A STUDY ON STRATEGIC REWARDS SYSTEM OF MOTIVATIONAL LEVEL OF

THE EMPLOYEE IN XENON AUTO SPARE PARTS PRIVATE LIMITED AT

COIMBATORE

CHAPTER I

INTRODUCTION

Motivation is an important factor which encourages persons gives their best performance and
help in reaching enterprise goals. A strong positive motivation well enables the increased output
of employees but a negative motivation will reduce their performance.

In order to make any managerial decision really meaningful. It is necessary to convert it in to an

effective action, which the manager accomplishes by motivating his subordinates. To motivate
means to produce goals oriented behavior since increase in productivity is the ultimate goal of
every industrial organization, motivation of employees at all levels is the most critical and
baffling function of the management. Almost every human problem the manager faces
throughout the firm has motivational elements.

MOTIVATION: AS A CONCEPT

The term motivation has been derived from Latin word-Movers which mean to move. In our
languages of management it implies something those energies and individuals or a group of
individuals to work.

W.G.SCOTT Motivation means a process of stimulating people to action to accomplish desired

goals.

BREECH says Motivation is a general inspirational process which gets the members of the
team to pull their weight effectively, to give their loyalty to the group, to carryout properly the
tasks that they accepted and generally to play an effective part in the job that the group has
undertaken.
REWARD SYSTEM

Fat pay package, quicker promotions and incentives are not enough any more. Employers need
to listen what employees want.
A reward or incentive can be anything that attracts a workers attention and stimulates
him to work.
In the words of Bureckm and Smith reward systems is a plan or programme to motivate
individual or group performance. An incentive programme is most frequently built on
monetary rewards, but also includes a variety of non-monetary rewards or prizes
On the other hand French says the incentive system has a limited meaning that excludes
many kinds of inducements offered to people to perform work, or to work up to or beyond
acceptable stands. It is related with wage payment plans which tie wages directly or indirectly to
standard productivity or to the profitability of the organization or both criteria.
The use of incentives assumes that peoples actions are related to their skills and abilities
to achieve important longer run goals. Even though many organization by choice or by tradition
or contract. In fact rewards on non performance criteria, rewards should be regarded as a pay
off the performance.
Jack Zigon defines rewards as something that increase frequency of an employee
action. This definition points to an obvious desired outcome of rewards and recognition: to
improve performance.

AN INCENTIVE PLAN HAS FOLLOWING IMPORTANT FEATURES:-

An incentive plan may consist of both monetary and non-monetary elements.
Mixed elements can provide the diversity needed to match the needs of individual
employees.
The timing, accuracy and frequency of incentives are the very basis of a successful
incentive plan.
The plan requires that it should be properly communicated to the employees to
encourage individual performance, provide feedback and encourage redirection.
 DETERMINANTS OF REWARDS

These features are contingencies, which affect the suitability and design of rewards to
varying degrees. The effective use of rewards depends on 3 variables.
Individual
Work situation
Incentive plan

THE INDIVIDUAL AND THE REWARDS:

Different people value things differently. Enlightened managers realize that all people do
not attach the same value to monetary rewards, bonuses, prizes or trips. Employees view these
things differently be of age, marital status economical need and future objectives .however even
though employees reaction to rewards varies greatly, rewards must have some redeeming
merits. For e.g. there might be a no of monetary and non monetary rewards to motivate
employees.

THE WORK SITUATION:

This is made up of four important elements,

1) Technology:

Machine or work system, if speed of equipment operation can be varied, it can

establish range of the rewards.

2) Satisfying Job Assignment:

A workers job may important a number of activities that he finds satisfying. Rewards may
take the form of earned time off, greater flexibility in hour worked, extended vacation time and
other privileges than individual values.
 3) Feedback:-
A worker needs to be able to see connection between works and rewards. These
responses provide important reinforcement.

4) Equity:-

Worker considers fairness or reasonableness as part of the exchange for his work.
Rewards in general are important motivator. Their effectiveness depends upon 3 factors.

Drives
Preference value and
Satisfying value of the goal objects.

TYPES OF REWARDS

There are a number of ways to classify rewards. We have selected three of the more
typical dichotomies: intrinsic versus extrinsic rewards, financial versus non-financial
rewards, and performance-based rewards. These categories are far from being mutually
exclusive.

INTRINSIC VERSUS EXTRINSIC REWARDS

Intrinsic rewards are the satisfactions one gets from the job itself. These satisfactions are
self- initiated rewards, such as having pride in ones work, having a feeling of accomplishment,
or being part of team. These techniques of job enrichment, shorter work-weeks, flex-time and job
rotation can offer intrinsic rewards by providing interesting and challenging jobs and allowing
employee greater freedom.

Extrinsic rewards include money, promotions and fringe benefits. Their common thread
is that they are external to the job and come from an outside source, mainly management. Thus,
if an employee experiences feelings of achievement or personal growth from a job, we would
label such rewards as intrinsic. If the employee receives a salary increase or write-up in the
company magazine, we would label those rewards as extrinsic.

Motivational researchers had generally assumed that intrinsic and extrinsic rewards were
independent; that is, the stimulation of one would not affect the other. However, research
conducted in the late 1960s and early 1970s suggested that this assumption might be in error.

Early experiments designed to test the independence assumption tended to support the
proposition that when extrinsic rewards like money, promotions or fringe benefits were used as
payoffs for superior performances, the internal rewards, which are derived from the individual
doing what he or she likes, were reduced. The explanation for these occurrences went something
like this. For money or other extrinsic rewards to be used as effective motivators, they should be
made contingent on the employees performance. But when this is done it decreases the internal
satisfaction the employee gets from doing the job. What has happened is that an external
stimulus has been substituted for an internal one.

