CHAPTER I

1.1 INTRODUCTION

Today an organizations result is highly dependent on the employees

work motivation. It is therefore important for a company to find out what motivates its
employees so that it can plan a suitable reward system and gain better results. The right
combination of immaterial and material rewards can boost up the employees' work
motivation and enhance their commitment to the company. Increasingly, organizations
are realizing that they have to establish an equitable balance between the employee‘s
contribution to the organization and the organization‘s contribution to the employee.
Establishing this balance is one of the main reasons to reward employees. Organizations
that follow a strategic approach to creating this balance focus on the three main
components of a reward system, which includes, compensation, reward and recognition.
Studies that have been conducted on the topic indicates that the most common problem in
organizations today is that they miss the important component of Reward, which is the
low-cost, high-return ingredient to a well-balanced reward system. A key focus of
recognition is to make employees feel satisfied and valued. Research has proven that
employees who get recognized tend to have higher self-esteem, more confidence, more
willingness to take on new work and more eagerness to be innovative.
1.2 RESEARCH PROBLEM STATEMENT

Rewards have been identified as the most powerful motivators of performance that leads
to job satisfaction. In today business climate rewards have become more important than
ever for several reasons managers have fewer ways to influence employees and shape
their behavior, Poor performance in the engineers is usually a reflection of poor services
to the clients. Companies and organizations everywhere need employees to work with.
However, while getting employees can easily be done through the recruitment process,
there is the more difficult task of keeping them motivated to work hard to achieve
improved performance and to attain both organizational and personal goals. The quality
of the services largely depends upon the employees working in organization. Therefore it
is necessary for the organization to have workforce who can deliver better services to the
customers.

1.3 OBJECTIVE OF THE STUDY

The general objective of the research was to study the impact of rewards and recognition
on employee motivation. And the specific objectives were to identify the most effective
means of rewards and recognition, to study the behavioral differences between
appreciated and nonappreciated employees, to understand the extent to which motivation
enhances employee‘s performance, to identify if the motivation has an effect on
individual and organizational growth and to study if rewards and recognition results in
emotional conflicts between employees. This research will attempt to investigate the
following:

1. To evaluate the effectiveness of the organizations reward systems as regards employee

motivation.

2. To find out if the reward system contributes to better performance.

3. Identify what kinds of rewards employees consider most beneficial.

4. To explore factors influencing the motivational level among the employees

5. To give suggestions towards the reward system for improving the motivational level of
employees.

1.4 RATIONALE OF THE STUDY

The reason why this study is significant is It will allow future researchers to understand
why rewards system is significant in IT sector. This research is also significant because
many individuals work in these sector and they don‘t necessarily know what rewards
management comprises of. This study will enlighten any individual who wants to gain a
further understanding of this topic of a person who is looking to write on this topic in the
future.

1.5 RESEARCH METHODOLOGY

Research methodology is way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. The study is
based on mainly the primary data which is collected through questionnaires. The methods
for study include collection of data from various sources such as primary source and
secondary source. Both primary and secondary data have been used for the study.

A. RESEARCH DESIGN

The descriptive research design was adopted for this study. It describes data and
characteristics about the phenomenon being studied. Descriptive research answers the
questions who, what, where, when and how. It is a scientific method which involves
observing and describing the behavior of a subject without influencing it in any way.
Since there has been various researches conducted on rewards and recognitions by
various researchers the descriptive design was adopted as the researcher intended only to
project the scenario and describe the phenomenon.
B. DATA BASED DESIGN

Data collection include both primary data and secondary data

a) PRIMARY DATA

These data mainly includes the data collected through questionnaire.

 Questionnaire: This is important and very popular method of data collection. In this
method questionnaires containing a printed list of questions are prepared and given to the
respondents and a request is made that the questions should be answered and returned.
The success of this largely depends on proper drafting of questions. The questionnaire
should be designed in such a way that, it elicits the accurate information. Moreover it
should be short as possible and simple to understand.

b) SECONDARY DATA

These secondary data are collected from the records, documents, broachers and
magazines that were kept in the organization. Secondary data, on the other hand, are
those which have already been collected by someone else and which have been passed
through the statistical process.

C. SOURCE OF DATA

a) SOURCE OF PRIMARY DATA

Primary data has been collected through small online discussions with IT employees,
whom I know personally working in IT sector.

b) SOURCE OF SECONDARY DATA

Data collected through published and unpublished sources are called secondary data. The
secondary data are collected by some others for their use. Hence it is second hand data.
The source of secondary data include websites, search engines, various magazines, and
library.
D. SAMPLING DESIGN

The study confined to IT companies such as TCS, TATA ELEXI.UST GLOBAL,

WIPRO and NDIMENSIONS ETC

UNIVERSE OF THE STUDY

The group of individuals under the study is known as the population or universe.
Therefore, universe or population is the set of all items in any field of enquiry. The
universe of the study, here is the total number of employee working under IT sector.

SAMPLING SIZE

Sampling size is the number of elements to be included in study. Determining sample

size is complex and involves several qualitative and quantitative considerations. The
sample size in this study is fixed as 100 in number which is collected from different IT
employees. .

SAMPLE TECHNIQUE

The selection of employees was done on the basis of random sampling. For the purpose
of study simple random sampling would suit well due to its case of use and accurate
representation of large population with simple random sampling, item of population will
get an equal chance for being selected. The Technique used for conducting the study is
convenience sampling because the population is large and scattered in wide area.
Convenience sampling is a non-probability sampling technique where the subjects are
selected because of their convenient accessibility and proximity to the researcher. A
convenient sample is obtained by selecting a convenient population unit.

E. STATISTICAL DESIGN

 Percentage method

a) Percentage Method The percentage is used for making comparison between two or
more series of data and to know the accurate percentage of data collected. Here simple
percentage method is used. Interpretations are made based on the results obtained. The
data collected was analyzed by employing the percentage analysis technique. Percentage
analysis refers to special kind of ratio.. Bar charts and pie charts were used to explain
tabulation clearly.

