A comparison of the impact of monetary and non-monetary incentives on employee's satisfaction of operation staff（ground staff）at BA (British Airways) brand in Singapore.
Why is this important?
It is important to carry out a study on motivation of BA's employees, especially the ground staff who give the first impression to its customers. A high quality passenger service is a key to keep customers loyalty for the company. Although British airways provide excellent transportation quality, they lost millions. There was a critical strategy indicates that the successful of human resource management give advantage of low-cost (Heizer and Render, 2006).
"Persistent Colleen C. Barrett is constantly reinforcing the company's message that employees should be treated like customers and do what is right for the customer' (Heizer and Render, 2006). Motivate BA's staff by using monetary or non-monetary to improve staff satisfaction, therefore, the productive performance can prevent company from losses in Singapore branch. However, there is an argument about whether monetary or non-monetary will be more effective. The study will try to sort out which type of the motivator is appropriate for BA to apply in order to reach company goals.
Background of British Airways
British Airways statement emphasizing on workplace states that 'to create a really high-performing business we need to build an inspiring and rewarding workplace where talented people can work to the best of their ability to meet our customers' needs and our wider social responsibility' (British Airways, 2009). Financial and nonfinancial are the two directions in this internal environment of workplace. Confronting £401m loss before tax this year, 'given the deterioration in trading conditions during the year, no bonuses will be paid' (British airways, 2009). During the strike of cabin crews, operation staff has to face current stressful situations, moreover，they require to provide high-quality service. Without the company incentive system to motivate employees, it is not easy to inspire high efficiency.
Literature Review:
There are many employees motivational theories, however, Maslow and Herzberg's theories are often used (Stone, 2005). Employee's motivation has been one of the most important factors in the company that divide into two aspects, monetary and non-monetary incentives. Monetary incentives consist of 'profit sharing, project bonuses, stock options and warrants, scheduled bonuses and additional paid vacation time' (Kepner, 2001). As for non-monetary incentives 'include flexible work hours, training, pleasant work environment, and sabbaticals' (Kepner, 2001).
A research shows that IBM uses Maslow's approaches in motivating their employees by applying compensation strategy (Heizer and Render, 2006). Profit sharing is a way which can create a mindset of being the owners and this will encourage the employees to performance well, however, it is complex and usually applies on higher-level employees like managers; the DuPont Fiber Division Company also uses profit sharing (Cieri et al, 2005). Base on surveys of American Association of Retirement, monetary incentives such as profit sharing may not be the key motivator for all employees as a whole due to career stage and generations (Nelson, 1999).
Companies are also often use stock options that give employees to enter the stock market, which help them to earn profit despite the salary (Cieri et al, 2005). Research shows that McDonald in Malaysia has adapted to the plan by giving stock options to their employees who work at least five years or more and so does Amazon.com (Campling et al, 2008; Connel, 1999).
Many managers carry similar idea that monetary incentives like good wages is the key aspect to motivate employees (Bessel et al, 2002). Though monetary incentives may seem the right method to motivate employees in the short-run, however, it does not conquer all the aspects of achieving employee's satisfaction. Kepner (2001) further argues that the effectiveness of monetary incentives may not work for all employees regarding the age differences.
Base on research, some authors argue that 'monetary rewards may increase extrinsic motivation but decrease intrinsic motivation' (Cieri et al, 2005). Parker (2004) states that 'dollars are not be-all and end-all' and agrees Pola (2004). Furthermore, Scott (2003) has drawn attention into using non-monetary incentives in which he believes that 'earning the non-cash incentive carries more value than earning the market value of the incentive in cash'.
Many researches indicate that many companies use Herzberg's theory (Herzberg, 1959) to motivate their employees despite Maslow's theory, which only base on need (Heizer and Render, 2006). Hewitt surveys (2003) shows that the Cisco System who won the 'Best employers in Australia' motivates their employees by allowing the employees a high level of autonomy (Hewitt, 2003).
Besides that, more and more people value the intrinsic motivators because they need achievement and recognition (Somerville, 2004; Cocinis, 2004; Nixon, 2003). According to a study, employees especially the young employees want the work to be more meaningful and challenging and promotion, hence, they can show their ability in their work and they need a job, which allows them to learn and grow (Kramar, 2004).
Furthermore, creating a working environment can help the employees to balance their work and life, which increase employee's working attitude and performance (Cieri and Helen, 2005; Lockwood, 2003; Hewitt, 2003; Squirchuk, 2003；Golembiewski and Proehl 1978; Dalton and Mesch 1990; Trost, 1992; Poelmans, Chinchilla and Cardona 2003; Kidd, 2003; Rohan, 2003). Work life balance which means providing a flexible working time so that employees can manage their time by controlling over their work and personal life. IBM Singapore is the first company that uses flexible work schedules to motivate their employees and follow by many companies such as Western Digital, City bank, Amax, Swiss Bank Corporation，and DBS Land (Dessler and Tan, 2005).
