LV Thạc sỹ_Work motivation at Cement finance company

ACKNOWLEDGEMENT
At the beginning, I would like to express my most sincere gratitude to NEU
Business School with all its members, especially to all my teachers, doctors,
professors and their assistants for the knowledge and experience that have been
shared during the last two years.
Next, I would like to send my special thanks to my supervisor, PhD …., who
has guided me a lot during the thesis’s implementation.
And thanks to all my colleagues in Cement Finance Company who have
helped me to fulfill questionnaires, supplied needed information and given advice
and ideas for my thesis.
Lastly, I deeply thank all my members in my family who always encourage
and help me along the way.
Once again, let me be thankful to other people who always stand by me in
the finishing period of the thesis.


TABLE OF CONTENTS
ABBREVIATION....................................................................................................1
LIST OF TABLES...................................................................................................2
LIST OF FIGURES.................................................................................................3
EXECUTIVE SUMMARY.....................................................................................4
CHAPTER 1: INTRODUCTION...........................................................................6
1.1. Rationale of the thesis.........................................................................................6
1.2. Research Objectives............................................................................................8
1.3. Research questions..............................................................................................8
1.4. Literature review.................................................................................................8
1.5. Research methodology......................................................................................10
1.5.1. Research process......................................................................................10
1.5.2. Data collection..........................................................................................11
1.5.3. Data Analysis...........................................................................................13
1.6. Scope of research..............................................................................................13

1.7. Structure of thesis.............................................................................................13
CHAPTER 2: THEORETICAL BACKGROUND OF EMPLOYEE
MOTIVATION.......................................................................................................14
2.1. Definition of employee motivation...................................................................14
2.2. Differences between employee motivation and employee satisfaction, job
satisfaction...............................................................................................................16
2.2.1. Employee satisfaction..............................................................................16
2.2.2. Job satisfaction........................................................................................16
2.2.3. Job performance......................................................................................17
2.3. Role of staff motivation....................................................................................17
2.4. Applied theories on staff motivation.................................................................18
2.4.1. Abraham Maslow’s theory......................................................................19
2.4.2. Equity theory of John Stacey Adams.....................................................21
2.4.3. Fred Herzberg’s theory...........................................................................22
2.4.4. The Job Characteristics Model (JCM)..................................................26
2.4.5. Path-goal Theory.....................................................................................27
CHAPTER 3: OVERVIEW OF CFC...................................................................31
3.1. An overview of CFC.........................................................................................31
3.1.1. Cooperate information............................................................................31
3.1.2. Products and services..............................................................................32


3.1.3. Vision and business principles................................................................32
3.1.4. General (overall) result of business........................................................32
3.2. The CFC’s human resources structures.............................................................36
3.2.1. CFC’s structures......................................................................................36
3.2.2. CFC’s demographic characteristic of employees..................................37
CHAPTER 4: ANALYSIS.....................................................................................40
4.1. Overview of work motivation in CFC..............................................................40
4.1.1 Evaluation of 10 factors of Herzberg theory..........................................40

4.1.2 Employees’ satisfaction level....................................................................41
4.1.3 The commitment to work for CFC..........................................................42
4.2. Analysis of the motivator factors in CFC..........................................................43
4.2.1. The achievement......................................................................................43
4.2.2. Recognition..............................................................................................45
4.2.3. The work itself.........................................................................................47
4.2.4. Promotion and growth............................................................................53
4.3. Analysis of the hygiene factors in CFC.............................................................58
4.3.1. Goal and vision of CFC...........................................................................58
4.3.2 Salary and benefits...................................................................................60
4.3.3 Appraisal policy........................................................................................63
4.3.4 Relationships.............................................................................................65
4.3.5 Supervision - technical.............................................................................67
CHAPTER 5: RECOMMENDATIONS..............................................................72
5.1. CFC ‘s goal in 2012..........................................................................................72
5.2. Recommendations for enhancing employee motivation at CFC.......................73
5.2.1. Completing the company’s goal..............................................................74
5.2.2. Reforming salary policy..........................................................................76
5.2.3. Upgrading the system to assess motivation for staff.............................77
5.2.4. Creating more interesting and challenging work..................................79
5.2.5. Creating more effective rewards and recognition.................................81
5.2.6. Establishing a feedback system..............................................................82
5.2.7. Completing an effective training program............................................83
CONCLUTIONS...................................................................................................85
REFERENCES......................................................................................................86
APPENDICES........................................................................................................87


