Motivational strategies for employees in Daikin Air

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

This research will help Daikin Air conditioning India Pvt. Ltd. to know various methods to motivate their employees in order to reduce the staff turnover ratio. The research will help them to improve their strategies regarding managing people with better motivating skills. It is followed by the literature review concentrating on different aspects like the psychological contract, employee involvement and participation in competitive climate, different types of motivating theories. Then later in this, there is the methodology followed by the various measures considered and followed for conducting this research.

This research starts by giving some knowledge of the background of the industry, followed by the research questions and then the approach to provide the answers for these questions. Later a proper framework of theoretical knowledge is provided.


Air conditioner had a 14% market share of consumer durable industry. The Indian air conditioning industry has seen a big change in last few years. Information Technology, IT enabled services, hospitals, hotels, and airports had a rapid growth in past few years. These changes have been favorable to the industry and in a direction to meet customer expectations and satisfaction moving forward towards global standards gradually.

These changes have been visible in areas of:

1. Product

2. Technology

3. Distribution

4. Back up support systems

The major players in the industry are Amtrex Hitachi, Blue Star, Carrier Aircon, Daikin, LG, Samsung, Voltas, Whirlpool etc. The scale of the Indian AC market in fiscal 2007 is regarded as 110 billion yen and the construction of large-scale commercial facilities and projects, including construction and upgrading of airports, has increased sharply accompanying recent economic growth. And it is expected the air conditioning market will surpass 20 billion yen by 2010.


Many new product variants have been introduced in Indian market which is well accepted by consumers. These models have been commonly used globally over a period of time. Consumers globally look forward for new products in any segment and this trend is true to Indian market as well. Moreover as the Indian outbound travel has considerably increased over last few years, exposure to such models globally has acted as a catalyst for high acceptance towards newer models.

Following types of products are widely used in India;

Window AC

Split AC - Wall mounted type, Ceiling suspended, Floor standing

Packaged type

Duct connection - Packaged type

VRV (Resident and commercial)


Products are available at different price ranges in the market.


Daikin Air Conditioning India Pvt Ltd is a 100% subsidiary of Daikin Industries Limited, Japan (DIL).

DAIPL is engaged in the business of providing air conditioning solutions under "Daikin" brand to Indian customers through wide network of dealers through out the country. Daikin branded products are linked to high quality and "worry free" environment to ultimate consumers. The USP (Unique Selling Proposition) is "calm" experience with advanced technology with wide range of models. DAIPL imports finished goods from Daikin plant at Thailand, Japan, Malaysia.


The Company is focused on the premium air conditioning segment in which it has a market share of more than 50 percent. Sales to commercial establishments constitute about 70 percent of DAIPL's sales while sales to the household market segment constitute the remaining 30 percent.

The company has been continuously focusing on developing premium segment of the market in line with company's global strategy, technological strength, and brand image. Daikin has a focused approach to continue with same in future also thru its premium end products for the Indian air conditioning market. Some of the prominent customers in commercial segment include Infosys Technologies, Wipro, Oberoi Hotels, Japanese Embassy, Canadian Consulate, American Embassy, ITC-Wills Retail, Essar Group, Covansys Technologies, Mastek, Microsoft, Larsen and Toubro, Saravana Bhawan, Jindal Steel, Reliance Group, Raymonds, Cipla, Torrent Group.


DAIPL is having business presence in all parts of India having 11 branches (including 2 regional offices in Delhi and Mumbai). Also, DAIPL has 250 authorized dealers in major cities and towns across India. These branches are responsible for promoting and selling in designated areas.

To meet demand of after sales service, DAIPL has 3 service centres and spare parts centre at all branch locations. Spare parts generally procured at Delhi from Daikin locations overseas which is a hub for all spare parts centres. As per requirements spare parts are distributed to all spare parts centre from hub.


DAIPL has introduced technically advanced models in Indian market to cater to premium segments both in residential and commercial segments. A detail range of products is discussed below. These products can be used both for residential and commercial segments.



