Maximizing employees' performance: the beneficial impact of salary and bonuses on worker's motivation and incentives

Abstract

The Master thesis entitled “Maximizing employees’ performance: The beneficial impact of salary and bonuses on worker’s motivation and incentives” aims at providing a starting point in the development of a multi – cultural system where the key is the measurement of the incentive an employee receives in order to be motivated enough to be part of company’s culture. The goal of the thesis is the theoretical and practical investigation of the motivational schemes the employees have with small and middle size European companies, from Romania specifically, and the way these incentives can influence the company’s productivity and the annual net turnover and costs. The thesis aims to be a starting point for future research and studies in the field of workers’ motivations and how their motivation can influence their quality and quantity of work which they do within the company. For this purpose a study was made with the help of a questionnaire which was created and sent through social media to employees from different companies and after that, they were analyzed and I have focused on 30 most relevant answers and employees who seemed relevant to my study and then structured interviews were conducted in order to find additional details related to the given before answers and not to have any bias in the research made. The thesis is structured in four main parts: Introduction, Theoretical Part, Practical Part: Evaluation of the impact of salary and bonuses within the company and Conclusion. In the first part of the paper I am introducing the reader into the field of employees’ motivation. The thesis is structured around the impact the salary and bonuses have on the level of satisfaction on employees within small and middle size European companies and a “satisfied” worker with their work achieved will have an impact on the company’s productivity and time usage of the working hours. The thesis is intended as a starting point in an academic debate regarding the European labor force and the level of salary in today’s market, where we see various changes within different European countries, which affect their neighbors. The Theoretical part is dedicated to theory, as the name states, and I am focused on how specific terms as “motivation”, “bonus” and “incentive” are defined. The employee’s evaluation is analyzed from a theoretical point of view and my interpretation concerning the evaluation is presented as part of my research. I have taken into consideration different motivational theories and Maslow’s pyramid where specific questions related to the questions from my questionnaire were asked to employees during the structured interviews. Also, I wanted to verify the status of the Maslow’s’ levels and to see if the employees are at the self-actualization level or esteem level. The target company used in my research is also presented into a sub-chapter. In the chapter “Practical part: evaluation of the impact of salary and bonuses within the company” the questionnaire and interview results are presented and analyzed. In the first and second sub-chapters the results are implemented into a Romanian small size company where the costs with employees were analyzed in relation to the annual turnover and profit and loss, which the company registered after it increased the number of employees with one and had already implemented the incentive scheme of quarterly bonuses and annual base salary increase. In the last chapter conclusions are drawn and final recommendations are presented for future researches which can be developed using this thesis as a starting point.