1

ABBREVIATION
AP
BIDV H.O

Appraisal measurement
Joint Stock Commercial Bank for Investment and

BOM
CEO
CFC
HCM branch
HR
HRM
ID
IT
Vicem

Development of Vietnam Head office
Board of management
Chief Executive Officer
Cement finance company
Ho Chi Minh Branch
Human resource
Human resource management
Identification
Informatic technology
Viet Nam Cement industry corporation


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LIST OF TABLES
Table 1.1: Data collection......................................................................................11
Table 1.2: Sent and received questionnaires by department categories............12
Table 2.1. Two factors of Herzberg theory...........................................................23
Table 2.2 Factors of motivation applied in CFC’s case.......................................28
Table 3.1 Demographic characteristic of employees...........................................38
Table 4.1 Evaluation of 10 factors of Herzberg theory.......................................40
Table 4.2. Interested in job....................................................................................41
Table 4.3. Intension to work for CFC...................................................................42
Table 4.4. Intension to work for CFC by year.....................................................43
Table 4.5. Employee ‘s evaluation on achievement.............................................44
Table 4.6. Employee‘s evaluation on recognition................................................45
Table 4.7. Employee‘s choice in reward policy....................................................46
Table 4.8. The reward policy of CFC...................................................................46
Table 4.9. Employee‘s evaluation on work itself.................................................47
Table 4.10. Employee‘s evaluation on responsibility...........................................48
Table 4.11. Number of reports..............................................................................50
Table 4.12. Report periodically.............................................................................50
Table 4.13. Application level information technology by periodically report. . .51
Table 4.14. Employee‘s evaluation on promotion................................................53
Table 4.15. Employee‘s evaluation on growth.....................................................56
Table 4.16. Commitment to training....................................................................57
Table 4.17. Employee‘s evaluation on Salary policy...........................................60
Table 4.18. Employee‘s evaluation on benefit policy...........................................62
Table 4.19. Employee‘s evaluation on Appraisal policy......................................63
Table 4.20. Mark of appraisal‘s system................................................................64
Table 4.21. Employee‘s evaluation on relationships............................................66
Table 4.22. Employee‘s evaluation on relationships............................................66
Table 4.23. Employee‘s evaluation on supervision - technical............................67

Table 4.24. Discipline in violations of labor regulations.....................................68
Table 4.25. Summarize in analysis........................................................................70


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LIST OF FIGURES
Figure 1.1. Research process.................................................................................10
Figure 2.1. A model of driving forces...................................................................15
Figures 2.2. Maslow’s hierarchy of need..............................................................19
Figure 2.3. Job Characteristic model...................................................................27
Figure 3.1. CFC’s shareholders............................................................................31
Figure 3.2. Profit before tax in CFC 2008-2012...................................................34
Figure 3.3. Total assets of CFC 2008-2012...........................................................34
Figure 3.4. CFC’s structures in 2012....................................................................36
Figure 3.5. Employees of CFC 2008-2012...........................................................37
Figure 4.1. Interested rate in job..........................................................................41
Figure 4.2. Intension to work for CFC.................................................................43
Figure 4.3. Employee‘s evaluation on their current job.....................................48
Figure 4.4 The numbers of report by department...............................................50
Figure 4.5. The frequency of reports....................................................................51
Figure 4.6. Employee‘s evaluation on job characteristic....................................52
Figure 4.7. Employee‘s desire about future position...........................................52
Figure 4.8. Structure of position 2012..................................................................54
Figure 4.9. Employee’s plan about their promotion in the next couple years. 54
Figure 4.10. Employee‘s understanding about CFC’s goal and strategy..........58
Figure 4.11. Employee‘s belief in CFC’s goal and strategy................................58
Figure 4.12. Comparision between understanding and belief in CFC’s goal and
strategy................................................................................................................... 58
Figure 4.13. Employee‘s satisfaction level with current salary..........................60

Figure 4.14. Salary in CFC in comparision with other colleagues and
companies............................................................................................................... 61
Figure 4.15. Employee‘s evaluation on relationships..........................................67