Formula: percentage (%) = number of respondents / total number of respondents*100

1.6 SCOPE OF THE STUDY

The present study is mainly concerned with

This study helps to identify the various types reward systems in IT sector. This study is
limited to the identification of the causes of demotivation, low performance in employees
and the ineffectiveness in the rewards systems. The study helps to know about the
solvency and safety involved in different reward system and also provide motivation.

1.7 LIMITATIONS OF THE STUDY

1. Some of the respondents were very busy and hence they didn’t co-operate with the
research.

2. Time available for the study was limited. So an in depth study was not possible.

3. The details given by the respondents can be bias.

4. The time frame given to complete the study did not allow an in-depth investigation
into the study because of the pandemic situation (COVID 19).

5. Some of the respondents will be reluctant to share information relating to their rewards

1.8 CHAPTERISATION
CHAPTER II
2.1 LITERATURE REVIEW

The performance of any organization and its continuity depends on their key assets,
employees, as well as the capabilities of the managers to be able to create a motivating
environment for their people. On the other hand, it is a challenge for the managers to
keep their people and employees motivated and satisfied. Thus why every manager has to
be aware about the needs and requirements their employee and what they are looking for.

The main objective and concern of most of the organizations is to make the benefit from
people who are feeling positively toward the work and motivate unsatisfied employees in
order to end up with a win–win situation for both the company and workers.

During the early 1400‘s, a lot of research were done with regards to employee
motivation and performance management such as;

George,( 1972)1monitoring of the pace of work being set by management, which is found
in the records of the Arsenal of Venice, where wages and quality of work (performance)
were closely controlled in the manufacturing and assembly shops and both piecework and
day rates were applied as required to compensate employees

FW Taylor(1878-90)2. developed the scientific management where he began to develop

his intuition on shop management . The main idea behind Taylor‘s scientific management
was to link efficiency to performance. Taylor tried so many techniques to improve
efficiency and employee performance but most often he encountered resistance from
employees. He noticed that workers tend to slack on the job due to a situation he termed
as ‗soldering‘; where workers believed that if they worked faster, they would put others
out of work. Based on his observations, Taylor concluded that a monetary reward was the
ultimate motivator for improved performance (Taylor, 1911).

Urichuck (2002)3 stated that motivated employee will increase the capability of the
organization to achieve its mission, goals and objectives. It will also engage all to build a
strong organizational culture.

Anne, (1994)4. Find that motivated employees will feel as having a strategic partnership
with the organization and their commitments and loyalty will increase from day to day.
Buttner and Moore (1997)5, based on their research about ―Happy Employees Make
Productive Employees‖ found that when employee attitudes improved by 5%, customer
satisfaction jumped by 1.3%, and the revenue increased by 5%. So, motivated employees
usually produce more than others and hence the customer satisfaction increases.

(Nandanwar , Surnis, Nandanwar (2010)6. Motivated employees can impact a

company‘s bottom line and make the workplace somewhere employees look forward to
interact with instead of just a place to ―pick up a paycheck‖

Urichuck, (2002)7. a well-motivated organization for sure will have more motivated
employees and hence they will be more productive and this will lead to extreme cost
savings.

Yongsun, Barbara, Christy,( 2002)8. In addition, satisfied employees positively impact

corporate culture, resulting in many intangible but equally important returns . They also
sees that people, who were motivated by sending them to foreign countries in order to
live and work, are seen as valuable resource as they give more than usual when they
return.

Deci and Ryan (1985)9, definite that an organization whose employees have low
motivation is completely vulnerable to both internal and external challenges because its
employees are not going the extra mile to maintain the organization's stability. An
unstable organization ultimately underperforms.

Ludivine,(2011)10. Firm‘s needs to motivate their people and keep them motivated in
order to obtain the productivity gains and to insure their competitiveness. Sometimes
people who are given responsibilities feel motivated and do their best and work hard
accordingly.

Mansoor (2008)11 also sees that motivation is about creating the environment where
employees will be motivated and hence work with their full effort.

Philip, Yu-Fang, Liang-Chih,(2007)12. Organizations should motivate their employees

to enhance competitive advantages and reach the firms vision and mission .
(Morris & Sherma, 1981)13. Researchers have recommended that employee‘s
commitment toward their organizations will enhance their satisfaction and which will
benefit the firm .

Rachel, Yee, Yeung, Edwin, (2010)14. Moreover, researchers have stressed that satisfied
and encouraged employees are crucial to the organization effectiveness .

Hislop, (2003)15.business and company‘s succession depends on motivated employee;

they can make all the difference in the company‘s ability not to just survive but also to
succeed

Jonathan, Christine and Yvonne (2002) 16, motivated people and their commitment are
vital to the productivity of the work as they will perform with their full potential and with
high quality

Michael and Crispen (2009)17 stated that having a motivated workforce provides the
competitive advantage that the organization seeks and better employee performance helps
the organization achieve higher productivity.

Jonathan, Christine and Yvonne (2002)18, identified that greater motivation will have a
direct effect in improving productivity through greater effort and possibly innovation.
They also stated that motivation leads to a productive with high performance employee
who does the best at work, saves time and effort and also volunteers to do more than what
is required. Such employee will be a great resource to the business and a great model to
be followed by others.

Lockley (2012)19 offering training and development programs that effectively

contributes to personal and professional growth of individuals is another effective
employee motivation strategy. At the same time, Lockley (2012) warns that in order for
motivational aspects of training and development initiatives to be increased, ideally they
need to be devised and implemented by a third party with relevant competency and
experience.

Wylie (2004)20, An interesting viewpoint regarding the issue has been proposed by ,
according to which members of management primarily should be able to maintain the
level of their own motivation at high levels in order to engage in effective motivation of
their subordinates.

Thomas (2009)21 the main challenge of motivation in workplaces is identifying what

motivates each individual employee taking into account his or her individual differences.
In other words, individual differences have been specified by Thomas (2009) as the major
obstruction for management in engaging in employee motivation in an effective manner.

Lockley (2012)22, on the other hand, addresses the same issue focusing on cross-cultural
differences between employees in particular. Namely, culture can be explained as
knowledge, pattern of behaviour, values, norms and traditions shared by members of a
specific group

(Kreitner and Cassidy, 2012)23, and accordingly, cross-cultural differences is perceived

to be a major obstruction in the way of successful employee motivation.

