Impact of Motivation on Employee Retention at Standard Chartered Bank

This thesis, submitted to the Institute of Distance Learning at Kwame Nkrumah University of Science and Technology in 2012, investigates the impact of motivation on employee retention, using Standard Chartered Bank Ghana Limited as a case study. The study, based on a survey of 180 respondents, reveals that factors like salary, fringe benefits, job security, and relationships with coworkers are crucial for employee satisfaction. The research also identifies recognition, training opportunities, and effective communication as key strategies for retention. The findings suggest the importance of improved compensation, benefits, and opportunities for professional development to enhance employee retention and satisfaction. The study aims to increase awareness among managers regarding retention processes and highlights the need for further research in this area.

IMPACT OF MOTIVATION ON EMPLOYEE
RETENTION: A CASE STUDY OF STANDARD
CHARTERED BANK GHANA LIMITED
BY
NYAMEKYE, FAUSTINA
(PG 4131110)
A Thesis submitted to the Institute Of Distance Learning, Kwame
Nkrumah University of Science and Technology in partial fulfillment
of the requirements for the degree of
COMMONWEALTH EXECUTIVE MASTERS OF BUSINESS
ADMINISTRATION
SEPTEMBER 2012

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DECLARATION
I hereby declare that this submission is my own work towards the Executive Masters
of Business Administration and that, to the best to my knowledge, it contains no
material previously published by another person nor material which has been accepted
for the award of any other degree of the University, except where due
acknowledgement has been made in the text.
………………… ………………………. …………………
Student Name & ID Signature Date
Certified by:
………………….. …………………….. ………………..
Supervisor Name Signature Date
Certified by:
Prof. I. K. Dontwi …………………….. ………………..
Dean, IDL Signature Date

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ABSTRACT
The retention of human resources has been shown to be momentous to the
development and the accomplishment of the organization‘s goals and objectives.
Retention of employees can be a vital source of competitive advantage for any
organization. Employee departures can have a significant effect on the execution of
business plans and may eventually cause a parallel decline in productivity.
The primary aim of this study was to discover the impact of motivation on the
retention of employees. A total of 180 respondents were selected for this study using
the simple random sampling method. The survey questionnaire was designed to
collect data from respondents. The result of the study shows that motivational factors
such as salary and fringe benefits were rated as most important to the workforce of the
bank followed by job security and relationship with co-workers. The three strategies
rated most important to the workforce are recognition, training opportunities,
openness and trust, promotional opportunities, and effective communication.
Considering the major findings from the research, it is recommended that
management put in place structures that will bring about an improvement in the
salaries of workers. Fringe benefits such as free medical care, transportation, canteen
services etc should be provided. Furthermore, it is suggested that management
encourages their employees to take courses such as distance learning, correspondence
courses etc, to help improve job satisfaction.
It is envisaged, that this study will lead to increased awareness of retention processes
among managers and the need for further research in the subject area.

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DEDICATION
I dedicate this work to Samuel Tuffour Boadu who supported me every step of the
way. God bless you.

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ACKNOWLEDGEMENT
I am immensely grateful to the Omnipotent Father for sustaining me in my quest for
higher education. The preparation and submission of this project work would not have
been possible without the support of certain personalities who deserve my gratitude. I
wish to offer my profound appreciation to my supervisor Dr.Kofi Osei Akuoko, for
his valuable suggestions and constructive criticisms of the content, structure and
preparation of this work.
Secondly, this thesis is dedicated to my parents, Dr. and Mrs. Nyamekye, who have
invested in my education and their advice from childhood till now. Also to my
siblings, Mrs. Dorcas Tenkorang and Josephine Nyamekye, for their prayers and
support for me.
Thirdly, my appreciation goes to Mr. James Awapoayi, of the University of Ghana
(Sociology Department) for his encouragement and support.
Finally, a big thank you to all my study group mates, for the support we have given
each other throughout our period of study.

