Job Security And Motivation Of Employees

Information Technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications. The term in its modern sense first appeared in a 1958 article published in the Harvard Business Review, in which authors Leavitt and Whisler commented that “the new technology does not yet have a single established name. We shall call it information technology (IT).

IT is the area of managing technology and spans wide variety of areas that include but are not limited to things such as processes, computer software, information systems, computer hardware, programming languages, and data constructs. In short, anything that renders data, information or perceived knowledge in any visual format whatsoever, via any multimedia distribution mechanism, is considered part of the IT domain. IT provides businesses with four sets of core services to help execute the business strategy: business process automation, providing information, connecting with customers, and productivity tools.

IT professionals perform a variety of functions (IT Disciplines/Competencies) that ranges from installing applications to designing complex computer networks and information databases. A few of the duties that IT professionals perform may include data management, networking, engineering computer hardware, database and software design, as well as management and administration of entire systems. Information technology is starting to spread further than the conventional personal computer and network technologies, and more into integrations of other technologies such as the use of cell phones, televisions, automobiles, and more, which is increasing the demand for such jobs.

In the recent past, the Accreditation Board for Engineering and Technology and the Association for Computing Machinery have collaborated to form accreditation and curriculum standards for degrees in Information Technology as a distinct field of study as compared to Computer Science and Information Systems today. SIGITE (Special Interest Group for IT Education) is the ACM working group for defining these standards. The Worldwide IT services revenue totaled $763 billion in 2009.

DOMAIN OF THE IT INDUSTRY:

A wide variety of services come under the domain of the information technology industry.

Systems architecture

Database design and development

Networking

Application development

Testing

Documentation

Maintenance and hosting

Operational support

Security services

GROWTH POTENTIAL:

The strong demand for electronic hardware and software in India has been fuelled by a variety of drivers including the high growth rate of the economy, emergence of a vast domestic market catering to the new generation of young consumers, a thriving middleclass populace with increasing disposable incomes and a relatively low-cost work force having advanced technical skills.

Indeed, the Government has also identified growth of this sector as a thrust area as there remains great expectation for significant growth given the fairly low levels of penetration of technology among the 1.1 billion populations; there were only 60 million Internet users in 2009, 7 million DVD players and personal computers were sold in 2008-09, and 11 million new mobile subscribers were added every month in the same period. In this scenario there is now a big opportunity to step up the production to gain higher global share besides meeting the domestic demands.

The Indian IT sector has also built a strong reputation for its high standards of software development ability, service quality and information security in the foreign market- which has been acknowledged globally and has helped enhance buyer confidence. The industry continues its drive to set global benchmarks in quality and information security through a combination of provider and industry-level initiatives and strengthening the overall frameworks, creating greater awareness and facilitating wider adoption of standards and best practices.

FUTURE OF INDIAN IT INDUSTRY:

The Indian IT sector persists to be one of the flourishing sectors of Indian financial system indicating a speedy expansion in the coming years. As per NASSCOM, the Indian IT exports are anticipated to attain US$ 175 billion by 2020 out of which the domestic sector will account for US$ 50 billion in earnings.

In total the export and domestic IT sector are expected to attain profits amounting to US$ 225 billion along with new prospects from BRIC nations and Japan for its outsourcing operations.

The industry is likely to continue growing from strength to strength, as local players incorporate best in class practices from global counterparts whilst retaining their edge in terms of lower cost of labor and focused governmental investments.

New graduates with degrees in related fields such as electrical engineering and computer science can hope to achieve significant professional growth and a healthy remuneration from companies looking to hire the best talent available, given the high proportion that leave to pursue jobs in this sector overseas.

IT professionals perform a variety of duties ranging from data management, networking, engineering computer hardware, database and software design, to the management and Administration of entire system. With the already high penetration of conventional personal computer and network technology, coupled with the growing convergence of information.