Lockley (2012)24 by insisting that certain practices such as engaging in constructive

arguments and dialogues in workplace can prove to be highly motivational for the
representatives of Western culture, whereas the same set of practices can prove to be
counter-productive for employees from Asian countries due to vast cross-cultural
differences.

Teo,Lim,Lai(1999)25 Motivation is defined as the performance of an activity because it is

perceived to be instrumental in achieving valued outcomes.
CHAPTER III
2.2 THEORETICAL FRAMEWORK

2.2.1 REWARD

Malhotra et al. define rewards as ‗all forms of financial return, tangible services and
benefits an employee receives as part of an employment relationship‘ (2007:2097). It is
without doubt that every employee expects some level of reward after delivering a
function or task. Employees expect employers to deliver or execute designated duties to
their satisfaction whilst employees also expect their employers to assure them of adequate
wages and salaries (rewards) after they dutifully deliver what is expected of them.

According to the oxford dictionary; performance, which originates from the word
‗perform‘, is to carry out, accomplish or fulfill an action, task or a function. The reward
for executing a task or a function is what is termed as motivation. Even though people
work for salary or wages (rewards), there are numerous ways of rewarding (motivating)
employees according to the task or function performed.

INCENTIVES

The incentive is a positive motivational influence on a person that helps improve his
performance

FINANCIAL INCENTIVES

In today‘s socio-economic condition money has become a very important part of our
lives. We need money to satisfy almost all our needs as it has purchasing power. Thus,
financial incentives refer to those incentives which are in direct monetary form i.e.
money or can be measured in monetary terms. Financial incentives can be provided on an
individual or group basis and satisfy the monetary and future security needs of
individuals.

The most commonly used financial incentives are:

(a) Pay and Allowances

Salary is the basic incentive for every employee to work efficiently for an organization.
Salary includes basic pay, dearness allowance, house rent allowance, and similar other
allowances. Under the salary system, employees are given increments in basic pay every
year and also an increase in their allowances from time-to-time.

(b) Bonus

It is a sum of money offered to an employee over and above the salary or wages as a
reward for his good performance.

(c) Productivity linked Wage Incentives

Many wage incentives are linked with the increase in productivity at individual or group
level. For example, a worker is paid 50 rupees per piece if he produces 50 pieces a day
but if he produces more than 50 pieces a day, he is paid 5 rupeess extra per piece. Thus,
on the 51st piece, he will be paid 55 rupees.

(d) Profit-Sharing

Sometimes the employees are given a share in the profits of the organization. This
motivates them to perform efficiently and give their best to increase the profits of the
organization.

(e) Retirement Benefits

Retirement benefits like gratuity, pension, provident fund, leave encashment, etc.
provide financial security to the employees post their retirement. Thus, they work
properly when they are in service.

(f) Stock Options or Co-partnership

Under the Employees Stock Option Plan, the employee is offered the ordinary shares of
the company at a price lower than its market price for a specified period of time. These
are non-standardized offers and shares are issued as a private contract between the
employer and employee. These are generally offered to management as a part of their
managerial compensation package. Allotment of shares induces a feeling of ownership in
the employees and they give their best to the company. Infosys, GoDaddy and The
Cheesecake Factory are some of the companies that have implemented the scheme of the
stock option.

(g) Commission

some organizations offer a commission in addition to the salary to employees for

fulfilling the targets extremely well. This incentive encourages the employees to increase
the client base of the organization.

(h) Perquisites

Several organizations offer perquisites and fringe benefits such as accommodation, car
allowance, medical facilities, education facilities, recreational facilities, etc. in addition to
the salary and allowances to its employees. These incentives also motivate the employees
to work efficiently.

NON-FINANCIAL INCENTIVES

Apart from the monetary and future security needs, an individual also has psychological,
social and emotional needs. Satisfying these needs also plays an important role in their
motivation. Non-financial incentives focus mainly on the fulfillment of these needs and
thus cannot be measured in terms of money.

However, there are chances that a particular non-financial incentive may also involve the
financial incentive as well. For example, when a person is promoted his psychological
needs are fulfilled as he gets more authority, his status increases but at the same time, he
has benefitted monetarily also as he gets a rise in salary.

The most common non-financial incentives are:

(a) Status

With reference to an organization, status refers to the position in the hierarchy of the
organizational chart. The level of authority, responsibility, recognition, salary, perks, etc.
determines the status of an employee in the organization. A person at the top level
management has more authority, responsibility, recognition and salary and vice-versa.
Status satisfies the self-esteem and psychological needs of an individual and in turn,
motivates him to work hard.

(b) Organizational Climate

Organizational climate refers to the environmental characteristics of an organization that

are perceived by its employees about the organization and have a major influence on their
behavior. Each organization has a different organizational climate that distinguishes it
from other organizations.

(c) Career Advancement Opportunity

It is very important for an organization to have an appropriate skill development program

and a sound promotion policy for its employees which works as a booster for them to
perform well and get promoted. Every employee desires growth in an organization and
when he gets promotion as an appreciation of his work he is motivated to work better.

(d) Job Enrichment

It refers to the designing of jobs in such a way that it involves a higher level of
knowledge and skill, a variety of work content, more autonomy and responsibility of
employees, meaningful work experience and more opportunities of growth. When the job
is interesting, it itself serves as a source of motivation.

(e) Job Security

Job security provides future stability and a sense of security among the employees. The
employees are not worried about the future and thus work with more enthusiasm. Owing
to the unemployment problem in our country, job security works as a great incentive for
the employees.

(f) Employee Recognition Programmes

 Recognition means acknowledgment and appreciation of work done by employees.
Recognition in the organization boosts their self-esteem and they feel motivated. For
example, declaring the best performer of the week or month, displaying their names on
the notice board and giving them rewards, fall under the Employee recognition program.

(g) Employee Participation

Involving the employees in decision making regarding the issues related to them such as
canteen committees, work committees, etc. also helps in motivating them and inducing a
sense of belongingness in them.