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EXECUTIVE SUMMARY
“Employee engagement is only part of the story when it comes to
performance. You also need to know whether your organization enables people to
do their jobs” (William Werhane Vice President, Effectiveness – Hay group). Today,
in competitive environment, managers are striving to motivate their employees to
perform at high levels. Numerous studies have shown a direct link between
employee motivation and high employee productivity but many companies still do
not recognize the link between workforce motivation and business performance.
Managers must find ways of motivating employees by developing programs or
practices aimed at emerging or unmet needs.
CFC is one of credit institutions in finance and banking sector, a member of
Vicem. HRM plays an important role in developing company, however, keeping
talent employees staying for a long time is a big problem facing CFC’s managers
since there are more and more qualified employees left CFC with many reasons.
CFC is facing more difficulties for managing employees which affects the operation
of the company. So enhancing employee motivation is very necessary for CFC to
limit the employees’ turnover
The thesis about “Work motivation at Cement Finance Company” is
written under such current circumstance with the purpose to find out some methods
to improve CFC’s human resources. Its objective is to provide the theoretical
background on Motivation – Hygiene theory of Frederick Herzberg, Hierarchy of
need of Maslow, Equity theory of John Stacey Adams, The Job Characteristics
Model of Hackman & Oldham and Path-Goal Theory of Robert House to find out

the factors influencing in employee motivation at CFC. Last, the thesis is to find out
the hygiene factors and motivator factors and propose solutions to enhance
employee motivation at CFC.
During the research process, the author conducted in-depth interviews with 4
current managers, 3 Ex-Managers, 3 Ex-employees and surveyed 59 members from


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all departments of company to collect staff‘s opinions about work motivation.
Moreover, the thesis used annual reports, periodic reports, and other statistics…of
CFC.
Motivation factors are referred as achievement, recognition, job itself,
promotion and growth, job responsibility.
Hygiene factors are referred as salary and benefits, appraisal measurement,
working relations, supervision-technical, company’s vision and goal.
After analyzing the current HRM, the author found main reasons causing
dissatisfaction of employee in CFC such as: goal and strategy is not clear, salary is
not competitive, appraisal measurement is not effective and flexible, employees do
not have chance for promotion, the training policy is not very effective, job is not
interesting and challenging.
Basing on discovered reasons, the author would like to suggest and
recommend some solutions to “enhance employee motivation”. These solutions can
make contributions to build up the policies in company. Some recommendations to
enhance employee motivation for CFC should be done such as: Complete the
company’s goal, Reform salary policy, Upgrading the system to assess
motivation for staff, Creating more interesting and challenging work, Creating
more effective rewards and recognition, Establishing feedback system, Completing
effective training program.
The author hopes that this research’s result will help BOM of CFC to
recognize and consider the importance of “enhance employee motivation” in HRM.

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CHAPTER 1
INTRODUCTION
This chapter will present some main parts of research proposal such as
rationale (the reasons for choosing thesis’s topic were its importance and
urgency for Cement Finance Company – herein referred to as “CFC”),
research questions, research methodology, research objectives, etc…. It will be
introduced in order to give readers a general picture of the research problem.

1.1. Rationale of the thesis
CFC was founded with decision #142/GP-NHNN, in the middle of the latest
financial crisis in 2008 with a charter capital of 300 billion VND. The shareholders
of CFC were provided by three leading enterprises in the banking and building
materials sector as Vietnam Cement Industry Corporation (Vicem) – the biggest
shareholder, The Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank),
and Vietnam Steel Corporation (VN Steel). CFC’s head office is located on the
7&8th floor, 28 Ba Trieu, Hang Bai, Hoan Kiem, Ha Noi.
From September 2008 up to now, after 4 years of establishment and
development, CFC now has owned the capital of more than 604 billion VND and a
total asset of nearly 2000 billion VND. The labor of CFC now is about 60.
CFC’s vision is to become the leading and most profitable financial
institution in the building materials sector. About Business Principles, CFC
considers their people, their capital and their reputation as the most important assets
of the Company.
Based on the real situation in Cement Finance Company (CFC), a member of
Viet Nam Cement Industry Corporation (Vicem) at the moment, the author finds out
three major reasons for conduction of the research.

