CHAPTER FOUR: RESEARCH RESULTS AND FINDINGS

CHAPTER FOUR: RESEARCH RESULTS AND FINDINGS

4.0 Introduction

This chapter presents the findings of the study and discusses them in relation to the research objectives. Moreover, the chapter compares findings from the current study with findings from previous studies and highlights areas of possible convergence or disagreement. Lastly, the chapter gives recommendations based on findings from the current study and makes suggestions for future research.

4.1 General Information

4.1.1 Response Rate

66 respondents out of the targeted 69 respondents filled and returned the questionnaires. This translates to a 96% response rate. Table 3 below summarizes the response rate per job category.

                                            Table 3: Response Rate

4.1.2 Respondents’ Gender

54 respondents were males while 12 were females, translating to 82% and 18% male and female gender representation respectively. This implies that the proportion of males was 4.5 times higher than that of females as shown in the figure below:

Figure 1: Gender Representation

4.1.3 Age Distribution

18% of the respondents were aged below 25 years while 335 of the respondents were aged between 25 years and 35 years. 35% of the respondents were aged between 36-45 years, while 14% of the respondents were aged above 45 years. This information is summarized in Table 4 below:

Table 5: Age Distribution

4.1.4 Education Level

Table 5 below summarizes respondents’ highest level of education:

Table 6: Respondents Highest Level of Education

All skilled laborers have completed A level, Certificate or Diploma level of education while all professional staff have either a Bachelor’s degree or Master’s degree.

4.1.5 Years of Employment in Residential Real Estate Sector

The research shows that 35% of the respondents had been employed in the residential real estate sector for between 1-5 years. 27% of the respondents had worked in the sector for between 6-10 years while 18% had worked for between 11-15 years. 14% of the respondents had worked for between 16 and 20 years while 6% had worked for more than 20 years.

Table 7: Years of Employment

4.2 Direct Financial Payments

The second part of the questionnaire asked respondents to list all the direct financial benefits that they received from their employer. All respondents (100%) stated that they were entitled to a salary. 44 respondents stated that they were entitled to a bonus payment while 23 respondents stated that they received allowances. None of the respondents stated that they were entitled to commissions or any other form of direct financial payment. From this information, it can be concluded that salaries are an important form of direct financial compensation for construction workers.

Table 8:  Direct Financial Payments Entitlement

4.3 Employee Motivation and Direct Financial Payments

The third part of the questionnaire had seven items which sought to determine the extent to which respondents were motivated by direct financial benefits. Results of the analysis are explained in the following subsections.

4.3.1 Direct Financial Payments as Motivators

Respondents were asked to rank direct financial payments in the order they felt these benefits acted as motivators for their job performance. 61 respondents ranked salary as the strongest motivator, 14 respondents ranked allowances as the strongest motivator, while 1 respondent ranked bonuses as the strongest motivator. This information is shown in Table 9 below:

Table 9: Direct Financial Payments as Motivators

4.3.2 Respondents Motivation for the Current Job

Respondents were asked to rate their general feeling of motivation for the current jobs. 11% of the respondent reported that their motivation levels were very high, 59% reported high levels and 9% reported moderate level of motivation. 18% of the respondents reported low motivation while 3% reported very low motivation. Overall, 70% of the respondents reported feeling high or very high motivation for their current jobs. These results are summarized in Table 9 below.

                                Table 10: Motivation Rank

4.3.3 Do Direct Financial Payments Motivate Respondents to do Their Jobs

Respondents were asked if direct financial payments (as a single package) motivated them to their jobs. Respondent gave their opinion on Likert scale by ticking 1 to imply strongly agree and 5 to imply strongly disagree. Table 9 below shows the responses. Overall, 95% of respondents either agreed or strongly agreed that direct financial payments motivated them.

Table 11: Direct Financial Payments as Motivators

4.3.4 Salary Balance in Comparison with Industry Standards

Respondents were asked to state whether their salaries/basic pay rates were well balanced in relation to industry standards. Responses are shown in Table 10. As shown in the table, less than 30% of respondents agreed that their salaries were balanced with industry standards. 42% were not sure, while 31% either disagreed or strongly disagreed. Overall, 73% of the respondents felt that their salaries were not balanced in comparison with industry standards.

Table 12: Salary Balance with Industry Standards

4.3.5 Adequately Compensated for Skills/Efforts/Contributions

Respondents were asked if they felt that they were adequately compensated for their skills/efforts/contributions. Only 6% of the respondent strongly agreed, 18% agreed, 32% were not sure, 24% disagreed, while 20% strongly disagreed.

Table 13: Adequately Compensated

4.3.6 Direct Financial Payments Increment

Respondents were asked if an increment of direct financial payments would make them more motivated. 79% of the respondents stated that they strongly agreed, while 21% agreed. The results are shown in Table 12 below.