Indoor Unit

Wall mounted type

Cooling only

Heat pump

Ceiling Suspended type

Ceiling Mounted Cassette type

Ceiling Suspended Cassette type

Ceiling Mounted Built-in type

Floor Standing type

Duct connection

Photo Catalytic Air Cleaner

VRV system


DAIPL is investing Rs.120 Crores (approx.) to construct its new factory at Neemrana, Rajasthan.

It will manufacture multi-split type commercial-use air-conditioning equipment and chillers (large-capacity air-conditioning heat source equipment).

Product supply to Southwest Asia, the Middle East and Africa is also envisioned in the future.

To further improve the level of product quality and service, Daikin will also establish a research & training center within the factory grounds for the purpose of enhancing workmanship in terms of installation, commissioning, after sales service, etc.


The research aim is to find motivation strategy that Daikin India can apply to motivate its employees.

The basic objectives of research are as follows:

(1) Identify the current motivation strategy in Daikin Airconditioning India Pvt. Ltd.

(2) Evaluate that motivational strategy within the framework of literature.

(3) To find what make employees in Daikin Airconditioning India Pvt. Ltd. dissatisfied.

(4) To assess how much role motivational strategy plays in an organisation's growth.

LITERATURE REVIEW write in diff mannare

There are many definitions for motivation. According to Baron (1991), motivation is the internal processes that activate, guide, and maintain behaviour (especially goal-directed behaviour). Other authors like Robertson and Smith (1985), also agreed that motivation is a psychological concept related to the strength and direction of human behaviour. There work was further carried by Kanfer (1998) who defined that motivation is only about the free will element of behaviour and defines motivation as psychological mechanisms that govern the direction, intensity, and determination. Further to this, Herzberg (1987) stated that motivation is a function of growth that helps in getting intrinsic rewards out of interesting and challenging work. Motivation is hidden because it comes from the individual. According to Hollyforde, S. & Whiddett, S. (2002), people cannot be motivated unless they get something.

A motivation theory is one that provide answers to questions like 'Why do people make the choices that make?' or 'What makes someone persist at one activity and yet quickly give up another?' or 'To what extent is a person's behaviour a free choice?' (Hollyforde, S. & Whiddett, S., 2002). Moreover, Weiner (1992) argued that the good motivational theory is that which applicable to different situations to interpret specific actions. This means that good motivation theory applies to all situations. On the contrary, Koopman-Iwema (1984) challenged by stating that such theory does not exist.

Motivational theories are classified by Kanfer (1990), as:

Need-motive-value theories- those that emphasise the role of personality, stable dispositions and values as a basis for behavioural variability (eg- Existence-relatedness growth and Hierarchy of needs theory).

Cognitive choice theories- those that focus on cognitive processes involved in decision making and choice (eg- Achievement theory and Expectancy theory).

Self-regulation-metacognition theories- those that focus on the motivational processes underlying goal-directed behaviours (eg- Goal-setting theory).

On the other hand Koopman-Iwema (1984) also classified motivational theories as:

Content theories- those that focus on what it is about the individual and/or about his environment that attracts his attention (eg- Achievement theory, Hierarchy of needs and Internal-external control theory).

Process theories- those that are related to the question how behaviour is energised, how it is channelled, how it is continued or changed (eg- Drive theory, Equity theory and Expectancy theory).

Both the classification is based on different perceptions. One believes that motivation is driven from internal environment to maintain the imbalance whereas other takes motivation driving from external environment to maintain the imbalance.


Achievement Theory: Atkinson (1964) defined the need of achievement as a capacity to experience pride in accomplishment. The more certain someone in getting successful in an activity, the less likely he or she is to feel a sense of accomplishment in achieving it. According to Atkinson (1964) every achievement-oriented activity has an 'approach-avoidance conflict'. This means that there is conflict between working towards a positive sort of outcome (approach) and not doing the activity to avoid a negative outcome (avoidance).