(h) Employee Empowerment

Giving more autonomy and powers to subordinates also make them feel that they are
important to the organization and in turn they serve the organization better

EXTRINSIC AND INTRINSIC REWARDS

Rewards basically falls into two categories; extrinsic and

intrinsic rewards. Shanks note that extrinsic rewards are ‗a host of external things that
managers can provide that may serve as incentives for employees to increase
productivity‘ (2007:30). These include money, benefits, bonuses, promotions, flexible
schedules etc.

According to Shanks, intrinsic rewards are internal to the individual and are in many
ways less tangible. In fact, they are highly subjective, in that they represent how the
individual perceives and feels about work and its value‘ (2007:30). Malhotra et al
(2007:2098) argue that ‗intrinsic rewards are inherent in the content of the job itself‘ and
include ‗motivational characteristics such as skill variety, autonomy and feedback‘ as
well as employee participation in decision making and role clarity (Gilsson & Durick,
1988, Singh, 998). Manion (2005) also notes five types of extrinsic rewards which can be
summarized as healthy relationship, meaningful work, competence, progress, and choice.
Researches into rewards as motivation tend support two schools of thoughts with regards
to extrinsic and intrinsic rewards. One school of thought argues that extrinsic rewards are
more powerful and effective in attaining employee motivation, performance and
commitment (Angle& Perry1983) while the other school of thought argues that intrinsic
rewards are best suited for motivating employees (Brief & Aldag 1983).

REWARDS AND MOTIVATION

Most organizations view rewards as a means of motivating certain behaviors in

employees. Specifically, rewards are intended to motivate employees to perform
effectively and efficiently towards achieving organizational goals. Malhotra et al.
(2007:2095) note that no matter the kind of organization one looks at, ‗rewards play an
important role in building and maintaining the commitment among employees that
ensures a high standard of performance and workforce stability‘. The rationale for the use
of rewards is to motivate or induce certain behaviors among employees which are viewed
as beneficial for enhanced performance while inhibiting other behaviors which they
perceive as detrimental to organizational growth and performance. This is best achieved
under what Vroom terms as expectancy models. Martin argues that the ‗the basis of
expectancy models is that motivation is a function of the desirability of the outcome of
behavior (2005:442). That is to say, an individual is motivated to produce expected
behavior if he or she is certain that that behavior will lead to certain rewards. The
expectancy model is discussed in detail under Vroom‘s Expectancy Theory.

2.2.2 MOTIVATION

Motivation is an interesting, challenging, and complex area of Human Resource

Management studies which is rapidly changing both in terms of its nature, understanding,
functions, purpose, as well as mode of application. It is generally agreed that managers
need employees to work with. These employees do not only have to show up at work but
more importantly they need to be motivated to perform their duties. Motivation can be
defined as a driving force which leads people to want to act, perform, or do something
without pressure or undue manipulation. In his famous book, Punished by Rewards, Alfie
Kohn (1993) argued that rewards are not necessary for employee motivation. He noted
that manipulating people through the use of incentives and rewards works only on a short
term basis, but ultimately fails and can even cause lasting problems in the long run.
Drawing on a number of studies, Kohn argues that people end up losing interest in the
work they do and rather do inferior work when they are enticed by grades, rewards and
incentives. He thus advocated for the total abandonment of the use of rewards and
incentives as motivation in organizations. Despite the above arguments, motivation
continues to be an important aspect of every work environment. Managers everywhere
want employees or teams who are efficient, effective, focused and committed to the
organizational goals or mission. Employee performance has been noted to be highly
correlated to their level of motivation. Motivation is the driving force that spurns
employees‘ eagerness to work. Research has shown that motivation is an essential tool
that managers use to attain not only higher performance, but also a form of inspiration to
retain high performers in order to achieve greater productivity. Bessel et al assert that
‗managers use motivation in the workplace to inspire people to work, both individually
and in groups, to produce the best results for business in the most efficient and effective
manner‘(2002:1). Employees will only perform efficiently if their managers are
motivating them effectively. Managers responsibility thus include ‗combining good
motivational practices with meaningful work, the setting of performance goals, and use of
an effective reward system…to establish the kind of atmosphere and culture that is
needed to excel‘(mindtools.com). In a rapidly and ever changing work environment,
motivated employees are essential tools for the very survival of companies,
organizations, and industries. Motivated employees tend to be more productive and are
critical for organizational survival. It is often agreed that it is the ultimate responsibility
of managers to motivate their employees. Shanks (2007:24) however argues that; ‗while
rewards may serve as incentives and those who bestow rewards may seek to use them as
motivators; the real motivation to act comes from within the individual‘. This is because
managers can only influence employees with a combination of rewards to motivate them
to perform but cannot force them. The onus therefore lies on the individual to choose to
perform or act. To this effect, it is essential that with the issue of management and
motivation, both managers and employees play a critical role in the process of
motivation. Effective motivation can therefore only be achieved when both managers and
employees act in partnership.

MOTIVATION THEORIES
Psychologists and behavioral scientists have developed some motivation theories and
some of these theories have been developed by researchers. There are a number of
different views of motivational theories. But, we will be discussing Abraham Maslow
Theory, ERG Theory, TwoFactor Theory of Fredrick Herzburg and Acquired-Needs
Theory of David McClelland‘s.

HIERARCHY NEEDS OF ABRAHAM MASLOW’S THEORY OF NEEDS:

Abraham Maslow (1908 – 1970) along with Frederick Herzberg (1923) introduced the
NeoHuman Relations School in the 1950‘s, which focused on the psychological needs of
employees. Maslow put forward a theory that there are five levels of human needs which
employees need to have fulfilled at work (Mary & Ann, 2011). Before the employee can
move to the higher level of the hierarchy, he/ she has to be satisfied and got the needs
from the previous level. In short, Abraham Maslow‘s theory argues that humans have a
series of needs, some of which must be met before they can turn their attention toward
others. Certain universal needs are the most pressing, while more ―acquired‖ emotions
are of secondary importance.