Table 14: Direct Financial Payments Increment

4.3.7 Entitlement to Direct Financial Payments Increments

Respondents were asked to state whether employees in their organizations were entitled to an increase in direct financial payments if they met their annual/periodic performance goals. 33% strongly agreed, 32% agreed, 17% were not sure, 8% disagreed and 11% strongly disagreed. These results are shown in Table 13 below

Table 15: Entitlement to Direct Financial Payment Increment 

4.4 Indirect Financial and Non-Financial Benefits (IFNFB)

The fourth part of the questionnaire sought to determine indirect financial and non-financial benefits that respondents were entitled to by their employers. In summary, 65 out the 66 respondents reported entitlement to pension benefits, 61 respondents reported entitlement to paid leave and 66 respondents reported entitlement to medical benefits. 12 respondents were entitled to a car loan, while 32 were entitled to a property development loan. 11 respondents were entitled to educational loan, 37 to severance pay and 21 to free or subsidized meals. This information is shown in table 16 below.

Table 16: Respondents Entitlements to Indirect Financial and Non-Financial Benefits

4.5 Indirect Financial and Non-Financial Benefits and Employee Motivation

The fifth part of the questionnaire had seven items which sought to determine the extent to which respondent were motivated by indirect financial and non-financial benefits. Results of the analysis are shown in the following subsections.

4.5.1 Rank of Indirect Financial and Non-Financial Benefits as Motivators

Respondents were asked to rank their indirect financial and non-financial benefits in the order they felt the benefits acted as motivators for job performance. Results of the analysis are shown in Table 17 below.

Table 17: Indirect Financial and Non-Financial Benefits as Motivators

As shown in Table 17 above, pension, annual paid leave, property development loan and medical benefits were ranked as the top 4 greatest motivators.

4.5.2 IFNFBs and Loyalty to Current Employer

The respondents were asked to state whether they were motivated by indirect financial and non-financial benefits to be loyal to their current employers. 47% of the respondents strongly agreed that they were motivated to be loyal, 27% agreed, 17% were not sure and 9% disagreed. Overall, 74% of the respondents either agreed or strongly agreed that indirect financial and non-financial benefits influenced their decision to remain loyal to the current employers. This information is shown in Table 18 below.

Table 18: IFNFBs and Loyalty to Current Employer

4.5.3 Employee Recognition System

The respondents were asked if there was a system for recognizing employees who achieve outstanding performance in their organizations. 53 answered ‘Yes’, 11 answered ‘No’ and 2 respondents answered ‘Not Sure’. These statistics translate to 80% for ‘Yes’, 17% for ‘No’ and 3% for ‘Not Sure’. This information is shown below:

Figure 2: Employee Recognition System

4.5.4 Employee Recognition System and Motivation

The respondents were asked to state whether they were motivated by the recognition system to perform well and exceed their performance expectations. 24% of the employees agreed strongly that they were motivated by the recognition system, 42% agreed, 14% were not sure, 6% disagreed and 14% strongly disagreed.

Table 19: Employee Recognition System and Motivation

CHAPTER FIVE: DISCUSSION, CONCLUSION AND RECOMMENDATIONS

5.1 Overview of the Research Process and Findings

The broader objective of the current study was to investigate the possible tradeoff between compensation strategies and motivation among construction workers in the UK. More specifically, the study sought to determine the components of compensation strategies used in the construction industry, and the extent to which direct financial payments and indirect financial and non-financial benefits influence employee motivation in the construction industry. The study used the descriptive research approach. A sample of 69 respondents was selected out of a population of 344 construction workers. The sample size represented 20% of the research population. Questionnaires were used to collect data from the respondents. The data was analyzed using SPSS (Version 27). Descriptive statistics such as frequencies and percentages were used to interpret and present the data. Results were also presented in the form of tables and graphs.

From the findings, 86% of the respondents were aged below 45 years, implying that the research population consisted of youthful workers. Moreover, 80% of the respondents had worked in the residential real estate development sector for not more than 15 years. The research shows that all the respondents were entitled to a salary as a direct form of compensation for their services. Two-thirds of the respondents received a bonus while approximately 35% received allowances. Majority of the respondents (71%) were of the opinion that salary was the greatest motivator for their jobs. In comparison, only 21% and 8% of the respondents rated bonuses and allowances as the greatest motivators respectively. Almost all respondents (95%) were of the opinion that direct financial payments (as a single package) motivated them to do their jobs.

Generally, most respondents were either not sure or disagreed with the view that their salaries were not balanced in relation to industry standards. This would imply that the respondents were either underpaid in comparison to industry standards or lacked knowledge of industry compensation standards for their jobs. Similarly, most respondents reported not feeling adequately compensated for their skills and efforts. Expectedly, all respondent were of the opinion that an increment in direct financial benefits would make them more motivated.

Regarding indirect financial and non-financial benefits, it was observed that each respondent received at least one form of benefit. Pension, medical benefit, annual leave and property development loan were the most common types of benefits as reported by the respondents. A strong response rate of 75% was received with regard to whether the respondents were motivated by the benefits to be loyal to their employers. There was even a more positive response regarding whether the respondents were motivated by their respective organizations recognition systems.

