Employee Motivation

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INSTITUTE OF ACCOUNTANCY ARUSHA
IAA

RESEARCH REPORT

TOPIC

EMPLOYEE MOTIVATION AND ITS EFFECTS TO THE ORGANISATIONAL PERFORMANCE

A CASE STUDY OF ZANZIBAR INSURANCE CORPORATION

A RESARCH REPORT SUBMITTED TO THE INSTITUTE OF ACCOUNTANCY ARUSHA (IAA) IN PARTIAL FULFILMENT OF THE CONDITIONS FOR THE AWARD OF ADVANCED DIPLOMA IN ACCOUNTANCY SUPERVISOR: MR. VALENTINE

BY Sabina Deo
ADA III 2004/2005

CHAPTER ONE
1.1BACKGROUND TO THE ORGANIZATION
Zanzibar Insurance Corporation was established in 1969 under the Zanzibar Public Enterprise Decree of 1966 by Legal Notice No. 11 of 1969. The Decree was later re-enacted and replaced by the Public Enterprise Decree of 1978. The enabling decree required the Corporation to carry on the Insurance and other ancillary services. Following subsequent changes it is now operating under the public investment Act No.4 of 2002. The corporation is a Parastatal Organization owned by the Revolutionary Government of Zanzibar through the Ministry of Finance and Economic Affairs. The main objective of ZIC is to transact in all forms of insurance business. The Corporation operates its business through its head office in Zanzibar and its branches of Chake Chake and Wete in Pemba and Dar es Salaam, Arusha and Mwanza in Tanzania Mainland. ZIC is located at Vuga near the High Court in Zanzibar. It is about one kilometer from Zanzibar Port. 1.2 INTRODUCTION AND BACKGROUND TO THE PROBLEM

At one time, employees were considered just another input into the production of goods and services. What changed this way of thinking about employees was research, referred to as the Hawthorne studies conducted by Elton Mayo from 1924 to 1932 (Utouh, 2000). This study revealed that employees are not motivated solely by money alone and employee behavior is linked to their attitude. The Hawthorne studies began the human relations approach to management, whereby the needs and motivation of employees became the primary focus of managers. Understanding what motivated employees and how they were motivated was the focus of many researchers following the publication of the Hawthorne study. Thus the question of employee motivation began to advance in terms of both the theory and techniques. These developments yielded rich dividends for industrial nations by way of creating effective organization and by way of improving employee performance.

According to research by Kovach (1987:58) it was found out that, “Management expectation was achieved in most western industries particularly in the Pittsburgh areas of America due to high motivation which results in the individuals concentrating on higher levels of accomplishment and focusing behavior on reaching objectives”.

However, this potential of employee motivation has not been realized in developing countries even though, the know-how and technologies developed by the west have been transferred to the developing countries. The central purpose of this stimulating study of employee motivation was to enhance the researcher’s knowledge and understanding of the issues involved in motivation in the organization. In any organization, success is contingent to how well its employees perform. Human resource management may have focused attention toward productive employees through the use of job analysis, proper recruitment, selection techniques and training of employees. Although these activities are critical, researcher could not assume that, they would have given the organization the desired result, highly energized employees and ensure satisfactory performance as motivation could do. This was also realized and pointed out by Decenzo, D. (1996:168) that, “Recruitment, selection and training typically focus only on the ability side, thus, missing ingredient is the one willingness. Motivation then, becomes a process of activating this potential in all organization employees”.

All in all, employee motivation creates positive tension that creates...
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