FINANCIAL VERSUS NON FINANCIAL REWARDS

Rewards may or may not enhance the employees financial well-being. If they do, they
can do this directly- through wages, bonuses, profit sharing and the like; or indirectly- through
supportive benefits such as pension plans, paid vacations, paid sick leaves and purchase
discounts.

Nonfinancial rewards cover a smorgasbord of desirable things that are potentially at the
disposal of the organization. Their common link is that they do not increase the employees
financial position. Instead of making the employees life better off the job, non financial rewards
emphasize making life on the job more attractive. The non financial rewards that we will identify
represent a few of the more obvious; however, the creation of these rewards is limited only by
managers ingenuity and ability to assess payoffs within their jurisdiction that individuals
within the organization find desirable.
 The old saying one mans food is another mans poison applies to entire
subject of rewards, but especially to the area of non financial rewards. What one employee views
as something I have always wanted, another finds superfluous. Therefore care must be taken in
providing the right non financial reward for each person; yet where selection has been done
assiduously, the benefits to the organization should be impressive.

Some workers are very status conscious. A paneled office, a carpeted floor, a large
walnut desk or a private bathroom may be just office furnishing that stimulates an employee
toward top performance. Similarly status oriented employees may value an impressive job title,
their own business cards, their own secretary or a well- located parking space with their name
clearly pained underneath the Reserved sign.

Some employees value having their lunch between one and two oclock in the afternoon.
If lunch is normally from eleven in the morning until noon, the benefit of being able to take their
lunch at another, more preferred, time can be viewed as a reward. Having a chance to work with
congenial colleagues and achieving a desired work assignment or an assignment where the
worker can operate without close supervision are all non financial rewards that are within the
discretion of management and, when carefully used, can provide stimulus for improved
performance.

PERFORMANCE-BASED VERSUS MEMBERSHIP-BASED REWARDS

The rewards that the organization allocates can be said to be based on either performance
criteria or membership criteria. While the managers in the most organizations will vigorously
argue that their reward system pays off for performance. Few organizations actually reward
employees based on performance.

Performance-based rewards are exemplified by the use of commissions, piecework pay

plans, incentive systems, group bonuses or other forms of merit plan. On the other hand,
membership-based rewards include cost-of-living increases, profit sharing, benefits and salary
increases attributable to labour market conditions, seniority or time in rank, credentials (such as
collage degree or a graduate diploma), or future potential (the recent M.B.A out of a prestigious
university). The demarcation between the two is not always obvious. For instance, company paid
membership in a country club or use of company-owned automobiles and aircraft by executive
may be given for membership or performance. If they are available to, all middle and upper level
executives, then they are membership based. However, if they are made available selectively to
certain managers based on their performance rather than their entitlement, which of course
implies they can also be taken away, we should treat them as performance-based rewards for
those who might deem them attractive.

ADVANTAGES OF THE PERFORMANCE RELATED PAY (PRP) SCHEME

Incentives are linked to meeting targets or objectives, as well as to the quality of

performance as perceived by superiors. Linking pay to performance that lends itself to
measurement is considered fairer then awarding across-the-board cost of living increases,
which do not discriminate between high and low performers.
Where employees performance can be measured and the amount of money available to
reward performance is sufficient to module effort, it saves money if the organization
targets rewards on those who performs.
High performers are attached to PRP culture in the knowledge that pay is linked
productive effort and that poor achievement is discouraged.
Employees receive useful feedback on their performance.
There is an emphasis on a result oriented culture, with the accent on effort directed at
activities that the organization values.
DISADVANTAGES OF THE PRP SCHEME

Behavior is rewarded, which one would expect to occur any way in accordance with
the employment contract. Here good performance is expected and provision is
made for it and where there is a poor performance it is job of the management to
sort it out.
Open communication between managers and subordinates could be discouraged,
because subordinates are less likely to divulge information on personal short
comings just in case such disclosures act to their disadvantage.
The rewarding of self-centered individualism can undermine the co-operation and
team work, which are necessary for coping with todays climate.

IMPORTANCE

Never assume a particular reward is universally important to all employees. Money, for
example, can have a very different meaning to different people. It may represent basic security
and love, power, a measure of ones achievements or merely means to a comfortable life style.
To some employees 1000/- Rs a-month raise would be very important. Other employees, in the
same job and at the same salary level might far prefer an extra week of vacation.

This different among employees was substantiated in a study undertaken at a public

utility. One hundred and fifty employees were asked to rank their performance for rewards. It
was found that the employees in general, rated extra vacation as most preferred, followed by pay,
a pension increase, paid family insurance, early retirement and work schedule rearrangements, in
decreasing order. But this ranking varied among different employee groups. For instance, the
preference for insurance plan decreased with age, while desire for more pension benefits
increases. Married employees also valued insurance plan morethan single employees, and this
preference increased with number of dependents.
 Research indicates that the preference for rewards will be significantly affected by age,
marital status and number of children the employee has. Young unmarried person desire more
time off the job and young married men rated more vacation lower than family health coverage,
or that older employees seek increased retirement benefits while younger workers opt for more
cash.

In expectancy theory terms, motivation is optimized when employees see rewards

satisfying their individual needs. Therefore a good reward system should be designed to offer
heterogeneous rewards to a heterogeneous labour force. Employees should be rewarded with
what they individually consider important.

One effort to broaden the idea of individualizing rewards has been labeled cafeteria
compensation. In contrast to the traditional manner in which fringe benefits are allocated- all
employees get the same package which best satisfies his or her current needs. Specifically where
cafeteria-type flexible compensation exists, employees are told what their total compensation is,
and they can choose a mix salary, life insurance, deferred compensation and other benefits suit
their particular needs.