Maslow classifies the needs that humans need as follows:

 Physiological

 Safety

 Belonging and Love

 Esteem

 Self-Actualization

The order in which the needs classifications are listed is not a coincidence. According to
Maslow, physiological needs must be met before those under safety, and only after
physiological and safety requirements are met will someone begin looking at those under
belonging and love. The goal of a human being is to incrementally meet the needs of the
individual levels so that they ―complete the hierarchy,‖ so to speak. As with all theories
of personality, Maslow‘s theory is limited in that it is only a model — it can capture
certain facets of an individual‘s personality, but it cannot capture individuals wholly.
Furthermore, Maslow‘s hierarchy provides a basic path for self-improvement. Growth
and personal development are hot topics today, and despite the lack of rigorous scientific
support, it offers a general framework people can use to better themselves. Originally
employment fell into the Safety category, but today Maslow‘s hierarchy in business is
relevant to the upper levels of the pyramid

1. PHYSIOLOGICAL NEEDS:

Physiological Needs are the basic needs that every individual needs to survive. They are
like food, air, shelter and water. If these basic needs are not met, then the employee will
not be able to go through other levels (Mary & Ann, 2011)

2. SAFETY NEEDS:

Safety needs are the needs related the feeling of the employee of being secure and safe
like having the medical insurance, job security, etc.

3. SOCIAL NEEDS – LOVE & BELONGING:

These needs are related to the interactions with other. The relationship of the individual
with the people surroundings, like having friends and feel accepted from others.

4. ESTEEM NEEDS:

Esteem is the feeling of being important. Esteem needs are classified to internal and
external needs. Internal esteems are these related to self-esteem like respect and
achievement. External esteem needs are those such as social status and recognition that
comes with the achievement.

5. SELF-ACTUALIZATION NEEDS.

It is the need of reaching the full potential as an employee. According to Vance & Pravin
(1976) this need is never fully achieved. Self-Actualization Needs are like truth, wisdom
and justice. There are different ways the organization can satisfy their employees and
motivate them. Money is the number one motivation factor that may satisfy the
employee‘s physiological needs as well as the safety needs. Social needs can be met by
providing the employee a workplace in a way that it is easy to communicate and
collaborate with others. Also, organizations get to gather and entertainment activities will
build good relationships between employees from different levels which will satisfy the
social / Love & belonging needs (Bradley, 2003).

Recognitions and rewards either verbally of formally will enhance the self-esteem of the
employee. Finally, providing a challenging job with somehow interesting aspects will
enrich the self-actualization needs of the employee (Garderner and Lambert, 1972).

ERG THEORY:

Alderfer re-categorized Maslow‘s hierarchy needs in to three simple classes of needs,

which are:

1- EXISTENCE NEEDS (PHYSIOLOGICAL AND SAFETY NEEDS):

These needs are basic and necessary to live like food and shelter.

2- RELATEDNESS (SOCIAL &BELONGING NEEDS):

These include the aspiration individuals have for maintaining significant interpersonal
relationships (be it with family, peers or superiors), getting public fame and recognition.
Maslow‘s social needs and external component of esteem needs fall under this class of
need (Ryan, & Deci, 2000).

3- GROWTH (SELF-ESTEEM AND SELF-ACTUALIZATION):

These include need for self-development and personal growth and advancement (Ryan &
Deci, 2000). Maslow‘s self-actualization needs and intrinsic component of esteem needs
fall under this category of need.

Every employee‘s needs and satisfaction factors differ from the other and every one of
them has more than one satisfaction factor and needs, and this is what the manager should
be aware of.
TWO-FACTOR THEORY OF FREDRICK HERZBURG :

In 1959 Fredrick Herzburg introduced a theory with two motivation factors. The two
factors are hygiene factors and motivators. The theory explains the factors that motivate
employees by identifying their individual needs and desires.The dissatisfaction factor is
called ―hygiene‖ and the satisfaction factor is ―motivators‖ (Bradley, 2003).

1- HYGIENE FACTORS

Hygiene factors are organization related. Like the policies and procedures, salary and job
security. Dissatisfaction comes if these factors are not existed in the workplace).

2- MOTIVATOR FACTORS

Motivator factors determine satisfaction. They are intrinsic factors such as sense of
achievement, recognition, responsibility, and personal growth which motivate employees
for a greater performance (Bradley, 2003).

ACQUIRED-NEEDS THEORY OF DAVID MCCLELLAND’S

1961 David McClelland‘s identified three needs that employees require to be satisfied
and motivated in the workplace (Ryan & Deci, 2000).

1- NEED FOR ACHIEVEMENT (NACH)

The employee with high need of achievement tries and does the best to attain challenging
goals and objectives. Taking responsibilities is a character of the need for achievement
person.

2- NEED FOR AFFILIATION (NAFF)

The person who has a high need for affiliation is people oriented more than task
oriented. The desire and needs of making relationships with people is there.

3- NEED FOR POWER (NPOW) The person who has a need for power is in a
managerial level where he wants to give orders and direct employees.
MOTIVATION APPROACHES AND THEIR EFFECT ON
EMPLOYEE’S SATISFACTION AND PERFORMANCE:

Despite the variety of number of theories have been studied by researchers, they have
come to increasingly emphasize on the importance of different motivation approaches
toward employee‘s performance.

Motivation approaches have been defined as tools and techniques which can be used to
motivate employees. Some of the approaches are:

