Relative Strengths of the Factors that most impact Employee Motivation and programs to Improve Employee Moral in the Workplace Prepared for Mary Groves University of Reno Nevada Prepared by Sean O’Brien Vince Stoddard Brad Rootz Clinton Strem December 6, 2011 Table of Contents List of Tables ................................................................................................................................... iii List of Figures ................................................................................................................................. iv Executive Summary ......................................................................................................................... v Section 1 ........................................................................................................................................... v Introduction to the Study .............................................................................................................. v Introduction .............................................................................................................................. v Statement of the Problem ......................................................................................................... v Significance of this Study......................................................................................................... v Scope of the Study ................................................................................................................... vi Methods of the Study............................................................................................................. viii Limitations of the Study .......................................................................................................... ix Findings, Conclusions, and Recommendations ........................................................................... ix Introduction ............................................................................................................................. ix Findings ................................................................................................................................... ix Conclusions ................................................................................................................................ xii Recommendations ...................................................................................................................... xii References ..................................................................................................................................... xiii Appendix A .................................................................................................................................... xiv Appendix B...................................................................................................................................... 1 Appendix C...................................................................................................................................... 2 POWERPOINT OUTLINE ............................................................... Error! Bookmark not defined. Appendix D ..................................................................................................................................... 2 POWERPOINTS ............................................................................................................................. 4 List of Tables Table 1. Weighted Responses…….………………………………………………………...2 List of Figures Figure 1. Age Distribution of Respondents……………………………………………….....5 2. Income Distribution of Respondents……………………………………………...5 3. Number 1 Ranked Motivator……………………………………………………...6 Executive Summary Introduction Findings Recommendations Section 1 Introduction to the Study Introduction It is no doubt that businesses would not have any chance of survival without its workforce, and it is for this reason that managers must keep their employees motivated. An employee’s level of satisfaction with their job is directly related to their level of productivity, but what is it that keeps an employee satisfied? Since every employee is different, there is no single factor that keeps them all satisfied. Some common factors of employee motivation are things like salaries, promotions, variety of tasks, workplace environment, and an employee’s feelings towards management. Part of being a manager is knowing how to keep your employees satisfied in order to keep a business afloat. Statement of the Problem (Linder 1998) “For this paper, motivation is operationally defined as the inner,” or outer, “force that drives individuals to accomplish personal and organizational goals.” The issue businesses face today is that employees are not fully motivated; in other words, the force that drives these individuals to complete a goal is not working at full potential. This inefficiency to businesses can be removed by increasing the forces that drive individuals. Motivated employees are necessary for the survival of organizations and the human race. The twenty-first century is full of “Rapidly changing workplaces” (Linder) that require businesses to be innovative to