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TABLE OF CONTENT
DECLARATION ............................................................................................................ i
ABSTRACT .................................................................................................................... i
DEDICATION ............................................................................................................. iii
ACKNOWLEDGEMENT ........................................... Error! Bookmark not defined.
TABLE OF CONTENT ................................................................................................ iv
LIST OF TABLES ........................................................................................................ vi
LIST OF FIGURE .....................................................................................................VII
CHAPTER ONE .......................................................................................................... 1
INTRODUCTION.....................................................................................................................1
1.1 BACKGROUND TO THE STUDY ........................................................................ 1
1.2 STATEMENT OF THE PROBLEM ..................... Error! Bookmark not defined.
1.3 OBJECTIVES OF THE STUDY ........................... Error! Bookmark not defined.
1.4 RESEARCH QUESTIONS ..................................................................................... 5
1.5 SIGNIFICANCE OF THE STUDY.........................................................................5
1.6 ORGANISATION OF THE STUDY......................................................................7
CHAPTER TWO ......................................................................................................... 8
LITERATURE REVIEW ........................................................................................... 8
2.1 THEORETICAL BACKGROUND.........................................................................8
2.2 THEORETICAL FRAMEWORK.........................................................................21
CHAPTER THREE ................................................................................................... 23
RESEARCH METHODOLOGY ............................................................................. 23
3.1INTRODUCTION...................................................................................................23
3.2 THE STUDY AREA.............................................................................................. 26
3.3 POPULATION AND SAMPLING TECHNIQUES.............................................24
3.4 DATA COLLECTION PROCEDURE.................................................................25
3.5 PRE-TESTING.......................................................................................................25
3.6 RELIABILTY AND VALIDITY OF INSTRUMENT.........................................26

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3.7 RESEARCH DESIGN...........................................................................................26
3.8 DATA SOURCE .................................................... Error! Bookmark not defined.
3.9 DATA ANALYSIS................................................................................................27
3.10 LIMITATIONS OF THE STUDY.......................................................................27
3.11 ETHICAL CONSIDERATIONS.........................................................................28
CHAPTER FOUR ...................................................................................................... 29
DATA ANALYSIS AND DISCUSSION OF RESULTS ........................................ 29
4.1 INTRODUCTION ................................................................................................. 29
4.2 SOCIO-DEMOGRAPHIC CHARACTERISTICS OF RESPONDENTS ............ 29
4.2.1 AGE DISTRIBUTION OF RESPONDENTS .................................................... 30
4.2.2 SEX OF RESPONDENTS .................................................................................. 31
4.2.3 EDUCATIONAL BACKGROUND OF RESPONDENTS ............................... 32
4.2.4 LENGTH OF SERVICE ..................................................................................... 33
4.3 FACTORS WHICH MOTIVATE WORKERS..................................................... 35
4.4 MAIN RETENTION FACTORS .......................................................................... 39
4.5 ENVIRONMENT THAT BREEDS TURNOVER ............................................... 49
4.6 ATTITUDE OF MANAGEMENT TOWARDS WORKERS .............................. 49
4.7 STYLE OF SUPERVISION .................................................................................. 50
4.8 DISCUSSION OF FINDINGS .............................................................................. 53
CHAPTER FIVE ....................................................................................................... 61
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 61
5.0 INTRODUCTION ................................................................................................. 61
5.1 SUMMARY OF FINDINGS.................................................................................61
5.2 CONCLUSION......................................................................................................64
5.3 RECOMMENDATIONS.......................................................................................66
REFERENCES............................................................................................................68
QUESTIONNAIRE.....................................................................................................73

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LIST OF TABLES
TABLE PAGE
4.1: Age Distribution of Respondents..........................................................................30
4.2: Level of Education of Respondents......................................................................32
4.3: Length of Service of Respondents........................................................................34
4.4: Factors which Motivate Employees......................................................................35
4.5 Supervisors sit down with employees to discuss their development plans............39
4.6: Employees are Given Opportunity to be Part of Task and Assignments outside
Core Job................................................................................................................40
4.7 Management Communicates Effectively with Employees....................................41
4.8 There is an environment of openness and trust in the bank...................................42
4.9: Employees are treated with Fairness and Respect................................................43
4.10: Supervisors have Style that Empowers workers to take Responsibility and
Authority..............................................................................................................44
4.12: Management Spend Time Listening to Employees Ideas...................................45
4.13: Attitude towards Workers...................................................................................49
4.14: Style of Supervision in Organization..................................................................51
4.15: Satisfied with supervisory style..........................................................................52

