EFFECTS OF MOTIVATION ON EMPLOYEE PERFORMANCE: A CASE STUDY OF GHANA COMMERCIAL BANK, KUMASI ZONE.

EFFECTS OF MOTIVATION ON EMPLOYEE PERFORMANCE: A CASE STUDY OF GHANA COMMERCIAL BANK, KUMASI ZONE.

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ABSTRACT The introduction of universal banking law has brought changes over the years, with it stiff competition in the banking industry. Commercial banks are no exception to the modern changes in ensuring staff motivation towards their organisational goals. The study seeks to assess the motivational packages available at Ghana Commercial Bank and how it affects employee performance towards the Bank‟s corporate objectives. The survey research design was used for the study. The study revealed that, management can make use of different strategies and policies to motivate employees in the banking environment. Employees are interested in enhanced salaries, fringed benefits, promotion, and car loans as motivating elements sufficient to push employees of the bank to give out their best. The research also revealed that the core duty of the bank is normally carried out by clericals who are more than the supervisors and as such motivational packages should be geared towards the clerical workers to ensure that they delight the customers. Promotion has been a worry to most staff; measures should be put in place by management to ensure that there is continuity in the promotion of staff to avoid low productivity in terms of deposit mobilisation. The study revealed that if management withdrew motivational packages it will have serious repercussions on employees‟ performance. There was a positive relation between employee performance and corporate performance since employees were able to achieve the bank‟s performance indicators in terms of deposits, loan recovery, profitability and also ensuring the liquidity of the banks. The conduciveness of the office environment has first time impression on the customers and the welfare of the employees. Management can develop new theories such as equity, macllend theory, Abraham Maslow and Hertzberg two factors to ensure employees achieve work targets.
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ACKNOWLEDGEMENT My sincere thanks go to the Almighty God for making it possible for me to finish this project work. I am very grateful to my supervisor, Mr. Yin Luu of University for Development Studies, for all the necessary support accorded during the project. I want to thank all my friends especially Mr. S. Kwaku Adjei of the Business School of University of Cape Coast, Miss Kwara Bintu, Mr. Owusu Sekyere and Mr. Kwame Siaw.
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DEDICATION I dedicate this work to my wife, Miss Priscilla Azumah my son, Junior Kofi Owusu and the entire Owusu family.
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TABLE OF CONTENT CONTENT PAGE DECLARATION ii ABSTRACT iii ACKNOWLEDGEMENT iv DEDICATION v TABLE OF CONTENT vi LIST OF TABLES ix LIST OF FIGURES ix CHAPTER ONE INTRODUCTION Pages
1.1 Background to the study....................................................................................................1
1.2 Statement of the problem..................................................................................................3
1.3 Objectives of the study.....................................................................................................4
1.4 Research Questions............................................................................................................4
1.5 Significance of the Study..................................................................................................5
1.6 Scope of the Study............................................................................................................5
1.7 Organisation of the Study................................................................................................5
CHAPTER TWO LITERATURE REVIEW 2.1 Introduction .................................................................................................................7
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2.2 History of the Banking industry and Ghana Commercial Bank in Ghana.........................................................................................................................................7 2.3 Motivation and corporate performance in the banking sector...........................................11 2.4 Performance Measurement.................................................................................................25 2.5 Chapter Summary...............................................................................................................33 CHAPTER THREE METHODOLOGY 3.1 Introduction.......................................................................................................................35 3.2 Research Design of the study............................................................................................35 3.3 Population, Sample Size and Sampling Techniques for the study....................................35 3.4 Data for the Design............................................................................................................36 3.5 Data Analysis and Presentation..........................................................................................37 3.5.1Motivation........................................................................................................................37 3.5.2 Job Satisfaction...............................................................................................................37 3.6 Organisational Structure of Ghana Commercial Bank Limited.........................................38 CHAPTER FOUR PRESENTATION, ANALYSIS AND DISCUSSION OF DATA 4.1 Introduction........................................................................................................................40
4.2 Socio-Demographic status of Respondents........................................................................40