In order to perform the complex functions required of information technology departments today, the modern Information Technology Department would use computers, servers, database and cryptography. The department would be made up of several System Administrators, Database Administrators and at least one Information Technology Manager. The group usually reports to the Chief Information Officer (CIO).

FEATURES OF THE IT INDUSTRY AT A GLANCE:

Economies of scale for the information technology industry are high. The marginal cost of each unit of additional software or hardware is insignificant compared to the value addition that results from it.

Unlike other common industries, the IT industry is knowledge-based.

Efficient utilization of skilled labor forces in the IT sector can help an economy achieve a rapid pace of economic growth.

Adversely impacted by the recent rupee-dollar volatility and the slowdown in the global economy, the IT sector is treading cautiously on salary & rewards. Therefore study of influence of the global crisis on employees is crucial.

Introduction to variables

Independent variable:

Global Crisis

Dependent variable:

Job Security

Motivation

Global Crisis

Since 2007, nations around the world experienced a series of major economic and financial problems. The events began with the financial crisis of 2007-2008, considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. The 2008-09 global meltdown was a fallout of corporate greed, malpractices and lack of government control. Banks and companies collapsed for their own fault. While the band-aid came in the form of government bail-outs or, in simple terms, socialising private losses, one has to bear in mind that we are no longer looking at the prospect of failing companies or banks It resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the 2008-2012 global recession and contributing to the European sovereign-debt crisis.

Job security

Job security is the probability that an individual will keep his or her job and high level of job security is such that a person with the job would have a small chance of becoming unemployed.

There are several factors which affect job security such as economy, prevailing business conditions, and the individual’s personal skills. It has been found that people have more job security in times of economic expansion and less in times of a recession. Also, some laws (such as the Civil Rights Act of 1964) bolster job security by making it illegal to fire employees for certain reasons. Unemployment rate is a good indicator of job security and the state of the economy and is tracked by economists, government officials, and banks. Typically, government jobs and jobs in education, healthcare and law enforcement are considered very secure while private sector jobs are generally believed to offer lower job security and it usually varies by industry, location, occupation and other factors. Personal factors such as education, work experience, job functional area, work industry, work location, etc., play an important role in determining the need for an individual’s services, and impacts their personal job security. Since job security depends on having the necessary skills and experience that are in demand by employers, which in turn depend on the prevailing economic condition and business environment, individuals whose services are in demand by employers will tend to enjoy higher job security.

To some extent, job security also varies by employment laws of each country. A worker in Continental Europe, if asked about his job security, would reply by naming the type of statutory employment contract he has, ranging from temporary (no job security) to indefinite (virtually equivalent to ‘tenure’ in US universities but across the whole economy). However, people’s job security eventually depends on whether they are employable or not, and if businesses have a need for their skills or not, so although employment laws can offer some relief and hedge from unemployment risk, they only have a marginal contribution to job security of individuals. Individuals need to have the right skill set to have good job security.

Job security index is a measure of job conditions. Developed by Scorelogix, Job Security Index is represents how economic factors, internet and computers, international trade and competition,outsourcing, off-shoring, job migration, etc., are impacting the demand and supply of employment. A higher Job Security Index for a region, such as a ZIP code, county or metropolitan statistical area (MSA), indicates that people in that region have a better opportunity of finding jobs and remaining employed. A lower Job Security Index for a ZIP or county means that job are relatively difficult to find and keep. Typically, cities and counties that have a larger concentration of government jobs or education related jobs have a higher Job Security Index values as these jobs are less impacted by the economy.

Motivation

The processes that account for an individual’s intensity,direction, and persistence of effort toward attaining a goal -specifically, an organizational goal. Three key elements:

Intensity – how hard a person tries

Direction – effort that is channelled toward, and consistent with, organizational goals

Persistence – how long a person can maintain effort

Motivation is an individual internal process that energizes, directs, and sustains behaviour and acts as a personal “force” that causes us to behave in a particular way.

