Assume you are the newly appointed internal auditor for the Foleo Group. The Chief Financial Officer Tracey Chen has asked you to assist her and the Chief Operations Officer Peter Singh in assessing the organisations staff motivation levels and incentive programs currently in place for the Foleo Head Office Marketing Department. As a result of your investigations into the Department, you have uncovered a number of concerning personnel issues. At your first monthly meeting with Tracey and Peter, you present your findings in the form of the below report: Foleo Marketing Department: I met last week with the Marketing Manager to review the operations of the newly updated internal controls across Head Office. Included in this review were the mechanisms in place that address and encourage employee performance. i.e. the various employee reward systems. In addition to discussing the incentive scheme currently in place, we also identified some underlying issues that I believe are directly related to the poor levels of staff motivation at Head Office, but more specifically, within the Marketing Department. The Manager noted that in recent years, absenteeism has been steadily increasing, as has staff turnover in his Department, which is concerning. The introduction of new internal controls have effectively reduced the opportunities for the theft (and subsequent sale) of customer data as well as supplier fraud, however, I believe that these types of dysfunctional behaviour have been directly influenced by poor levels of job satisfaction and motivation within the Marketing workforce. The Department Manager notes that he has received a vast number of complaints over the years from staff regarding their working space, remuneration and career path opportunities. I read a selection of these emails which suggest that the Marketing employees are concerned with the lack of opportunities for advancement and bonuses offered to them in comparison with those offered to other Foleo departments & business units. The marketing employees who are directly involved with the campaigns and promotions are offered bonuses on the basis of the sales that are generated from their specific campaigns. This scheme has not been well-received by staff as they feel that the sales generated from marketing campaigns are not a true measure of the value of the campaigns. They argue that the sales are dependent on many other factors outside the control of the Marketing Department and are concerned that bonus payments are rarely paid to the Marketing employees. They feel that this is unfair, since many of the other departments and business units of the Foleo Group receive regular bonuses. Also apparent from the emails, was the high level of dissatisfaction in respect to the opportunities offered to Marketing employees for training and advancement, compared to other areas within the organisation. For example, both the Finance and R&D Departments hold monthly in-house training workshops to develop and update employee skills and send employees to annual external training courses to enhance their communication skills. Consequently, many of the staff believe that they need to look outside Foleo to further their career, as is evident from the staff turnover statistics for the Department over the last few years. The staff are also highly critical of their workspace, arguing that they are creative people who need a workspace that inspires them. When asked how he managed this level of dissatisfaction amongst his staff, the Marketing Manager responded by referring to the Suggestion Box in a corner of his office and handing me a flyer containing information on the next Marketing Departments Family Picnic. These initiatives are a good start, however Im not sure they have been all that effective to date. 17 For your next monthly meeting, Tracey & Peter have asked you to analyse your observations & present suitable recommendations for resolving the identified motivation issues.

Required: Using Expectancy theory, assess & explain the current level of motivation in the Marketing Department as either high or low using evidence from the case facts. Assess each component of the expectancy theory as either positive or broken & explain the impact on motivation level.