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LIST OF FIGURE
Table Page
4.1: Sex Distribution of Respondents...........................................................................31

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CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND TO THE STUDY
The retention of employees has been shown to be significant to the development and
the accomplishment of an organization‘s goals and objectives. Retention of
employees can be a vital source of competitive advantage for any organization.
Today, changes in technology, global economics, and trade agreements, are directly
affecting employee/employer relationships. Until recently, loyalty was the cornerstone
of that relationship. The loss of talented employees may be very detrimental to the
company‘s future success. Outstanding employees may leave an organization because
they become dissatisfied, underpaid or unmotivated (Coff, 1996), and while trying to
retain employees within the organization they may present other challenges as well.
They may demand higher wages, and may not comply with organization practices,
and interact well with their co-workers or comply with their managers‘ directions.
Besides these problems, asymmetric information or lack of information about the
employees‘ performance may complicate an organization‘s endeavour to retain
productive employees. Without adequate information an organization may not be able
to distinguish productive workers from non-productive ones. Employees often may
take credit for the successes and deflect failures to other employees. This is known as
a moral hazard problem. In many instances companies may reward or punish
employees for an organization‘s outcome for which they had no impact (Kerr, 1975).
Insufficient information about employees‘ performance may result in adverse
selection by them (Grossman and Hart, 1986). The employees who perform better

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may move to other organizations for better opportunities. The co-workers who cannot
improve their positions are more likely to stay. This is especially possible when due to
inadequate information outstanding performance is not rewarded. Non productive and
productive workers end up receiving the same or nearly the same compensation and
package of perks because of management‘s inability to distinguish talented employees
from the rest of the labour force in the organization. The problem of attempting to
keep talented members of the workforce is further complicated because of bounded
rationality (Simon, 1976). It is another result of asymmetric information where both
the manager does not know the information for which to ask from the employee and
the employee does not know what to provide. Therefore, productive workers cannot
distinguish themselves from non-productive co-workers.
Even if an organization is fortunate enough to retain talented employees, the company
may still have to cope with agency costs resulting from them and their colleagues.
When information about an employee‘s activities are difficult to gather, the employee
may be motivated to act in his own interest which may diverge from the interest of the
organization. This divergence of interests results in costs to the organization in the
form of excessive perquisite consumption, shirking of job responsibilities and poor
investment decision making. Jensen and Meckling (1976) explained that it is in an
employee‘s interest to over consume perks and shirk job responsibilities of the firm if
they are not sole owners of the organization.
Employees may also be enticed to make sub optimal investment decisions for the
firm. Since most company employees have their wealth tied up in the organization for
which they work, employees may attempt to make investment decisions which are
less risky than the stock holders of the firm would prefer. This is done to reduce the
risk of failure by the company, which protects the no diversified employee from loss

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of wealth. This investment strategy may also reduce the return on investment that the
diversified owners of the firm desire (Murphy, 1985).
The employees or agents of the organization may also use a short sighted approach in
investment selection to enhance their own career chances (Narayanan, 1985). The
employee can signal the labour market his superiority through the selection of a fast
starting project, which may fizzle out later for the firm. This strategy may cause the
firm to miss profitable long-term projects or much needed research and development.
Employees may also attempt to increase the size of the firm through acquisitions and
project selection regardless of the effect on company profitability in order to increase
their own power base within the firm. Another area contributing to decreased
employee satisfaction is that of a company‘s motivational style. For example,
Weinberg (1997) states that most companies relied in the past on two traditional
strategies for managing turnover. First, they raised wages until the situation stabilized.
If that did not work, they increased training budgets for new hires and first-level
supervisors. These solutions do not work anymore.
1.2. STATEMENT OF THE PROBLEM
Understanding employee perspectives and measuring their retention factors are
critical to an organization‘s success. However, each employee in an organization
creates his or her own understanding of a phenomenon and assumptions (Argyris and
Schon, 1978). It is the understanding of the situation that provokes an action (Weick,
1979; 1995). Employee motivation has been studied at length. Through research, a
significant myth has been dispelled and shown to be incorrect. The biggest
misconception was that good wages were always the primary motivational factor