The advantages of flexible compensation go beyond merely allowing employees to

customize their own compensation package. This method involves little in additional direct costs,
it makes clear to employees how much the organization is actually spending to compensate them
and it ensure that the money will be spent only on the rewards the employees want. On the
negative side, there is the tendency for employees to think in short- range rather than long- range
terms. Most organizations that have instituted a cafeteria plan actually provides all employees
with minimum insurance and pension benefits and let each employees select additional rewards
to suit his or her own needs.
EQUITABLE DISTRIBUTION

Employees desire rewards that are distributed in what seems to be an equitable manner.
This means fairness among the organizations employee and fairness relative to what people get
for doing a similar job in another organization. Equity theory has been proposed to explain what
happens when individuals perceive an imbalance between what they put into job and what they
get out of it relative to others give-and-get ratio.

It is no secret that employees make comparisons between themselves and their peers.
Employees perceive what they get from a job situation in relation to what they must put into.
They also compare their input-outcome ratio with the input-outcome ratio of their peers. If a
persons ratio and that of others are perceived to be equal, a state of equity is said to exist. If they
are unequal, in-equality exists. That is, the individual views herself or himself as under rewarded
or over rewarded. Equity theory argues that when an inequality is seen as aversive, the individual
will attempt to correct it.

Evidence indicates that the referent chosen by the employee is an important variable in
equity theory. The three referent categories have been classified as other, system and self.
The other category includes other individuals with similar jobs in the same organization, as
well as friends, neighbors or professional associates. Based on information that employees
receive through word of mouth or through newspapers and magazines on such issues as
executive salaries or recent union contract, employees can compare their pay relatively to that of
others.

The system category considers organizational pay policies and procedures and
administration of this system. It considers organization wide, implied and explicit, pay policies.
Organization precedents in terms of allocation of pay would be a major determinant in the
category.
 The self category refers to input-outcome ratios unique to the individual that differ
from the individuals current input-outcome ratio. This category is influenced by such criteria as
past jobs or commitments that must be met in terms of family role.

The choice of particular set of referents is related to the information available about
referents as well as their perceived relevance. Based on equity theory, employees may choose
one or more five alternatives.
1) Distort either their own or others input or outcomes
2) Behave in some way so as to induce others to change their inputs or outcomes
3) Behave in some way as to change their own inputs or outcomes
4) Choose a different comparison referent
5) Leave the organization
6) Visibility

A reward that is not visible to the employee may fail to get the desired motivating
effect from employee. On the other hand, a truly visible reward gets the attention not only of
employees but also their peers. This latter qualify means visible rewards can contribute to
satisfying an employees esteem and recognition needs.

In what ways can managers increase the visibility of rewards? Possibilities include well-
publicized bonuses, allocating annual salary increases in a lump sum rather than spreading them
out over the entire year, and eliminating the secrecy surrounding pay by openly communicating
everyones compensation.

Some organizations have successfully maximized the value of rewards by making them
both impressive in size and highly visible. Probably the most widely discussed and controversial
approach to increasing the visibility of rewards is to eliminate the traditional secrecy surrounding
pay. The proponents of openness argue that pay secrecy actually demotivates employees.
Secrecy may tend to work to the disadvantage of using money to motivate managers because
even most carefully derived pay schedule and differentials may be seen as potentially less
rewarding as they actually are. The misperception of pay contributes to dissatisfaction with pay,
and secrecy regarding pay contributes to this misperception.

Complete openness about pay policies is indeed rare in organizations. If such information
were common knowledge, employees would undertake to compare their salaries with those of
everyone else and the inevitability of human error would reveal any inequalities in pay system.
There would be misunderstandings, petty complaints, increased dissatisfaction and perceived if
not real inequalities. Whether it is true or not, almost everyone thinks him or her worth more
than the next person. On the other hand, an open pay system demonstrates confidence by
management in the structure of compensation and hence it should increase the trust individuals
have in the organization.

Flexibility

An effective reward is one that has the flexibility to vary with changes in performance. If
an employees job performance declines in 1987, the rewards he received in 1986 should ideally
have downside adjustment capability.

An effective reward would be flexible in terms of the amount given to everyone in the
organization. The annual performance bonus, for instant, offers high flexibility. It can be
adjusted upward or downward or eliminated, each year depending on some measure of
performance. Additionally, it can be given selectively to those employees who have done a
superior job.

Another attribute of flexible reward is that it be given frequently without losing

importance. Giving rewards frequently is often helpful foe sustaining extrinsic motivation, yet
some rewards diminish in importance when used over time. As a case in point, praise is a
flexible reward in that its amount can be varied in allocation to and among individuals. However,
it suffers from diminishing returns. Continued use of praise results in the reward losing its
importance.
Low Cost

The final quality of an effective reward is low cost. Rewards are not free goods, and the
organization must consider the costs along with the benefits from any rewards. A high-cost
reward simply cannot be given out as often, and when it is, it reduces organizational
effectiveness as a result of its cost. All other factors equal, the lowest-cost reward should be
preferable to management.

DESIGNING A REWARD PROGRAM

The keys to developing a reward program are as follows:

Identification of company or group goals that the reward program will support
Identification of the desired employee performance or behaviors that will reinforce
the company's goals
Determination of key measurements of the performance or behavior, based on the
individual or group's previous achievements
Determination of appropriate rewards
Communication of program to employees

In order to reap benefits such as increased productivity, the entrepreneur designing a

reward program must identify company or group goals to be reached and the behaviors or
performance that will contribute to this. While this may seem obvious, companies frequently
make the mistake of rewarding behaviors or achievements that either fails to further business
goals or actually sabotage them. If teamwork is a business goal, a bonus system rewarding
individuals who improve their productivity by themselves or at the expense of another does not
make sense. Likewise, if quality is an important issue for an entrepreneur, the reward system that
he or she designs should not emphasize rewarding the quantity of work accomplished by a
business unit.