Firstly, motivation plays an important role in life. It is one of the key factors
to the success. Work motivation is not the exception. Work motivation brings about
the capacity and effectiveness in business. But Cement Finance Company has never


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done research on work motivation methodical before. As a member of CFC‘s HR
department, I have heard much complaints about the policies, the opportunity, the
relationship at work …And the staff are really unhappy at work.
Secondly, in recent time, there have been some of CFC’s figures which are
noticed.
 The rate of turnover has fluctuated from year to year. The figure is 33% in
2009, 52% in 2010 and 48% in 2011. It shows in these tables in the appendix 4.
 The rate of absence of staff has increased. It is 2% in 2009, 5% in 2010 and
about 7% in 2011.
 In 2010, labor productivity reached 1.722 billion VND/person. In 2011 it
dropped to 1.355 billion VND/person. This year (according to the resolution in
1/2012) it reduced to only 736 million VND/person (down 54% corresponds
compared to 2011).
 The attitude of staff at work is not satisfied. The rate of feeling satisfied at
work in 2010 was 56 % and decreased to is 35 % in 2011 (according to HR’s
statistic).
 The commitment to the company is also lower. It dropped sharply from
19% in 2010 to 7% in 2011.
Specifically, in 2010, 8% of the staff desired to work for CFC in 1 year, 19%
wanted to work in 2-3 years, 32% wanted to work for a long time. In 2011,
however, the corresponding data were 5%, 7% and 32%. And the rest is say “not
sure” (42% in 2010, 56% in 2011) (Source: CFC HR sector’s survey).
Theoretical acknowledge and empirical evidence guide the author that those
problems must partially emerge from low work motivation at CFC.

Finally, CFC is a young and medium-sized credit organization in Viet Nam
finance and banking sector. The company is faced with numerous difficulties and
challenges, especially in attracting qualified candidates, encouraging the staff to
create the "output products" with real quality and competitive value. Starting from
this issue, the assessment of work motivation and giving some solutions is
necessary in order to improve the image, reputation of the Cement Finance


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Company and contribute to self-assessment activities in the accreditation process in
becoming Viet Nam Cement Group.
Regarding all of these above factors, the topic “Work motivation at
Cement Finance Company” was chosen for the research.

1.2. Research Objectives
This research is to:
 To systematize the theory in CFC’s practice in order to find out the CFC‘s
work motivation elements.
 To evaluate strengths and weaknesses of work motivation at CFC
 To propose recommendations to improve work motivation at CFC

1.3. Research questions
The question that should be answered to get close to the research objectives
were:
 What are the factors that influence work motivation in CFC? Which are the
most important factors?
 What are strengths and weaknesses of work motivation in CFC?
 What should CFC manager do to improve work motivation for its staff ?

1.4. Literature review

- In 2011, Ms. Le Minh Giang (In a Master of Business administration thesis
named “Work motivation of Planning department of Garment 10 corporations joint stock company” of National Economic University) has taken a complete
research on work motivation at planning department of Garment 10 corporations
joint stock company. She has found the problems originating from organizational
system of planning department like: they don’t have a high commitment about their
statements, the employees feel they are treated unfairly and the leader always
engages to lift employee’s salary level but in reality there is a little change, the
management of planning department has the trend of bias evaluation on employee
advancement and promotion throughout ex-workers’ activities highlights …She
showed the planning action to solve those problems. The research applied the theory


9
of Herzberg and the way she applied the theory in research was flexible. But her
scope of research is only in a department, so the recommends will difficult to
perform. The Herzberg theory shows motivators factors and hygiene factors, so the
solution system could not apply for planning department only. It would be better if
she divided the company into two groups to research like back office and front
office. If so, the solutions, the policy and the proposals she gave would be more
possible.
- Another research on work motivation was done in But Son Cement
company in 2010 by Mr. Truong Quoc Huy (In a thesis named “To complete work
motivation in But Son Cement Company” of Ha Noi School of Business - HSB). It
is one of the best studies about work motivation in a manufacture. The production is
completed but the theory which he applied is not clear although the analysis is well
done with large objectives and careful surveys from more than 400 members of But
Son Cement company. He applied the theory in general in research work motivation
in organization. The study shows that the factors which influence the work
motivation are the factors belonging to the enterprise (like leadership style,
company’s

strategy),

factors

of

the

job

(specific

production,

business

characteristics), individual factors (sexual, age, education) and factors outside the
enterprise. The author is the Head of Human resource management department, so
the scope of research is large and the solution is uniform and micro.
- Last year, Mr. Le Nguyen Hoang, a 49th course student of Economic and
Human resource management faculty, National Economic University, has
researched on CFC’s salary policy in a thesis “To complete salary policy in Cement
Finance Company”. He gave the solutions to complete salary policy by researching
the satisfaction of CFC’s members in receiving salary. He showed the components
of salary in CFC and the factors which influence. In some ways, the research
suggests the method to promote work motivation.