Classical theories of motivation

Maslow’s hierarchy of needs theory

Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943. This theory is a classical depiction of human motivation. This theory is based on the assumption that there is a hierarchy of five needs within each individual. The urgency of these needs varies. These five needs are as follows-

Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other words, physiological needs are the needs for basic amenities of life.

Safety needs- Safety needs include physical, environmental and emotional safety and protection. For instance- Job security, financial security, protection from animals, family security, health security, etc.

Social needs- Social needs include the need for love, affection, care, belongingness, and friendship.

Esteem needs- self- respect, confidence, competence, achievement ,freedom, recognition, power, status, attention and admiration

Self-actualization need- This include the urge to become what you are capable of becoming / what you have the potential to become. It includes the need for growth and self-contentment

According to Maslow, individuals are motivated by unsatisfied needs. As each of these needs is significantly satisfied, it drives and forces the next need to emerge.

Herzberg’s Two Factor Theory of Motivation

In 1959, Frederick Herzberg, a behavioural scientist proposed a two-factor theory or the motivator-hygiene theory. According to Herzberg, there are some job factors that result in satisfaction while there are other job factors that prevent dissatisfaction. According to Herzberg, the opposite of “Satisfaction” is “No satisfaction” and the opposite of “Dissatisfaction” is “No Dissatisfaction”.

Hygiene factors are those job factors which are essential for existence of motivation at workplace. These do not lead to positive satisfaction for long-term. But if these factors are absent / if these factors are non-existent at workplace, then they lead to dissatisfaction.It includes pay ,company policies,fringe benefits etc.

Motivation factors According to Herzberg, the hygiene factors cannot be regarded as motivators. The motivational factors yield positive satisfaction. These factors are inherent to work. These factors motivate the employees for a superior performance. These factors are called satisfiers. It includes Recognition, sense of achievement, growth etc.

Theory X and Theory Y

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of human behaviour at work, or in other words, two different views of individuals (employees): one of which is negative, called as Theory X and the other is positive, so called as Theory Y. According to McGregor, the perception of managers on the nature of individuals is based on various assumptions.

Assumptions of Theory X

An average employee intrinsically does not like work and tries to escape it whenever possible.

Since the employee does not want to work, he must be persuaded, compelled, or warned with punishment so as to achieve organizational goals. A close supervision is required on part of managers. The managers adopt a more dictatorial style.

Many employees rank job security on top, and they have little or no aspiration/ ambition.

Employees generally dislike responsibilities.

Employees resist change.

An average employee needs formal direction

Assumptions of Theory Y

Employees can perceive their job as relaxing and normal. They exercise their physical and mental efforts in an inherent manner in their jobs.

Employees may not require only threat, external control and coercion to work, but they can use self-direction and self-control if they are dedicated and sincere to achieve the organizational objectives.

If the job is rewarding and satisfying, then it will result in employees’ loyalty and commitment to organization.

An average employee can learn to admit and recognize the responsibility. In fact, he can even learn to obtain responsibility.

The employees have skills and capabilities. Their logical capabilities should be fully utilized. In other words, the creativity, resourcefulness and innovative potentiality of the employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behaviour at work, while Theory Y presents an optimistic view of the employees’ nature and behaviour at work

Modern theories of motivation

ERG theory of motivation

To bring Maslow’s need hierarchy theory of motivation in synchronization with empirical research, Clayton Alderfer redefined it in his own terms. His rework is called as ERG theory of motivation. He recategorized Maslow’s hierarchy of needs into three simpler and broader classes of needs:

Existence needs- These include need for basic material necessities. In short, it includes an individual’s physiological and physical safety needs.

Relatedness needs- These include the aspiration individual’s have for maintaining significant interpersonal relationships (be it with family, peers or superiors), getting public fame and recognition. Maslow’s social needs and external component of esteem needs fall under this class of need.