Properly measuring performance ensures the program pays off in terms of business goals.
Since rewards have a real cost in terms of time or money, small business owners need to confirm
that performance has actually improved before rewarding it. Once again, the measures need to
relate to a small business' goals. As Linda Thornburg noted in HR Magazine, "Performance
measures in a rewards program have to be linked to an overall business strategy. Most reward
programs use multiple measures which can include such variables as improved financial
performance along with improved customer service, improved customer satisfaction, and
reduced defects."

When developing a rewards program, an entrepreneur should consider matching rewards

to the end result for the company. Perfect attendance might merit a different reward than saving
the company $10,000 through improved contract negotiation. It is also important to consider
rewarding both individual and group accomplishments in order to promote both individual
initiative and group cooperation and performance.

Lastly, in order for a rewards program to be successful, the specifics need to be clearly
spelled out for every employee. Motivation depends on the individual's ability to understand
what is being asked of her. Once this has been done, reinforce the original communication with
regular meetings or memos promoting the program. Keep your communications simple but
frequent to ensure staffs are kept abreast of changes to the system.

MOTIVATION CONCEPTS

Intrinsic motivation

Intrinsic motivation refers to motivation that is driven by an interest or enjoyment in the task
itself, and exists within the individual rather than relying on any external pressure. Intrinsic
Motivation is based on taking pleasure in an activity rather working towards an external reward.

Extrinsic motivation

Extrinsic motivation refers to the performance of an activity in order to attain an outcome, which
then contradicts intrinsic motivation. Extrinsic motivation comes from outside of the individual.
Common extrinsic motivations are rewards like money and grades, coercion and threat of
punishment. Competition is in general extrinsic because it encourages the performer to win and
beat others, not to enjoy the intrinsic rewards of the activity.
A crowd cheering on the individual and trophies are also extrinsic incentives. Social
psychological research has indicated that extrinsic rewards can lead to over justification and a
subsequent reduction in intrinsic motivation. In one study demonstrating this effect, children who
expected to be (and were) rewarded with a ribbon and a gold star for drawing pictures spent less
time playing with the drawing materials in subsequent observations than children who were
assigned to an unexpected reward condition. For those children who received no extrinsic
reward, Self-determination theory proposes that extrinsic motivation can be internalized by the
individual if the task fits with their values and beliefs and therefore helps to fulfil their basic
psychological needs.

TYPES OF EMPLOYEE MOTIVATION

Understanding employee motivation is necessary to the success of a company. By knowing what

encourages an employee to do his or her job, a company will be able to implement different
policies to increase the performance of the workers. In order to understand employee motivation,
one must realize that people are different. This means that different things motivate different
employees.

Achievement

One type of employee motivation is achievement. In this type of employee motivation, the
worker is driven by the goal itself. This in a sense is like climbing a mountain because the
mountain is there. Employers often make use of this by presenting challenges to the employees.
In making use of this type of employee motivation employers often include incentives such as a
promotion or cash. However, for the employees, the incentive is only a bonus to the
achievement.

Advancement

For some employees, their motivation is the prospect of rising up in the ranks of the corporation.
They work hard in order to catch the eye of the boss and probably get a promotion. This type of
employee motivation is characterized by ambition. Of course; there are times when this type of
employee motivation can be dangerous. Sometimes, superiors may find their jobs in danger
because of an advancement-motivated employee. However, if handled properly, an employee
whose motivation is advancement can be the best in the business. As such, this type of employee
motivation should be handled carefully.

Pressure

Some employees work harder under pressure. This employee motivation is rarely manifested
consciously in a worker. It is often the case that an employee unknowingly piles pressure on him
or her and this pressure pushes them to work harder. Sometimes, pressure is used by and
employee to see just how far he or she would be able to go. However, this type of employee
motivation can have some very negative results, considering the fact that every person has a
limit. In fact, it often ends up in a breakdown of some sort.

Fear

This is one of the most commonly used employee motivation techniques. Employees are often
threatened with termination if they fail to meet certain objectives. Of course, if an employee does
not handle pressure very well, this type of employee motivation technique could be detrimental
to his or her work performance. The key to the best employee motivation technique is balance.
You need to understand that people have different preferences. Since it is virtually impossible to
meet every employees motivation needs, you must develop a technique that incorporates all of
the elements of employee motivation. In doing so, you will be able to ensure your companys
continued growth.

Nature of Motivation

Motivation is a psychological concept that generates with in an individual. It is an inner

felling which energies a person to work more.
The emotions or desires of a person prompt him for doing a particular work.
Man has innumerable wants to satisfy & there are unsatisfied needs of a person which
disturb his equilibrium. All the wants cannot be satisfied at one time where one is
satisfied other may emerge. Satisfaction of wants is an unending process. Hence,
motivation is also unending process.
A person moves to fulfill his unsatisfied needs by containing his energies.
 There are dormant energies in a person which are activated by canalizing them into
actions.
A man works to achieve some individual goals. After the goal is achieved he is no longer
interested in work. Goal means satisfaction of needs. Therefore, it is very essential for the
management to know the goals or motives or needs of each individual, so that they may
be pushed to work by directing them towards achievement of their goals.

