financial incentives as a technique of employee performance improvement

7/25/2019 Financial Incentives as a Technique of Employee Performance Improvement

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Table of ContentsChapter 1.........................................................................................................4

Introduction.....................................................................................................4

1.1 Background of the research....................................................................5

1.2 Rationale of the research........................................................................5

1.3 Importance of the study.........................................................................6

1.4 ims of the research...............................................................................!

1.5 Research o"#ecti$es................................................................................!

1.6 %oti$ation for choosing the research su"#ect.........................................!

1.& 'tructure of the research........................................................................(

1.! Chapter 'ummary..................................................................................(

Chapter 2.......................................................................................................1)

*iterature re$ie+............................................................................................1)

2.1 Introduction..........................................................................................11

2.2 ,nderstanding moti$ation and -nancial incenti$es..............................11

2.3 ,nderstanding the preferences of -nancial incenti$es among

employees..................................................................................................13

2.4 /ects of -nancial incenti$es in moti$ating employee "eha$iours......14

2.5 ,nderstanding the employee demands................................................15

Importance of -nancial incenti$e and payments........................................15

2.6 %oti$ation of employees "y -nancial incenti$es..................................16

2.& *ong term moti$ation and -nancial incenti$es.....................................1!

2.! Chapter summary.................................................................................2)


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Chapter 3.......................................................................................................21

%ethodologies...............................................................................................21

3.1 Introduction..........................................................................................22

3.2 Research philosophy.............................................................................23

3.3 research approaches............................................................................25

3.4 Research strategy.................................................................................26

3.5 Research choice....................................................................................2!

3.6 0ata collection method........................................................................2(

3.& 0ata analysis method...........................................................................3)

3.! Research ethics....................................................................................3)

3.( Research limitations.............................................................................31

3.1) Research summary.............................................................................31

References.....................................................................................................32


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Chapter 1

Introduction

1.1 Background of the research

The term of human resource management is applied by the managers of all companies in present

times. The purpose that it serves is to encourage employees to increase productivity. DeCenzo

and Robbins (200! agreed that human resource managers ta"e various methods into action to

encourage the #or"force they have to deal #ith but in most of the cases$ it remains un"no#n that

#hat type of encouragement does employee #ant. %mployees get motivated the most by


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financial incentives. &t is needless to say ho# important human resource is for current conte'ts.

&n the past$ employees are thought to be only #or"ing part of the organization but the thin"ing

has changed so rapidly that managers falls into confusion #hat to do or not. The conte't of

financial motivation is no# integrated #ith various approaches in the application of human

resource management #idely$ e'pressed by &vancevich and ee in 2002. This area has become a

significant part developing management strategies relating to human resource. The term financial

incentive is based not only on the needs but also the proper development planning so that it can

boost up the performance level. %mployees are needed to be financially content in the #or"

environment beside their basics as #ell as to motivate them so that employee turnover ratio is

assumingly reduced. The proper implication of financial incentives ma"es sure of better

performance$ better productivity and better satisfaction level in most of the times. )inancial

incentives or motivational methods$ in this manner$ contributes in "eeping #or"force satisfied

#ith increasing performance level and help human resource managers ultimately the #hole

organization to concentrate more on other sectors of business than remaining busy #ith

employee problems to solve. &t creates enough strength for this term to be clarified for its

significance in organizations.

1.2 Rationale of the research

The reason behind choosing the term *)inancial &ncentives+ as the sub,ect of the research is the

gro#ing importance and issues around it. &t #or"s as a techni-ue of employee performance

enhancer. %very organization recruits human resource managers for the sa"e of the

organizational goal achievement (archington and /il"inson$ 200!. The conte't of ritish

merican Tobacco is described in this research. ut managers in this case face difficulties in

motivating people. Compensation is the return of employee performance for organization. 3tudy

on employee behaviors sho#s that it is not only compensation or basic payment that "eeps them

motivation financially as #ell as mentally. The one of the purpose of this research issue is to

clarify the importance of financial incentives from the other motivational methods and discuss an

effective implication of this term of T (ritish merican Tobacco!. 4ne of the other rationales

behind the issue is the personal interest in human resource management. 5uman resource


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managers see" to imply correct #ays for motivating their #or"force but conflicts create #hen the

financial incentives and social or emotional incentives are not clearly understood.