Growth needs- These include need for self-development and personal growth and advancement. Maslow’s self-actualization needs and intrinsic component of esteem needs fall under this category of need.

McClelland’s theory of motivation

David McClelland and his associates proposed McClelland’s theory of Needs / Achievement Motivation Theory. This theory states that human behaviour is affected by three needs – Need for Power, Achievement and Affiliation. Need for achievement is the urge to excel, to accomplish in relation to a set of standards, to struggle to achieve success. Need for power is the desire to influence other individual’s behaviour as per your wish. In other words, it is the desire to have control over others and to be influential. Need for affiliationis a need for open and sociable interpersonal relationships. In other words, it is a desire for relationship based on co-operation and mutual understanding.

Goal setting theory

In 1960’s, Edwin Locke put forward the Goal-setting theory of motivation. This theory states that goal setting is essentially linked to task performance. It states that specific and challenging goals along with appropriate feedback contribute to higher and better task performance. In simple words, goals indicate and give direction to an employee about what needs to be done and how much efforts are required to be put in.

Reinforcement theory

Reinforcement theory of motivation was proposed by BF Skinner and his associates. It states that individual’s behaviour is a function of its consequences. It is based on “law of effect”, i.e, individual’s behaviour with positive consequences tends to be repeated, but individual’s behaviour with negative consequences tends not to be repeated.

Reinforcement theory of motivation overlooks the internal state of individual, i.e., the inner feelings and drives of individuals are ignored by Skinner. This theory focuses totally on what happens to an individual when he takes some action. Thus, according to Skinner, the external environment of the organization must be designed effectively and positively so as to motivate the employee. This theory is a strong tool for analyzing controlling mechanism for individual’s behaviour. However, it does not focus on the causes of individual’s behaviour. Reinforcement theory explains in detail how an individual learns behaviour. Managers who are making attempt to motivate the employees must ensure that they do not reward all employees simultaneously. They must tell the employees what they are not doing correct. They must tell the employees how they can achieve positive reinforcement.

Equity theory of motivation

The core of the equity theory is the principle of balance or equity. As per this motivation theory, an individual’s motivation level is correlated to his perception of equity, fairness and justice practiced by the management. Higher is individual’s perception of fairness, greater is the motivation level and vice versa. While evaluating fairness, employee compares the job input (in terms of contribution) to outcome (in terms of compensation) and also compares the same with that of another peer of equal cadre/category. D/I ratio (output-input ratio) is used to make such a comparison.

Assumptions of Theory

The theory demonstrates that the individuals are concerned both with their own rewards and also with what others get in their comparison.

Employees expect a fair and equitable return for their contribution to their jobs.

Employees decide what their equitable return should be after comparing their inputs and outcomes with those of their colleagues.

Employees who perceive themselves as being in an inequitable scenario will attempt to reduce the inequity either by distorting inputs and/or outcomes psychologically, by directly altering inputs and/or outputs, or by quitting the organization.

Expectancy theory of motivation

The expectancy theory was proposed by Victor Vroom of Yale School of Management in 1964. Vroom stresses and focuses on outcomes, and not on needs unlike Maslow and Herzberg. The theory states that the intensity of a tendency to perform in a particular manner is dependent on the intensity of an expectation that the performance will be followed by a definite outcome and on the appeal of the outcome to the individual.

The Expectancy theory states that employee’s motivation is an outcome of how much an individual wants a reward (Valence), the assessment that the likelihood that the effort will lead to expected performance (Expectancy) and the belief that the performance will lead to reward (Instrumentality). In short,Valence is the significance associated by an individual about the expected outcome. It is an expected and not the actual satisfaction that an employee expects to receive after achieving the goals. Expectancy is the faith that better efforts will result in better performance. Expectancy is influenced by factors such as possession of appropriate skills for performing the job, availability of right resources, availability of crucial information and getting the required support for completing the job. The theory concentrates on the following three relationaships-

Effort-performance relationship: What is the likelihood that the individual’s effort be recognized in his performance appraisal?