TYPES OF MOTIVATIONAL

When a manager wants to get more work from his subordinates then he will have to motivate
them for improving their performance. They will either be offered incentives for more work, or
may be in the shape of rewards, better reports, recognition etc, or he may in still fear in them or
use force for getting desired work. The following are the types of motivational.

Positive Motivation: - Positive Motivation is based or reward. The workers are offered
incentives for achieving the desired goals. The incentives may be in the shape of more pay,
promotion, recognition of work etc. according to peter Drucker, the Real and positive
motivators are responsible for placement, high standards of performance, information adequate
for self control and the participation of the workers as responsible citizen in the plant
community. Incentive motivation is the pull mechanism.

Negative Motivation: - Negative or fear motivation is based on force or fear. Fear causes
employees to act in a certain way. In case, workers do not act accordingly then they may be
punished with demotions or layoffs. The fear act as a push mechanism. Moreover it may result
in lower productivity because it tends to dissipate such human assets as loyalty, co-operation and
esprit de corps. Moreover, the imposition of punishment frequently result is frustration among
those punishments, leading to the development of mal adaptive behavior.

Extrinsic Motivation :- is concerned with external motivators which employees enjoy-pay,

promotion, status, benefits, retirement plans, health insurance schemes, holiday and vacations
etc. by and large these motivations are associated with financial rewards.

Intrinsic motivation: - On the other hand, is concerned with the feeling of having
accomplished something worthwhile, i.e. the satisfaction one gets after doing ones work well.
Praise, responsibility, recognition, esteem, power, status, competition and participation are
examples of such motivation.

Self motivation: - before one can motivate others one must motivate one. One must overcome a
certain amount of ones nature inertia. One of the most common deterrents to human action is
that of tired feelings. This thing that effect the conscious mind are generally known as anxiety
are :

Monotonous work
Driven by boss
Bad physical conditions
Financial troubles
Under constant strain

Group motivation:-

The motivation of a group is an important as self-motivation, A group can be motivated by

improving human relations and dealing with people to feel involvement in their work and by
giving them an opportunity to improve their performance and by complimenting or praising
them. In dealing with others, it must be borne in mind there the greatest returns can be obtained
when each member of a group is properly motivated.

IMPORTANCE OF MOTIVATION

Management tries to utilize all the sources of production in a best possible manner. This can be
achieved only when employees cooperate in this task. Efforts should be made to motivate
employees for contributing their maximum. The efforts of management will not bear fruit if the
employees are not encouraged to work more the followings is the importance of motivation:-

Motivated employees are always looking for better ways to do a job. It is the
responsibility of the managers to make employees look for better ways of doing their
jobs.
Motivated employees will put maximum efforts for achieving organizational goals. Better
performance will also result in higher productivity. The cost of production can also be
 brought down if productivity is raised. The employees should be offered more incentive
for increasing their performance. Motivation will act as a stimulate for improving the
performance of employees.
A motivated employees, generally, is more quality oriented. This is true weather we are
talking about a top manager spending extra time on data gathering & analysis for a report.
Highly motivated workers are more productive than apathetic workers. The productivity
of workers becomes a question of the managements ability to motivate its employees.
An appreciation of the nature of the motivation is highly useful for managers.
A good motivational system will create job satisfaction among employees. The
employees will try to contribute their maximum and management will offer them better
service conditions and various other incentives. There will be an atmosphere of
confidence among employees and employers. It will lead to better industrial relations.
Every organization requires human resource in addition to financial and is significant to
the organizations.
People must be attracted not only to join the organization but also to remain in it.
People must perform the task for which they are hired and must do so in a dependable
manner.
People must go beyond their dependable role performance and engage in some form of
creative, spontaneous and innovative behavior at work.

STEPS OF MOTIVATION

The management should concentrate on two things to motivating its employees.

Working method of motivation i.e., it should be determined as to what ought to be done.
The tools of motivation i.e. it should be determined as to when and how a job is to be
done.

Knowledge of position of employees:-

First of knowledge should be obtained regarding the needs of the employees who are to be
motivated. Different persons have different needs. So, different methods are to be used for
motivated different persons. Both the individuals and the groups should be kept in mind while
assessing the conditions.

Development of tools of motivation :-

After obtaining the knowledge of the employees needs managers should do the job of
selecting and using specific tools or techniques of motivation. The managers should determine
the following issues through their own experience of others and through the experience of others
and through the experience of the personnel department.

Which employee is to be motivated and by which technique of Motivation?

Under what conditions is hello/she to be motivated?

Selection of tools of motivation:-

Selection of tools of motivation is a difficult task. Following observation are to be made for the
purpose

Who is to be motivated?
Which technique succeeded or failed in the past?
Is requisite efficiency, means time needed for the use of that technique available or not?
Thus, after the determination of the technique its use should its should be considered. It
should be decided as to when and how the motivation is to be used. The employees
should immediately get the reward or appreciation can spoil the effect of motivation.

COMMUNICATION MEDIA:-

The technique of motivation should be brought into the notice of employees. Communication
media should be good enough for this purpose. If the management cannot communicate its
viewpoint to the employees, it cannot motivate them as well.

FOLLOW UP ACTION: -
The manager should assess, from time to time, whether the employees have been motivated or
not through a technique of motivation. If one technique fails, others can be made use of. This
type of assessment can bring to light the shortcomings of present technique by removing its
shortcoming.

MOTIVATION THEORIES

Maslow needs hierarchy: - Motivation is influenced by the needs of a person. There is a priority
of certain needs over others. The importance of needs will influence the level of motivation.
A.H.Maslow has categorized human needs into five categories.

Physiological:-Hunger, thirst, shelter, sex & other needs.

