Title

Impact of non-monetary motivational tools on employee retention of Kallol Group of

Companies.

Table of Contents

1. Introduction ............................................................................................................................................... 1
1.1 Statement of the problem ............................................................................................................... 1
1.2 Non-monetary reward ..................................................................................................................... 2
1.3 Objectives of the study..................................................................................................................... 2
1.3.1 General Objective...................................................................................................................... 2
1.3.2 Specific Objectives .................................................................................................................... 2
2. Literature Review ..................................................................................................................................... 3
2.1 Maslow’s Hierarchy of Needs Theory ....................................................................................... 3
2.2 Expectancy theory ............................................................................................................................. 4
2.3 Herzberg’s two factor theory ........................................................................................................ 5
2.4 Employee Retention .......................................................................................................................... 6
3. Conceptual Framework ........................................................................................................................ 6
4. Research Methodology .......................................................................................................................... 7
5. Data Analysis ............................................................................................................................................. 8
6. Discussion ..................................................................................................................................................... 9
7. Conclusion .................................................................................................................................................10
8. Recommendation ....................................................................................................................................10

1. Introduction

1.1 Statement of the problem

Employee retention denotes the process of physically keeping the employees as this is one of

the most important factors for an organization’s success. Retention of high performing

employees is a huge challenge for organizations especially in times of high turnover rates.

Our targeted organization; that is Kallol group is paying high salary to its employees, but still

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facing problem to retain its employees. In our research we will try to find out the reason

behind high turnover rate of Kallol Group employees, and the impact of non-monetary

motivational tools on employee retention. We have tried to identify some non-monetary

motivational tools that we will work with, such as generous family leave policies, company

culture, learning opportunity, advancement opportunity, job security, performance incentives,

flexible work option, prize reward program, encouraging employees to reward one another,

public recognition after a good performance, decision making authority upto a certain level.

1.2 Non-monetary reward

Non monetary rewards are those that do not involve direct money to employees. Most

companies are not conscious about various needs of their employees and do not comprehend

among different forms of rewards. Employees’ different needs, demographics and their life

stage should be considered before designing a reward package.

According to Lawler (1996), while extrinsic rewards such as money are important in the short

term, intrinsic rewards in the form of meaningful work tend to sustain motivation in the long-

term.

1.3 Objectives of the study

1.3.1 General Objective

The general objective of this study is to establish the impact of non-monetary motivational

tools on employee retention at Kallol Group of Company.

1.3.2 Specific Objectives

The specific objectives of this study are:

1. To establish the effect of generous family leave programs on employee retention of Kallol

Group.

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2. To establish the effect of learning opportunity programs on employee retention of Kallol

Group.

3. To establish the effect of performance incentive programs on employee retention of

Kallol Group.

4. To establish the effect of flexible work options on employee retention of Kallol Group.

5. To establish the effect of decision making authority on employee retention of Kallol

Group.

2. Literature Review

Maslow, Victor Vroom, Herzberg has demonstrated some theories of motivation.

2.1 Maslow’s Hierarchy of Needs Theory

Maslow hypothesized that within every human being, there exists a hierarchy of

five needs:

1. Physiological- Includes hunger, thirst, shelter, sex, and other bodily needs.

2. Safety- Security and protection from physical and emotional harm.

3. Social- Affection, belongingness, acceptance, and friendship.

4. Esteem- Internal factors such as self-respect, autonomy, and achievement,

and external factors such as status, recognition, and attention.

5. Self-actualization- Drive to become what we are capable of becoming; includes growth,

achieving our potential, and self-fulfillment.

Although no need is ever fully gratified, a substantially satisfied need no longer motivates.

Thus as each becomes substantially satisfied, the next one becomes dominant. So to motivate

someone, according to Maslow, one needs to understand what level of the hierarchy that

person is currently on and focus on satisfying needs at or above that level. Maslow separated

the five needs into higher and lower orders. Physiological and safety needs, where the theory

says people start, were lower-order needs.