PRAISE-

one of the effective methods is being used to motivate individuals. Saying thanks and
admire individuals is the most commonly ways of motivating employees. It is easy to use,
and it is said usually from the heart and naturally. Looking on the employee‘s eyes in
front of others and say thanks, really means a lot (Salasiah, Zainab, Rosmawati, Ermy,
2010). Employees appreciate being recognized for doing a great job and the feeling of
being valued as an individual. The praise tends to carry even greater meaning and
motivational effect (David Louis, Micheal, 2004). (ID, 1983) stated that praise was the
response of the most of employees who surveyed about motivation. Also attendees from
different seminars about motivation agreed that praise is the most important thing when
motivating employees. In addition to that, ID clarified that praise is the most powerful of
human needs. When it comes to get the best performance from employees, praise should
be on the top of the motivation approaches list. When employees feel that their managers
appreciate and praise them, they tend to perform better which leads to higher business
productivity (Salasiah, Zainab, Rosmawati, Ermy, 2010). So, the more managers‘ praise
their employees, the easier the tasks will be and the more productive they will be.
Furthermore, when managers look around for a way to complement their employees on
their work, it is a large drive shot. It is served to let employees know that their work and
what have been accomplished by them so far is appreciated (David, Louis, Micheal,
2004).
SALARY / WAGES/ INCREMENTS-

all these are temporary approaches used to motivate employees. Most of the researches
and studies have proved that money and payments are important to employees relative to
other motivators as earning a lot of money is an advantage for pushing toward
motivation. It clarifies that when employees are satisfied financially, they motivate at
work and work hard. Financial aspects like payments, allowances, salaries and bounces
increase and affect employee‘s productivity positively as a result of a study which has
been done by Locke, Feren, McCaleb, Shaw and Denny (1980), they have concluded that
introducing of individual pay, increase productivity rate from 9% to 17%. So, it is
obvious that when employees are motivated and satisfied, their productivity increases
which adds value to the whole business. Also, Guzzo, Jette, and Katzell (1985), have
done analysis on motivation programs and productivity, they found that financial aspects
and payments are the largest effect on employee‘s productivity. Furthermore, Judiesch,
1994 stated that paying and salary increments for individuals from the organizations,
increases the productivity. Furthermore, for employees to feel safe in terms of work, they
prefer getting good salaries and allowances rather than receiving appreciation (Trank,
Rynes, & Bretz, 2002). Yes, appreciation is important in order for employee‘s
motivation, but the previous statement explains that good salaries are more important. On
the other hand, when employees get high performance rate and a very good appraisal,
they appear to be sensitive to whether their performance will be rewarded by money and
pay increase or not (Harrison, Virick, &Williams, 1996; Trevor, Gerhart, & Boudreau,
1997). So, money concerns are always there and it is important for employees to work
and give.

RECOGNITION-

it is a useful positive tools where usually people get recognized by their work and job
done and based on that they receive recognition. Pinar, (2011) stated that employees
work harder when they are recognized and appreciated for their effort toward the work
and tasks have been given and this is a simple, easy and powerful strengthen system.
When employees get recognized and appreciated, they do their best to prove the skill,
talents and abilities they have. Furthermore, recognizing employees is also considered a
way of communication that strengths and rewards the outcomes people create for your
business. For that, leaders should develop recognition system which is powerful for both
employees and organization (Hsiu-Fen, 2007). Employees who feel appreciated and
recognized are more positive about themselves and their abilities to contribute. It also
guarantees positive, productive and innovative organization environment. Saying thank
you as recognition will make the business successful (David, Louis, Micheal, 2004).

ASSIGNING NEW ROLES-

usually satisfied employees who are given higher roles and responsibilities work as
motivators toward unsatisfied employees. In order for employees to successfully take the
new role, they should be given specific directions and expectations. They also are more
open to the new responsibilities when they feel supported and have all the resources to
perform the job (Jurgensen, 1978). Employees who are given new role and high
responsibilities are motivated to work harder because they see that all their effort in work
will accomplish positive results and based on that they will receive recognition (David,
Louis, Micheal, 2004).

MANAGEMENT STYLE

Most researchers agreed that in order to motivate employees and get the desired outcome
from them, we need leaderships, not managers. So, being a leader instead of a manager is
more important for motivation (Yongsun, Barbara, and Christy, 2002). A successful
leader is aware of the value of helping employees to be successful. Helping employees to
become more successful on their career and to be recognized and appreciated is the key
concern of leaders (Holly, Buttner and Dorothy, 1997). A basic role of leaders is that they
have to understand their employee‘s needs and rank the importance of them and be aware
of what their employees enjoy most about the work in order to adopt motivation
(Kuratko, Hornsby, and Naffziger, 1997).

To be a motivator, it is important to be a leader in order to discover what really

motivates employees and it is necessary to discover the fundamental needs of the
employees (Freeman, Edward & Stoner, 1992). One of the reasons that motivators can
successfully be motivators because they understand that every employee should be
motivated differently which are not the characteristics of the managers and they need
time to outline it (Kuratko, Hornsby, and Naffziger, 1997). True and real motivational
leaders are those who are self-motivated to energize others. Also, they demonstrate
qualities that develop responses to success (Chadwick, Hunter, & Walston, 2004). In
order for a leader to be a successful motivational leader they have to have knowledge and
skills, always confident toward their abilities, have the commitment and energy and very
winning communicator (Hislop, 2003).
CHAPTER IV
4.1 INDUSTRY PROFILE

Information technology is a rapidly growing field that offers secure positions for
individuals with a minimum of a bachelor‘s degree in an IT-related field. From
engineering to support, there are a number of specializations that deal with the different
components of information technology, and students with solid technical skills as well as
an aptitude for gathering information and interpreting data are likely to find success in
this industry.

The field of information technology, or IT, covers the support, administration, and design
of telecommunications and computer systems. Some positions in this field include system
analysts, software programmers, computer scientists, computer support specialists, and
network and database administrators. Most of the careers in the IT field entail operational
and design tasks related to software applications, networks, and computer hardware
components. Professionals work with organizations and businesses to install and support
viable computer networks that will keep systems reliable and efficient. IT encompasses
all software and hardware used in the creation, storing and access of information.
Examples of some technologies that IT professionals may work with include the Internet,
networks, media storage devices, databases, and firewalls.

IT or Information technology deals with information - its storage, retrieval, usage,

processing in relation to a business or similar enterprise or government. It is a complete
system of information management using technology and computers and to communicate
the same in controlled manner to authorized users appropriately.

