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