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2.2 Expectancy theory

One of the most widely accepted explanations of motivation is Victor Vroom’s expectancy

theory. Although it has its critics, most of the evidence supports it.

Expectancy theory argues that the strength of our tendency to act a certain way depends on

the strength of our expectation of a given outcome and its attractiveness. In more practical

terms, employees will be motivated to exert a high level of effort when they believe it will

lead to a good performance appraisal; that a good appraisal will lead to organizational

rewards such as bonuses, salary increases, or promotions; and that the rewards will satisfy the

employees’ personal goals. The theory, therefore, focuses on three relationships-

1. Effort–performance relationship- The probability perceived by the individual that exerting

a given amount of effort will lead to performance.

2. Performance–reward relationship- The degree to which the individual believes performing

at a particular level will lead to the attainment of a desired outcome.

3. Rewards–personal goals relationship- The degree to which organizational rewards satisfy

an individual’s personal goals or needs and the attractiveness of those potential rewards for

the individual.

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2.3 Herzberg’s two factor theory

To Hertzberg, the data suggest that the opposite of satisfaction is not dissatisfaction, as was

traditionally believed. Removing dissatisfying characteristics from a job does not necessarily

make the job satisfying. Herzberg proposed a dual continuum: The opposite of “satisfaction”

is “no satisfaction,” and the opposite of “dissatisfaction” is “no dissatisfaction.” According to

Herzberg, the factors that lead to job satisfaction are separate and distinct from those that lead

to job dissatisfaction. Therefore, managers who seek to eliminate factors that can create job

dissatisfaction may bring about peace, but not necessarily motivation. They will be placating

rather than motivating their workers. As a result, Herzberg characterized conditions such

as quality of supervision, pay, company policies, physical working conditions, relationships

with others, and job security as hygiene factors. When they’re adequate, people will not be

dissatisfied; neither will they be satisfied. If we want to motivate people on their jobs,

Herzberg suggested emphasizing factors associated with the work itself or with outcomes

directly derived from it, such as promotional opportunities, personal growth opportunities,

recognition, responsibility, and achievement. These are the characteristics people find

intrinsically rewarding.

Frederick Herzberg’s two-factor theory (also called motivation-hygiene theory) proposes

that intrinsic factors are related to job satisfaction, while extrinsic factors are associated with

job dissatisfaction. Herzberg believed the factors that led to job satisfaction were separate and

distinct from those that led to job dissatisfaction. Therefore, managers who sought to

eliminate factors that created job dissatisfaction could keep people from being dissatisfied but

not necessarily motivate them. The extrinsic factors that create job dissatisfaction were called

hygiene factors. When these factors are adequate, people won’t be dissatisfied, but they

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won’t be satisfied (or motivated) either. To motivate people, Herzberg suggested

emphasizing motivators, the intrinsic factors having to do with the job itself.

Based on this theory, we will try to find out how ‘motivators’ helps an organization to retain

its employee. In our case ‘motivators’ are generous family leave policies, performance

incentives, flexible work option, prize reward program, encouraging employees to reward

one another, public recognition after a good performance, decision making authority upto a

certain level etc.

2.4 Employee Retention

Afenyo (2012) in his study of motivation effects on retention in a private sector in Ghana,

found that motivation has significant positive result on retention and further recommended

future researchers to include demographic factors and job satisfaction to the effect of

motivation and retention in the private sector and further recommended future researchers to

include demographic factors and job satisfaction.

Sajjad et.el (2013) found that motivation has significant effect on workers quitting jobs in

Pakistan financial segment; this indicates the fact raise in motivation in-turn enhance the

employee retention.

3. Conceptual Framework

This framework attempts to determine the influence of non-monetary motivational tools on

employee retention of Kallol group. The non-monetary tools include generous family leave,

learning opportunity, performance incentives, flexible work option, decision making

authority of employees up to a certain level. The study will therefore determine effect of

independent variables on the dependent variable.