survive. The best innovations come from employees. Unmotivated employees are the cause of business inefficiency. The purpose of this report is to establish five criteria of employee motivation and test the effectiveness of each one on employees in order to provide management with an informed recommendation on how to increase employee motivation. Significance of this Study Knowing and understanding the factors that play into employee motivation will allow the ability to identify what to implement to the workplace that will better motivate employees from a company standpoint. By doing so, the employee workplace will be a safe and positive place where business can be conducted. Understanding variables that impact workplace motivation, ability to deploy fixes will be simple to do and will increase workplace effectiveness as well as overall efficiency. With these fixes, employees will have a positive outlook on coming in for work and find it more enjoyable than before. The company will witness higher employee efficiency, seeing more work get done and when it is time to increase efficiency rates, will know what to implement to see results. With the recommendations in this study, managers will know what programs to enforce to those under them and meet their quota. Scope of the Study The purpose of this study is to identify factors that significantly affect employee within the company and based upon the results, provide recommendations to management for improvement. Within the study, the five criteria are “Monetary Compensation”, “Recognition Compensation”, “Workplace Environment”, “Personal Relationships”, and “Promotion Opportunities”. Each criterion is defined below: Monetary Compensation: The additional acquisition of income in the forms of but not limited to: yearly/hourly salary increase, paid vacation, company provided health benefits, and commission. Recognition Compensation: Receiving acknowledgment for accomplished tasks in the form of formal congratulations, company acknowledgement awards, and recognition from management. Personal Relationships: The day to day experiences one receives with co-workers, management, and any individual that represents the company. Promotion Opportunities: The additional acquisition of employment benefits through increase in job responsibilities, tasks, status, and overall rank within the company. Review of Related Literature Houran & Kefgen (2007) reported findings from research done on the effects of money and employee motivation. They stated that money is one of the most fundamental incentives for employees to perform satisfactorily no matter how bland or diverse their job tasks are. Other studies showed that managers must be conscious of how much they are raising an employee’s salary because it can strongly influence the employee’s perception of their manager’s recognition. For example if the increase in pay is too low, the employee may feel that their manager is not appreciative of their efforts. What managers must take in to consideration is that money is not the only incentive for employee’s to perform well. Although it is true that monetary incentives are known to show the highest percentage increase in performance, other factors such as social recognition and feedback play a large part in employee motivation as well. This study of motivation was found through the use of the University of Nevada, Reno’s copy of Business Source Complete article database. The study was conducted in 2011 by the University of Eriznican, Turkey. The individuals who created this study were Orhan Cinar, Cetin Bektas, and Imran Asian. All personal information is available for these individuals including email. The source for the article is Economics & Management; 2011, Vol. 16. The accuracy of the study has been confirmed through creditability of the University and report found in Economics & Management,2011, Vol. 16. Through the use of descriptive analysis of a survey, the researchers compared the effectiveness of both intrinsic and extrinsic motivation. The analysis is present in the report using descriptive statistics that are valid and accurate. Key motivation theories are discussed, including Maslow’s Hierarchy. Nohria, Groysberg, and Lee (2008), discuss how to fulfill motivational drives for employees. They have come up with the four step model of motivational drives which include the following: acquire, bond, comprehend, and defend. Acquire is best thought of as a reward system. Bond is the workplace culture; relationship among peers and fellow workers. Comprehend is best looked at as job design. Defend is having transparency between all processes, being fair, and building trust between management and employees. The authors argue that these four drives are the essentials that employees wish to fulfill during their time of employment. If company executives can follow and apply these drives to their employees, allowing them to fulfill their most fundamental needs, then there will be a big increase in company performance. (Linder 1998) Workplace environment for the purpose of this study is comprised of three major factors: interesting work, job task variety, and good working conditions. In Linder’s study, interesting work ranked the highest