Conclusion
In short run, the company may use the monetary incentives as money can directly motivate people but in long run non-monetary incentives may be suitable as many researches indicate that it leads to more of positive behavior in the future (Bandura, 1969; Hamner, 1974; Luthans and Stajkovic, 2000; Mahoney, 1974; Stajkovic and Luthans, 1997; Welsh, Luthans, and Sommer, 1993). Therefore, a successful company often uses both monetary and non-monetary incentives to motivate their employees that lead to employee's satisfaction like in IBM and Southwest Airlines (Heizer and Render, 2006).
Research Objectives:
What are the positive and negatives impact on employee's satisfaction using monetary incentives method?
What are the positive and negatives impact on employee's satisfaction using non-monetary incentives method?
Does the effect of monetary and non-monetary on employee's satisfaction vary by level in the operational staff (ground staff) at BA in Singapore?
Methodology
Quantitative research focuses on collection and analysis of data, while qualitative research emphasizes on words. According to the necessary of proposal, there is a need to gather and analyze data, furthermore, entails to interpret these numerical data. Thereby, quantitative research will be selected. This study primarily focuses on deductive approach, which relates to the theories and research above and especially testing those theories. Besides, the proposal combines natural science model and positivism in particular (Bryman and Bell, 2007, p.28).
Research design
There is five types of research designs can be chosen from: experimental design, cross-sectional design, longitudinal design, case study design, and comparative design (Bryman and Bell, 2007, p.44).
Due to limited amount of time, cross-sectional eventually is used in this research. The cross-sectional design is not only research with questionnaires but also statistics observation (Bryman and Bell, 2007, p.55).
The mission of this study is to discover the effect of monetary and non-monetary methods on employee's satisfaction at BA in Singapore. The factor of the cross-sectional design should not be ignored, which is the simultaneity of the variables data collection (Bryman and Bell, 2007, p.55). From here, research can be done efficiently among a large number of staff.
Research methods
There are two types of surveys: cross-sectional surveys and longitudinal surveys. The study uses cross-sectional surveys in which 'are used to gather information on a population at single point in time' (ischool, 2010). This cross-section surveys will be shown as a questionnaire in the study.
Sampling
There are a lot of types of sample, such as systematic sample, stratified random sampling, snowball sampling, and quota sampling. Due to time limit, simple random sample is introduced, which is the most basic form of probability sample. Besides each one has equal opportunity to be chosen and the process of selection is completely mechanical, this means that the same probability to be chosen (Bryman and Bell, 2007, p.186). After approaching the BA ground staff at Changi Airport, 50 staff is selected; 20/50 staff is from check in and checkout, 10/50 is from tag luggage, and the remains are passenger-guiders.
The purpose of this is to be able to know the attitude of monetary and non-monetary in which can be applied on BA staffs in Singapore.
Questionnaire
Self-completion questionnaire is frequently used in business research. The questions can be classified into open questions and closed questions.
To get the opinions from the British Airway staff in Singapore, choosing self-completion questionnaire is an efficient method. In the questionnaire, both open and closed question will be given. The closed questions consist of the monetary and non-monetary benefits that the staff may desire to get. The quantity of the questions is 20 and 5 levels can be chosen. For the open question, only 1 question needs to be given as a complementarity like "in your point of view, are there some other benefits that can motivate you?"
Schedule
The Assumptions of Qualitative Design
April week1, 2010
April week2,
2010
April week3,
2010
April
Week4,
2010
May
Week1,
2010
Identify research area
Formulate research questions
Formulate research strategy, research design and select methods
Write research proposal
Negotiate access
Data collection
Data analysis
Write drift
Dissertation due
Data analysis
Univariate analysis, bivariate analysis, and multivariate analysis are the three main types of analysis methods. To the univariate analysis, frequency tables can show all kinds of variety (Bryman and Bell, 2007, p.357). The frequency table in univariate analysis can be introduced in the quantitative data analysis of this proposal.
The row items are twenty points of the monetary and non-monetary benefits, the bar items are five levels that shows the reader's degree. After getting all the data and fulfill the table, it showed which of the benefits preferred the most.
Implication
This study will give a brief outlook and better understanding of negative and positive effects on using monetary and non-monetary incentives that may or may not help to motivate operational staff (ground staff) in BA and as well as airline industry. With the above evidence, BA can consider which is the best way to increase employees' satisfaction. BA recognize that profit sharing may not work for lower level staff such as operational staff that mainly work at the airport, hence to its current financial situation, BA may not able to adopt back its tradition of stock options. Furthermore, with Herzberg's two factors theory, BA realize the significant effects of non-monetary incentives have on employees in terms of intrinsic motivators. Therefore, the theory is the key guidance to BA in which BA shall further investigate into it. However, many studies show that both monetary and non-monetary incentives shall be introduced. From this study, airline industry will able to generalize and consider which of the methods regarding monetary vs. non-monetary incentives beneficial them more regarding presence economic crisis.
