industry to determine the right type of motivation for their employees that will improve
their organizational productivity.
Heneman (2012) observed that motivated employees are significant in affecting organizational outcomes like
productivity, employee performance and customer satisfaction. According to Ouchi(2004)organizations would be more
profitable, effective and efficient when its workers are motivated and this will lead to increased organizational
productivity and a high level of involvement. In realizing this new generation organizations all over the world are
adopting new techniques to overcome the challenges of employee motivation and increase their organizational
productivity as a result. For example, companies like Toyota, Starbucs and Oracle are adopting techniques of
motivation that include hiring professional psychologists to attend to employees in each department of their
organizations who can work with the employees and prepare them mentally for the job at hand (Brian, 2013).
Furthermore, in African countries like South Africa companies like ABSA give their employees non-monetary
incentives like work flexibility and the permission to telecommute in order for them to work from the convenience of
their homes (Achamfour, 2013). More so in Nigeria, startup companies in the IT industry have adopted innovative
techniques to keep their employees motivated. For example, companies like Andela have recreation tools like
Foosball that help to create a relaxed environment for employees in order to increase their motivation and ultimately
productivity (Muogbo, 2017). These organizations having realized the importance of employee motivation were quick
to adopt techniques to improve their employees’ motivation and benefited from the resulting increase in productivity of
their employees and their organization as a whole. However, this has not been the case in the insurance industry as
managers in the insurance industry have still struggled with motivating their employees to improve the organizations’
productivity.
Manzoor (2015) noted that the financial benefits received by employees can go a long way in determining their
effectiveness. Similarly, Sekiguchi (2013) noted that companies with good financial benefits tend to attract better
quality of employees which also determines the efficiency of the employee base as a whole due to the fact that high
quality employees tend to be more effective than poor quality employees. However, Ehsiteti, Okaka, Maragia, Odera
and Akerele (2016) noted that in the insurance industry many employees have complained that the financial benefits
they receive are inadequate and as a result they are not motivated to be effective while on the job.
Chappins (2005) stated that the work environment in which employees are surrounded by is important in influencing
their satisfaction and convenience and ultimately their job performance. Similarly, Koima (2015) opined that the
quality of the workplace environment impacts on employees’ job performance. However, a KPMG survey (2015)
noted that employees in the insurance industry have made the point that working in insurance companies is stressful
with a high output demanded from employees and many times long hours of shifts well beyond the stipulated working
hours also demanded of them without any overtime payment. According to Ajala (2016) this has affected the job
performance of employees in insurance companies.
Cummins (2010) also stated that training and development of employees can go a long way in determining how
productive they will be on the job. However, according to Kolawole (2016) majority of insurance companies are still
reluctant to invest significant resources in the training and development of their employees and as a result have
experienced poor employee productivity.
Therefore there is a need to understand and examine various factors that can serve as motivation to employees and
how these factors impact upon the organization’s productivity. Therefore this study will be an inquisition into the
relationship between employee motivation and organizational productivity.
THE EFFECT OF EMPLOYEE MOTIVATION ON ORGANIZATIONAL PRODUCTIVITY