EFFECT OF MOTIVATION ON EMPLOYEES RETENTION AND ORGANIZATIONAL PERFORMANCE
BACKGROUND OF STUDY
To have effective and sustainable organization there should be spirit of cooperation and sense of commitment and satisfaction within the sphere of its influence; hence, the capacity to retain people in that environment. Also, in order to make employees to stay long, to be satisfied and committed to their jobs, there is need for strong and effective motivation at the various levels of work departments.
Motivation is a very important tool that moves every human being to achieve his or her goal. People in an organization are the most valuable asset; thus, retaining staff in their jobs is essential for any organization. It is this guiding principle that enables people to stay focused on the path of success regardless of the challenges that may be encountered.
One of the eminent issues for organizations was one of attracting and retaining people with the skills to do the work. The situation became even more complex as economy of the country became worse, thus, forcing thousands of companies and institution to cut back or downsize their employee populations.
Reichheld (2001) observed that organizations are now indicating that product quality is beginning to suffer; employees satisfaction is dropping to experience a significant increase in turnover of key talent especially amongst those individuals considered most crucial to the downsized organization.
Some researchers have demonstrated that the quality of employees in an organization has a direct impact on its organizational performance and effectiveness (Erasmus & Strydom, 2008). Armstrong (2009) says there is a paradigm shift from human resources to human capital which consists of the knowledge skills and abilities of the people employed in organizations which is indicative of their value. Any time the employees leave their jobs, it is often a sign that something is going wrong.
An Employee Retention Program (ERP) is said to be effective when a systematic effort is made to create and foster an environment that encourages and supports employees to remain employed by maintaining strategies and practices in place that addresses their diverse needs.
Employee retention (ER) is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Even though ER has now become a tough task, it is beneficial for the organization as well as the employee.
The job of human resource personnel is done perfect if it places a right person for a right job at a right place in a right time. But retention is more important than hiring. A talented employee will never fall shortage of the opportunities. If a person is not satisfied with the present job, he may switch over to another, of his choice.
The top organizations are on the top because they care for their employees and they know how to keep them glued to the organization. Employees stay or leave organizations for many reasons the reasons may be personal or professional. Employees who are satisfied and happy with their jobs are more dedicated and work for organization’s growth.
Job satisfaction is something that working people seek and a key element of employee retention which is possible only by making the employee feel comfortable physically and psychologically. The inflationary trends seen in the market economy is causing the job market more competitive. It is getting more difficult to retain employees, as the pool of talent is becoming more-and more tapped-out.
A good employer should know how to attract and retain his employees (Qadria Alkandari, 2009). There might be many other strategies to keep the employees comfortable in the present job but motivation strategies boost the employees on day to day basis.
Contrary to modern belief, monetary compensation is not the highest employee motivator. According to the Harvard Management Update (June, 1988) nine of ten managers think people stay or go because of money. But, Kaye and Evans (2000) conclude that money and perks matter, but employees are interested in challenging and meaningful work, good bosses, and opportunities for learning and development.
With the recent global trend, it has become imperative that for organizations to bring out the best from their respective employees there is need to adopt strategies for motivating them towards higher performance (Hennessey and Amabile, 2005).
According to Lambert, Hogan, & Barton, (2001), for every organization to survive, the need to adopt and integrate to the global changing patterns which is accelerating at an enormous speed becomes inevitable. And since management is about getting things done through people, therefore, there is a greater need to employ various techniques to motivate employees to perform to the best of their ability (Thomas, 2000).
Garman, Davis-Lenane, & Corrigan, (2003) added that corporate survival and business excellence which is a dependent variable on human factor becomes unrealistic until managers identify and relate with employees and their job and to anticipate the effect on future attitude and performance.
Researchers have shown that in the future, successful organizations will be those which adapt their organizational behavior to the realities of the current work environment where longevity and success depend upon innovation, creativity and flexibility.
Also, the dynamics of the work environment will have to reflect a diverse population comprised of individuals whose motivation, beliefs and value structures differ vastly from the past and from one another.
Robbins & Judge (2008) observes that the notions of staff motivation started to take roots in the 1960s and sought to tailor the work environment and incentive structure to harness as much as possible workers’ untapped reserves of skills, ideas, and other potential benefits to an organization.
Turner (1965) in Anthony (2010) suggests that a motivating job must allow a worker to feel personally responsible for a meaningful portion of the work accomplished.