Performance-reward relationship: It talks about the extent to which the employee believes that getting a good performance appraisal leads to organizational rewards.

Rewards-personal goals relationship: It is all about the attractiveness or appeal of the potential reward to the individual.

Vroom was of view that employees consciously decide whether to perform or not at the job. This decision solely depended on the employee’s motivation level which in turn depends on three factors of expectancy, valence and instrumentality.

Chapter 2

Review of Literature

Lubna Rizvi D/O Dr Javed1* Khawaja Atif Siddiqui, 2012

The paper tells about the relationship of Motivation with organization climate, engagement, and job security in a service organization, where it is going through rightsizing. It study finds out as to how employees working in the organization perceive it and how much they feel connected to it. The level of competition in the media industry has intensified in recent years, driven by several factors such as the decline in household wealth, rising unemployment, rapid globalization, unclear economic picture. Viewers have also become extremely conscious, especially as other channels have come in the market with lot of good programming. In this scenario the aim of the organization is simply to grab as much market share as possible and that can only be done by giving attractive programming to viewers. Target will be achieved if the employees working in the organization are productive which can only be achieved if they are motivated. The focus is to examine the employee Motivation in relation to employee commitment, culture and job security. The climate of the organisation and the level of employee engagement also affects the motivation level of employees.

Fatimah, O.1, Noraishah, D.2, Nasir, R.1 & Khairuddin, R.1(2012)

Economic instability around the world has resulted in many organizations having to lay off workers and also shutdown to save their business. This economic strain and stress have impact on the worker’s job satisfaction and well being through job insecurity. This paper examine the moderating effects of employment security on job security and job satisfaction and well being among workers in the banking sectors and manufacturing sectors who were most affected by the economic downturn. Participants were 600 workers of which 200 represented the workers who work in the bank, 200 in electronic industry and 200 in textile industry. They were randomly selected to participate in the research. A set of questionnaire comprising of Employment Security Scale, Job Security Scale, Job Satisfaction Scale and Well-Being Scale were used to measure the variables. Results from the multiple regression analysis showed that employment security did not moderate the relationship between job security and job satisfaction and well being of workers. However, job security had a direct relationship with job satisfaction and well being of workers .Thus, result from this study implicated that it was not the employment security that worried the workers but the security of their job that they were holding that impacted on their job satisfaction and well-being.

Impact of recession on Indian economy

ET bureau Aug 8, 2011

The recession started in US has touched the boundaries of india. India is facing the position of recession as globalisation showing its negative scenario. It is a phase wherein rupee depreciates, cash crunches, money market slowdown, inflation rises. During this period it is difficult to get money from the pockets of individuals. If the producer starts reducing the price of the commodity believing that the customers will buy it, it can happen only when he cuts the cost of production. Cost cutting means reduction in variable cost. As the price of steel ,iron , equipments , machinery are touching sky , the only option left to reduce the cost is by reducing the employees. Hence people fear job security. In the fear of job security people are generally shifting their purchasing.

Mehri, iqbal, hekmat, ishak,2011

To achieve the competitive advantage in the current changing and dynamic environment satisfied human capital has become a strategically very important for the organizations. During the past decade the financial crises has shattered the economic stability of different economies all over the world. A phenomenal change has been witnessed in the banking industry of Iran in recent years, due to the liberal reforms executed by the Central Bank of Iran and the effective restructuring of banks. This research demonstrates how a global financial crisis has recently affected the occupational and skill profiles of job in banking industry of Iran.