According to achievement theory a person could be motivated to do something a way of avoiding failure. To the contrary authors like Atkinson and Feather(1966) stated that the correct interpretation of the motivation to avoid failure corresponds to 'what activities a person is not likely to undertake, not what activities he is likely to undertake'.

Achievement theory has evolved and refined over the years. This theory basically suggests that people with high achievement and who see effort as the primary element of successfully completing goals, may take on tasks beyond their capability because they feel that if they work hard then they will get succeed. This strategy can be successful in gaining long term goals but in short term it may prove counter productive.

Activation Theory: Further to Achievement theory, Berlyne (1967) and Scott (1966) developed activation theory and were the first to apply Activation theory in work setting. The activation theory is primarily a physiological theory which is based on studies of heightened and depressed levels of activation or arousal on the brains and bodies of organisms.

Research of Activation theory in work settings concerned on what happens when people are under-activated in their jobs. On the other hand authors like Hackman and Oldham (1976) believe that activation theory ignored the jobs that result in over-activation because there are few such jobs exist for rank-and-file workers in contemporary organisations.

According to Activation theory, people get under-activated when they are put in routine jobs. It is the repetitive nature of the job that leads to problem in motivation rather than the routine per se. Research shows that at low activation level, performance decreases due to following three key factors: lack of alertness; a dulling of the sense and a lack of muscular co-ordination (Hollyforde, S. & Whiddett, S., 2002). To deal with low activation, external variations can be tried like formal rest periods, systems for employees to monitor their own progress and the most effective external activator can be monetary reward. Berlyne (1967) believe that the successes achieved in increasing activation with these external variations are short-lived. It should be possible to make most routine jobs stimulating by changing the job itself. According to Berlyne (1967), the different types of stimulation can be: novelty; complexity; variations; intensity and uncertainty.

Control Theory : Miller, Galanter and Pribram(1960); Powers (1973) were the first to apply control theory to work situations. Control theory is based on the premise that human action and motivation is based on a negative feedback loop. Later to this Klein (1991), stated that 'in human systems neither the sensor, standards, nor effector are necessarily fixed quantities. This theory is related to goal-setting theory. Control theory was one of the few theories that focus on a person's self-regulation in response to external influences such as goals and incentives.

Drive Theory: Hull (1952), and others, asserted that motivation stemmed from physiological need deprivation which "drove" organisms to engage in random activity until, by chance, the need was satisfied and the drive was thus reduced. On subsequent occasions, cues in the situation would be recalled so that organisms would take suitable action rather than engage in random trial and error.

Reinforcement Theory: Skinner (1953) agrees that motivation was similar to drive theory except that he eliminated the concept of an internal drive state. According to Skinner behaviour was controlled by reinforcements, which were consequences that followed behaviour, making subsequent, similar responses more likely to occur in similar situations. This behaviourist approach suggested by Skinner ruled the field of psychology for decades. It was based on the assumption that the human action could be understood without reference to consciousness. Some authors like Binswanger (1991), argued against this assumption and it led to termination of behaviorism as a major intellectual force in psychology. Reinforcers (consequences of behaviour) only effects subsequent action if the individual: (a) anticipates that the reinforcer will follow future actions; (b) desires or values the reinforcer; (c) understands what actions need to be taken to get it; and (d) believes that he or she can take the requisite actions (Bandura(1986); Locke (1977)).

Maslow's Hierarchy of Needs Theory: Further to the work of Skinner (1953), Maslow (1954) proposed that motivation is based on a number of human needs. These are arranged in a hierarchy that require basic needs to be satisfied before the less basic needs.

Maslow in his hierarchy of needs theory identified five key categories of need:

5. Self-actualisation needs- e.g. the need for personal growth and development

4. Esteem/ego needs- e.g. the need for status, self respect

3. Belonging and love needs- e.g. the need to part of a family or social group

2. Safety needs- e.g. the need for shelter and warmth

1. Physiological needs- e.g. to stave off hunger and thirst

Hierarchy of needs theory is based on the assumption that individuals are concerned to satisfy their unmet needs and they will shift to other need only when the need below that has been satisfied. Maslow suggested that people become so focussed on satisfying their current need that they put that in priority over lower needs.