Safety: - includes security, and protection from physical and emotional harm.
Social: - includes affection, belongingness, acceptance and friendship.
Esteem: - includes internal esteem factor such as self-respect, authority and achievement
and esteem factors such as status, recognition and attention.
Self actualization: - The drive to become what one is capable of becoming includes
growth, achieving ones potential and self fulfillment.

Motivation Hergers theory: -

He gives two factor theory of motivation. First factors include company policy and
administration, technical supervision, inter-personal relations with supervisor, salary, status, job
security and personal life. These factors were found to be only dissatisfied and not motivators.
These are hygiene factors. Second type of factor is motivational factor, which includes
achievements, recognition; advancements work itself, possibilities of personal growth,
responsibility. According to this theory, attention should be given to the job content to motivate
the employees of the organization.

X & Y Theory: -

After viewing the way in which managers dealt with employees, Mc. Gregor concluded that a
managers view of the nature of human being is based on certain grouping of assumptions. He
proposed two distinct view of human being, one basically negative theory X which assumes that
the employees dislike work are lazy, dislikes responsibility and must be coerced to perform and
the other basically positive labeled theory Y which assumes that employees like work are
creative, seek responsibility and can exercise, self direction. Mc Gregor himself held to the belief
that theory Y assumptions are more valid than theory X. therefore he proposed such ideas as
participation decision making, responsible and challenging job and good group relation as
approaches that would maximize an employees job motivation. As, already mentioned,
Maslows need hierarchy theory states that every human being there exist hierarchy of five
needs-physiological, safety, social, esteem and self actualization and as each is sequentially
satisfied, the need becomes dominant. From the stand point of motivation, if you want to
motivate someone, you need to understand at what level in hierarchy that person currently is and
then focus on satisfying those needs at above that level.

Different needs dominant different people at different time, workers will be dominated by lower
order needs like physiological, safety and social needs while on the other hand staff members
whose lower order needs like esteem and self actualization needs. The reason behind this
difference can be variable such as education, family background and cultural environment. But
the important aspect, which should be taken care, is fulfillment of desired needs at every level. If
the organizational fails to fulfill needs of its employees ultimately it results in non-fulfillment or
targeted result. For example to fulfill esteem needs (particularly recognition needs) an employee
work hard to bring better result out of his work. He leaves no stone unturned in achieving the set
target in the best possible manes.

In return of this hard and dedicated labour the employee looks forward to have recognition
within the department and in the organization as a whole. The recognition encourages the
employee to put more of his labour in fulfilling the task still in the better way. Apart from this he
also becomes an example for others.

As a result they are to motivate. On the contrary, if this employee not rewarded appropriately
that will result in lower morale and employee will not repeat this enthusiastic behavior again,
simultaneously effecting the organizational target.
So in the present scenario, this is responsibility of HR department to find out what are various
needs of employees, what are the policies and procedures from which the employees are not
satisfied and accordingly suitable steps should be taken to boost the morale of employee.

MONEY AS A MOTIVATOR

The importance of money as a motivator has been consistently downgraded by most behavioral
scientists. They prefer to point out the value of challenging jobs, goals, and participation on
decisions making, feedback, cohesive work teams, and other non monetary

factors as stimulants to employee motivation. We agree otherwise here that money is the crucial
incentives to work motivation. As a medium can purchase the numerous, need-satisfying things
they desire. Furthermore, money also performs the function of a scorecard, by which employees
assess the value that the organization places on their services and by which employees can
compare their value to others. Money improved in employees performance.

MONEY DOESNT MOTIVATES MOST EMPLOYEES TODAY

Money can motivate some people under some conditions, so the issue is not really whether or not
money can motivate. The answer to that is it can! the more relevant question is does money
motivate most employees in the workforce today to higher performance? The answer to this
question, well argue, is No.

For money to motivate an individuals performance, certain conditions must be met. First, money
must be important to the individuals. Second, money must be perceived by the individual as
being a direct reward for performance. Third, the marginal amount of money offered for the
individual, as being significant must perceive the performance. Finally, management must have
the discretion to reward high performers with more money.

Money is not important to all employees. High achievers for instance, are intrinsically motivated.
Money should have impact on these people. Similarly, money is relevant to those individuals
with strong lower-order needs, but for most of the workforce, lower-order needs are substantially
satisfied.
Money would motivate if employees perceived a string linkage between performance and
rewards in organizations, unfortunately, pay increase are far more often determined by levels of
skills and experience, community pay standards, the ational cost of living index, and the
organizations current and future financial prospects than by each employees level of
performance.

So might be theoretically capable of motivating employees to higher levels of performance, but

most managers are not given enough flexibility to do much about it.

TECHNIQUES OF MOTIVATION

Every management tries to spacing certain motivational techniques which can be employed for
improving performance of its employees. The techniques may not be similarly useful in all types
of concerns. Some techniques may be suitable employed in one concern; others may be useful in
another concern and so on. Motivational techniques may be of two types i.e., financial and non
financial.

Financial motivators

Financial motivators may be in the form of more wages, salaries, profit-sharing, leave with pay,
medical reimbursement bonus, company paid insurance of any other things that may be given to
employees for performance. Money is the most important motivator to people who are young
and raising their families. For some persons money remains to be a motivator and for others it
may never be. Besides all money can motivate people if their wages are related to their
performance.

Non-financial motivators

Under non financial motivators the employees is not given more money. He, is rather given more
chances of promotion, job security, respect and appreciation under non financial incentives.
Thus, non-financial incentives include those factors which do not indirectly he may be receiving
financial benefits. Modern managers make use of all types of motivators i.e., positive, negative,
financial, non-financial.
Motivational techniques are utilized to stimulate employee growth. The purpose of motivation is
to develop conditions in which people are willing to work with zeal, interest and enthusiasm.