motivation factor. Interesting work is a form of self actualization in Maslow’s need-hierarchy theory, the highest and most realized point. According to the theory, an employee must have the first four levels satisfied before being able to have self actualization. This study will be unable to test if one need has to be met before the next level can be achieved, but it is important to note that Linder’s top rated motivator rests at the top of the pyramid. This source was obtained through the University of Nevada, Reno’s online database. This article discusses key information with regards to the importance of an individual’s need to for self-fulfillment through accomplishing self-set goals. These goals may pertain to promotion through a company. If an individual does not see the value in these promotions then they may become complacent and lack the drive with regards to their job task performance. This source’s creditability is confirmed through the connection of the University of South Florida. All personal information is included for the authors and researchers involved with this article and it was published in April of 2010. Methods of the Study Source of Data All data will all come from 60 participant’s answers to the questionnaire. The questionnaire includes 6 demographic questions about sex, age, education, income, marital status, and dependent children. Respondents must then rate different criteria of employee motivation on a scale from 1 to 6, 1 being never motivates and 6 being highly motivates. Respondents are asked 4 questions on monetary compensation spanning from wage increases, bonuses, paid vacation, and health benefits. 2 questions deal with receiving recognition compensation from either managers or the public. Another 2 questions cover an employee’s personal relationships with co-workers or managers. 1 question has respondents rate the effectiveness of job security. 3 questions deal with workplace environment asking about the actual job and its location cleanliness. Finally is a question that has respondents rate the 5 main criteria of employee motivation on a scale from 1 to 5, 1 being the most motivating and 5 being the least. A copy of the questionnaire can be found in Appendix A on page _. Sample Selection A nonprobability, convenience sampling technique was used to reach out to employees on Facebook and email. Every member of the group posted a link of the questionnaire to Facebook asking employees to complete the survey. Other questionnaires were emailed to employees working in casinos in Las Vegas. The confidentiality of the questionnaire makes it impossible to identify respondents. Statistical Methods The bulk of the data was analyzed using simple statistics. Demographic questions were analyzed as a percent of response, meaning the number of responses to each choice is divided by the total number of responses. Minitab will be used to perform more complex analysis of the data. Correlation should be checked for between significant variables in order to check for patterns or trends. The final ranking question was analyzed by assigning 5 points to the 1st ranked motivator, 4 points to the 2nd ranked motivator, and so on. Then the weight for each criterion, for every single rank, was multiplied by the number of points assigned to each rank. Please refer to Table 3 on page _ to see the exact process. Limitations of the Study Obvious limitations of this study include: being unable to test all variables of employee motivation, being focused on a specific company, using a short and simple length questionnaire, and not everyone answers truthfully on questionnaires. The study would be too difficult if it tried to encompass all possible criteria of employee motivation; therefore, only five variables were chosen for comparison. The questionnaire was kept short and simple in order to get people to take time out of their days to fill them out. Because the questionnaire is the main source of information, its simplicity deters the need for more question analysis. It is also true that some people do not fill out questionnaires with honesty so some of the results could be inaccurate. The final and largest limitation to this study is the fact that the criterion “Job security” is not really applicable to the real world. Although job security may be an awesome motivator for employees, few to no employers would ever offer such a deal. Section 2 Findings, Conclusions, and Recommendations Introduction The purpose of this study is to determine to what extent different criteria motivate employees and make recommendations to management on how to most effectively motivate employees. Sixty respondents to the questionnaire posted on Facebook were analyzed. This section discusses the findings, conclusions, and recommendations to management. Findings Demographic Profile Almost all of the questionnaires were filled out through Facebook. The distribution of sex was fairly even with 31 females and 29 males. Figure 1 on the next page illustrates that 43% of the questionnaires were completed by young adults in the 18-24 range, 28% of respondents between the ages 25-34, and 13% of respondents between ages 45-54. Figure 2 on the next page demonstrates that 38% of respondents make below $22,500 a year while 27% of the respondents reported making between $100,001 to $200,000 a year. The other 45% fall between these two categories. Chart of What is your age? 25 Count 20 15 10 5 0 >77 18-24 25-34 35-44 What is your age? 45-54 55-64 Figure 1: Age Distribution of Respondents Chart of What is your household income? 