CHAPTER I THE PROBLEM AND ITS BACKGROUND

1.1 Introduction

The term motivation was originally derived from the Latin word movre which roughly

translates to move. Defined as the contemporary influence on the direction, vigor, and

persistence of a certain action on whether or not it would take place. Considered as one of the

determinants not only how an individual will behave but also how on how that individual will

interact with others. Hence, motivation enables a person and directs their behavior to a

particular setting or goal. (Deshmukh, 2010)

In any well-established organization, such as Meralco, the largest electric distribution companies

in the Philippines, the employees, specifically its linemen, are the most vital and essential

internal resource for their success is mainly contingent on the satisfaction and motivation of the

employed. Hence, the need to maintain the employed satisfied and motivated with their tasks

and works is an essential responsibility of an employer. The performance of the employed is a

fundamental component that facilitates organizational growth and sustainability, specifically

being affected by the reward system employed in an organization (Nisar, et al., 2011)

Therefore, the question arises, how can an organization motivate its employees and encourage

them to exceed what is expected. Management has constantly been searching for ways to

create a motivational environment where associates work at their optimal capacity to

accomplish company objectives. Workplace motivator includes both monetary and non-

monetary incentives. (Ballentine, et al., 2011) Monetary incentives are intended to reward the

employed for excellent job performance through money. Examples include but are not limited
to profit sharing, salary bonus, Christmas bonus and additional paid vacation time. (Pattanayak,

2005) But, in this research, the focus would be the latter, which are the Non-monetary

incentives, rewards granted to a worker non-financially, specifically the linemen of Meralco,

which are considered as one of the most essential workers of the company.

1.2 Objectives of the Study

Being the backbone of an electric company, the role of the linemen is really vital. This

study aims to know the impact of non-monetary compensation that the linemen receive on

their motivation. With this study, the researchers will be able to provide Meralco a deeper

understanding about the significance of the non-monetary compensation given to its linemen.

The following are the objectives of this study:

General Objective:

To determine the impact of non-monetary compensation on the motivation of the linemen of

Meralco

Specific objectives:

1) To determine the impact of non-monetary compensation on the level of energy of the

linemen of Meralco
 2) To determine the impact of non-monetary compensation on the retention of the

linemen of Meralco

3) To determine the impact of non-monetary compensation on the satisfaction of the

linemen of Meralco

4) To list the kinds of non-monetary compensation given to the linemen of Meralco

1.3. Theoretical Framework

When talking about employee motivation, the level of creativity, energy and

commitment that employees establish are of primary concerns. This increases competitiveness

in the company so the latter finds ways in motivating said employees to add productivity in the

workplace. Turner and Lawrence said that there are three basic characteristics of a motivating

job. Firstly, it must make the employee feel that he is responsible for the job he has

accomplished and that he must be connected with the job he does. Secondly, the outcomes of

the job must have a value to the employee. This is because even if the job done is plausible, said

job will not be maintained if the employee does not feel that his efforts do not matter. Thirdly,

there must be a comment about an employees job because a feedback of the job done is

important to provide improvement.

 Figure 1.3.1 Frederick Hertzbergs Two-Factor Theory

The first theory in connection with the study is Frederick Hertzbergs Two-Factor Theory

(1966) which is also known as dual-factor theory or motivation hygiene theory. This states that

there are two factors motivator and hygiene - affecting satisfaction and motivation of

employees. Motivator factors lead to satisfaction and motivate employees to work harder. On

the other hand, hygiene factors lead to dissatisfaction and a lack of motivation if they are

absent. The former includes career progression and feeling recognized while the latter includes

salary, benefits, company policies and relationships. Even though these two factors influence

motivation, they are not dependent of each other. In other words, the existence of hygiene

factors does not appear to increase motivation but their non-existence can cause

dissatisfaction. Also, while the presence of motivator factors increase motivation, their absence

does not necessarily cause dissatisfaction. This signifies that both motivators must be worked

on so that productive workforce must be maintained. Employees must be appreciated and

treated right by giving them the best working conditions in order to motivate them.
 Figure 1.3.2 Abraham Maslows Hierarchy of Needs

Another is Abraham Maslows Hierarchy of Needs (1954) where there are five levels.

