Employee Satisfaction Relation To Performance Sectors Commerce Essay

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The aim of this project is to examine the factors that engender employee satisfaction in relation to Beatbullying's outstanding performance in the Voluntary sector. Contrary to key landmark theories which argues that employees derive satisfaction at work from a big wage and other incentives, employees in the Third sector are paid 'poverty wage'. This creates the gap/puzzle for this project, as to what really makes for a satisfied workforce in a charity that has made significant impact in the sector through its dedicated workforce. Staff interviews and questionnaires were administered on 20 respondents out of 46 employees after a pilot scheme and the results reveal that the bases for employee satisfaction are largely INTRINSIC. The project concludes that satisfied employees are more likely to be innovative and productive, and that they will likely stay with the company, reducing turnover.

The core research objective measures the correlation between employee satisfaction and Beatbullying's (BB) performance. The first section will commence with a justification of the choice of research question and highlight the rationale employed to construct the question. The second section will provide the leading literature in the area of employee motivation and engagement with the use of text books, journals and the internet. This section commences with a broad view as to why this is considered an appropriate research question. The following section will highlight the methods employed in data collection and the ethical issues associated. The final section will produce the analysis of the results.

The Research Question/Hypothesis

Essentially the project endeavour was to investigate the relationship, association or correlation between BB's performance within the Third Sector and employee satisfaction. In other words, is BB's impressive performance in the Third Sector attributed to a satisfied workforce?

Can a satisfied workforce enhance firm performance?

Can a firm performance improve without a satisfied workforce?

Do firms with a satisfied workforce outperform firms without a satisfied workforce?

This hypothesis is formed through a process of conceptualisation, thus facilitating the identification of analytical concepts which may arguably be attributed to BB's performance. Therefore employee satisfaction is the independent variable and BB's performance is the main dependent variable.

A hypothesis is a statement, theory or proposition between two variables, the dependent variable and the independent variable, which attempts to explain a fact or observation, usually in terms of a relationship of causation. (Encyclopaedia or dictionary)

Walliman (2006) argues that a justification of a hypothesis lies closely with theory and the theoretical assumptions of researcher (Walliman 2006:67). Moreover research into the real world requires the application of background assumptions (Gouldner 1970, cited in Dyson and Brown 2006:1).


This rationale for doing the research on the topic stems from my own personal area of interest and also working for a charity. The outcome of the project will unravel the puzzle surrounding employees' extra-ordinary commitment, dedication and hard work in the Third sector for a 'poverty wage'. This brings to the fore other factors apart from pay that can induce workers productivity especially during the incumbent economic crisis where expenditures have been drastically reduced at national and business levels.

Researchers suggest, for instance, that nonprofit workers differ from their

for-profit counterparts in that they are more committed to organizational missions

involving public benefits and seek more work-related challenges, job

and task variety, autonomy, and collegiality. Nonprofit employees place a

high value on nonmonetary compensation and are, therefore, more willing to

accept a trade-off between lower pay and noncash benefits (Mirvis, 1992;

Mirvis & Hackett, 1983; Onyx & Maclean, 1996). Jeavons (1992) noted that

nonprofit staff forfeits wages in order to work in a "values-expressive" environment.

Nonprofit employees tend to be highly professionalized with more

education than their for-profit counterparts. The high degree of

professionalization suggests that the values of professionals, including the

need for autonomy, participation in shared decision making, and collegiality

among all employees, may be adopted as values for the entire workforce.

The question raises particular issues which I intend to mitigate through the project. The issue of employee motivation is arguably subjective, intangible and difficult to measure, presenting an immediate flaw in the research. By contrast or on the other hand, organisational performance is more tangible.


The award winning charity, Beatbullying is the UK's leading bullying prevention charity. It was founded in 1999 and registered in 2002. Beatbullying empowers young people to lead off on-line anti-bullying and anti-violence campaigns in their schools and local communities, and builds the capacity of local communities to sustain the work.  BB has directly and indirectly worked with 800,000 young people over the last 7 years, assisting and supporting young people, who are being bullied, harassed or abused by a peer, re-educating and changing the behaviour of young people who bully, reducing and preventing bullying in schools and communities across the UK.

In March 2009 Beatbullying launched CyberMentors, www.cybermentors.org.uk. CyberMentors is a unique, pioneering social networking site tackling the enormous issue of cyber bullying, providing information and support for young people being bullied or suffering violence or abuse from a peer. In keeping with the guiding principle 'by young people, for young people', CyberMentors are young people, aged 11-25, trained by BB's experienced staff, over an intensive 5 workshop process, to give support and advice to their peers who are being bullied, cyber bullied or have any other emotional problems. Since its launch, 179,623,000 unique users have logged on; there have been 1,807,081 page views, 126,648 mentoring interactions and 9,404 counselling interactions.

