The Impact of Monetary Incentives on Employee Motivation, using the Chinese Hotel Industry as a Case Study (Dissertation Sample)

The Impact of Monetary Incentives on Employee Motivation: A Case Study of the Hotel Industry in China.
Name
Institution
DateABSTRACT
This study employs a descriptive research design to investigate the impact that monetary incentives have on employee motivation. The main focus of study is investigating the correlation between monetary and non-monetary incentives on employee motivation and job performance. The researcher obtained the feedback of 300 employees surveyed by their managers in three five-start Chinese hotels, Shangri-la Hotel, Pullman Lifestyle Hotels, and the InterContinental Hotel, all located within Tangshan City in Hebei Province, China. The data was used to test the assumption that both monetary and non-monetary incentives do not necessarily influence employee motivation and performance. The specific assumption tested is that monetary based compensation incentives directly influences employee motivation while non-monetary incentives do not necessarily influence employee motivation.
Key words: motivation, intrinsic incentives, extrinsic incentives, hotel industry, monetary incentives, non-monetary incentives
Table of Contents
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ABSTRACT  PAGEREF _Toc451005972 \h
2
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Table of Contents  PAGEREF _Toc451005973 \h
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CHAPTER ONE  PAGEREF _Toc451005974 \h
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1.0 Introduction  PAGEREF _Toc451005975 \h
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1.1 Background of the Study  PAGEREF _Toc451005976 \h
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1.3 Purpose of the Study  PAGEREF _Toc451005977 \h
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1.4 Objectives of the Study  PAGEREF _Toc451005978 \h
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1.5 Research Questions  PAGEREF _Toc451005979 \h
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1.6 Statement of Hypothesis  PAGEREF _Toc451005980 \h
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1. 7 Significance of the Study  PAGEREF _Toc451005981 \h
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1.8 Scope of the Study  PAGEREF _Toc451005982 \h
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1.9 Limitations of the Study  PAGEREF _Toc451005983 \h
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CHAPTER TWO  PAGEREF _Toc451005984 \h
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LITERATURE RE VIEW  PAGEREF _Toc451005985 \h
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2.1 Introduction  PAGEREF _Toc451005986 \h
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2.2 Theories of Motivation  PAGEREF _Toc451005987 \h
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2.2.1 Content Theories  PAGEREF _Toc451005988 \h
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2.2.2 Process Theories  PAGEREF _Toc451005989 \h
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2.3 The Concept of Behavior Modification  PAGEREF _Toc451005990 \h
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2.4 Theoretical Framework  PAGEREF _Toc451005991 \h
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2.4.1 The Concepts of Motivation and Job Performance  PAGEREF _Toc451005992 \h
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2.4.2 Intrinsic and Extrinsic Motivation  PAGEREF _Toc451005993 \h
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2.4.3 Monetary Incentives  PAGEREF _Toc451005994 \h
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2.5 The effects of motivation on employee performance  PAGEREF _Toc451005995 \h
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2.6 The State of the Chinese Hotel Industry  PAGEREF _Toc451005996 \h
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CHAPTER THREE  PAGEREF _Toc451005997 \h
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RESEARCH METHODOLOGY  PAGEREF _Toc451005998 \h
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3.1 Introduction  PAGEREF _Toc451005999 \h
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3.2 Research Design  PAGEREF _Toc451006000 \h
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3.2 Rational For Research Design  PAGEREF _Toc451006001 \h
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3.3 Sample Population………………………………………………………………41
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3.5 Method of Data Collection  PAGEREF _Toc451006002 \h
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3.8.1 Validity  PAGEREF _Toc451006003 \h
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3.8.2 Reliability  PAGEREF _Toc451006004 \h
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CHAPTER FOUR……………………………………………………………………...48
4.1 Results ……………………………………………………………………48
4.2 Discussion…………………………………………………………………..50
4.3 Conclusion…………………………………………………………………52
4.4 Recommendations…………….……………………………………………54
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References  PAGEREF _Toc451006005 \h
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APPENDIX 1  PAGEREF _Toc451006006 \h
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QUESTIONNAIRE IN ENGLISH  PAGEREF _Toc451006007 \h
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CHAPTER ONE
1.0 Introduction
The assessment of the impact of monetary incentives on employee productivity and firm performance is an endeavor that falls within the principles of economics. Many organizations tie their employees’ remuneration to certain verifiable measures of performance. The implementation of financial incentives is widely used because it significantly influences the indicators of organizational performance, such as worker absenteeism and productivity. This overly implies that Performance-related pay (PRP) are either individual or group incentives that are connected to subjective or objective evaluation of employees’ input such as merit payment or payment based on results. PRP are also collective schemes anchored upon aggregated measures of organizational profitability such as share-ownership, bonuses, and profit-sharing. However, caution should be taken because poorly designed and implemented monetary incentives may lead to employees’ inefficiencies, especially from those workers that perform multiple activities in the organization, work in a team or experience subjective evaluations from superiors.
Management scholars consistently redefine the term motivation in a bid to design the best incentive strategies to promote organizational performance. The widely acknowledged definition in organizational performance context is that motivation is the inner stimulus that energizes, triggers, and moves human needs, fears, or senses to prompt action. This definition illustrates that motivation directs human action or behavior towards a given goal. An organization’s productivity is shaped by the structure of its incentives, which is often designed to strike a balance between various management levels.
A number of incentive variables can motivate employees to provide optimal effort to realize the organization’s productivity. Some incentives can be in the form of monetary remuneration and are often applicable to those who embrace money as the best reward, while others may focus on enhancing employees’ status and prestige and are applicable to those who cherish career progress and recognition.
Starke (1976:35) brings rich insight into the connection between motivation and rewards. He proposes that employees work for two major rewards: extrinsic and intrinsic rewards. The extrinsic rewards include compliments, recognition, and timely pay promotions that are unrelated to the task performed and controlled by superiors. Conversely, intrinsic rewards include the personal satisfaction realized by an individual after completing a task and are controlled by the concerned individual. These forms of rewards interact with each other and other incentives to promote organizational performance and employees’ job satisfaction.
1.1 Background of the Study
For a long time, economists have been concerned about the psychological forces that influence workers’ level of input and productivity. Traditionally, workers’ labour was treated as just part of the total input required to produce goods and deliver services. As such, their efforts were considered a form of resource that can be purchased at a given wage, just in the same way that a business may purchase raw materials from suppliers at the agreed price. However, this view changed following the publication of the findings of the Hawthorne Studies in 1932, which investigated the relationship between monetary incentives and the level of employee motivation (Dickson, 1973). The studies’ findings showed that employee behavior was not solely determined by monetary incentives, but in addition, by their attitudes. These findings were the precursor to a shift in business management, whereby managers adopted the human relationship approach to human resource management (Bedian, 1993). As a result of this shift, the new paradigm focused on identifying and addressing employees needs as a means of increasing the level of employee motivation. This was also the basis fo...