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4. Research Methodology

 The study is descriptive in nature and we will use qualitative research procedure for

analyzing this case.

 Variables: Independent variables- generous family leave policies, performance

incentives, flexible work option, prize reward program, encouraging employees to

reward one another, public recognition after a good performance, decision making

authority upto a certain level, dependent variable –Retention of employees.

 Questionnaire: Unstructured form questionnaire will be used for interview.

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  Data collection method: Interview, Focus group discussion (FGD)- these two method

will be used for data collection.

 Sampling: Convenient random sampling will be conducted.

 Data analysis method: We will conduct narrative analysis based on answers we get

from respondents and try to find some insights on employee retention.

5. Data Analysis

We have collected the data by informal interview and have conducted a thematic analysis.

Analysis is done following the below mentioned steps:

Step-1: Getting familiar with the data

Step-2: Generating initial codes

Step-3: Searching for themes

Step-4: Reviewing the theme

Step-5: Defining themes

Step-6: Writing up

We have interviewed eight employees of Kallol Group.

Here are the two positive categories where employees of Kallol Group are satisfied:

Salary: All eight employees said that they receive satisfactory salary on time.

Felixible working hour: Six employees said that they are having flexible working hour and

successfully having work-life balance.

Here are categories where employees are not satisfied:

Generous Family leave policies: Company does not provide generous family leave policies

for its employees.

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Learning opportunity: One employee mentioned, “learning opportunity is very little,

seniors do not guide properly.” Most of the employees mentioned company does not provide

ample learning opportunities.

Performance incentive: Only one employee mentioned that he receives performance based

incentive. Other Seven said that it is not introduced in their departments, but they will be

happy and be encouraged to continue their job if they get performance incentive.

Decision making authority: Employee does not get the scope to make decisions even in the

smallest issues. Top management try to intervene in every issues where it is not necessary.

Finally employees were asked to share their opinion about employee retention at Kallol

Group. Four of them mentioned about more decision making authority and performance

based incentives. Two of them highlighted about more training opportunity. Three of them

mentioned about generous family leave opportunities so that they can spend quality time with

their family.

6. Discussion

It is very important for an employer to retain its potential and talent employees. Employer

should set a target percentage to retain its employee on annual basis. To fulfill that target,

Kallol Group should highlight the importance of non-monetary motivational tools as a part of

their total reward policy, as motivating employee does not always require to involve money.

Innovative and memorable non-monetary motivational tools also play a substantial role to

stabilize employee retention. In our case, we have found that generous family leave, better

learning opportunity, good performance incentives, flexible work option and decision making

authority could play a pivotal role to increase employee retention at Kallol Group.

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7. Conclusion

From the result of the research it can be concluded that non-financial motivational tools took

dominance on employee satisfaction and hence retention. The fact that Kallol Group is

paying well enough to their employees does not suffice and does not retain employees for

long. Alongside guaranteed remuneration, non-financial rewards plays an important role in

employee retention.

8. Recommendation

Given the context of this study, it is safe to say that there is a place for non-financial rewards.

It is recommended that Kallol Group should continually review their reward practices to

ensure alignment with the potential impact of changes in the macro environment. The fact

that most of the employees differed in their opinions of some rewards like learning

opportunity or performance incentives shows that different employees have different needs

and some rewards may not satisfy them therefore, an employer should diversify their rewards

to make it compatible with employee’s needs.

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REFERENCE

Afenyo Sedem, K. (2012). The Effect of Motivation on Retention of Workers in the Private

Sector: A Case Study of Zoomlion Company Ghana Ltd (Doctoral dissertation,

Institute of Distance Learning, Kwame Nkrumah University of Science and

Technology, Kumasi).

Sajjad, A., Ghazanfar, H., & Ramzan, M. (2013).Impact of motivation on employee turnover

in telecom sector of Pakistan.Journal of Business Studies Quarterly. 5 (1), 76-92

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