Business strategies

Beatbullying provides anti-bullying support and workshops for schools, communities and young people, enabling them to devise their own anti-bullying strategies and solutions. They run a range of programmes, using sport, music and new technology, to engage young people, encouraging them to take action against incidents of bullying and help others combat the problem. All the programmes are based on 'peer to peer' education, and enable young people to talk about bullying in a safe environment, empowering them to take responsibility for supporting each other and preventing bullying from happening in their communities.

Beatbullying's highly expert development officers and counsellors utilise various mediums to engage young people, including sport, new media, life and campaigning skills training, drama and music. When BB intervenes, our proven proven prevention model reduces incidents of bullying by 39%


All programmes undergo comprehensive monitoring and evaluation and are linked directly to corresponding outputs and outcomes.

The outputs and outcomes include:

Increase in the reporting of bullying by the young people in the areas of operation

Measurable and evaluative decrease in bullying of young people, due to the delivery of education and prevention programmes across all sectors of the community

Greatly improved knowledge of bullying and anti-bullying strategies by young people, professionals, parents and carers through the programmes, and the use of Beatbullying's website.

Definition of the Third Sector - The Third Sector, also known as the voluntary sector (also non-profit sector), is the charitable sector of the UK, compiled of organisations undertaking social activity for the benefit of the general public. The Learning and Skills Council, 2008, has identified three key characteristics: non-government; value driven, which means that it is primarily motivated by the desire to further, social, environmental, or cultural objectives rather than to make profit per se; principally reinvest surpluses to further, social, cultural and environmental objectives.


This section intends to highlight the academic research and key landmark studies in the area of employee motivation, satisfaction and engagement which underpin organisational performance or improved outputs or outcomes. It will provide a critical analysis of the existing literature and research, with a view to inform the research endeavour and my own position to the study. According to the principles of social research, initial research ideas must be based on reference to other research (Walliman 2006:67). This literature review will use books, journals and the internet.

Definition of Employee satisfaction - Employee satisfaction within the workplace arguably refers to positive employee morale. Furthermore, employee satisfaction is closely associated with productivity. Multiple academic studies in the area motivation have identified a relationship between motivation and productivity.

Motivation is a general term applying to the entire class of drives, desires, needs wishes, and similar forces to satisfy a want (Achieve an outcome); Satisfaction is experienced when the outcome has been achieved (Contentment experienced). (H Koontz, 1988)

Results in to achieve

Feedback which provide

(L Mullins,1999)

Desired Goals

Driving Force

(behaviour or action)

Needs or Expectations


Needs and expectations at work.

There are various needs and expectations of employees which can be categorised in two broad divisions: Intrinsic and Extrinsic motivation.

Intrinsic Motivation is related to 'psychological' rewards such as the opportunity to use one's ability, a sense of challenge and achievement, receiving appreciation, positive recognition, and being treated in a caring, valued and considerate manner.

Extrinsic Motivation is related to 'tangible' rewards such as salary and fringe benefits, security, promotion, contract of service, the work environment and conditions of work. Such tangible rewards are often determined at the organisational level.

As a starting point, the following is a useful, broad, three-fold classification for employee satisfaction at work.

Economic rewards- such as pay, fringe benefits, pension rights, material goods and security. This is an instrumental orientation to work.

Intrinsic satisfaction- This is derived from the nature of the work itself, interest in the job, and personal growth and development. This is a personal orientation to work and concerned with 'oneself'.

Social relationships- such as friendships, group working, and the desire for affiliation, status and dependency. This is a relational orientation to work and concerned with 'other people'

An employee's motivation, job satisfaction and work performance will be determined by the comparative strength of these set of needs and expectations, and the extent to which they are fulfilled.


There are many competing theories which attempt to explain the nature of motivation. These theories are all at least partially true, and all help to explain the behaviour of certain people at certain times. However, the search for a generalised theory of motivation at work appears to be in vain. As with leadership, Handy suggests that the search for the definitive solution to motivation problem is another endless quest for the Holy Grail in organisation theory.

Scientific Management and the work of

F.W. Taylor

The Hawthorne experiments and the

Nature of work motivation

Development of many competing theories

On the nature of work motivation

Emphasis on what motivates individuals.