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4.3 Motivational Packages in Ghana Commercial Bank..........................................................47 4.4 Effects of Motivational package on Employee Performance.............................................55 4.5 Effects of Motivational packages on Ghana Commercial Bank Performance.............................................................................................................................58 5.0 CHAPTER FIVE SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 Introduction......................................................................................................................69 5.2 Summary of Major Finding..............................................................................................69 5.3 Conclusion.........................................................................................................................72 5.4 Recommendation...............................................................................................................74 REFERENCES.......................................................................................................................77 APPENDIX „A‟ Questionnaire ...............................................................................................84 APPENDIX „B‟ List of tables..................................................................................................88 APPENDIX „C‟ MAP OF GCB LTD......................................................................................94
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LIST OF TABLES Table Page 4.1 Kinds of motivational packages for respondents of GCB Limited................................48 4.2 Suggested Alternative Adequacy Levels of Packages....................................................53 4.3 Selected branches of performance report for 2009/201..................................................64 4.4 Comparison of key performance indicator of GCB with other banks............................67 LIST OF FIGURES Figure Page 2.1: hierarchy needs of Abraham Maslow ………….……………………………………...14 4.1 Gender of respondents in GCB Limited ........................................................................42 4.2 Designation of respondents within GCB Limited............................................................43 4.3 Core duties of respondents of GCB Limited....................................................................45 Years respondents have been working with GCB Limited....................................................47 4.5 Importance of motivational package of respondents........................................................51 4.6 Incorporation of respondents view on motivational package............................................52 4.7 Are packages enough to motivate employees to give their best........................................53 4.8 Conducive of office environment to enhance work output...............................................55
4.9 Influence of motivational package on employee performance..........................................57
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4.10 Employee is able to achieve the same levels of output without motivational packages...................................................................................................................................58 4.11 Effects of motivational packages on respondent output..................................................58 4.12 Effect of motivational packages on GCB performance...................................................60 4.13 Financial Highlight of GCB Annual Report....................................................................63
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CHAPTER ONE INTRODUCTION 1.1 Background of the study The commercial banks play important roles in worldwide economies and their employees are the best sources of delivering good services to their customers. Excellent services provided and offered by employees can create a positive perception and ever lasting image in the eyes of banks‟ customers. The motivation of a bank‟s employee plays a major role in achieving high level of satisfaction among its customers (Petcharak, 2004). The financial services industry is one of the most competitive and highly globalised sectors due largely to the extensive use of information technology systems by firms operating in the sector. Despite the fact that information technology has become the bedrock of all companies in the financial sector at the global level, human capital still remains the driving force in the highly digital financial services industry, because not all the functions performed by financial institutions can be undertaken solely by electronic devices such as automated teller machines (ATM), computers or other similar devices. Where even electronic devices can, the organization still requires human beings to operate them.
Ombati et al. (2010), stated that services, by definition, are intangible and can be divided into high-touch or high-tech services. “High-touch services are mostly dependent on people in the service process producing the service, whereas high-tech services are predominantly based on the use of automated systems, information technology and other types of physical resources. For example, high-tech services include Internet/Telephone/Short Messaging Service (SMS),
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ATMs whereas high-touch services consist of instructions and personnel assistance in using the services”. Even with the provision of these high-tech services by electronic devices, some amount of human effort is required to service and monitor the equipment used in the process of delivering the service. Therefore, financial institutions still need to recruit and retain some level of qualified and self motivated staff in order to be competitive in the current globalised and turbulent financial services industry. In case of using human beings to provide services, it is not enough to merely rely on the number of people engaged, their qualification and experience or their ability but remunerating them appropriately is also of paramount importance. The personnel engaged must be motivated in order to get the best output from them. Many captains of industries believe that the key to improve staff performance and productivity in any area is motivation rather than ability. Bateman and Snell (1996), contend that motivation is the force that energizes, direct and sustains a person‟s effort towards the achievement of a goal. A highly motivated person will work hard towards the achievement of organizational goal, given the ability and adequate understanding of the job. Therefore, the challenge for today‟s management is to administer motivational programmes which will encourage employees to improve their work performance and productivity. To this end modern day managers of companies in the financial services industries are therefore adopting various kind of motivational packages not only to retain employees but also help them to achieve competitive advantage in the market.
