ABSTRACT
Retaining employees forms the basis for developing
competitive advantage in any organization including banks. It is therefore
imperative to consider employee retention role in the banking institutions. One
factor that influences employee retention is motivation. This study primariliy
assessed how financial and non-financial reward benefits motivate employeees at
First Atlantic Merchant Bank with (FAMB) and how these in turn influence their
employee retention. Specific objectives were to examine whether there are
differences in fators which motivate managers and non-managers, the challenges
of motivation and employee retention, and the effect of motivation and employee
retention. Data was collected from both employees and management using
purposive and imple random techniques. Data analysis was done by using
descriptive statistics, Pearson correlation coefficient and independent sample
test, and qualitative techniques. The outcome of the study shows that pay,
fringe benefits, allowance, promotion, training and development and
recognition. Again the study found that managers were found to be more
motivated when given non-financial rewards whiles other staff members who are
not managers were motivated by financial rewards. Further, the study found that
the relationship between employee motivation and job retention was positive.
From the human resource management perspective, the study recommends the use of
both intrinsic and extrinsic factors to motivate employees, the need to achieve
equityin in motivational sytems, and using different motivational packages by
understanding individual psychologies regarding motivation.
CHAPTER ONE
INTRODUCTION
Background to the Study
The competitive business environment of the modern era has
warranted the need to recruit and maintain a highly qualified manpower. Kassa
(2015) contends that human capital has long been held to be a critical resource
in most firms. One of the important and effective components of human resource
management is employee’s motivation in order to maintain an effective workforce
.The literature on organizational motivation is elusive of a
definite definition. For instance, Olubebe (2005) posits motivation as an
internal arousal which directs and maintains achieving a set goal. Petri (1996)
also define motivation as the forces acting on within a person to initiate and
direct behavior.
According to Halepota (2005), these definitions put forward
by Olubebe and Petri have not only stated the meaning of motivation but have
also made inputs on the role of motivation to the worker. He further assets
that the concept of motivation is abstract because different strategies produce
different results at different times and there is no single strategy that can
produce guaranteed favorable results at all times. There is usually the
difficulty in ascertaining key motivational factors and as highlighted by
Halepota, any universal application of a particular motivational factor may be
misleading. Nevertheless, Chiang and Canter (2008) cite several motivational
factors including reward, recognition from managers, challenging work, good
working conditions, good work schedules, and job security. Similarly, Mak and Sockel (2001) note that
strategies of motivation may range from lucrative compensation packages to
involving employees in every sphere of the functioning of the organization.
Within the literature on organizations, motivation is not
seen as an end in itself but as a means to an end. Motivation is seen as a
predictor of such desirable organizational outcomes such as job satisfaction
which invariably lead to employee retention. Chaminade’s definition of
retention highlights the claim made that motivation can lead to job retention.
Chaminade (2007) defines retention as a voluntary move by an organization to
create an environment which engages employees for a long time. The definition
of retention by Schuler and Jackson (2006) says that retention is seen as
everything an employer does to encourage qualified and productive employees to
continue working for the organization. This definition gives emphasis to the
role of motivation in ensuring employee retention.
Mak and Sockel (2001) noted that retaining a healthy team of
committed and productive employees is necessary to maintain corporate strategic
advantage. For De Vos and Meganck (2009), talented people with varied competencies
are very critical for the survival of an organization however that such people
are difficult to maintain. This is because they attach more importance to their
own career path than organizational loyalty which in turn can result in
voluntary turnover making the organization lose employees that can impede
achieve organizational goals easily.
Employee retention is very important to the success of all
organizations. Unfortunately however, employee retention still constitutes a
challenge to most organizations. Chew and Chan (2008) opined that retention of
employees has become a primary challenge to most organizations worldwide. The
authors attribute consequences such as the high cost of recruitment and
selection, the possible loss of productivity during adjustment period, the
probable loss of business opportunities, poor customer rapports among others to
the problem of labour turnover. Mayfield and Mayfield (2008) following their
study on employee retention in the United States also subscribe to the view
that employee retention constitutes a challenge to organizations. The authors
stated that the retention of valuable employees is one of the most significant
issues confronting leaders in organizations.
The effects of employee retention have been demonstrated in
Ghana across various sectors of the economy including the banking industry,
which is the focus of this study. For instance, the Bank of Ghana annual report
in 2005 revealed that there were several complaints by customers from the
banking sector in the forms of unfair banking practices and poor customer
service. In an empirical study on employee turnover in Ghana, Dwomoh and
Korankye (2012) attributed the high level of customer complaints to the high
rate of employee turnover in the banking sector. Amediku (2008) in an earlier
study corroborated the claim of the high level of employee turnover in the
banking industry by Dwomoh and Korankye (2012) Amediku (2008) observed that the
period between 2001 and 2007 witnessed an average labour turnover rate of 5.35
percent in the banking sector in Ghana. Consequently, Dwomoh and Korankye advocate that banks
in Ghana adopt measures to retain their key employees citing motivation as one
of such measures.
The theoretical motivation for this study derives from the
fact that motivational strategies may not be applicable to every work setting
as espoused by Halepota (2005). More so the evidence provided by Dwomoh and
Korankye (2012) in Ghana pertaining to the high incidence of customer
complaints in the banking industry citing labour turnover as a causative factor
partly serves as the motivation for this study. The choice of First Atlantic
Merchant Bank (FAMB) for the study is also informed by Dwomoh and Korankye findings
which had been corroborated by Amediku. Thus the FAMB is a banking firm and the
rationale is to select a sampling unit from the banking industry which has been
plagued by the problem of labour turnover.
Statement of the Problem
Employee motivation is widely citedin organizational
literature as a factor that influences employee retention. In their study of
the impact of motivation on employee retention in South Africa, Kekana et al.
(2004) established that the reasons for emp[loyee turnover include lack of
promotion, lack of opportunities for training and development, job insecurity,
and lack of recognition of good performance.
Nyamekye (2012) in a study of the effect of motivation on job
retention drawing on the experience of Standard Chartered Bank in Ghana found
monetary benefits as a significant determinant of motivation among
employees and that motivated employees show greater level of retention. In a
related study, Asiamah (2011) in his study of motivation among the staff of the
Ghana Internal Revenue Service found good manager relationship as a significant
predictor of motivation among staff.
The findings of these studies lend credence to the contention
by Lindner (1998) that in order to be effective, managers need to understand
what motivates employees within the context of the roles they perform. Spector
(2003) following his study on motivation in the United States provides a logical
extension of Lindner’s position on motivation by asserting that a variety of
factors motivate people at work; some are motivated with tangibles such as
money and others are motivated with intangibles such as sense of achievement
and recognition.
The aim of the current study therefore is to fill the gaps in
the literature on employee motivation and job retention by examining what
factors motivate employees to be retained at First Atlantic Merchant Bank in
Ghana.
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