Major writers under this heading include:

A. Maslow , F Herzberg, Alderfer, McClelland

Emphasis on the actual process of motivation

Major theories under this heading include:

Expectancy theories, Equity theory

Goal theory, Attribution theory.

(L Mullins,1999)





In this section, three motivation models which have been developed for work setting will be described: a.) Maslow's hierarchy of needs

b.) Alderfer's existence-relatedness-growth (ERG) and

c.) Herzberg's motivator-hygiene.

Following this discussion will be a review of current application of employee satisfaction in the Third sector (Beatbullying's) and the relationship between satisfaction and Beatbullying's success.

Maslow's Hierarchy of Needs

One of the most well known authors concerning motivation is A.H. Maslow. In 1943 he developed the 'hierarchy of needs model', which is very often presented as a pyramid of needs. Although the model is over 60 years old it is still widely used and applied in different situations and remains valid today for understanding human motivation, management training, and personal development. However, the model has not been without its critics.

Wikipedia Website 2009, cited 16.10.09 at: http://en.wikipedia.org/wiki/File:Maslow%27s_Hierarchy_of_Needs.svg

Maslow's hierarchy of needs is often depicted as a pyramid consisting of five levels: Physiological, Safety, Belonging, Esteem and Self-actualization. According to Maslow (1954), individual needs move from the bottom toward the top, and lower-level needs must be satisfied before entering higher-level needs which could drive behaviour. Furthermore, only unsatisfied needs can influence behaviour, those already been satisfied do not motivate. That is to say, a person starts at the bottom of the hierarchy, and initially seeks to satisfy basic needs (e.g. food, shelter).Once these physiological needs have been satisfied, they are no longer a motivator, then the needs move up to the next level- Safety. At work, it could include physical safety as well as protection against unemployment etc. After safety need has been satisfied, people want a sense of belonging.

As a result, for workplace motivation, it is important that management understands which need actives individual employee motivation. However, as mentioned earlier, there are some limitations to the hierarchy of needs.

Wahba and Bridwell (1976) concluded that Maslow's model presents the work motivation with a paradox: The Theory is widely accepted, but there is little evidence to support it.

Firstly, no clear evidence was found that human needs can be classified into five categories.

Secondly, it is not clear that an individual will focus exclusively on one unsatisfied need.

Finally, no research evidence support that satisfaction of needs at one level activates the next level of needs.


This model of motivation will be presented in an attempt to overcome some problems of Maslow's Hierarchy of Needs.

The most popular refinement of Maslow's Theory of Needs is likely to be the one proposed by Aldefer (Cherrington, 1989). Alderfer argued that the need categories could be divided into three general classes:

1. Existence needs: physiological and safety needs (such as hunger, thirst and sex).

(Maslow's first two levels).

2. Relatedness needs: social and external esteem (involvement with family, Independent Project friends, etc.). (Maslow's third and fourth levels).

3. Growth needs: internal esteem and self-actualization. (Desire to be productive, creative to complete meaningful tasks). (Maslow's fourth and fifth levels).

Although there are some similarity between Alderfer's ERG Theory and Maslow's Hierarchy Needs, ERG theory differs in two important respects. First, in addition to the satisfaction-progression process, a frustration-regression sequence also exists. For example, if an individual is continually frustrated in his or her attempts to satisfy growth needs, then relatedness needs will be reactivated and become the primary driver. Second, in contrast to Maslow's theory, the ERG theory does not hold that one level of needs must be satisfied before the next level. Instead, Alderfer believed that more than one need may be appeared in an individual at any point of time (Porter, 2003). In the ERG theory, Managers must recognize that individuals have multiple needs to satisfy simultaneously.


Herzberg (1966) suggested a two-step approach to understand employee Motivation and Satisfaction:

Hygiene factors are based on the need for avoiding unpleasantness in a business work. If these factors are considered inadequate by employees, then dissatisfaction will arise in the work. It includes: Company policy and administration, Wages, Salaries; Quality of inter-personal relations; Working

conditions; Feelings of job security, etc. (Calder, 2000)

Herzberg's Motivator-Hygiene Theory cited 16.10.09 at http://www.tutor2u.net/business/people/motivation_theory_herzberg.asp

The existence of motivator factors is to create job satisfaction. They are based on an individual's need for personal growth. If they are effective, then they can motivate an individual to contribute more effort to achieve more performance. Motivator factors include: Status; Opportunity for advancement; Gaining recognition; Responsibility; Challenging or stimulating work, etc. (Calder, 2000)

The main difference between Herzberg's and Maslow's theory is that Herzberg argued only the higher levels of the Maslow Hierarchy (e.g. self-actualization, esteem needs) act as a motivator. The remaining needs can only cause dissatisfaction if not addressed. (Calder, 2000)

Motivational Theories Applied in Beatbullying.

