Effect of salary, training and motivation on job performance of employees

1. Introduction and Background

Salary can be defined as a fixed amount of money paid to a worker usually measured at monthly and annual basis, not hourly, as opposed to wages, salary is a fixed amount of money or compensation paid to an employee by an employer in return of work done. It is rather encouraging to observe that self-equity is perceived as being less relevant since an organization can do little about its employees' perception of inequity with respect to their financial needs or their historical pay evolution. (Lazear, 1981) discusses how firms offer upward-sloping wage profiles to their workers in order to discourage shirking. (Salop & Salop, 1976) suggest that upward-sloping profiles are used by firms as a way of discouraging "movers" from applying for jobs. (Jovanovic, 1979)demonstrated how job-matching under imperfect information could generate upward-sloping wage profiles.

Motivation is viewed as the amount of effort the salesman desire to expend on each of the activities or tasks associated with his job, such as calling on potential new accounts ,planning sales presentations, and filling out reports

(Walker Jr, Churchill Jr, & Ford, 1977). monetary rewards are the primary motivator of sales effort and (2) the pay package is the basic motivator whereas other financial incentives, such as bonuses and contests, operate only to induce effort over and above that produced by the basic plan in certain circumstances (Churchill Jr, Ford, Hartley, & Walker Jr, 1985). Those individuals who are aggressive and relatively high in financial motivations eventually seek out such occupations as sales men, the typical salesman is financially motivated far more strongly than the average employee in his company (Beatty, Mayer, Coleman, Reynolds, & Lee, 1996).

“Training assists learning from early childhood to adulthood and takes different forms at different stages. Training is distinguished from conditioning on the one hand and discovery on the other and it is argued that most of the criticisms of the use of training techniques arise from a misidentification of training with conditioning. Finally, consideration is given to possible cultural and intellectual influences on the current low status of training’’, (Orpen, 1999)

studied the relationship of salary with job performance and his result showed that companies with long term incentives plans

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enjoyed significantly greater increased in R, O, E return on equity. (Chung, 1968) investigated motivation and its effect on job performance and results of his study showed that :(1) the stronger the need and motive to perform a task, the higher the incentive value of the task a person is undertaking. (2) The stronger the motive to perform a task, the more the person considers the task likely to be achieved. (Bartel, 1994) studied the relationship between training and job performance and he concluded that formal training indeed increases the wage growth and job performance, there by confirming the relationship between robustness and productivity. (Barron, Berger, & Black, 1997) show that employees and employers differ in their reports of the amounts of both formal and informal training, with workers reporting less training. Another problem is the comparability of training events across individuals working in different organizations.

2. Methodology

Research model for this study shows the relationship between three independent variables salary, motivation and training with a dependant variable, job performance. As previous study show that salary has a direct relationship on the job performance of employees. Increase and decrease in salary can influence the job performance, which will ultimately affect the firm’s productivity. Following is the model presented below.

Figure 1. Model: job performance of the employees

Salary; the most obvious reward employees receive at work is salary. Many organization use surveys to determine the amount of salary to be given to the employees of a specific rank. Executives pay is a special case within the topic of compensation (Decenzo; Robbins, DeCenzo, Coulter, & Langton, 2005). Salary is as the pay in terms of hourly wage, a rate of wage for each unit produced, known as piece work rate or rate of wage per month or year is called a salary. Salary includes cash and non cash payment. In non cash payment an employee can receive house and transport facility and some other non monetary benefits. The operational construct for the salary is as follows.

Motivation; Maslow Abraham explained motivation as the willingness to do something. He further explained that motivation consists of five needs which are arranged in a hierarchy. All these needs must be fulfilled in order to motivate someone. Motivation is not what the employees’ exhibit, but a number of surrounding issues rounding the job (Robbins et al., 2005). Motivation may arise from work

environment or from involvement in decision making. Training; the basic purpose of training is to help employees build their skills which will increase their performance and ultimately it will lead towards greater organizational productivity. The need of training arises when top management changes its philosophy, values or way of operating. Training can also include career development activities to help employees make better choices about their careers. (Training consists of on the job and off the job training. On the job training consists of some practical interface with workplace instrument and off the job training consists of seminars and etc.

Descriptive statistics are used to describe the main features of a data in quantitative terms. Descriptive statistics simply tells that what is, and what data shows. Descriptive statistics are used to present qualitative description in a meaningful form. It helps us to simply large amount of data in a sensible way. Descriptive statistics of this study shows that respondents have answered the variable job performance on nominal scale which indicates “agree”. Standard deviation of job performance is .61734 which indicates that respondents have answered between agree and strongly agree. Mean of motivation is 4, which shows on the scale that respondents have answered with agree. Standard deviation of motivation is .57560 which proves that respondents have placed their answer between neutral and strongly agree. Training has the mean of 4 and its standard deviation shows that respondents have placed their answers between neutral and agree. Mean and standard deviation of salary shows that answerers lie in the range of neutral and agree.

4. Conclusion

This study indicates the link between three measures of organizational factors and job performance perceived by the teachers of the universities in twin’s cities of Pakistan. (Islamabad and Rawalpindi).in particular it investigates whether a high level of salary, motivation and job related training is associated with job performance of employees, a favorable outcome. A questionnaire survey yielded 310 useable responses (a response rate of 100 %). Result obtained from regression analysis indicates that there is a positive and significant relationship between the job performance and salary, motivation and training. So, Ho is accepted. This finding implies that salary, motivation and training are the means through which top management can obtain high level of job performance. It also indicates the importance of continued research in this area. More important, it is useful for top managers to be aware that higher job performance can lead to higher level of job satisfaction which will enhance profitability and productivity.

Finding of the study shows that salary is the more efficient variable, which means that job performance of employees can be increased to a sufficient level by bringing a small increase in salary. Particularly in Pakistan employees heavily prioritize salary more than something else. Other rewards and benefits attached to the salary can also result in greater change in job performance. So managers should wisely consider this issue before implementing incentive plans. Particularly in services firms, financial strengthening has a tendency to produce a stronger brunt on job performance. Salary is not the only motivator for the job performance; job related training also has a significant impact on job performance. Results of the study show that job performance can be increased to a large proportion by increasing the training of the employees. In educational sectors training is essential in order to make the employee acquainted what is required of them and what they are supposed to deliver on the job. Training need assessment programs should involve a complete job analysis, and training programs based on job analysis. It is also to be argued that

unnecessary training is of no use and neither it puts effect on the job performance nor it plays any role in employee development. Findings of the study showed that motivation is also an important factor behind job performance. Motivation is the willingness to perform some task better. Key function of the management is to keep the employees motivated. Employees can be motivated through fulfillment of their needs. There are many ways to keep the employees motivated. Top managers should be concerned that what derives motivation in their employees.

What is the Problem? Has the researcher found a convincing solution to the problem?

What are the Research Questions?

Has the researcher made Hypothesis? What is the relationship between the Hypothesis and Research Questions and the Problem?

What are the dependent and independent variables? How does the researcher measure these variables?

Do you think the study is important? Explain its contribution and Significance.

Do you think the researcher has reviewed enough Literature?

Briefly explain the Data Collection process, the population, and sample of the study.

Do you suggest any improvement, in terms of increasing the sample size etc