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1.2 Statement of the problem According to Bank of Ghana report (2009), the introduction of the Banking Act of 2002, Act 612 and the Universal Banking Act of 2007, Act 673 and its amendments, the banking industry had grown in numbers with a lot of multi-national banks opening more branches in Ghana. Since the enactment of these Acts, the banking industry in Ghana had both increased in numbers and capital based. The liberalization of the banking industry has therefore engendered fierce competition in the sector. According to Michael Porters five forces strategy model, free entry and exit of new firms into a competitive industry or market comes with its associated opportunities and treats. Therefore the liberation of the banking industry comes with it opportunities and treats to existing banks including GCB limited. The level of motivations to determine whether the employees of GCB are well motivated to stay in the bank or are leaving the bank and joining the new banks is of greater concern. This element of easy entry and exit of new firms, as in Michael Porters Model, brings some challenges to the exiting banks in the Ghanaian banking industry. These challenges can be categorized into operational and human resource.
1. Operational Challenges– These are associated with products innovation, waiver of some restrictive policies on some service deliveries, customers oriented banking rather than task oriented, liberal lending processes or fast tracking of loans/advance disbursement, improved technological system, reduction in the profitability and new promotional strategy, increased internal rivalry/competition among the banks, and loss of customers and deposits leading to unstable liquidity of the banks.
2. Human Resource challenges- Threats in these areas include: volatile loyalty and commitment, potential defective morale, employees‟ taste for different motivational packages and increase in the cost of recruitment and placing.
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Any of these can affect the performance of the banks in the banking industry. The likelihood of potential and experience staff moving from existing banks to these new banks is a source of worry because they need to be replaced at a higher cost to fill the gap. Alternatively, the residual staff would have to be appropriately remunerated to work extra hard to sustain the service demand on their bank. The concerns this research addresses are the various motivations that can push employees of a human resource challenged bank to out-perform and raise the service delivery standard of their bank. In other words, how can GCB push the existing employees so that performance targets can be achieved? These issues have necessitated the study to assess the effect of motivational packages on employees‟ performance. The question then is what must top management do to ensure that employees perform well in the bank? 1.3 Objectives of the study The general objective of the study is to investigate the effect of motivational packages on employee performance at GCB Limited. The specific objectives are:
i. To assess the various motivational packages for the staff of GCB Ltd.
ii. To determine which of these motivational packages influence staff performance at GCB Ltd.
iii. To assess the effect of motivational packages on corporate performance at GCB limited.
1.4 Research questions The research will address the following specific questions:
i. What are the employee motivational packages at GCB Ltd?
ii. Which employee motivational factors affect the performance of GCB Ltd?
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iii. In what ways do employee motivational packages affect performance of GCB Ltd?
1.5 Significance of the study The study will be vital in so many ways. It would reveal:
 Whether these packages enhance staff performance; and
 How management can strategically maximize the human resource potentials of the organization to the fullest in the midst of the new entrants.
The findings of the study will therefore provide vital information to policy makers and human resource managers of the bank to either consolidate or re-think ways of motivating staff of the bank. The results of the study will also add to the existing body of knowledge on the issue of motivation and productivity in the bank sector. Finally the research is in partial fulfilment of the KNUST School of Graduate Studies‟ requirements for the award of a postgraduate degree. 1.6 Scope of the study The scope of the study was limited to the Kumasi Zone of GCB Limited. The Kumasi Zone of the bank consists of twenty-two (22) branches and seven (7) divisions. All the twenty branches and divisions were covered. Most theories of motivation and employee performance concepts were considered. Limited resources and time constraints affected the completion of the project on time. There was less participation from respondents due to the busy schedule during the day. 1.7 Organization of the study
The study is presented in five chapters. The first chapter which is the introduction covers the background of the study, problem statement, objectives of the study, research questions,
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significance of the study, as well as the scope and limitations of the study. This is followed by chapter two which reviewed extensive related empirical literature on the subject matter. Among the various topics to be covered include concepts of motivation, productivity in relation to job performance, deposit mobilization and profitability, the profile of GCB Limited, performance appraisal, and the relationship between motivational packages and employee‟s performance. Chapter three looked at the methodology of the research which comprises the research design, the research population, sample and sampling technique. It also considered the sources of data and data collection instruments, methods of data collection and analysis. Chapter four is dedicated to data analysis, findings and discussions. Finally, chapter five deals with a summary of the study, conclusions drawn from the findings and recommendations of the study.

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