Motivation Schemes in Afghanistans Microfinance Sector - Paper Example

Abstract

The aim of this study was to examine how the current motivation schemes in Afghanistans microfinance sector influence employees satisfaction and organizational performance. In particular, the study focused on the case study of The First Microfinance Bank-Afghanistan (FMFB-A), which is a leading microfinance bank operating across Afghanistan. A quantitative study approach was applied to engage 150 employees as the participants. The Expectation Theory, Equity Theory, and Maslows Hierarchy of Needs Theory were applied to investigate the link between employee satisfaction and either financial or non-financial motivation schemes. A questionnaire was used to collect the data. Due to security challenges and accessibility challenges in Afghanistan, a convenience sampling method to access participants in several branches located in urban areas. With the help of the SPSS, the analysis focused on the comparison of means and Pearson correlation. In summary, Pearson correlation analysis revealed that non-financial motivation scheme is positively linked to organizational outcome (r=.546). On the contrary, there was a weak correlation between financial motivation scheme and organizational performance (r=.208). The outcomes show that Afghan employees are more motivated with non-financial motivation than financial incentives. A comparison of means revealed that demographic factors such as age, gender, and job position influenced the participants responses. For instance, the preference for non-financial motivation schemes increased with age. However, it is worth noting that the majority of the respondents admitted receiving both financial and non-financial motivation packages. Therefore, as a practical recommendation, it is important to include both financial and non-financial schemes to achieve maximum employees motivation.

INTRODUCTION

1.1 Background

Job motivation and job satisfaction have become universally accepted goals for organizations to improve employees individual performance. However, it remains unclear how the generalized findings apply to specific countries such as Afghanistan, where country-specific studies are limited, shallow, and out-dated. At the global front, researchers seem to agree in unison that job motivation leads to better employees performance since the motivation leads to job satisfaction (Springer, 2011, 29; Lan and Jian, 2016, 14; Stringer, Didham, and Theivananthampillai, 2011, 161). However, these studies represent the views of employees from different parts of the world. Therefore, they do not necessarily share a similar attitude towards monetary or non-monetary motivation schemes. In Afghanistan, efforts to rebuild the economy are ongoing in the wake of tough economic and volatile security situation. As the international community seeks an exit strategy and allows Afghans to revive the ruined economy, the question of how well employees are motivated is of great importance. Therefore, there is a need for country-specific or sector-specific studies to determine the most applicable motivation schemes.

1.2 Afghanistan Banking Sector Background

This study focuses on Afghanistans banking sector; specifically, the microfinance sector. Afghanistan banking and microfinance market volatile due to security situation deterioration, discontinuation of international donation/funds and outflow of investment from Afghanistan. Therefore, all the banks and microfinance institutions MFs want to be the leading banks or organization in this competitive market. To sustain in the market the MFIs regardless of size, technology and market focus the employee performance and productivity is the key for success and growth of any organization. In order to have constant progress and performance improvement, the organization must focus on staff motivation and satisfaction. On the other hand, different organizations consider developing and applying a diverse motivational system to motivate, attract and retain their top performing employees.

Specifically, the study focuses on the First Microfinance Bank Afghanistan (FMFB-A). The FMFB-A is the leading microfinance bank in Afghanistan with having more than thousand active employees in 15 provinces. In addition, the bank has more than 125 thousand active customers (lending and depositor) in 39 branches. The focus of this study is to understand what is the current motivational system used by FMFB-A as well as other microfinance institutions in Afghanistan and understand what would be the best staff motivator factor from employee and employer perspective in the microfinance industry.

1.3 Problem Statement

This study aims to address several country-specific and sector-specific challenges that Afghan banks face in terms of employee performance. Firstly, at the national level, Afghanistan is struggling with national challenges that most countries in the Middle East country are yet to experience. For decades, Afghanistans economy has suffered greatly due to a number of challenges ranging from insurgency and the insecurity that comes with it. The political instability and uncertainty have made the country a no-go zone for investors creating an unattractive business environment (Ra'ees, 2012, 52). Consequently, employees not only work in an unfavourable working environment but also work under pressure due to lack of alternative employment. Therefore, the most critical question is whether Afghan employees are motivated and what kind of motivation system leads to employee satisfaction considering the country-specific challenges that Afghans face. Also, the civil wars, insurgencies, and global military interventions against terrorism have contributed to the current ruinous state in Afghanistan. For instance, it is worth noting how the poverty levels among Afghans influence their willingness to accept specific jobs. Most importantly, what motivates them and encourages them to registers the best individual performance? The critical question is how well Afghan employees are motivated to rebuild their country.

1.4 Aim and Research Objectives

1.4.1 Aim

This study aims at providing empirical evidence for the understanding of the current motivation system t...