He further says it must provide outcomes which have intrinsic meaning to the individual and finally it must provide the staff feedback about his or her accomplishment. Researchers have demonstrated that the two variables are positively related in a particular fashion: a hardworking worker is a motivated worker; a happy worker is a good worker.
STATEMENT OF THE PROBLEM
Motivation and job satisfaction has become the backbone of organizational victory and success. It has become the fundamental part that defines the characteristics of organizational success and excellent performance.
Several and numerous researches have been made on the relationship between motivation and job satisfaction, as well as a wide range of variables to support organizational success. These studies on workers job satisfaction have broadly been extended to both developing and developed nations of the world and which cut across different profession.
A research was conducted by Lew and Liew, 2006) to unravel the antecedents of employee’s needs on their job satisfaction using a leading organization. They come to understand that for the right people to be retend in any organization, there has to be a motivating factor.
As it could be inferred from above that not much research has been conducted on the relationship between all of these constructs. In this regard, this study aimed to contribute to the existing knowledge particularly in the sphere of motivation on employees’ retention and organizational performance.
A thorough understanding of ‘how’ and ‘why’ motivation is imperative to attain high performance from the employees will enable employers in organizations to adopt, adapt and integrate strategic changes towards employee retention and operational excellence as well as organizational performance.
Lastly, interacting with some employees of some organizations, it was observed that there are misgivings among some employees regarding motivations interventions in the organization.
Some of the employees in the organization seem to be dejected and do not appear to be motivated to be retained in the organization. This can undermine the achievement of the set goals of the organization as well as organizational performance. All these problems form the basis of this research.
AIMS AND OBJECTIVES
The main aim of this study is effect of motivation on employees retention and organizational performance. Other specific objectives include:
1. to determine the relationship between motivation on employees retention and organizational performance.
2. to ascertain motivation of employees as a factor towards achieving organizational performance.
3. to examine the effect of motivation on employees retention and organizational performance.
4. to identify factors that hinder organizational performance.
5. to proffer solutions to the factors hindering organizational performance.
1. what is the relationship between motivation on employees retention and organizational performance?
2. how is motivation of employees as a factor towards achieving organizational performance?
3. what is the effect of motivation on employees retention and organizational performance?
4. what are the factors that hinder organizational performance?
5. what are the solutions to the factors hindering organizational performance?
STATEMENT OF RESEARCH HYPOTHESIS
1. H0: motivation has no significant effect on employees’ retention and organizational performance.
2. H1: motivation has a significant effect on employees’ retention and organizational performance.
SIGNIFICANCE OF STUDY
Ascertaining the singular and collective relationship between motivation and employees’ retention, the study would be of immense benefit to organizations, companies, some stakeholders and union leaders. It will assist organizational managers to appropriately maximize the use of this variable to retain employees in organizations or company.
The study will be of great significant as It will also indicates how the concept of motivation and staff retention are both valued and meaningful and the need for all to pay attention to motivation issues for employees retention and organizational performance.
The study will shed light on different forms of motivation that will inform the design of appropriate measures aimed at retaining employees. The findings would also assist in the development of effective and functional managerial strategies and policies which can help in improving the administration and realization of organizational goals and excellent performance.
Lastly, the finding will assist as a reference point for researchers, educators, organizational authorities and policy makers on the importance of motivation for retaining staff to achieve excellent performance.
SCOPE OF STUDY
The scope of this study will cover effect of motivation on employees retention and organizational performance.
LIMITATION OF STUDY
1. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
2. Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
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DEFINITION OF TERMS
Effect: a change which is a result or consequence of an action or other cause.
Motivation: a reason or reasons for acting or behaving in a particular way.
Employees’: a person employed for wages or salary, especially at non-executive level.
Retention: the continued possession, use, or control of something.
Organization: an organized group of people with a particular purpose, such as a business or government department. An organization is a group of people who work together, like a neighborhood association, a charity, a union, or a corporation.
Organization is also the act of forming or establishing something (like an organization). It can also refer to a system of arrangement or order, or a structure for classifying things.
Performance: is understood as achievement of the organization in relation with. its set goals. It includes outcomes achieved, or accomplished through. Contribution of individuals or teams to the organization’s strategic goals.
Organizational performance: Organizational performance comprises the actual output or results of an organization as measured against its intended outputs. According to Richard et al. organizational performance encompasses three specific areas of firm outcomes: financial performance; product market performance; and shareholder return.
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