This study aims at #hat motivates employees most to perform s#iftly #ithin the #or"

environment and ho# employees react to each methods of motivation. To e'plore employee

behaviors to#ard financial incentives are the purpose of this #riting.

ryman and ell (2011! e'pressed their thought that the evaluation of this sub,ect is important

for organizations and for researcher as #ell to be clarified as this issue is becoming unavoidable

for every organization. 3o$ the concurrent importance and significance of this topic is another

rationale behind this research.

1.3 Importance of the study

The main reason for choosing financial incentives as a techni-ue of employee performance

improvement is its ongoing importance in the organizations. &vancevich and ee (2002!

described that managers find this method of motivation helpful in most of the cases #hen

conflict arises about satisfaction in employee6s mind. &n general$ financial incentives are

financial benefits offered to employees$ customers and other parties to affect their behaviors

to#ard a particular fact or to motivate them to#ard the fact (/ilton$ 2011!. &n organization$

financial incentives are offered rather provided to employees so that they can be motivated to

enhance their #or"ing abilities and performance as a follo# through. The study definitively

carries a huge importance in several points of vie#. 3ome of the benefits are li"e7

)inancial incentives are re#ards in return for employee performance. 8eople have a

strong feeling about this issue. &t helps to satisfy the needs of employees. 9eeds$ such as7 3ecurity needs

%steem needs

3elf:actualization needs

&t has been a sub,ect of business legislation importantly no# days. &t covers the national

minimum #age$ e-ual opportunities legislation and so many other acts relating to it.

The company offers a relevant and locomotive financial benefit attracts more effective

and suitable candidates in selection processes. 8eople desire to #or" for the organization.

3o$ human resource managers and recruiters find it helpful to choose the best possible


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employee options for the company among many #illing people. 8eople #illing to #or"

for a company #ill definitely enter as motivated recruits and try to prove themselves

through better performance from the beginning. &t also creates a positive impact on

employee training and motivation directly. &n result$ that organization en,oys much

reliable and s"illful #or"force that is needed to succeed.

&ndividual performance is so much affected by financial re#ard or motivations.

%mployees seem to have a positive outloo" on the current organization if they are

properly benefited according to their performance level. &t also causes a competition

among the employees to prove they better by increasing individual performance and

productivity.

8roductivity increasing is another importance for managers to imply financial re#ards to

employees of any organization. &ncreased productivity

3atisfaction level

chievement of organizational goals

ess turnover ratio

Competitive advantage

1.4 ims of the research

The aim of this research is to establish the importance of the term financial incentives in

improving employee performance in the environmental conte't of ritish merican Tobacco.

1.! Research ob"ecti#es


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This research has been conducted based on several aspects that #ill serve as the ob,ectives of this

research and the #hole #riting #ill shed light on these ob,ectives from the managerial and

individual employee6s point of vie#. The ob,ectives of this research are li"e7

To determine the preferred types of incentives of employees To find out #hether the employees are motivated by financial incentives

To get to "no# ho# they are motivated by financial incentives

To "no# #hat is needed for high performance in #or" place

To understand the long term needs of employees in #or" environment

1.$ %oti#ation for choosing the research sub"ect

asically the ongoing importance of motivation in increasing employee performance has made

the researcher to choose the sub,ect. )inancial incentives as a tool of employee and #or"force

motivation are undoubtedly applied by the human resource managers of almost every company.

ut this sector of organizations needs development on planning and implementing them. Current

organizational conte't motivates researcher to advance ahead #ith this sub,ect. The proper

evaluation can ma"e the action simpler than current positions. This research sub,ect signifies

single certain research area #hich helps to research and analyze. 8ersonal interest is another fact

to choose the research sub,ect. nother reason to choose is the availability and access to

resourceful databases #hich decorates the research in successive manner. 3o$ based on the

reasons behind$ the operational research is proceeding further.