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1.5. Research methodology
1.5.1. Research process
The author believes it is easier if a clear roadmap of researching is built up as
a guideline for all of the steps taken during the research. Please take a look at the
chart below:

Figure 1.1. Research process

Source: Made by the author
 Step 1: Start from management problems. The events and the figures in fact
guided the research


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 Step 2: Choose the conceptual frame work. The “Two factor theory” of
Herzberg mainly apply, however, some theories about work motivation could be
used sometimes.
 Step 3: Collect secondary data and primary data with methodology
 Step 4: Basing on the data collected in step 3, design main interview
questions for in-depth-interview, and interviewed with the current managers and
some ex-managers and employees. Besides, the author delivered surveys to all
employees in company.
 Step 5: Find out analysis, discussion of findings and causes of low work
motivation.
 Step 6: Give some recommendations, suggestions.

1.5.2. Data collection
1.5.2.1 Sources of data
- Secondary data is collected to relating work motivation, dimension items to
measure work motivation.

- Primary data is approached by in-depth interviews and surveys.
 In-depth interviews approached by face-to-face to design questionnaire with
Table 1.1. Data collection

Interviewee
Current Manager
Ex-Manager
Ex-employee
Total

Numbers

Objective
Find out the possible reasons of low work

4

motivation and which are the most important

3
3
10

motivator factors
Find out the real reasons make them leave
Find out the real reasons make them leave
Source: Made by the author

 Survey used questionnaire to distribute at CFC with 59 members from all
departments of company to collect staff ‘s opinions about work motivation

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1.5.2.2 The result of sent and received questionnaires by department
Based on the theoritical framework built in previous part, table surveys to
evaluate human resource and work motivation in CFC include 73 questions
assessing two main groups of factors: the hygiene factors and the motivator factors .
All the surveys have been sent to all members of all departments, except the
CEO and the Deputy general director because the CEO and the Deputy general
director work by the mobilization of Vicem; a Board of Control member works
follow the indicated of BOM). This case may be good for the author because the
result of the survey will evaluate the reality of HR and the work motivation at CFC
because it shows the thought and the desire of all employees. The employees in
HCM branch answered the survey via email.
The result of the evaluation:
- The number of the sent surveys : 59
- The number of the surveys received: 58, which accounts for 98% of the
population.
Table 1.2. Sent and received questionnaires by department categories

Source: Survey by the author
The survey form has been showed in the appendix 2. A characteristic of CFC
is that the majority of the labor are in the age of 25-35 and the average year of
working in CFC is 1-3 years, so in analysis, the author counted the average mark for
each question or factor by their position and did not use the SPSS software. In the


13
analysis, the author will sometimes combine the offices group, sex, years of

working in CFC, age… to clear the problem and give the solutions.

1.5.3. Data Analysis
Data Analysis by diagrams, tables, and Microsoft excel (with functions).

1.6. Scope of research
 Research Object: Work motivation at Cement Finance Company
 Research location: 7&8th floor, 28 Ba Trieu, Hang Bai, Hoan Kiem, Ha Noi
 Research time:
 Secondary data collected from materials dating from the period of 2009 and
2011
 Primary data collected from April to May 2012

1.7. Structure of thesis
The thesis includes five chapters:
Chapter 1. Introduction
Rationale, research objectives, research questions, research methodology, scope of
work and the thesis structure.
Chapter 2. Motivation theoretical framework
- The definition of motivation and the role of employee motivation.
- Two factors theory, Hierarchy of need, Equity theory, Job characteristics
model, Path-Goal theory and the relevance of the these theories to the case of CFC
Chapter 3. Overview about CFC
General introduction about CFC, CFC’s organization, human resource structures
and demographic.
Chapter 4. Analysis
Analyzing the factors of Herzberg and other theories in CFC and concluded
research results.
Chapter 5. Recommendations
Suggesting some solutions for CFC to enhance motivation for its employees

CHAPTER 2


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THEORETICAL BACKGROUND OF EMPLOYEE
MOTIVATION
This chapter will present the concept of work motivation and its role;
distinguish the definition of work motivation, employee satisfaction and job
performance; theoretical background on motivation and previous researches.