There are thousands of articles about effective ways to motivate employees. It has been said for years in many reports that money alone is a very poor motivator, but many companies still use money as incentive for employee satisfaction. Imberman (2007), pointed that although many employees claim money is the only thing that will drive their motivation higher, Employee contribution and involvement in the decision making process is something that can increase employee satisfaction (Management by Objective).

In the Third sector, it is very obvious that pay is a very poor motivator. Hence, the Herzberg motivator-hygiene theory as discussed above very much applies to BB.

The extrinsic factors that influence employee satisfaction in Beatbullying as indicated by the interviewed staff are the work/life balance. Employees are given 28 days holiday a year, plus 2 weeks at Christmas. Staff also has the option of taking 5 "duvet" days a year, extensive maternity and paternity leave, a flexible working hour's system is in place. There are generous pension options and health cover schemes to each employee.

Beatbullying values every staff and their input is constantly sought. There are always opportunity for cross-departmental work and projects, and everyone's input is valued. There is a culture of "best idea wins", and employees are given the opportunity, freedom and support to flourish, take ideas and expand them, and given the opportunity to make mistakes and learn from them.


From the theory of Needs and Expectations at work, I can deduce that the bases for employee satisfaction in Beatbullying are INTRINSIC. The fact that their abilities are utilised, their ability to make a positive impact or difference in people's lives, involved in the decision making process, receive appreciation and a positive recognition for a well executed task and many other factors goes a long way to give them a sense of self esteem and actualization. It also justifies the point that employee satisfaction is a factor that attributes to Beatbullying's success in the third sector.



Incentives are indispensable tools for organisational inducement, and are key to assisting corporate planners understand the impetus for the organization. An organizational incentive interpolates the intention of new employees entering the firm, and the procedures it follows to compensate and penalise its employees respectively. Incentive techniques can strengthen or dampen employees and team behaviour (Allcorn, 1995).

Organizations must constantly find new methods of engaging, and motivating their employees to sustain their creativity, efficiency, productivity and loyalty. The degree of a firms performance depends on its capacity to design formal and informal structures that attracts and retains the best human resource. (Brudney and Condrey, 1993).

Dimensions of Incentives

What constitutes an incentive for employees in an organisation?

Given the fact that money is a powerful and most acceptable form of rewards, it is only a part of reward methods an organisation can employ. There are several forms of incentives that can be used to fortify behaviours that undermine the interests of the firm.

Basically, rewards methods can be divided into four main streams.

The use of money.

Many organisations offer various kinds of financial incentives, based on their capacity to generate profits. Firms in the private sector grant financial incentives that are almost impossible for not-for-profit or government organisations to offer. These include pay for achieving set targets, bonuses for increased profit levels and stock option plans; a kind of joint ownership scheme.


Researchers in one organization were asked what kind of incentives would increase their motivation. Surprisingly, although money was cited as an important incentive, the researchers also listed the following as factors that would increase their effectiveness and therefore their motivation: access to better research materials, subscriptions to major publications in their field, access to the Internet to "chat" with other researchers on a specific topic, and the opportunity to present research findings in appropriate forums.

However, some studies conducted in the private sector indicate that economic incentives are only part of an incentive system. People also want other types of incentives. They want to be praised for achievement; they want opportunities for advancement and learning; and they want increasing responsibilities to test their range of competencies. Over the longer term, employees want multiple incentives in their work place. So, although economic incentives are important in the private and public sector, more complex, holistic incentive systems also warrant attention.

A second dimension of incentives relates to more intrinsic factors such as values, security and working conditions. Many people have a strong desire to serve, and thus seek employment that has a redeeming social value, such as with NGOs or in public service. There are, as well, many businesses that provide goods and services for the "public good."

Another set of intrinsic incentives relates to the conditions of employment. Some employees want to have security of employment and other noneconomic rewards such as flexible working hours. These conditions provide incentives for productive workers.

For some workers, their identification with the organization and the cause it serves is an incentive. This is most evident in mission-driven organizations, where motivation is often driven by the power of the organizational mission and other noneconomic incentives. Many church-based or development oriented not-for-profit organizations have strong mission service orientations.