1.& 'tructure of the research

This dissertation aims at ans#ering the ob,ectives of the research. This research has strategically

planned to help researcher. The research begins #ith chapter 1 #hich describes an introductory

overvie# of the research ob,ectives$ aims$ rationale and reasons of the research. The second

chapter defines and elaborates the research ob,ectives of the research topic #hich is financial

incentives as a techni-ue of employee performance improvement according to the conte'ts of

ritish merican Tobacco. The ne't chapter e'presses the methodologies of data sourcing$

collection and analysis needed to complete the research. The processes used by the researcher are


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described in this part. The fourth chapter is all about result analysis and discussion #hich carries

the most importance of this research #or". Researcher then comments some recommendations to

the company from his point of vie# and leaves a conclusion at the end chapter.

1.( Chapter 'ummary

The research bac"ground is the basis of discussion of the introductory first chapter. This chapter

has broadcasted a vie# of research accessories based on the conte't of T6s human resource

sectors and its motivational management. The research ob,ectives and aims as #ell as rationale

and importance of the study are also displayed in this chapter #ith a vie# to clarify the research

issues. ean#hile$ researcher plans to describe the literature revie# of the sub,ect of financial

incentives in the conse-uent chapter. &t #ill define the issue clearly and describe the conte'tualfacts around it. n overvie# #ill be sho#n of #hat role the financial incentives play in

motivating employees in multinational companies li"e ritish merican Tobacco.

Chapter 2

)iterature re#ie*


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2.1 Introduction

The second chapter describes about the literature revie# of the term *)inancial &ncentives+ used

to improve employee performance in ritish merican Tobacco. &n this portion of dissertation$researcher clarifies about financial incentives differing or relating to motivation. This chapter

also sho#s an over vie# of the research ob,ectives including employee preferences of financial

incentives and effects of it on employee behaviours. Researcher summarizes ho# human

resource managers ta"e initiatives to motivate employees implementing financial incentives in

action.


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2.2 +nderstanding moti#ation and ,nancial incenti#es

)inancial incentives programs are mainly designed to inspire the employee to #or" #ith loyalty

and get the best performance from them. &n other #ord the main purpose of financial incentivesare to motivate the employees. ritish merican Tobacco (T! one of the biggest multinational

tobacco companies motivates their employees through meeting their needs by giving financial

incentives in different sector. They give financial incentives in different situation depending on

the situation.

braham aslo# described different "inds of need of human being in his motivation theory. 5e

outlined a hierarchy of needs starting from lo# level and after one meets the first need then he go

for the ne't one (1;

Figure 1: Hierarchy of needs (Maslow, 1970)


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The first needs of the employees are al#ays basic needs li"e food$ housing$ rest etc. To meet this

"ind of needs money is essential and employees can get the money by selling their service to the

organization. )or their #or" they get salaries #hich help them to meet these "inds of basic needs.

fter satisfying the lo#est need the employee try to meet the ne't level of needs and money is

also the main factors here. oney can help them to reach the ne't level #hich includes the

security or esteem needs. 3o the organization and also the employee see money as the main

motivational factors for their #or".

There are many #ays in #hich financial incentives are used to motivate and influence employee

performance$ e'pressed by 3hrestha (1;=;!$ the human resource head of 3iddhartha an"

imited. 3ome of the most fre-uently used ones include allo#ances for holidays$ overtime and

lunch. dditionally$ there are performance lin"ed incentives$ li"e salary increments and

revisions$ #hich are usually given at the end of the financial year based on performance

appraisals.

The bonus and other "inds of commission are al#ays helpful tools to get the efficient #or" from

the employees. There are lot of theories and #riting #hich said that financial incentives or

motivation is overrated. %ven in aslo#6s hierarchy theory he said that after a certain period

money cannot able to holding po#er over people6s performance. nother famous theory #hich is

presented by 5erzberg "no#n as T#o )actor Theory (1;=! state that salary is not a motivation

after all$ rather achievements$ responsibility and advancement in a ,ob affect employee

performance more than #ages.

Though these theories state other#ise but T founds that financial incentives are the most

helpful and it is very effective to inspire the #or"ers for their #or". 3o T al#ays tries to

maintain a good amount of financial incentives for their employees in order to "eep them

productive.