2.1. Definition of employee motivation
“Work is one of the most absorbing things men can think and talk about. For
most of us, it fills most of the working day. For the fortunate it is the source of great
satisfactions; for many others it is the cause of grief ” (Herzberg, The Motivation to
work, 2008, p3). Motivation is a complex phenomenon which is influenced by
individual, culture, ethnic and history. According to Den Cenzo (1996), people who
are motivated usually perform a better job than those who are not motivated.
Motivation can be defined as “a series of energizing forces that originate both with
and beyond an individual’s self”. These forces determine a person’s behavior and
therefore influence his/her productivity (Jackson, 1995). Another definition of
motivation may be the desire and willingness of a person to do as best as possible
job or to exert the maximum effort to perform assigned work (Cardy, 2001). In
order to be motivated, a person needs to have certain basic needs fulfilled.
Otherwise, this could result in lack of interest to progress and develop, both
professionally and personally. There are several theories of human needs which are
the foundation of motivation (Latham and Ernst, 2006). Motivation is seemed the
desire of labor and voluntary workers to strengthen efforts towards achieving the
objectives of the organization (Nguyen Van Diem, Dr. Nguyen Ngoc Quan, Human

resource Management, 2010, p 134). As we consider about the employee
motivation, we could not skip the “Stick and a carrot” model. Those images
associate with the reward and punish form in order to promote desired behavior.
This form comes from the fairy tales saying that the best way to make a donkey
move is to put a carrot in front of it or use a stick rate behind him. In fact, the


15
reward method likes a carrot is usually applied as growth and promotion, salary or
benefit, although money is not everything but it is still very important measures.
However, in many cases, people receive a carrot but do not care about his
performance. A stick here is a punish method likes: out of work, salary decrease,
demotion and other punishment. In general, in order to promote the staff at work,
management has to know and apply the theories flexibly.
Employee motivation is aiming to motivate employees to improve their
performance and support them to complete the tasks effectively. To encourage
employees, management board has to create motivation on job. Motivation comes
from people’s demand that needs to be satisfied and in process of pursuing their
demand, they will work harder. A simple model of driving forces as the below chart:

Figure 2.1. A model of driving forces

Sources: />Motivation can be seen as continuous reactions, starting from feelings of
having demand, then being desire and goals being looked for, leading to impulsing
status that demands need to be met, next is action to achieve the goal and finally is
satisfaction as demand is met. In fact, this chain is more complicated. Need depends
on working environment. On the other hand, although demand is the cause of
behavior, it is the result of behavior too. A need satisfaction leads to other desires.
One thing that needs to be taken care is the difference between motivation and
satisfaction. Motivation is the trend and endeavour to satisfy a need or a goal.

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Satisfaction is the fulfillment or gratification of a desire or need. In other words,
motivation is a trend leading to the result and satisfaction is a result achieved. In
management point of view, a man can have high satisfaction on job low motivation
and vice versa. Some people have strong motivation on job but they don’t satisfy
much on job, as a result, they are going to look for other jobs. Also, some people are
paid much lower than their expectation while their position is important,
consequently, they will look for other jobs.
Totally, motivation is the willingness to exert high levels of effort to reach
organization goals, conditioned by the effort ability to satisfy some individual
need (Stephen P. Robbins & David A. De Cenzo).

2.2. Differences between employee motivation and employee satisfaction,
job satisfaction
2.2.1. Employee satisfaction
Employee satisfaction is the terminology used to describe whether
employees are happy and contented and fulfilling their desires and needs at work?
Many measures purport that employee satisfaction is a factor in employee
motivation, employee goal achievement, and positive employee morale in the
workplace. (By Carl Hose, eHow Contributor)

2.2.2. Job satisfaction
- The extent to which a person's hopes, desires, and expectations about the
employment he is engaged in are fulfilled ( />- Job satisfaction describes how happy an individual is with his or her job.
The happier people are within their job, the more satisfied they are said to be. A
primary influence on job satisfaction is the application of Job design, which aims to
enhance job satisfaction and performance using methods such as job rotation, job
enlargement, job enrichment and job re-engineering. Other influences on

satisfaction include management styles and culture, employee involvement,
empowerment, and autonomous work position. Job satisfaction is a very important
attribute and is frequently measured by organizations. Questions can relate to rates


17
of pay, work responsibilities, variety of tasks, promotional opportunities, the work
itself, and co-workers.