Existence-Relatedness-Growth Theory: Alderfer (1969), further developed work of Maslow and stated that motivation is the result of people's striving to meet certain basic needs. Whereas Maslow provided five needs, Alderfer suggested three core needs: Existence needs; Relation needs; and Growth needs.

Unlike Maslow's Hierarchy of needs theory, ERG theory addresses the issue of why people continue to be motivated to meet needs that have apparently been met. Alderfer suggested that when people get frustrated by lack of growth needs, lower-level needs may assume greater motivational importance, even if they have already been satisfied. ERG theory assumes interchange-ability of various existence needs- lack of satisfaction from one area can be compensated by an increase in satisfaction in another.


Process theories attempt more dynamic approach by striving to understand the thought processes of individuals which act to influence their behaviour. These are related more to process of developing motives rather than to static analysis of needs. Two theories covered under this are equity theory and expectancy theory.

(i) Equity theory:

Equity theory explains relational satisfaction in terms of perception of fair/unfair distributions of resources. It was developed by Adams (1963) who states that if individuals feel they are rewarded unfairly for what they do, the result is more likely to be alienation or de-motivation. It explains a potentially limitless list of factors which can lead toward motivating behaviour.

(ii) Expectancy theory:

Expectancy theory is also known as Path-Goal (P-G) concept developed by Vroom(1964). Hr argues that performance is a multiplicative function of motivation (M) and ability (A):


The (P-G) model presupposes that people can estimate expectancies (in terms of probabilities that range from 0 to 1) in regard to both whether they can carry on with the particular task and the likelihood that their effort will be noticed and rewarded accordingly.

Reinforcement theory: a situational approach to motivation

Thorndike (1911), stated that reinforcement theory is based on the belief that likelihood of a certain behaviour being repeated is a function of its expected consequences. It states that if you do something that gives to pleasant reward, then you are more likely to do it again. There are basically four types of reinforcement theories: (i) Positive reinforcement; (ii) Negative reinforcement; (iii) Extinction; and (iv) Punishment.


Managing pay as an extrinsic reward: The managers need to maintain a fair and appropriate system for providing pay for work performance. If it is not well-managed then dissatisfaction among employees can lead to troublesome consequences.

The dissatisfaction among employees regarding pay can lead to employees start to leave or work less, coupled with difficulties in recruiting new, qualified staff, then the organisation's ability to regenerate itself is thrown into question.

Pay and motivation: The basic assumption behind providing employees with performance-related pay, merit schemes, profit-sharing and employee share ownership is to motivate people by money. According to Wright (1986), financial sharing schemes helps in greater motivation among employees by :

Creating better organisational climate;

Stimulating employee interest in profits and financial performances of the firm, which therefore;

Encouraging more effective work.


The researchers like Richardson and Nejad (1986), believe that if the dissatisfaction or less motivation prevails in an organisation then it can lead to better employees start to leave or work less. The less motivated employees in an organisation can stop an organisation to grow and can effect its performance. Therefore, it becomes important for every organisation to have motivated employees who can give their best to the organisation, it can enhance the organisational performance.


A single or unified theory of motivation is impossible to coherent. Individuals are very complex in their needs, values, beliefs, perceptions and attitude. Theories of motivation lie at the heart of much organisational practice. It all depends on organisation which motivational strategy they adopt on the basis of their employees values and beliefs. Organisation can provide the environment, resources and support to influence and affect others' motivation to behave in a particular way. According to Hollyforde, S. & Whiddett, S., (2002) the application of motivation theories to practical settings is more an exercise of encouraging readers to think 'How do I create an environment and incentives that encourage motivation?' than 'How do I change a person, or people, to make them motivated?'