2.3 +nderstanding the preferences of ,nancial incenti#esamong employees


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usiness organization can follo# various #ays to motivate their employees but the most

effective and efficient #ay to motivate the employees is financial incentives said by 9orthouse

(200!. %mployees al#ays li"e to get financial incentives and #hen they get it they dedicate

themselves to #or" and try to get more. T give their employees financial incentives

considering their performance$ they follo# performance incentives plan to properly give

incentives. 8erformance incentives plan is good for any "inds of organization. T creates

ob,ectives for their employees and #hen they achieve the ob,ectives they are re#arded

financially. 3ometimes the company gives financial re#ard #hen their net profit is increased.

good incentive plan must be directly related to a measurable performance beyond the norm.

3ome theories are not agree #ith the fact is that financial incentives is the most useful tools for

motivation. 5ezerberg believe pay system is motivating people and it is true that lac" of enough

pay can demotivate people but he doesn6t thin" that money is a positive motivator. Though the

real factor is that the employees are al#ays li"e to get paid properly and get various financial

incentives. 3o to "eep the employees satisfied T provides various incentives in different #ay.

They set several types for financial incentives and give them based on situation.

There are different types of financial incentives that an organization gives their employee to "eep

them satisfied. Different types of financial incentives are7

Time:rate pay

8iece:rate pay

Commission

8erformance:related pay

onuses

3hares and options

)ringe benefits


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8ensions

T mainly gives these "inds of financial re#ard to their employees and motivated them for the

#or" and these helps them to improve the employees performance #hich increase the total

production of the company.

2.4 -ects of ,nancial incenti#es in moti#ating employeebeha#iours

&n the present #orld the competition in business #orld are increasing day by day and

organization need to ta"e various strategy to survive in the competition. Tyson (1;;! said that

ar"et strategy is one of the most important factors to improve company performance. ut

mar"et strategy is not all$ every company need to find the best #ay to motivate its employees to

get the best #or" for them. There are various #ay to motivate employees but the best and most

effective one is the financial incentives and T use this techni-ue most to motivate this

employees.

The employee of any organization is motivated but both the internal and e'ternal factors.

)inancial incentives are e'ternal factors and the main ob,ectives of financial incentives are to

motivate the employees to#ard their #or".

ay >ordan state three primary ob,ectives of the financial incentives and they are

?ive employee the control over their income as the income of the employees depend

on their performance. 3o they can income more by improving their performance.

Create responsibility and liability to#ard #or" on employee6s mind

%ncourage the employee to #or" hard by giving them the a#ard for their #or"

performance.

research done by oc"e and raver sho#ed the effect of financial incentives on employee very

clearly. They offer employee to #or" on a special tas" and there are re#ard and punishment

depending on the result of the #or". The chec"ing the heart rate of the #or"er #hile they #or"

and they use ehavioral &nhibition@ctivation 3ystem (&3@3! for this. The result from this

e'periment sho#s that the senility of #or"ers is greatly related to the re#ard and it sho#s


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positive effect of re#ard on employee heart acceleration. &t proves that financial incentives can

produce a positive impact on employees mind and increase their performance.

2.! +nderstanding the employee demands

This is very important to "no# the demand of the employees of the organization. /hat they

#ant$ #hy they #ant it and by ho# much they #ant it. T is very careful about these factors.

They try to "no# their employees demand by arranging -uestioner intervie# time to time. &t

helps them to "no# the needs and demand of the employees and they ta"e steps to meet those

demands.

Imporance of financial inceni!e and paymens

)inancial incentives or regular pay are al#ays important factors to the employees in an

organization. There are various factors behind these.

8eople feel safe and po#erful if they get paid enough and it helps them to meet their

basic needs (/ilton$ 2011!.

usiness la#s have very clear statement about paying the employees perfectly.

ttractive amount of pay and incentives helps organization to get the staff and "eep them

productive.

There are al#ays ris"s of losing the employees if the organization paid them timely.