IT sector is considered a sub sector of Information and communication sector. It involves

computer systems with Hardware, Software, Network, Infrastructure and associated other
equipment. Today this also includes, electronics, telecom, internet, semi-conductors and
ecommerce and more! Today from IT products, software, tools, its maintenance and
support, consulting and more form part of IT industry. BPO or what is called as call
center etc are also making big revenue in today‘s IT sector. In fact with the AI and
mobile technology there are more and more applications and products coming under the
IT sector to replace many manual and people dependent industries! IT is now a part and
parcel of every industry even medical, education, food, hospitality are slowly getting
actively involved with IT products and tools and services. From order, billing to medical
records, tests and machines like Scan, X- Ray to Uber cabs or eats and even hotel
booking, train tickets etc. are all now internet and software. Phones are now with chats,
messengers, and maps etc. which are all IT products. In short everywhere IT is not there
and all industries are now on IT products and services! Anything and everything with
computing systems for any business or operations or work or service or governance or
management is now IT!

4.1.1 OVERVIEW

The IT industry is a broad, sweeping term that covers many information technology
oriented organizations. If you think about it, no organization (whether corporate or
government or nonprofit) can survive without IT.

Therefore, when we speak about the IT industry we include all organizations or

departments within organizations which develop, maintain or operate the Information
Technology systems.

Broadly, we can come up with the following segments for IT organizations. Many
organizations will have a presence in multiple segments.

1. Product Companies:

These are companies that work on products meant to serve a specific use for a customer.
There could be pure software product companies (e.g. Adobe Systems or Computer
Associates) or hybrid product companies which have both software and hardware – often
bundled together but sometimes sold independently too (e.g. Google, Microsoft, Apple,
etc.). Also included in this classification are the hundreds of thousands of small start-up
companies looking to make their idea the next big idea.

2. Services Organizations:
These organizations provide IT services to their customers. They are some which
specialize in providing services only to the product companies whereas others provide a
wide range of services ranging from network maintenance, business process outsourcing,
system support, and bespoke application development.

3. In-house IT Departments:

The IT function of some of the largest organizations may be bigger than many
standalone IT companies. This function typically functions like a cost center that
provides IT services for the core business. For example, the IRCTC which serves the
Indian railways builds and supports some of the most complex systems in the world.

This definition is so pervasive, that it is hard to put a size estimate to it. Also, the size of
the organizations may range from the Goliaths like IBM having hundreds of thousands of
companies to garage based start-up companies with barely 1 or 2 people. However, the
goals of these organizations and the challenges they face are similar. They aim to make
the core business more efficient, or spur new business models

CHALLENGES

IT is one of the youngest industries in the world and therefore the challenges facing IT
organizations are many.

1. Global Competition:

IT products and services are able to overcome geographical limitations easily with the
pervasive connectivity across the globe, which keeps getting faster and more reliable.

2. Rate of Obsolescence:

It is fair to say that the IT industry re-invents its own technical infrastructure every few
years. Moore‘s law and Nielsen‘s law have proven themselves to be exceptionally
resilient. Modern systems (both hardware and software) look nothing like they did just a
few years ago. This means the rate of adaptation to new technology has to be very high.
3. Disruption of business models:
Using IT as an enabling technology has disrupted traditional businesses in many areas.
Whether it is in bookselling (Amazon), hospitality (Airbnb) or Ride sharing (Uber), there
is no telling when the next wave of disruption will come in.

4. Quality and Security:

As IT becomes more and more embedded in traditional products and traditional

businesses, it is critical to ensure that quality and security are not compromised. Imagine
if a software bug causes a space shuttle mission to fail or a car to malfunction. Security is
an even bigger concern. Recent malware and ransom ware attacks have shown how
heavily dependent we are on smooth functioning of IT systems. A huge global company
like Maersk shipping was down on its knees for nearly week, trying to recover from these
attacks.

SOLUTIONS

1. Agile product development:

Flexibility and rapid deployment cycles are the need of the hour. Agile methods help in
keeping the development process flexible as well as achieve rapid time-to-market.

2. Focus on Realizing Business Benefits:

Technology can be addictive but organizations must adopt the right technology that
solves the most pressing business problems. The product or system being built must
address the business problems that organizations face.

3. Stakeholder Engagement:

IT is one of the most man-power intensive industries. The interaction and collaboration
between the business and the development is critical as IT products and systems are
complex and often intangible. Therefore success of IT initiatives often hinge upon the
effectiveness of stakeholder engagements.
4. Leadership Development:

Management Development Programs help organizations develop the next generation

leaders to drive change. For a people intensive industry, the development of people is
probably the biggest driver for success.

4.2 INFORMATION TECHNOLOGY JOB TITLES

Below is a list of some of the most common job titles from the IT industry, as well as a
description of each.

CLOUD COMPUTING ENGINEERS

Cloud computing engineers define, design, build, and maintain systems and solutions
leveraging systems and infrastructure managed by cloud providers such as Amazon Web
Services (AWS) and Microsoft Azure.

COMPUTER NETWORK SPECIALISTS

Computer network specialists and analysts define, design, build, and maintain a variety of
data communication networks and systems. They typically have a bachelor‘s degree in
computer science or a related field. Some also have a master‘s degree in business
administration (MBA), with a focus on information systems. Computer network
architects can earn notably high salaries: the median salary is $109,020.

COMPUTER SUPPORT SPECIALIST

Computer support specialists and network administrators help computer users and
organizations. Some of these workers support computer networks by testing and
evaluating network systems and ensuring that the day-to-day operations work. Others
provide customer service by helping people with their computer problems. Some require
a bachelor‘s degree, while others need an associate degree or post-secondary classes.

DATABASE ADMINISTRATOR

Database administrators help store and organize data or companies and/or customers.
They protect the data from unauthorized users. Some work for companies that provide
computer design services. Others work for organizations with large database systems,
such as educational institutions, financial firms, and more. These jobs are growing at a
faster-than-average rate, with an expected 9% growth in jobs between 2018-2028.

INFORMATION TECHNOLOGY ANALYSTS IT

analysts are responsible for designing and implementing organizational technology for
businesses. They create solutions for collecting and analyzing market data, customer
input, and client information.

INFORMATION TECHNOLOGY LEADERSHIP

Leadership in IT draws from candidates with strong technology backgrounds and

superior management skills. They have experience in creating and implementing policies
and systems to meet IT objectives, and the ability to budget the time and funds necessary.