5.2 Discussion

One of the specific objectives of the current study was to determine the elements of compensation strategies used by construction companies in the UK. The current study found that elements of compensation plans can be broadly classified as direct financial payments and indirect financial and non-cash benefits. Under direct financial payments, salary constituted the greatest and most important component of compensation strategy. This finding is consistent with findings from other studies such as Darrington and Howell (2011) and Nelson and Spitzer (2003) who reported salary as the most important form of compensation. According to Darrington and Howell, most people would not work if they are not entitled to a base salary. The researcher further reports that fair salary scales are critical for optimal employee motivation.

The link between motivation and direct financial payments has been extensively explored in literature (Yan & Sloan 2014; Callen, Klein & Tinkelman, 2003). In the current study, majority of respondents reported that direct financial benefits acted as motivators for their jobs. Most authors in this subject, such as Leete (2000), agree that a reasonable level of direct financial compensation is necessary to attract and retain high performing and well-motivated employees. However, there are debates regarding whether direct compensation serves as a tool for employee retention or if it is useful in motivating employees in the long run. This is an important area for further research.

According to Darrington and Howell (2011), most companies use a system of salary plus allowances, bonuses and commissions as a strategy for motivating employees. The current study found that besides salary, respondents were entitled to bonus, allowances or a combination of both. Allowances are financial payments advanced to employees in addition to their salaries for specific purposes such as compensation for the expenses incurred by the recipient (Schultz & Schultz, 2010). Bonuses are a type of payment offered to employees in addition to base pay (salary) for various reasons such as appreciation of employee’s efforts or for the purpose of rewarding specific behaviours. Commissions are a form of direct financial payments paid to employees upon successful completion of a particular task. According to Tay and Diener (2011), most companies offer commissions to employees who perform the task of selling goods and services. Commissions can be paid as a percentage of total sales or as a flat rate. No respondent in the current study reported earning a commission. This may be explained by the fact that since none of the respondent worked in sales, they could not be entitled to commission payment. In general, bonuses, allowances and commissions are critical drivers of employee motivation.

The finding that an increase in direct financial payments would make respondents more motivated is consistent with findings from previous studies. For instance, Leete (2000) reported that salary increment increases the motivation of employees and makes them more competitive in the workplace. He further argues that having a solid plan for regular performance review and salary increment helps in connecting employee’s performance to compensation, which encourages the development of a more competitive workforce. In a similar study, Nelson and Spitzer (2003) reported that a higher pay tends to increase employee motivation and performance in the long-term. Eriksson and Kadefors (2015), however reported that not all employees report increased motivation as a result of pay increment. This finding may imply that other factors such as the nature of task and the work environment could have a significant impact on employee motivation.

The finding on the impact of indirect financial and non-financial benefits was that this form of compensation influenced respondents’ motivation levels. A major difference between direct financial payments and indirect financial and non-financial benefits is that the later are given to employees as a plan rather than cash (Ferner & Almond, 2012). According to Yan and Sloan (2014), indirect financial and non-financial benefits are designed to attract and motivate employees. He adds that these benefits have grown in importance in many industries as employers realise that the benefits influence the decision of job applicants to accept a job offer as well as the decisions of employees to remain loyal to their organizations.

The significance of indirect financial and non-financial benefits as a motivator factor has also been confirmed in a study by Inés and Pedro (2011) and Jang et al (2011). These researchers reported that motivation is not derived from the direct financial benefits alone. Rather, employees expect additional considerations that can make their lives more meaningful without necessarily increasing their financial position. In this regard, indirect financial and non-financial benefits and reward systems add to motivation for the job and make employees more satisfied.

Conclusion and Recommendations

This study has explored the impact of compensation on motivation.  It can be concluded from the findings of this study that there exists a strong correlation between compensation strategies and employee motivation. Salaries, allowances, bonuses and indirect compensation benefits have been reported to have a strong impact on motivation levels among construction workers. In view of these findings, the following recommendations have been suggested:

1. Findings from the current study suggested that employees are motivated by salary increment. It is therefore recommended that salary should be reviewed regularly to ensure that employees maintain high level of motivation. Moreover, companies should offer higher than industry average salaries in order to attract well motivated and high-performing workers.
2. The current study established that allowances and bonuses paid to employees serve as a motivator. In this regard, it is recommended that construction companies should introduce specific allowances to compensate workers for their efforts towards organizational growth. This recommendation is important especially because construction work involves a high likelihood of job-related hazards.

• The current study established a strong positive correlation between indirect financial and non-financial benefits and motivation. In light of this finding, it is recommended that construction companies should offer a wide variety of indirect compensation plans.

Directions for Future Research

The results obtained from the current study are believed to have adequately addressed the objectives of the study. In a recap, the current study was conducted in London to determine the relationship between motivation and compensation among construction workers (particularly in the resident real estate sector within the city). Future studies can be extended to other regions and industry sectors of the UK. Future studies may also include additional variables to determine their effect on motivation. Lastly, the current study was conducted in the private sector setting. Future studies should focus on public sector construction workers.