The main factors for an employee to #or" are the pay and incentives he gets from the

organization.

survey is run by a research organization #hich sho#s the tools and factors that are mostly usedby every organization to motivate their employees. They intervie# = participants from different

sectors. 11A of the respondents are from financial service$ 2;A are fromindustrial mar"ets and

consumers$


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The result of the survey sho#s that most of the respondents thin" that the factors #hich influence

most are the financial incentives. B1A of the total respondent are thin" that. 20.A of the

respondents ans#ered that sho#ing recognition to the employees is the best #ay to motivate

them for #or". 1.2A said that providing career development opportunities are the tools to

motivate the employees. .A are thin" that employee benefits are the "ey #ay and other 1B.=A

emphasize that see"ing #or"ers opinion is also very important to motivate them because #hen

the organization do that to ta"e a decision it encourage the employee to thin" themselves as a

part of the organization and these positive thin"ing reflects on their #or" performance.

2.$ %oti#ation of employees by ,nancial incenti#es

&ncentives are an act or promise that the administration does for their employees (&vancevich andee$ 2002!. &t is one "ind of inspiration or stimuli for the employee to #or" hard and helps them

to achieve the goal. 3ometimes incentives are given as e'tra money or in addition to the #ages.

)inancial incentives al#ays help the organization to "eep their employee satisfied and

productive. recent research sho#s that the employee #ho get financial incentives are BB times

more li"ely to done voluntary #or" for the organization by their o#n then the employee #ho

don6t get financial incentives. T al#ays motivate their employee by financial incentives and

they try to get several benefits from their employees. The main purpose behind the financial

incentives are:

?et the better performance from the employees

&ncrease the productivity of the organization

&ncrease the interest to#ard #or"

To create the ,ob satisfaction on the mind of employee through psychologically

satisfaction Change the outloo" of the employee to#ard #or" and shape it perfectly

tilize the ma'imum capability of the employee and get the best performance from them

"elaionship #eween "ewarding or Inceni!es and $erformance

&n the real #orld$ it is very important to re#ard high performance levels because this motivates

and controls the performance (5orne and /acho#icz$ 200=!. The performance of any employee

in any organization is highly connected to the incentives or re#ard he gets. 3o T develops


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their re#ard strategies #hich include the financial and non:financial incentives necessary to

inspire the employees for the #or" and also helps the organization to hold their s"illful and

talented employees. The manager of any organization needs to have a clear "no#ledge about the

incentives #hich really motivate their employees. ost of the incentives are given in financial

forms li"e #ages$ bonus$ commissions etc. though organization also need to give various non:

financial incentives #hich are really important to satisfied the employees and these non:financial

incentives may differ from one employee to another.

%enefis of Highly Moi!aed &mployee

Research has proven that highly motivated employees are more beneficial for the organization

and the main stimuli behind their motivation are various financial incentives. 5ighly motivated

employees are li"ely to:

l#ays attend in #or"place and very fe# amount of absence

They perform better than other employees

Depending on the situation they #or" harder and sometimes they #or" e'tra time if the

organization demand it They are very loyal to the organization

They are not s#itching the ,ob fre-uently rather #or" in one organization for a very long

time

2.& )ong term moti#ation and ,nancial incenti#es

ritish merican Tobacco provides long term motivation to their employee so that they are loyal

to the company and don6t thin" about s#itching the ,ob. &f the employees are not satisfied #ith

their ,ob and if they don6t get satisfactory amount of financial incentives then the ,ob turnover

rate is increased in any company. 3o motivation is very important factor for any "ind of business

organization.


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T provides various types of financial incentives for their employees to motivate them for long

term. The types of financial incentives T gives are describe here7

'ommissions:aum (1;;B! stated that$ *Commission is a particular percentage that a salesman

gets on the total amount of his sales.+ 3ometimes it is a fi'ed rate set for a particular #or".

Commission is a great #ay to motivate the employees because it is one "ind of re#ard and

people al#ays #ant to be re#arded. %mployee #ho gets commission sees a direct lin" bet#een

their #or" and the pay they got so they try to improve their #or" to get more. Commission also

inspire motivation and create a sound competition.