Universities and research centers are other examples of organizations with service orientations. However, creating effective incentive systems in research centers in developing countries presents a daunting array of paradoxes. First, the staff is often highly professional and has technical skills that could command higher pay in the private sector market. Researchers, however, often prefer environments that value scientific knowledge and the recognition that emerges from peer review. They seek working environments that encourage wide communication and external stimulation, and that give them the right to decide what research should be conducted. The incentive system must reward their professional behavior in ways that compensate for the discrepancy between what they could earn in the private or government sector, and what they receive in the research center.

Whether they are generating new knowledge through research, working with the poor, or helping the sick, people in the not-for-profit sector are motivated by the calling of their organizational work. They believe in the particular nature of their work, and are often willing to give up some economic incentives for this "service." Today, there is a great deal of publicity given to the good work of such organizations. International agencies support these organizations to foster the provision of servic-

es to hard-to-reach groups (the poor, rural, other disadvantaged groups). However, these mission-oriented organizations present similar problems to organizational managers with regard to incentives.

Creating incentive systems that support the efficient use of resources and motivate staff is difficult in any type of organization. The challenge is to find the mix of incentives that will motivate employees to engage in productive and efficient behavior. A further challenge is where to provide organizational incentives. For example, in the public sector, formal incentives are often centralized and beyond the control of senior managers of government agencies. Even the most creative senior managers in the public sector have difficulty managing the incentive system of their agency. This rule of the game is changing in some of the more progressive government agencies.1

Data on Incentives

How can information be gathered about an organizational incentive system and the motivational needs of employees? One step is to obtain the documents regarding the organization's salary structures and benefits. If possible, these should be examined in relation to the organization's overall industry.

This only provides the tip of the iceberg, however. Incentives are also in the eyes of the individual. Thus, to obtain data on incentives, it is necessary to create ways to ask employees about the state of the incentive systems that exist within the organization. In some cases, this can be done through face-to-face interviews. However, we found that the best way to gather this type of information is through a combination of questionnaire surveys given to all employees and focus groups based on job category. The survey provides the information that can then be probed more deeply during a group interview or focus group.

Assessing Incentive Systems

What does all this mean for analyzing the incentive systems of an organization? First, it is important to understand the organization's underlying incentive structure. In the private sector organization, economic incentives are an important aspect of the struc-


1See Osborne and Gaebler (1992) for some ideas about how this is occurring in the United States.

ture; in the public sector, the sense of service to the public is often central; and in not-for-profit organizations, understanding the extent to which the mission drives behavior is paramount. When examining the incentive structure, it is important to identify the specific aspects of the system that either support or divert attention from performance. Are the incentive systems providing the right mixture of economic and noneconomic rewards and punishments? Are they sending the right signals to the individuals and groups in the organization? If not, is there anything the organization can do to correct this, or is it beyond the organization's control?

Questions: Incentives

Does the organization's incentive system encourage or discourage good staff performance?

Do people feel rewarded for their work?

Are people adequately compensated?

Do non-monetary rewards support good organizational behavior?

Is the incentive system adequately managed?

Is there an ongoing review of the incentive system?

Are people treated equitably in the organization?

Is there consistency between what people are rewarded for and what the organization says it will reward?


Each organization and the people within it are motivated to behave in ways that are predictable within that organization. But where does this come from? What are the forces that drive performance?

Organizations have different characteristics at different points in their history and may be motivated by different forces. Young organizations, for example, may be more open to change and re-engineering than more mature organizations. The mission of an organization can be a powerful guiding light, but it is important to determine whether the stated mission really moves people, whether it reflects what the people in the organization believe, or both. Organizational culture, a complex and layered system of values and beliefs, is difficult to diagnose (with all its sub-themes, sub-cultures and underlying assumptions), but is a powerful contributor to motiva-

tion and, ultimately, to performance. People are motivated to do well by a variety of incentives, the greatest of which is not always monetary.

Every organization is driven by a unique combination of energy that comes from experience, a vision of the future, some sense of shared values, and anticipated rewards. Taken together, these factors constitute organizational motivation. Understanding what motivates an organization can be a powerful tool in assessing and improving its performance.


Organisational Analysis: getting to the real cause of problems

Organisational Performance Framework(check Research printout)




No organization can survive today by maintaining the status quo. Even top-performing organizations need to achieve at higher levels to maintain their competitive edge. But it takes more than a new business model to push performance and productivity beyond the norm.

What is needed is a satisfied workforce.


The limitation of this survey is the limited number of respondents. Since 5 responses cannot act on behalf of all the employees in Beatbullying which also cannot represent the entire Voluntary sector. Further recommendation for the research would be conducted among much wider range of employees who work in the voluntary sector.