Incentives motivation:-

An incentive or reward can be anything that attracts a workers attention and stimulates him
to work, when the question comes of incentive motivation, the answer can not be said to be a
perfect one but satisfactory. It is said that people work for incentives in the form of Ps which are
as follows:

Praise
Prestige
Promotion

Marriage gift scheme:- with a view to promote cordial relations with the employees, the
company has been given gifts on the occasions of marriages of either the employees themselves
or their dependent children marriage gift schemes.

Wage and salary:- one of the most important technique of motivation is an appropriate wage
and salary the salary given to the employees are in accordance to their work and job.

Medical reimbursement:- only those employees are covered under this scheme which are not
being covered under the ESI scheme.

Reimbursement of medical expenses to eligible employees will be for: self, spouse,

unmarried daughter, unemployed son, dependent parents

Suggestion and reward system:- This scheme was introduced by the management to create an
environment which employees are encourage and motivate to give constructive suggestions for
improving the overall profitability of the company the management believes that employees have
tremendous capability and desire to make the company prosper in every field.

Self motivation: - In XENON AUTO SPARE PARTS PRIVATE LIMITED AT

COIMBATORE., self motivation exists to a great extent, the urge or desire that should come
from within the individuals exists in the employees of the organization. The employees believe
in themselves that they are capable of performing the given task smartly and efficiently, arrives
from with on the individuals not from someone else.

Conveyance facility/allowance:-The Company provides conveyance facility to female workers

from industrial establishment to their place of residence and male workers get conveyance
allowance.

Other financial motivators designed by XENON AUTO SPARE PARTS PRIVATE

LIMITED AT COIMBATORE

Leave with pay includes casual, sick, and earned leaves

Attendance allowance
Conveyance allowance
House rent allowance
Child education allowance
Provident fund
Employee state insurance corporation scheme
Appraisal, praise or recognition

When an employee does his work well, he naturally wants it to be praised and recognized by his
boss and peers. Some attempts have been made XENON AUTO SPARE PARTS PRIVATE
LIMITED AT COIMBATORE

Attention to the suggestion of the individual

Working conditions
Job in accordance to qualification and experience
Training development programmers.

SIGNIFICANCE OF THE STUDY

Consequently, this study derives its significance from the attempt to add to existing literature on
the subject. It shall be a welcome addition to the vast field of resources based on personnel
administration, particularly in the field of compensation.
Furthermore, the study shall highlight steps to creating an effective reward system at would
motivate employees in the food processing firms to work at their optimum level. The study shall
point out the need of innovative strategies in order to motivate employees of selected food
processing firm in Port Harcourt into upgrading their level of competency as well to permeate
organizational commitment among them.

Specifically, managers seeking means of putting proper employee motivation in place, in the
food processing firms would find this study immensely useful. The study would be able to help
prospective administrative department of food processing firms by providing them a concrete
study regarding the potential of an effective reward system to boost up the performance of the
organizations as a whole.

The food processing sector is expected to boost if the measures recommended are adopted, as
unmotivation and low performance will be drastically reduced if not eliminated.

SCOPE OF THE STUDY

This study is limited to the identification of the causes of demonization, low performance in
employees and the ineffectiveness in the rewards systems of some food processing firms.

In identifying the causes of unmotivation, low performance in employees and the ineffectiveness
of the rewards systems in the food processing firms, only Port Harcourt metropolis, which has a
good number of food processing firms in it, are covered by the study.

DEFINITION OF TERMS

Reward System: A formal or informal program used to recognize individual employees

achievement, such as accomplishment of goals or projects.
Motivation: Motivation is a kind of internal which drives a person to do something in
order to achieve something.
Effectiveness: A reward system is said to be effective if it contribute to better
performance, employee motivation, organizational learning, increased product quality,
and the resolution of organizational problems.
OBJECTIVE OF THE STUDY

To evaluate the organizations reward systems as regards employee motivation.

To find out if the reward system reflects the employees personal values and the overall
culture of the organization.
To assess the extent of flexibility in the organizations rewards systems.
To find out if the reward system contributes to better performance.

STATEMENT OF HYPOTHESIS

H01: There is no significant relationship between the type of incentives offered and the
level of employee motivation.
H02: There is no significant difference in the job performance of motivated employee and
non-motivated employee.

LIMITATIONS OF THE STUDY

This study was limited to Port Harcourt because of time constraint. However, Port
Harcourt being one of the commercial nerve centres of the country with a good number
of food processing firms in it minimized the impact of the limitations.
Convenience sampling method was used because of time, finance and the availability of
research materials.
The selection of the sample size, the design and administration of the questionnaire, and
the reliance on respondents for objective responses must have introduced sampling
error/bias into the data generated and the findings made.
The above notwithstanding, the findings and recommendation of the study would be very
useful to any organization seeking to adopt effective reward system that would have long
term motivating effect on employees
 CHAPTER III
RESEARCH METHODLOGY
RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis data in a
manner that aims to combine relevance to the researcher purpose with economy in procedure.

It constitutes the blueprint for the collection, measurement and analysis of data. As such
the design includes an outline of what the researcher will do form writing the hypothesis and its
operational implication to the final analysis of data.

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It is understood as

a science of studying how systematically a research is done scientifically. In it we study steps
that are generally adopted by the researcher in studying the research problem along with the
logic behind them.