This states that if the first two levels physiological and safety needs are not satisfied, then

the last three levels belonging, self-esteem and self-actualization will be stifled. In other

words, the lower needs must be prioritized which then would eventually lead to achieving the

higher needs. In work situations, this suggests that employers are responsible in giving the first

two needs of the employees. Therefore, the latter must be given safe working environment and

fair wages. Also, having a proper climate at work can develop an employees fullest potential

because without which, there can be an increase of frustration which then results to poorer

performance. Motivating employees can be done in so many ways. An employees paycheck

may satisfy his physiological needs. Other than this, the company may also provide vending

machines, cafeterias and drinking fountains for employees to use. Satisfying safety needs

includes but is not limited to providing health insurance, company-sponsored retirement plans

and other measures of job security. Avoiding abrupt decisions and providing job descriptions

are also included in safety needs. Likewise, employees are also motivated when their social

needs are met. This presupposes that communication with other people in the workplace may

help. Promotion opportunities and recognition of accomplishments, on the other hand, help in

attaining the fourth level of needs which is self-esteem. Challenging and interesting task are

done to promote growth and development which is an important aspect of self-actualization. By

giving importance to different needs mentioned, a highly motivated workforce may be ensured.

Figure 1.3.3 David McClellands Acquired-Needs Theory

 David McClelland, on his Acquired-Needs Theory, described the three types of

motivational need of a person. These three needs influence the motivation and effectiveness in

some job functions. First is the n-ach or the achievement motivation. This suggests that a

person needs a sense of accomplishment. One seeks to attain a challenging goal either by

working alone or with others. Second is the n-pow or authority/power motivation. One seeks

the need to be influential and that he makes an impact. This states that there is a need to lead

and for a persons ideas to prevail. Third is n-affil or affiliation motivation. A friendly relationship

is needed and interaction with other people builds up motivation. Just like in employment,

employees need harmonious relationship and to feel accepted by other people in the

workplace. With this, employees could have significant personal interaction and would tend to

compromise with those of their work group. This theory states that motivational needs affect

the employees behavior and working style.

Figure 1.3.4 Vrooms Expectancy Theory

 Expectancy Theory of Vroom discusses that an employees performance is based on

individual factors such as personality, skills, motivation, abilities and experience. Three main

variables expectancy, instrumentality and valence - are used in this theory. Expectancy is the

presumption that an increased effort will result to an increased productivity and this implies

having the right resources available, the right skills to do the job and the necessary support to

get the job done. Instrumentality suggests that a valued outcome will be achieved if one

performs well. This is affected by clear understanding of the connection between performance

and outcomes, trust in the people who decide on who gets the outcome and transparency of

the process that decides who gets the outcome. Valence, on the other hand, is the value that a

person places upon the expected outcome. The individual should choose to achieve the

outcome to have a positive valence. Vrooms Expectancy Theory therefore states that peoples

level of effort depends on the value they place on the rewards they receive from the work and

on their understanding of the relationship between the effort and outcome.

1.4 Conceptual Framework

All organization, may it be in the public or private sector, regardless of size, or industry,

requires motivated employees to function efficiently. One of the indispensable assets that

ensure productivity and efficiency is human resource. The outcome of a motivated workforce

includes human retention, loyalty, and harmony, factors that significantly contribute to the

development and growth of a corporation. (Lai, 2009)

 In order retain and motivate employees, their demand and needs must be factored in

together with the corresponding incentive schemes implemented. Monetary incentives,

researched by multiple researchers have a very large impact in delighting employees but the

bigger question arises about the involvement of non-monetary incentives in gratifying

employees and whether or not the impact is positively or negatively strong. (Nisar et al. 2011)

Figure 1.4.1 Conceptual Framework

This research will mainly revolve around the non-monetary incentives given to the

Meralco linemen, which due to the nature of the industry, considered as an essential asset, and

to determine how satisfied they are with the incentives they are receiving from the company. As

seen in figure xxx, this research will tackle the different non-monetary incentives and to

determine the impact on the linemens commitment to stay with the company, their

satisfaction, motivation, and their functionality.

1.5 Statement of the Problem

The role of the linemen is very significant in the function of Meralco. Because of this,

this study focuses on how the motivation of these linemen is affected by the non-monetary
compensation that they receive. To be able to fulfill the objectives of this study, the following

are the questions that the researchers intend to answer:

General Problem:

What is the impact of non-monetary compensation on the motivation of the linemen of

Meralco?

Specific Problems:

1) Does non-monetary compensation add level of energy of the linemen of Meralco?

2) Does non-monetary compensation help in retaining the employment of linemen of

Meralco?