2.2.3. Job performance
Performance is considered as a function of ability and motivation, thus:
Job performance = f (ability) (motivation) (Gerhart, 2003)
Other definition, Job performance is the way employees perform their work.
An employee's performance is determined during job performance reviews, with an
employer taking into account factors such as leadership skills, time management,
organizational skills and productivity to analyze each employee on an individual
basis. Job performance reviews are often done yearly and can determine raise
eligibility, whether an employee is right for promotion or even if an employee
should be fired (By Carl Hose, eHow Contributor)
Ability in turn depends on education, experience and training and its
improvement is a slow and long process. On the other hand, motivation can be
improved quickly. There are many options and an uninitiated manager may not even
know where to start.

2.3. Role of staff motivation
“Quality of work now is the top priority in all industries all over the world”
and “Motivation is the key to performance improvement”. It is the statement of
Herzberg in the year of 1959 but now it still has the value and it is always true at all
time.
Human resource is the most important assets of all organizations. It is also the

factor determining the company’s competitive advantage.

Employees are the

resources of the organization, and a huge factor determining the production
costs of the enterprise business. Thus, the role of human resource management
is increasingly being featured in the organization. An organization can only
achieve high productivity when employees work hard and creatively. That
depends on the manner and method by which the managers use to motivate
employees to staff. Therefore, leaders must know the use of human art, know
how to manage and administer staff in an effective way, making them


18
committed, enthusiastic and energetic with job. That is the work of motivating
employees. This is a key part of human resource management, and it is
especially important in modern times.

2.4. Applied theories on staff motivation
“Motivation theory is the generic label applied to the ongoing study on why
we do what we do” (Author Gerry Jones, in ).
During the middle of the 20th century, there were many theoretical frameworks that
could help managers and executives to optimize the output of their rapidly
expanding industrial workforces. One of the common themes of these theories was
the stress on the emotional aspects of the work situation as opposed to the literal
and functional aspects of everyone’s job specification. Here, author mentions some
of them which are applied to the case study in CFC.
In this study, the author uses three main theories as: hierarchy of need, two
factor theories and the Equity theory. Three theories are suitable for pointing out the
current problem of CFC.

Firstly, Maslow‘s theory helps to understand common needs of every
individual. From that, CFC can design HR policy to meet their individual demands.
Secondly, two factors of Herzberg help the manager consider about company
policy, supervision, interpersonal relations, working conditions and salary. These
are de-motivation factors and motivation factors. The manager can appreciate the
satisfaction and dissatisfaction about works of employees. From the survey, the
author finds out which factors satisfy the employees of CFC, which factors
dissatisfy them and find out solutions and propose to apply in management to
motivate them more.
Thirdly, J. Stacy theory of equity helps the manager and policy makers to
appreciate inputs and outputs with relevant people. Applying this theory, CFC
analyzes the external equity and internal equity to find out the best way to motivate
employees.
Furthermore, the Path-Goal theory, The Job characteristics model have
been used in the thesis, too.


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2.4.1. Abraham Maslow’s theory
Maslow developed “Hierarchy of needs” in 1940 – 1950s’ in USA. The
theory remains valid today for understanding human motivation, management
training, and personal development. Indeed, Maslow’s theory on “Hierarchy of
needs” concerning the responsibility of employees to provide a workplace
environment that encourages and enables employees to fulfill their own unique
potential are today more relevant than ever. Maslow’s hierarchy of needs is shown
in the following diagram:

Figures 2.2. Maslow’s hierarchy of need

Source: Maslow’s theory

 The first level is formed by biological and the physiological needs (e.g.
food, water, air, and sleep) which are essential for life. When these are not satisfied
we may feel sick, irritated, painful uncomfortable…These feelings motivate us to
alleviate them and to establish homeostasis. Once they are alleviated, we may think
about other things.
 The second level is the needs for safety and security (e.g. structure, order
and predictability). After physiological need is met, one’s attention turns to safety