25 Count 20 15 10 5 0 1 00 0, 0 $1 0 00 0, 0 2 -$ 01 ,5 2 $2 0 00 5, 3 -$ 0 0 0 00 00 00 0, 5, 0, 5 7 0 1 -$ -$ -$ 1 01 0 1 0 0 5, 00 0, 5, $3 $5 $7 < 0 50 2, 2 $ What is your household income? Figure 2: Income Distribution of Respondents Criteria that most Effectively Motivates Employees Respondents had to list the five criteria in order from the most effective at motivating employees to the least effective. This was necessary because most respondents ranked all of motivating criteria as being an effective motivator on its own. Respondents were forced to choose one criteria over another. Figure 3 represents the best motivation factor to the respondents. Summed up, Table 1 shows the respondents ranked the five employee motivation criteria in the following order: (1) monetary compensation, (2) job security, (3) personal relationships, and (4) recognition compensation, and (5) workplace environment. Chart of 1. Rank 1 motivator 25 Count 20 15 10 5 0 b Jo y ri t cu e S a et on M ry m Co n io at s n pe lR na o rs Pe a el s ip sh n tio Re i gn co n tio m Co a ns pe n ti o W la kp or ce nm iro v En t en 1. Rank 1 motivator Figure 3: Number 1 Ranked Motivator Job Security Monetary Compensation Personal Relationships Recognition Compensation Workplace Environment (20/60)(5) (25/60)(5) (4/60)(5) (4/60)(5) (8/60)(5) +(12/60)(4) +(23/60)(4) +(6/60)(4) +(12/60)(4) +(7/60)(4) +(8/60)(3) +(5/60)(3) +(19/60)(3) +(16/60)(3) +(12/60)(3) +(9/60)(2) +(5/60)(2) +(22/60)(2) +(10/60)(2) +(14/60)(2) +(11/60)(1) = 3.35 +(2/60)(1)= 4.067 +(10/60)(1)= 2.583 +(18/60)(1)= 2.567 +(19/60)(1)= 2.517 Table 1: Weighted Responses Programs Employers can Offer Employees to Increase Motivation The first and best way to motivate employees, according to this study, is to increase the amount of monetary compensation they receive. If it is possible to provide job security than that will also increase employee motivation significantly. The other three criteria did not have as much motivational weight as the other two, but they still positively affect employees Conclusions Based on the findings, multiple conclusions can be made about what factors motivate employees the most. The findings of this study show the criterion in order from the highest motivation factor to the lowest: (1) Monetary Compensation, (2) Job Security, (3) Recognition Compensation, (4) Personal Relationships, and (5) Workplace Environment. It was not surprising to learn that monetary compensation beat out the other motivators in this study. Referring back to Figure 1, because 71% of the respondents fall between the ages 18-35, it is not surprising to discover that the driving motivator for this study is money. The 43% of respondents between ages 18 – 24 are still building the foundations of their life and career. It is only logical that money would be the best motivator for this group because they are just getting started. Job Security was chosen as the second best motivator by respondents. As great as absolute job security would be, it is something that employers cannot guarantee. The job security criterion has been deemed unrealistic. Despite being a highly effective motivator in this study, no conclusions can be made because employers will not be able to implement any job security motivation programs. Although recognition compensation landed third on the list of motivators, it should not be ignored. Just because it is not the most effective motivator does not mean that it does not motivate employees. The payoff in motivation may not be as high as increasing a person’s wages, but it will still increase. The differences between recognition compensation, personal relationships, and workplace environment were very slim. All three of these criteria have similar or equal power in increasing the motivation of employees. Recommendations can be made based on the data of all three. These criteria were unable to land the number 1 spot, but that does not mean that they are useless of ineffective. Recommendations The following recommendations were made based off the findings and conclusions in this study: 1. Employers can increase employee motivation by increasing the amount of monetary compensation employees receive. 2. Employers should encourage all employees to develop a sense of community with each other and management. 3. Employers should institute policies that formally recognize the achievements of its employees. 