$remium $ay: 8remiums pay is a great #ay to attract the employee to #or" more and #or"

hard. 8remium pay is li"e the #ages that is given for the e'tra time #or" of the employee #hich

called overtime. 4vertime rate is set by the main hourly #ages rate. &t is normally double time as

normal #ages. 4vertime inspired #or"ers to spend more time on #or" and it is greatly motivated

the employees.

oc: 3toc" is a great #ay for the employer #ho #ants so offer financial re#ard for their

employees. &t is re#ard the employee by giving them a special chance to buy a bloc" of company

stoc" at a lo# priced than normal. They can sell that #henever they #ant or hold the stoc" as

long as they #ant. The o#ner of the stoc" also has the shareholder right and they can have some

particular advantages li"e voting for board members$ receiving a copy of annual report.

%mployees are greatly motivated #hen they get or have a stoc" of the company and #or" more

efficiently because they consider themselves as a part of the organization.

$rice "ae ysem: &n the price rate system employees are paid depending on the #or" that they

done on in the #or"place. This is given on the amount produced by a #or"er. )or e'ample a

#ood #or"ers get his incentives on depending the number of tolls or furniture he created one day

or a mechanic get his price on the number of devices he repair one day. This is e'tra money

#ithout his main #ages. &t is provide for incur age the employee to #or" more and efficiently.

This system is more appropriate #here the #or" amount is countable.

Meri $ay: /hile bonus is given for one time based on performance merit pay is a permanent

pay raise of the employee depended on his performance. 4rganization uses their performance

appraisal system to "no# about the performance of the employees. &f the performance of any


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employee is at a satisfactory level then he is a#arded a merit pay. )or e'ample: for the good

performance of any employee T gives a 2A to 1A increase in their #ages depending on

individual6s performance.

%onus: onuses are the most common and traditional form of financial incentives. onus is

onetime payment that raises the total amount of payment. onus is given on special occasion or

for the good performance. )or e'ample: a group of people are assigned on a special pro,ect and

after completing the pro,ect they get a bonus amount. 3ometimes bonus is given in special

occasion li"e Christmas. onuses are given based on salary. &t is depend on the performance of

the employee and sometimes the total performance of the organization

*ward: #ard is a creative #ay to motivate the employees (Cambridge 8ersonality Research$

201B!. &t is a #ay to motivate the employee through financial incentives but it cost less money

because it is not given regularly. fter a certain period company give a#ard to the employees

#ho achieve a big success or help the company in a special pro,ect. #ard is not al#ays directly

money related rather company can gives a certificate or a crest. ut it motivated the employee

greatly because it proves that he #or" hard and after the re#ard he get recognition to the every

one of the company.

+eam %onus: Team #or" is very important for any organization. The environment of the

company is hampered if they the relation bet#een the employees are not good. 3o organization is

given team bonus depending on the team #or" to encourage the team #or" to the organization

and it also helps to develop the relation bet#een employees.

$rofi haring: 8rofit sharing is the system #here company shares a particular amount of their

total profit #ith their employees. &t is a great #ay to motivate the employees because to get more

profit share employees are #or"ing hard to increase the company profit. This techni-ue also

helps to develop a positive mentality of employees #here they consider themselves not ,ust an

employee of the organization rather a part of the organization.

2.( Chapter summary

This chapter of literature revie# describes about the financial incentives from various point of

vie#s. The purpose of this chapter is to focus the term according to the T6s conte't. The ne't


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chapter describes about the methodologies of collecting$ analyzing and evaluating data and

processed information for further research #or".

Chapter 3

%ethodologies


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3.1 Introduction

3aunders et al (200! described that to get benefit from the research in the best possible #ay is to

choose the proper methodologies. The selection and adoption of right methodologies helps

ans#ering all the -uestions that are to be solved in the research. The main purpose behind

conducting a methodology is to collect information #hether primary and secondary$ data that are

necessary to analyze$ evaluate and decide. Research #or"s can be in various "inds and each


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research type re-uires different methodologies. There is no single perfect #ay for all types of

research (c9iff and /hitehead$ 200;!. )rom that point of vie#$ methodologies selection is a

vital part again choosing the right source and techni-ues reduces the comple'ities largely. &n the

introductory part of this chapter a brief discussion about the definition of methodologies$

research philosophy$ strategies and choices #ill be presented. This chapter also aims at providing

a clear understanding of data collection and analyzing methods that helps to come to a decision

#ill be sho#ed. /hile$ running the research #or"$ difficulties and ethical issues faced #ill also

be broadcasted in brief manner.