INFORMATION SECURITY SPECIALIST

The increased incidence of security breaches and the associated danger of identity theft
have enhanced the importance of protecting data on commercial and governmental sites.
Information security analysts help defend an organization‘s computer network and
computer systems. They plan and carry out a variety of security measures, such as
installing and using software, and simulating cyber-attacks to test systems. Information
security jobs are expected to grow much faster than average, with an increase of 32%
between 2018 and 2028.

SOFTWARE/APPLICATION DEVELOPER

Software developers design, run, and test various computer programs and applications.
Application Developers create new applications and code solutions. They usually have a
bachelor‘s degree in computer science or a related field. They also have strong
programming skills. Software developer jobs are expected to grow by about 21% from
2018-2028. The median salary of a software developer is $105,590.
WEB DEVELOPER

Web developers design, create, and modify websites. They are responsible for
maintaining a user-friendly, stable website that offers the necessary functionality for their
client‘s needs. Some jobs require a bachelor‘s degree, while others need an associate
degree, including classes in HTML, JavaScript, or SQL.

4.3 IT SECTOR IN INDIA

(INDIAN IT AND BPM INDUSTR REPORT SEPTEMBER 2020)

INTRODUCTION

The global sourcing market in India continues to grow at a higher pace compared to the
IT-BPM industry. India is the leading sourcing destination across the world, accounting
for approximately 55% market share of the US$ 200–250 billion global services sourcing
business in 2019–20. Indian IT & BPM companies have set up over 1,000 global delivery
centers in about 80 countries across the world. India has become the digital capabilities
hub of the world with around 75% of global digital talent present in the country.

MARKET SIZE

IT-BPM industry‘s revenue was estimated at around US$ 191 billion in FY20, growing
at 7.7% y-o-y. It is estimated to reach US$ 350 billion by 2025. Moreover, revenue from
the digital segment is expected to form 38% of the total industry revenue by 2025. Digital
economy is estimated to reach Rs 69, 89,000 crore (US$ 1 trillion) by 2025. The
domestic revenue of the IT industry was estimated at US$ 44 billion and export revenue
was estimated at US$ 147 billion in FY20. Total number of employees grew to 1.02
million cumulatively for four Indian IT majors (including TCS, Infosys, Wipro, HCL
Tech) as on December 31, 2019. Indian IT industry employed 205,000 new hires and had
884,000 digitally skilled talents in 2019.

INVESTMENTS/ DEVELOPMENTS

Indian IT's core competencies and strengths have attracted significant investment from
major countries. The computer software and hardware sector in India attracted
cumulative Foreign Direct Investment (FDI) inflow worth US$ 44.91 billion between
April 2000 and March 2020. The sector ranked second in FDI inflow as per the data
released by Department for Promotion of Industry and Internal Trade (DPIIT).

Leading Indian IT firms like Infosys, Wipro, TCS and Tech Mahindra are diversifying
their offerings and showcasing leading ideas in block chain and artificial intelligence to
clients using innovation hubs and research and development centers to create
differentiated offerings. Some of the major developments in the Indian IT and ITeS sector
are as follows:

• In July 2020, Infosys won a multiyear deal worth US$ 1.5 billion from investment
management company, Vanguard

• In July 2020, HCL Technologies signed a five-year deal worth US$ 600 million with
telecom equipment maker Ericsson

• In May 2020, SirionLabs, a software-as-a-service (SaaS) provider, raised US$ 44

million as part of its Series C round led by Tiger Global and Avatar Growth Capital.

• PE (private equity) investment in the sector stood at US$ 11.8 billion across 493 deals
in 2019.

• In January 2020, Nippon Telegraph and Telephone, a Japanese tech announced its
plans to invest a significant part of its US$ 7 billion global commitments for data centres
business in India over the next four years.

• As of February 2020, there were 417 approved SEZs across the country with 274 from
IT & ITeS and 143 as exporting SEZs.

• In February 2020, Tata Consultancy Services bagged a contract worth Rs 10,650 crore
(US$ 1.5 billion) from pharma company Walgreens Boots Alliance.

• UK-based tech consultancy firm, Contino, was acquired by Cognizant.

• In May 2019, Infosys acquired 75% stake in ABN AMRO Bank's subsidiary Stater for
US$ 143.08 million
• In June 2019, Mindtree was acquired by L&T.

• Nasscom has launched an online platform which is aimed at up-skilling over 2 million
technology professionals and skilling another 2 million potential employees and students.

GOVERNMENT INITIATIVES

Some of the major initiatives taken by the Government to promote IT and ITeS sector in
India are as follows:

• On May 2019, the Ministry of Electronics and Information Technology (MeitY)

launched the MeitY Startup Hub (MSH) portal.

• In February 2019, Government released the National Policy on Software Products 2019
to develop India as a software product nation

• The Government has identified Information Technology as one of 12 champion service

sectors for which an action plan is being developed. Also, the Government has set up a
Rs 5,000 crore (US$ 745.82 million) fund for realising the potential of these champion
service sectors.

• As part of Union Budget 2018–19, NITI Aayog was to set up a national level
programme to enable efforts in AI^ and leverage AI^ technology for developing the
country

. • In the Interim Budget 2019–20, the Government announced plans to launch a national
programme on AI* and setting up of a National AI* portal.

• National Policy on Software Products-2019 was passed by the Union Cabinet to

develop India as a software product nation. ACHIEVEMENTS Following are the
achievements of the Government during 2019–20:

• About 200 Indian IT firms are present in around 80 countries

. • Total export revenue of the industry is expected to grow 8.1% y-o-y to US$ 147 billion
in FY20. IT-BPM sector accounted for the largest share in the Indian services export at
45%.
 • Total number of employees grew to 1.02 million cumulatively for four Indian IT
majors (including TCS, Infosys, Wipro, and HCL Tech) as on December 31, 2019.

ROAD AHEAD

India is the topmost offshoring destination for IT companies across the world. Having
proven its capabilities in delivering both on-shore and off-shore services to global clients,
emerging technologies now offer an entire new gamut of opportunities for top IT firms in
India. The industry is expected to grow to US$ 350 billion by 2025 and BPM is expected,
to account for US$ 50 55 billion of the total revenue.