4. Employers should hire interested employees, give them a variety of tasks, and keep the work environment clean. References Çınar, O., Bektaş, Ç., & Aslan, I. (2011). A MOTIVATION STUDY ON THE EFFECTIVENESS OF INTRINSIC AND EXTRINSIC FACTORS. Economics & Management, 16690-695. Retrieved December 4, 2011 from http://www.knowledgecenter.unr.edu/search/blackbox.aspx?x=0&y=0&bookKey words=&articleKeywords=motivation&searchType=articles&searchEngine=acad emic+search+premier Houran, J., & Kefgen, K. (n.d.). Money and employee motivation. Retrieved December 6, 2011 from http://www.2020skills.com/asts/Money and Employee Motivation.pdf Johnson, R. E., Chang, C., & Yang, L. (2010). COMMITMENT AND MOTIVATION AT WORK: THE RELEVANCE OF EMPLOYEE IDENTITY. Retrieved December 4, 2011 from Lindner, J. (1998). Understanding Employee Motivation. Retrieved December 4, 2011 from http://www.joe.org/joe/1998june/rb3.php Nohria, N., Groysburg, B., & Lee, L. (2008). Employee motivation: A powerful new model. Retrieved December 4, 2011 from http://www.ippn.ie/images/stories/EndaMcNulty_Emp Appendix A Employee Motivation Questionnaire Please answer the following questions. All responses will be confidential and respondents will remain anonymous: o 2 What is your sex? o Female o >3 o Male What is the highest level of What is your age? education that you have o < 17 completed? o 18-24 o < High School o 25-34 o High School Graduate/GED o 35-44 o Some College o 45-54 o Associates Degree o 55-64 o Bachelor's Degree o 65-76 o Master's Degree o >77 o Doctorate's Degree o Other What is your marital status? o Never married What is your household income? o Married o < $22,500 o Divorced o $22,501 - $35,000 o Separated o $35,001- $50,000 o Widowed o $50,001 - $75,000 o $75,001 - $100,000 How many dependent children do you o $100,001 - $200,000 have? o 0 o >$200,001 o 1 On a scale of 1 to 6, with 1 being never motivates and 6 being highly motivates, please rate the following types of monetary compensation. 1.) Receiving additional monetary Motivates Motivates compensation in the form of wages On a scale of 1 to 6, with 1 being never 1 2 3 4 5 6 motivates and 6 being highly motivates, Never Highly please rate the following types of Motivates Motivates personal relationships. 2.) Receiving additional monetary compensation in the form of bonuses: 1 2 3 4 5 6 Never Motivates Highly Motivates 3.) Receiving additional monetary compensation in the form of paid vacation: 1 2 3 4 5 6 Never Highly Motivates Motivates 4.) Receiving additional monetary compensation in the form of company provided health benefits for you and your children: 1 2 3 4 5 6 Never Highly Motivates Motivates On a scale of 1 to 6, with 1 being never motivates and 6 being highly motivates, please rate the following types of recognition compensation. 1.) Receiving positive recognition from management for a job well done: 1 2 3 4 5 6 Never Highly Motivates Motivates 2.) Receiving public recognition for a job well done: 1 2 3 4 5 6 Never Highly 1.) Having positive relationships with co-workers: 1 2 3 4 5 6 Never Highly Motivates Motivates 2.) Having positive relationships with managers: 1 2 3 4 5 6 Never Highly Motivates Motivates On a scale of 1 to 6, with 1 being never motivates and 6 being highly motivates, please rate the effectiveness of job security. 1.) Having job security: 1 2 3 4 5 6 Never Highly Motivates Motivates On a scale of 1 to 6, with 1 being never motivates and 6 being highly motivates, please rate the effectiveness of workplace environment. 1.) Being interested in your job: 1 2 3 4 5 6 Never Motivates Highly Motivates 14.) Rate the following motivators on a scale from 1 to 5, with 1 being most important and 5 being least important: 2.) Having a variety of job tasks: 1 2 3 4 5 6 Never Motivates Highly Motivates 3.) Working in a clean and organized physical location: 1 2 3 4 5 6 Never Motivates Highly Motivates ____ Job security ____Monetary compensation ____Personal relationships ____Recognition compensation ____Workplace environment Appendix B Job Security Monetary Compensation Personal Relationships Recognition Compensation Workplace Environment (20/60)(5) (25/60)(5) (4/60)(5) (4/60)(5) (8/60)(5) +(12/60)(4) +(23/60)(4) +(6/60)(4) +(12/60)(4) +(7/60)(4) +(8/60)(3) +(5/60)(3) +(19/60)(3) +(16/60)(3) +(12/60)(3) +(9/60)(2) +(5/60)(2) +(22/60)(2) +(10/60)(2) +(14/60)(2) +(11/60)(1) = 3.35 +(2/60)(1)= 4.067 +(10/60)(1)= 2.583 +(18/60)(1)= 2.567 +(19/60)(1)= 2.517 One-way ANOVA: 1. Receiving additional wages versus Income Source Income Error Total DF 5 54 59 S = 0.9030 Level 0 1 2 3 4 5 N 23 1 4 7 9 16 SS 4.698 44.035 48.733 MS 0.940 0.815 R-Sq = 9.64% Mean 5.3478 6.0000 5.7500 5.7143 4.8889 5.6250 StDev 0.8317 * 0.5000 0.4880 1.6159 0.6191 F 1.15 P 0.345 R-Sq(adj) = 1.27% Individual 95% CIs For Mean Based on Pooled StDev --------+---------+---------+---------+(--*---) (-----------------*-----------------) (--------*---------) (------*------) (-----*-----) (---*----) --------+---------+---------+---------+5.0 6.0 7.0 8.0 <22k 22k-35k 35k-50k 50k-75k 75k-100k 100k-200k Pooled StDev = 0.9030 Correlations: 4. Receiving additional health, How many dependent children do Pearson correlation of 4. Receiving additional health and How many dependent children do = 0.237 Appendix C EMPLOYEE MOTIVATION Presented to the Management Team WolfPack I. OPENING SLIDE1- TEAM INTRO A. Good morning everyone. Today we are here to discuss employee motivation within our company. We will look at the reasons why it is important for management to be aware of what motivates their employees. Secondly, we will discuss what are the main factors of employee motivation. And finally, our team will provide you with the results of our internal review of the company’s employee’s motivation factors and how we think we can improve them. B. Purpose: Our purpose today is to explain to you, management executives, the importance of understanding how to motivate your employees to achieve maximum proficiency. SLIDE 2- WHY STUDY MOTIVATION? C. Increase Employee Satisfaction. 