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and security in order to be free from the threat of physical and emotional harm.
Such needs might be fulfilled by: living in safe area, medical insurance, job
security, financial reserves. According to Maslow’s hierarchy, if a person feels that
he or she is in harm, higher needs will not receive much attention.
 The third level is the need for love and belonging or called social needs
(including family, friends, and sexual intimacy – give and receive love).
 The fourth level is the esteem needs – the next stage on the ladder. One a
person feels a sense of “belonging”, the need to feel important arises. Esteem needs
may be classified as internal or external. Internal esteem needs are those related to
self-esteem such as self respect and achievement. External esteem-needs are those
such as social status and recognition. Some esteem needs are: self-respect,
achievement, attention, recognition, reputation…
 The fifth as well as final level is what Maslow referred to as selfactualization. Self-actualized people tend to have needs such as: truth, justice,
wisdom, meaningful. People who have everything can maximize their potential.
 He eventually added a sixth cognitive need level (acquiring knowledge) and
a seventh aesthetic needs level (the creation and experience of beauty)
This hierarchy is now often represented as a pyramid, or sometimes seen it as
a ladder. Maslow said that needs must be satisfied in the given order. Aims and
drive always shift to next higher order needs, from deficiency motivators to growth
motivators and relatively rarely found. The thwarting of needs is usually a cause of

stress, especially true at level 4. For instance:
 You can't motivate someone to achieve their sales target (level 4) when
they're having problems with their marriage (level 3).
 You can't expect someone to work as a team member (level 3) when they're
having their house re-possessed (level 2).
The application of Maslow’s need hierarchy for management, an important
point for management to keep in mind is that employees are motivated by needs that
are not satisfied. And there are some important implications for management. There


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are opportunities to motivate employees through management style, job design,
company events and compensation packages.

Take the following case as an

example:
 Physiological needs: Provide lunch breaks, rest breaks, and wages that are
sufficient to purchase essentials of life
 Safety and security need: Provide a safe working environment, retirement
benefits and job security.
 Social needs: Create a sense of community via team-based projects and
social events.
 Esteem needs: Recognize achievements to make employees feel appreciated
and valued. Offer job titles that convey the importance of the position.
 Self-actualization: Provide employees a challenge and opportunity to reach
their full career potential.
However, not all people are driven by the same needs – actually, different
people may be motivated by entirely different factors. It is important to understand
the needs being pursued by each employee. To motivate an employee, the manager

must be able to recognize the needs level at which the employee is operating, and
use those needs as levels of motivation.

2.4.2. Equity theory of John Stacey Adams
A behavioral psychologist, John Stacey Adams conceived the theory in
1963 that asserts humans will be more motivated if what they receive as
compensation is equal to the efforts they give out. Apart from the equality
itself, the theory also studies the human perception and how it affects the view
on what is equal. The theory comprises several factors, two of which are the
“input” and the “output.” Input can generally refer to an individual’s
contribution or effort in a certain situation, while the output is things that the
individual gets in return for his contribution. In a familiar setting such as the
workplace, the input can be the employee’s efforts and hard work for doing his
task/duty.
Outcomes
Person’s own input

=

Outcomes
comparable other’s input


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Outcomes of the employees receiving from the job are: pay, benefit, rewards,
intrinsic job factors…Inputs to the job by employees are: education, experiences,
job qualification, skills…(Source: Human factors training, Online Aviation Human
Factors Training, www.lrtt.co.uk). There is very little application of this equity in
the workplace. Furthermore, the individual are very sensitive with inequity. It is
better to identify those inequities and do some more research before some

applications can be applied.

2.4.3. Fred Herzberg’s theory
Herzberg has developed a contrasting twin factor theory which distinguishes
between: motivational factors (which had the capacity to remove dissatisfactions)
and hygiene factors. It is regarded as one of the great original thinkers in
management and motivational theory. Fredrick Herzberg identified and studied
motivational factors in improving employee satisfaction in order to increase
productivity. It was the result of interviews conducted with 200 technical and
financial workers representing typical Pittsburg industrial employees during the late
1950’s (Herzberg, 1966). Herzberg identified two sets of independent factors,
motivating factors for job satisfaction and hygiene factors for job dissatisfaction
(Stoner, Freeman, & Glibert, 1995). Herzberg (1968) quickly pointed out that job
satisfaction and job dissatisfaction are not opposite but r distinctive factors. Hygiene
was used to describe dissatisfaction factors because they were primarily related to
the environment of the job (Herzberg, 1966). Herzberg suggests that hygiene factors
motivate employees but only for short time. In order to properly motivate
employees, managers need to focus on motivating factors. Herzberg (1966)
concluded that motivators were responsible for high job satisfaction and hygiene
factors were fundamentally responsible for low job satisfaction. Merely adding
motivators to an employees’ job was not enough to change their satisfaction level.
The key to increasing job satisfaction is to add these motivators to an employee’s
job in a specific way.
Herzberg was the first person to show that satisfaction and dissatisfaction at
work nearly always arose from different factors, and were not simply opposing