MOTIVATION AND SALES PERFORMANCE OF AN ORGANIZATION IN NIKO INSURANCE KAMPALA BRANCH

CHAPTER ONE

INTRODUCTION

1.1 Introduction

This chapter of the research report covers the background of the study, statement of the problem, objectives, the research questions, scope and significance of the study.

1.2 Back ground of the study.

World over satisfying of employees’ personal needs so as to lead them into the fulfillment of the organization goals, is a big challenge faced by leaders. Employees strive to achieve goals such as; pay, job security, credit for work done, responsibility in work places, positive interpersonal relationship and good working conditions. According to Syptak et al (1999:23), Barrie (2000:36) and Jensen (2000:41) pay in form fair remuneration is an important aspect of motivation of employees. This is because it helps them to meet their physiological, security and egoistic needs. In many organizations there exists persistent grievances concerning nonpayment, underpayment and delayed payment. Many organizations pay what they want, when and how they want it (Jensen, 2000:42). This is likely to impact on the motivation of staff and the performance of the organization.

With the increase in competition, locally and globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. In addition, within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. Motivation is an effective instrument in the hands of managers for inspiring the work force and creating confidence in it. By motivating the work force, management creates „will to work‟ which is necessary for the achievement of organizational goals (Chhabra, 2010; Cole, 2004).

 

Management in today’s world is about management in times of repaid change [Robbins, 2000:3]. In today’s world, the biggest task of the human- resource manager is to motivate and retain employees. Motivation is a company’s life- blood [Sharma, 2006:] a well managed company can motivate and retain its employees and hence has the following competitive advantages: reduced turnover; an increase in productivity; reduced absenteeism; increase revenue; and improved performance. However; managers tend to assume that know what the employees want from their work. This assumption can lead managers into making mistakes while trying motivating their employees [Simons & Enz, 2006]. This study is thus an attempt to help managers to understand the factors that motivates their employees to perform to the best of their ability.

Motivation is referred to as a driving force that determines how much effort an individual puts into his learning’s, his work to perform effectively. (Farrant, 2010). Niko insurance use motivational tools like, commissions, recognition, promotions and bonuses for its employees. HOY, (2010) indicates that unless the worker is motivated performance won’t be efficient. Performance is the relationship between the output of goods and services and the input of all resources used in the production process therefore it is a comparison of input and output (John Kendrick, 2009).

 

According to Dubin, (2002), “Motivation is the complex of forces starting and keeping a person at work in an organization. Motivation is something that puts the person to action, and continues him in the course of action already initiated”. Motivation refers to the way a person is enthused at work to intensify his desire and willingness to use his energy for the achievement of organization’s objectives. It is something that moves a person into action and continues him in the course of action enthusiastically.

Motivation, according to Bulkus & Green, (2009), motivation is derived from the word “motivate”, means a move, push or influence to proceed for fulfilling a want. Bartol and Martin, (2008) describe motivation as a power that strengths behavior, gives route to behavior, and triggers the tendency to continue (Farland et al, 2011). This explanation identifies that in order to attain assured targets; individuals must be satisfactorily energetic and be clear about their determinations. In view of Bedian, (2003), it is an internal drives to satisfy an unsatisfied need and the will to accomplish. Also motivation is a progression of moving and supporting goal-directed behavior (chowdhury, M.S, 2006). It is an internal strength that drives individual to pull off personal organizational goals (Reena et al, 2009). Motivation is a set of courses concerned with a kid of strength that booster performance and directs towards accomplishing some definite targets (Kalimulla et al, 2010).

Sales performance describes the trend of collections in terms of revenue when comparing different periods (MC Cathy, 1994). The sales may be in form of offering products or services to consumers. A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in ownership of anything (Kotler and Armstrong, 2010).Sales volume is the core interest of every organization and is based on sales and profit .When volume goes up profits rises and management in organizations is made easier.

Niko insurance (Uganda) limited is part of the NICO group a leading insurance, financial and IT Group in SADC and COMESA region headquarter in Malawi with offices in Uganda, Zambia, Zimbabwe and Tanzania. With over 30 years of insurance and risk management, experience in the region, NICO holdings limited brings a wealth of expertise, professionalism and financial base into the Uganda insurance market (Company brochure, 2010). Some of the services that NICO offers include school fees insurance, travel comprehensive in insurance on vehicles Health insurance’ travel insurance, fire and special perils (Company brochures, 2010).

Niko insurance uses motivation tools like promotion, recognition, commissions however still has a challenge in situations where the company does not effectively motivate it's employees such as delayed payments, failure to participate in formulating polices, low payments, absence of job security and others. (Human Resource Report, 2010).  20 millions and large clients are the ones whose premium is above 20 millions In reference to the table above, Niko insurance failed to hit its excepted sales by 43% and 20% in large and small sized clients respectively in 2007, 33% and 12% in large and small sized clients respectively in 2009. In 2010it fallen below by 12% and 27% in both large and small sized clients respectively (Niko insurance sales records 2010). This has affected the sales excepted by the Company as indicated in the table below.

Table 1: Sale performance of Niko insurance Ltd

Year	Size of clients	Expected new clients	Clients obtained
2008	Large	700	400
	Small	1500	1200
2009	Large	1050	1050
	Small	2230	1890
2010	Large	2000	1750
	Small	3000	2000

Source: Niko insurance sales records.

Small clients are the ones whose premium is below 2Omillions and large clients are the ones whose premium is above 20 millions In reference to the table above, Niko insurance failed to hit its excepted sales by 43% and 20% in large and small sized clients respectively in 2008, 33% and 12% in large and small sized clients respectively in 2009. In 2010 it fallen below by 12% and 27% in both large and small sized clients respectively (Niko insurance sales records 2010).

1.3 Statement of the problem.

In his book “Working today: Understanding what drives employee engagement”, Towers, P. (2003) emphasizes that employee motivation is perhaps the biggest driver of organizational performance. He adds that an organization which is able to motivate its employees and maintain it, is able to leverage their zeal and drive in order to ensure staff performance.

 

Motivation of employees in any organization is crucial in that it improves the performance of workers however Niko insurance Limited has failed to motivate its employees in that they receive low payments, delay payments, denied allowances, not recognized for their performance, receive little benefits and above all have no job security. These have therefore affected the sales performance of Niko insurance.

 

1.4. Purpose of the study.

The purpose of the study was to establish the relationship between employee’s motivation and sales performance of Niko insurance.  .

 

1.5 Objectives of the study

i. To identify the motivational tools used by the Niko insurance.

ii. To establish the level of sales performance.

iii. To establish the relationship between employees motivation and sale performance?

 

1.6 Research questions

i. What are the motivational tools used by Niko insurance?

ii. What is the level of sales performance?

iii. What is the relationship between employee motivation and sale performance?

1.7 Scope of the study

1.7.1 Subject scope

This considered motivation as an independent variable and sales performance as a dependent variable.

1.7.2 Geographical scope

The study was carried out at Niko insurance located 3rd floor Green land Towers Kampala Road. This was because the agency was with easy reach and furnished me with current information pertaining to the subject matter of my study.

1.8 Significance of the study

i. Niko insurance was able to understand how to motivate its employees basing on the result of the study.

ii. The study helped the researcher to fulfill the requirements for a Bachelor of Business Administration from Bishop Stuart University.

iii. The findings of the study acted as literature review for the future generation.

v. The researcher applied the findings where ever she would go so as to gain more skills.

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