Global economy woes force local workforce off for National Statistics(2009)

Global economic firms have started to cut job in India as the economy worsens and chances of crisis in the western world aims business outlook forcing companies to scrap funds raising and M&A plans. More than 200 have been laid of in investment banking. The Asian crisis of 1997 led to many including Dresdner and Societe General to close leaving scores countless. Decade later subprime crisis forced many such as Merrill and Credit Suisse to reduce headcounts. The European crisis has just started to impact. HSBC which planned to eliminate 30000 jobs worldwide has told 120 employees to search for new jobs, sacked 12 employees from executive positions from small and midium size enterprise while Credit Suisse ,the second biggest swiss financial services has already aid more than 14 people from India wealth management team

A study on facets of HR during slowdown phase

Ram Anand , Sr. Faculty ,IPE, Hyderabad

Hr departments of Indian organisations have faced many issues in managing people during the slowdown phase. The role of HR and HR interventions administered in organisations during this phase served as an opportunity to survive and face the slowdown is the premise is studied in this paper. The comprehensive view on the various HR interventions during the downturn ensures an understanding of the HR strategies adopted by the organisations to overcome the slowdown phase. The intent of the paper is to provide a template for organisations to focus on HR interventions during slowdown phases which may occur in future. These strategies facilitate the organisations during the slowdown phase.

Randall, Oct 2008

Many businesses have frozen wages and many have cut wages by as much as 10%. As the economy has started recovering, organisations income statements may be starting to look decent. But what would they look like with previous pay levels restored is the question. With unemployment around 10% ,employees retention hasn’t been much of an issue but that won’t last forever so it may be prudent to begin restoring compensation sooner rather than later, especially for key employees. During the meltdown some businesses eliminated entire job functions from overheads. Those cuts may not be sustainable in the growing economy, so a decision must be made. Many businesses hav deferred maintanence on buildings and equipments and cut back on employee training. Organisations can’t afford to let important physical and human assest deteriorate.

Tih Koon Tan, 2008

By using a sample of 277 firms from eight East Asian economies, the relationship between

financial distress and firm performance during the Asian Financial Crisis of 1997-1998 was

tested. The crisis provides an exogenous shock which reduces the endogeneity issues between

firm performance and leverage. The results from this study reaffirm that firms with low financial leverage tend to perform better than firms with high financial leverage. Additionally, the crisis magnifies the negative relationship between financial distress and firm performance. High leverage firms experience worse performance during a crisis. Limitation of the study is that the sample contains firms from eight countries. For those countries with an adequate number of firms, a separate study to analyze the individual country to provide more insights on what might be driving the results is planned.

Chapter 3

Research Methodology

Problem statement

The research will be conducted to find out the impact of financial crisis on job security and motivation of employees working in the IT companies in Bangalore. The existing literature supports the view that the sensitivity of employee motivation and job security level magnifies during financial crisis.This study is important to company employees as it will show how the financial crises can disturb their jobs.

Research design

Based on different views of authors and literature review a conceptual framework was developed which determined the association between the impact of global crisis , job motivation and job security by a questionnaire. Correlation and Regression analysis was used to support the above model.

Objective

To study the relationship between Global Crisis and its influence on employees job security and motivation among large and medium-sized organizations located in Bangalore.

To study the influence of Global crisis on job security

To study the influence of global crisis on motivation

Hypothesis

H0: There is no significant correlation between Global crisis and Job security in IT organisations.

H1: There is significant correlation between Global crisis and Job security in IT organisations.

H2: There is no significant correlation between Global crisis and Motivation in IT Organisations.

H3: There is significant correlation between Global crisis and Motivation in IT Organisations.

Methodology

The Research design

Experience survey(Questionnaire construction)

Secondary Sources of Data Collection

Data Mining Techniques

Literature reviews

The Analysis of Data

Percentage Method

Histogram and Bar graphs

Statistical Tools for Data analysis(Karl Pearson’s Regression analysis and correlation test)

Sample design

Research method: Exploratory

Sampling method: Simple random sampling

Sample size: 100 respondents (Employees of large and medium size IT Organisations who have experience above 8 years).

Data collection tool : Questionnaire Survey Method

Location : Bangalore