5o#ever$ researcher can avail any of various methodologies to get the research #or" done

s#iftly (c9iff and /hitehead$ 200;!. &n case of researching on financial incentives as a

motivational tool possess general and numerous data collection methods. eing a #ell "no#n

company$ ritish merican Tobacco has a huge database of its o#n and so many publications on

this company. The methodology is put on careful significance because it also helps to process$

analyze and present data in a #ay that not only the business en,oys the benefit but also the other

parties #ant to "no# about T. ethodology can be various in "inds. 3uch as7

Eualitative

Euantitative

Correlation

Regression analysis.

&t is described by arhsall in 200= before that selection of proper methodologies is important for

the author to conduct the research. Researcher needs to adopt such methodology or brunch of

methodologies that it can ans#er all probable -uestions about the research. The selected

techni-ue should be amply eligible to effectively collect and present data in an easy manner for

the researcher. This vital pre:research #or" is called research design. proper research design

allocates the researcher #ith a complete scenario of the research. Thus$ researchers are able to

avoid comple'ities and preplan all the possible solutions to upcoming problems. research

design consists of several processes. s li"e7


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i

l

at

a

o

l le

c

ti

o

Figure : "esearch $hilosophy (-ha, 00.)

Describing every stages of research design is the purpose of this chapter and that provided in the

conte't of researching on financial incentives as a motivational techni-ue of T.

3.2 Research philosophy

Research philosophy is the thin"ing$ belief and attitude to#ard the #ays of data collection$

presentation$ analyzed and implemented$ defined by ?ill and >ohnson (200

concepts encompass the philosophies of research approaches. 4ne is epistemology means #hat is

"no#n to be true and another is do'ology opposition to epistemology meaning #hat is believed

to be true.

Research philosophy reveals the nature of the research. Researchers should have a particular

philosophy to#ard the research sub,ect. ac"ground of the research also depends on researcher6s

philosophy. Research philosophy provides a clear idea of #ays of conducting research.

ccording to %lliott (2001! there are usually t#o types of philosophies noticeable li"e7

1. 8ositivism 8hilosophy

2. 8henomenological 8hilosophy

8ositivism 8hilosophy7 &t captures the idea that the researchers are free to observe. That means

independency to thin" and act. The positivism philosophy is a process of establishing

hypothetical tests from samples. 8revious developed styles relating data collection$ presentation$


24/34

and analysis may be repeated in this philosophy of research #or". /riters find it comfortable

#hen the sample portion is huge in numbers. The positivism philosophy puts importance on

empirical data and scientific methods at the same time. &t encourages human relationship by

testing the causes and results.

8henomenological 8hilosophy7 The phenomenological philosophy of research$ on the contrary is

naturally sub,ective depending on the issues of research. %vents and actions are ta"en into

consideration in this type. nli"e$ positivism philosophy$ this process induces a small number of

samples. &t is deep investigation that re-uires in the phenomenological research process of the

researchers. blend of both these methods can be used in this philosophy of research.

Researcher in this #riting uses positivism philosophy due to the huge number of samples. &t #ill

help the author to collect data relating sample6s e'perience and behaviors.

To conduct research on companies li"e T using a large sample base positivism

philosophy is suitable developing research design.

s this research re-uires descriptive data to properly research on this term$ positivism

philosophy serves much better than phenomenological philosophy.

This philosophy provides researchers #ith proper and efficient data to conduct research

#or"s.

This research philosophy helps the author to successfully rely on the collected data to

enrich the fact of financial incentives and motivational facts of ritish merican

Tobacco.

3.3 research approaches

Researches are needed to be conducted and #holly operated through some genuine processes and

approaches (Ferzner$ 201B!. Research philosophy affects to determine the approaches to


25/34

0 e $ el o p

5 u e st i o n s 6 o rm

7 y po t h es i s

8e s t7 u po t h e

s i s

6 o r mu l a t e8 h e o

r y

research.