1. If management can learn what factors contribute to their employee’s satisfaction, they are more likely able to enhance those factors. D. Increase Employee Productivity. 1. Once the motivation factors are enhanced by management, employee productivity should increase. E. Increase in Results for company. 1. With employee productivity on the rise, the company should experience increased results. F. Success for company. 1. Increased results lead to the overall increased success of the company. II. Body SLIDE 3- FACTORS AFFECTING MOTIVATION A. Monetary compensation-This is the additional acquisition of income in the forms of but not limited to: yearly/hourly salary increase, paid vacation, company provided health benefits, and commission. B. Recognition Compensation- This is receiving acknowledgment for accomplished tasks in the form of formal congratulations, company acknowledgement awards, and recognition from management. C. Workplace Environment- Can be defined as the physical and/or emotional attributes that affect the atmosphere around an employee. D. Personal Relationships- Are the day to day experiences one receives with co-workers, management, and any individual that represents the company. E. Promotion Opportunities- Finally, Promotion Opportunities are the day to day experiences one receives with co-workers, management, and any individual that represents the company. SLIDE 4- METHOD OF STUDY F. We conducted both primary and secondary research in order to be successful in our study. Our primary research was a Convenience Sample of 60 employees within the Company sent via Email & Facebook. The results will be discussed in just a second. G. Our Secondary Research was conducted through the review of scholarly articles to determine factors of motivation. SLIDE 5-RESULTS OF THE STUDY H. Here is the ranking of motivational factors scored by the 60 individuals within our survey. The scores next to the factor were computed by using a weighted average of the submitted answers. Please take a moment to review the following: 1. Monetary Compensation (4.067) 2. Job Security (3.35) 3. Personal Relationships (2.583) 4. Recognition Compensation (2.567) 5. Workplace Environment (2.517) Slide 6-RECOMMENDATIONS FOR THE COMPANY I. Finally, we would like to conclude with our recommendations for the company. As you can see here, we have four solid recommendations for our company. With the last recommendation being unfinished. J. Monetary Incentives for Performance: The first recommendation would be an increase or emphasis within the company on receiving monetary compensation with increases in performance. Due to rough economic times, we understand that any additional monetary compensations will cost the company, however, we feel that in the case of motivating your employees, the incentive to make more money will increase their productivity. With that productivity, the increased revenues may be put forth to the employee in the form of a bonus, paid day off, vacation, or other monetary incentive. K. Company Awards for Performance: Company awards are a great way to keep your employees motivated. These awards can be something as simple as an employee of the month. Here are some other recommendations for awards within the company: Customer Service Award, Team Player Award, Outstanding Performance Award, and Employee of the Year. L. Develop a “Community” within Company: What this recommendation is in a nut shell is simply getting to know your surroundings. We want our employees to be excited to go to work and be around people they like. On many cases, employees see more of their coworkers than they do their own family. That is why we want to establish a “community” type feel. We want everyone to be comfortable at work. M. Company bonding activities are simply activities that strengthen the relationships between co-workers. These can be in the form of company parties, picnics, etc. However, we want our company to think outside of the box. We would recommend things like company outings to sporting events, concerts, movies, and other normal things people enjoy doing. Have events where employees bring their family. All and all, we want our employees to get to know one another. Be friendly, happy, and thus more productive when they are clocked in. N. Job Security is a tough recommendation to cover. Unfortunately, with the tough economic times, it is hard to guarantee a job to someone for a unforeseen length of time. However, our recommendation would be to focus on upcoming goals within the company. If you are able to keep your employees in the present and near future, you will be able to get the best work possible. III. CONCLUSION A. We would like to thank you for being here today and taking the time out of your busy schedule. We hope our presentation has been informative and beneficial to the company. We will now take any questions. Appendix D POWERPOINTS