3) Does non-monetary compensation provide satisfaction to the linemen of Meralco?

4) What are the kinds of non-monetary compensation given to the linemen of Meralco

1.6 Hypothesis

Hypothesis for the General Objective:

Null:

Non-monetary compensation has no significant impact on the motivation of the linemen of

Meralco

Alternative:
Non-monetary compensation has a significant impact on the motivation of the linemen of

Meralco

Hypotheses for the Specific Objectives:

1) Null:

Non-monetary compensation has no significant impact on the level of energy of the

linemen of Meralco

Alternative:

Non-monetary compensation has a significant impact on the level of energy of the

linemen of Meralco

2) Null:

Non-monetary compensation has no significant impact on the retention of the linemen

of Meralco

Alternative:

Non-monetary compensation has a significant impact on the retention of the linemen of

Meralco

3) Null:

Non-monetary compensation has no significant impact on the satisfaction of the

linemen of Meralco
 Alternative:

Non-monetary compensation has a significant impact on the satisfaction of the linemen

of Meralco

4) Null:
The kinds of non-monetary compensation given to the linemen of Meralco are

sufficient
Alternative:
The kinds of non-monetary compensation given to the linemen of Meralco are not

sufficient

1.7 Significance of the Study

Meralco, being the largest electric company in the Philippines, provides a number of

employments to people in different fields. Linemen are one of the specific groups of employees

employed by Meralco. These employees may be said to be ordinary employees and do not

receive that much of a salary. However, according to Meralco First Vice President and Networks

Head Ronnie Aperocho, these linemen are, being the backbone of the company, its heroes.

They work really hard, in every difficult situation, risking their lives just to restore power

immediately and to bring back normalcy in the lives of customers Their role in the company is

so vital that without them, the primary purpose of Meralco would not be sustained. For this

reason, it is important to assure that said employees are well-motivated in order for them to

accomplish their tasks with satisfying quality. With this, they will greatly help in the progress of

the company.
 It is undeniable that non-monetary compensation is a form of benefit given to

employees. But it is still a question whether or not this kind of compensation provides

significant impact on the motivation of employees. This being said, the result of our study will

provide help in understanding the stand of the linemen of Meralco in connection with the non-

monetary compensation given to them. With this research, we will be able to pinpoint and

enumerate the impacts, if there is, depending on the output of our study. By understanding how

the non-monetary compensation plays its role, we will be able to show the connection between

them and the motivation of linemen. So with this, the company, too, could provide a better

understanding of the importance of the benefits it gives to their employees. In addition, it could

learn how to properly allocate non-monetary compensation in motivating its linemen and

therefore, adding loyalty and commitment to the organization.

1.8 Scope and Limitations

The researchers will discuss in this study the relationship of non-monetary

compensation and the motivation of the linemen of Meralco. With the answers to be gathered

from our respondents, the non-monetary compensation which is the independent variable and

the motivation of the linemen which is the dependent variable are to be tested to see how the

former really gives impact to the latter. This study includes all kinds of non-monetary

compensation that said employees receive. In addition, different theories are included in this

study to explain the rationale on how this non-monetary compensation affects motivation.

The subject of the study, being very specific, is limited on the motivation of the linemen

of Meralco. The results to be derived will be understood to be limited to said linemen and not
applicable to other types of employees. Likewise, there is a specific branch of Meralco Ortigas

- that the researchers focus on.

1.9 Definition of Terms

Motivation Defined as the contemporary influence on the direction, vigor, and

persistence of a certain action on whether or not it would take place. The reason for

acting or behaviouring in such a way.

Extrinsic Motivation Motivation which includes engaging in a behavior because of

getting external rewards or averting penalty.

Intrinsic Motivation Refers to practice that is directed by internal rewards. In other

words, the motivation to act in a certain way arises from within the individual because it

is innately pleasing.
Monetary Incentives Money-based reward given when a worker meets or exceeds

expectation. Includes but not limited to financial rewards handed to the employed in

terms of: bonuses, insurances, paid leave, etc.

Non-monetary Incentives Refers to the indirect payment of money in the form of

tangible rewards such as gift cards, watches, garments, vacation trips and the likes. May

be tangible or intangible.
Meralco The largest electric distribution company in the Philippines, covering 36 cities

and 75 municipalities, including Metro Manila.

Meralco Linemen One of the essential human resource of Meralco. They deal with the

constructing, troubleshooting, repairing, and maintaining overhead and underground

power lines.