RESEARCH INSTRUMENT AND STATISTICAL TECHNIQUES

Normally two types of data are used for the purpose of carrying out research. For this survey
also I have collected these data i.e.

a) Primary data
b) Secondary data

PRIMARY DATA:

Primary data is one, which is collected from fresh sources and for the first time while conducting
the research. For the project, primary survey has been undertaken through a survey instrument
consisting of structured questionnaire filled by employees by the way of personal interviewing

SECONDARY DATA:

Secondary data is that data which has been collected for some other purpose. There are two types
of sources for collecting secondary data:
 o Internal sources
o External sources

RESEARCH METHODOLOGY

The methodology used for my project is as follows:

RESEARCH APPROACH METHOD-

Survey Method

AREA OF STUDY-

The survey was carried out in XENON AUTO SPARE PARTS PRIVATE LIMITED AT
COIMBATORE

RESEARCH-

Exploratory and Descriptive

DATA SOURCE-

Primary Data and Secondary Data

RESEARCH TECHNIQUE-

One-on-One interview.

Sample size-

The sample is 100 employees which includes the employees of Gr. 500 (Sr. Engineers)

SAMPLING METHOD-

Sampling procedure used for this study is Simple Random Sampling

SAMPLE OF STUDY-

The sample is a basic unit consisting of the elements of the population to be sampled.
Sample population includes employees from XENON AUTO SPARE PARTS PRIVATE
LIMITED AT COIMBATORE.The population includes the employees of the various
departments in the organization.

SAMPLE DESIGN-

To select the samples, the sampling technique used was Simple Random Sampling.
Themain benefit of Simple Random Sampling is that it guarantees that the sample chosen
is arepresentative of the population. This ensures that the statically conclusions will be
valid.
In this technique each member of the population has an equal chance of being selected as
subject. The entire process of sampling is done in a single step with each subject selected
independently of the other member of the population.

TOOL FOR DATA COLLECTION-

The research instrument used in this study is structured questionnaire which consists of 25
questions. It was predetermined before conducting the survey. The questions are open ended.

STATISTICAL TOOLS USED IN THE STUDY-

For the analysis of data percentage analysis is used.

DESCRIPTION OF STATISTICAL TOOLS USED

Percentage method

Chi-square test

PERCENTAGE METHOD

In this project Percentage method test was used. The percentage method is used to know
the accurate percentages of the data we took, it is easy to graph out through the percentages. The
following are the formula

No of Respondent
 Percentage of Respondent = x 100

Total no. of Respondents

From the above formula, we can get percentages of the data given by the respondents.

CHI-SQUARE TEST

In this project chi-square test was used. This is an analysis of technique which analyzed
the stated data in the project. It analysis the assumed data and calculated in the study. The Chi-
square test is an important test amongst the several tests of significant developed by statistical.
Chi-square, symbolically written as x2 (Pronounce as Ki-Spare), is a statistical measure used in
the context of sampling analysis for comparing a variance to a theoretical variance.

Formula

(O-E)2

2 =
E

O = Observed frequency

E = Expected frequency
A STUDY ON STRATEGIC OF REWARDS SYSTEM OF MOTIVATIONAL LEVEL OF
THE EMPLOYEE IN XENON AUTO SPARE PARTS PRIVATE LIMITED AT
COIMBATORE

QUESTIONARIES

PERSONAL DETAILS:

1. Age group:

a) below 25

b) 25 to 35

c) 36 to 45

d) 46 and above

2. Gender:

a) Male

b) Female

3. Educational Qualification:

a) SSLC

b) HSC

c) Graduate

d) Post graduate

4. Experience:

a) 3-5yrs

b) 6-10yrs

c) 11-15yrs

d) 16-20yrs
 e) 21 and above

EMPLOYEE MOTIVATION:

5. Are you able to get continuous support from the HR department?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

6. Are career advancement opportunities provided to the employee?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

7. Is the management really interested in motivating the employee ?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

8. Which type of incentives motivates you more?

a) Financial

b) Non-financial
 c) Both

9. Are you recognized for your performance?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

10. Does the management involve you in decision making regarding your department?

a) Very Frequently

b) Frequently

c) Occasionally

d) Rarely

e) Very Rarely

11. What is your satisfaction level on opportunities provided to develop your skills and
knowledge?

a) Highly satisfactory

b) satisfactory

c) Neutral

d) Dissatisfactory

e) Highly dissatisfactory

12. The job which I perform is challenging and interesting in nature?

 a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

13. Does the training programs offered by the organization motivate you to work effectively?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

14. Which of the following factors motivate you the most?

SA A N DA SD
salary hike
promotion
leave
motivational
talks
recognition

15. Does the management provide periodic salary hike

a) Strongly agree
 b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

16. Effectiveness of performance appraisal system adopted by the organization

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

17. Team spirit as a key factor for the achievement of goals?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree
18. Which mode of communication between the management and the nurses would be more
effective in your opinion?

SA A N DA SD
House magazine
Meetings
Bulletin boards
Suggestion scheme

19. How is your relationship with your supervisors/ managers/ In-charges?

a. Excellent

b. Above average

c. Average

d. Below average

e. Very poor

20. Are you happy with the safety practices and welfare measures provided by the organization?

a) Highly satisfied

b) Satisfied

c) Moderate

d) Dissatisfied

e) Highly dissatisfied
21. Support from your co-worker is helpful in getting motivated?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

22.The impact of motivation is reflected in the following aspects:

SA A N DA SD
Improved productivity
Reduced absenteeism
Reduced employee turnover
Better industrial relations
Increased loyalty towards workplace

23.Rank the following motivating factors that can improve the quality of work life in an
organization like this?

SA A N DA SD
Flexible time
Autonomous work group
Job enrichment
Participation
Improved communication

Note:
SA Strongly agree

A Agree

N Neutral

DA Disagree

SD Strongly disagree