Figure /: "esearch *pproaches (&asham, harples and %all, 001)

There are t#o types of research approaches. They are7

1. &nductive research

2. Deductive research

&nductive research approaches7 &nductive research focuses on the observation of different

theories and models by developing empirical generalization. ccording to 3aunders et al$ 200

e'pressed that this approach does not allo# the researcher to establish any hypothesis at the


26/34

beginning of the research and before the completion of the dissertation it is impossible to

understand the nature if this approach.

Deductive research approaches7 4n the other hand$ deductive approaches are fle'ible research

approach #here researchers can formulate o#n theories or models by establishing suitable

hypothesis. The evaluation and analysis of those hypotheses can be improvised if needed. &t

helps the researcher in this dissertation because its nature of focusing only particular points. )or

obvious reasons$ researcher chooses to adopt deductive research approach to conduct research

comfortably. The improvised approaches are li"e7

The reasons for choosing deductive approach this research are summarized as7

)le'ibility

odification

Developing and running models as o#n #ish

ess procedural comple'ity

3.4 Research strategy

This chapter of methodologies aims at clearly follo#ing an appropriate research strategy by

#hich the dissertation can be successful in proving the truth of the statement. &t is unnecessary to

describe ho# important to select a proper strategy to research on any sub,ect is (?ill and

>ohnson$ 200

shed light on the fact of financial incentives as a techni-ue of employee performance

improvement$ researcher select to adopt the survey strategy among the strategies sho#n in )igure

B. 3urvey method re-uires developing a -uestionnaire according to the needs. ut the fact to


27/34

.;perim

ental

'

u

r$

e

y

ction

Research

.thnogr

aphy

%odell

ing

9perational

Research

Case

'tudy

"eep in mind is that the -uestions need to be relevant and eligible enough to ans#er the -uery of

the researchers. Researchers should develop the -uestionnaire in such manner so that people do

not get bored and e'hausted and e'pected ans#ers can be achieved easily.

To collect information$ researcher has developed several -uestions for employees of T. The

-uestions are easily understandable and ans#erable as #ell. The participants as the sample of

research provide more relevant information than any other sources. mong the participants from

different sectors of T are -uestioned in the process.

%mployees of )inancial services G A of participants

%mployees of Consumer and industrial mar"ets G 2;A of participants

%mployees of &nformation technology (&T!$ communications and entertainment G B=A of

participants

%mployees of other sectors: 1


28/34

0

i

s

ci

p

l

i

n

ed

I

n

. and edli" 3. (1;=1! Tourism7 8ast$ 8resent and )uture. ondon7 5einemann.

;. Cambridge 8ersonality Research (201B! 8ersonality:traitL conscientiousness M4nlineN

ccessed from7 http7@@cambridgepersonality.com@inde'.php@science:menu22@=:trait:

description:conscientiousness (ccessed at 2;th 9ovember$ 201

10. Coghlan D. I rannic" T.$ 200;$ Doing Research in Kour 4rganization (Brded!$ 3age

8ublication$ California.11. Cohen . et al$ 200$ Research ethods in %ducation (thed!$ 9e# Kor".

12. Coolican 5.$ 200;$ Research ethods and 3tatistics in 8sychology (thed!$ 5odder

%ducation$ ondon.

1B. DeCenzo$ D. and Robbins$ 3.8. (200! )undamentals of 5uman Resource anagement (=th

ed! 5obo"en7 >ohn /iley I 3ons.1.$ 2001$ ction Research )or %ducational Change$ 4pen niversity 8ress$ ondon.


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1. ?ill >. I >ohnson 8.$ 200


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B. c9iff >. I /hitehead >.$ 200;$ Doing nd /riting ction Research$ 3age 8ublications$

California.B. ullins$ . and Christy$ ?. (201B! anagement I 4rganizational ehavior. (10thed!5arlo#7 )T

8ublishing.

B. urty$ ?. (2010!. 4ptimization for decision ma"ing7 inear and -uadratic model. nitedFingdom7 /illey.

B=. 9orthouse$ 8. (200! eadership : Theory and 8ractice. (

financial incentives as a technique of employee performance improvement

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