DE-MOTIVATION PREVAILING AMONG THE EMPLOYEES AT ENGRO FOODS

Business Communication Report

DE-MOTIVATION PREVAILING AMONG THE EMPLOYEES AT ENGRO FOODS

Business Communication Report

Group Members:

Ammar Yasir 17214

Saad Hassan Qureshi 17678

Sheikh Abdul Waris 17910

Sidra Razi 17360

Date: 17-12-2014

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Letter of Transmittal

Mr. Asif Khan

Iobm, Korangi Road

Karachi

Dear Sir,

Here is an in depth qualitative study regarding Demotivation prevalent amongst employees at

Engro Foods Corporation.

This study revealed that employees are dissatisfied with the organizational design, work

environment and salary and compensation of the corporation. A majority of employees felt that

office politics and inflexible organizational policies led to increasing job disengagement. The

report suggests ways to enhance employee motivation and productivity. Thank you for

authorizing. We would like to express our immense gratitude for authorizing the research. You

proved to be a perpetual source of guidance. We hope that our suggested strategies proved to be

effective for the employees at Engro Foods.

Yours Sincerely,

Ammar Yasir

Saad Hassan Qureshi

Sheikh Abdul Waris

Sidra Razi

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Letter of Acknowledgement

We would like to express our deepest appreciation to all those who provided us with the

possibility to complete this report. Special thanks to the employees at Engro who took out time

from their hectic schedule and provided us with the valuable data to complete our report.

We would also like to express our special gratitude to our teacher Mr. Asif Khan, for his

continuous guidance through our project with suggestions and encouragement.

Thank You,

Ammar Yasir

Saad Hassan Qureshi

Sheikh Abdul Waris

Sidra Razi

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Executive Summary

The purpose of writing this report is to determine the causes revolving around an increase in

demotivation prevailing amongst the workers at Engro Foods Corporation and how employers

can enhance employee motivation and productivity. Our research identifies loop holes in the

organizational design and structure and suggests ways to improve this problem. Due to an

increase in the complaints from employees regarding office politics, unbiased attitudes and

perceptions, we conducted this research to find out where exactly the problem existed. Several

studies were conducted previously. However, none of those were successful in identifying the

root causes of the problem or devise viable solutions to solve this problem. Hence, our study

revolved identifying and rectifying the exact issues to provide prompt action. Report revealed

that employees were highly unsatisfied with the corporation’s configuration. A majority of

employees rated poor boss-subordinate relationship and lack of empowerment as the two

imperative factors responsible for decreasing their motivation to perform. The major reasons

behind the demotivation were the weak compensation and benefits policies at Engro that failed to

keep the employees motivated. Organizational design should incorporate non- monetary rewards

to stimulate employee creativity and motivation. The firm should focus on developing

compensation plans for different clusters such as for star performers and laggards. There should

be clear and transparent communication across the organizational hierarchy. Open door policies

and whistle blowing should be encouraged in order to allow employees to air their grievances.

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Table of Contents

Executive Summary.......................................................................................................................iii

Introduction......................................................................................................................................6

Engro Corporation........................................................................................................................6

Engro Foods.................................................................................................................................6

Problem............................................................................................................................................7

Background of the study..................................................................................................................7

Job Satisfaction............................................................................................................................7

Job Motivation.............................................................................................................................8

Factors leading to job satisfaction and motivation of the employees..........................................8

Methodology....................................................................................................................................9

Findings of the Research...............................................................................................................10

Kinds of Benefits.......................................................................................................................10

Factors important to Motivate Employees.................................................................................11

Factors causing Dissatisfaction to the Employees.....................................................................12

Use of Feedback.........................................................................................................................13

Conclusion.....................................................................................................................................14

Recommendations..........................................................................................................................15

Appendix........................................................................................................................................17

Questionnaire.............................................................................................................................17

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De-Motivation Prevailing Among The Employees At Engro Foods

Introduction

Engro Corporation

Engro Corporation is a public company based in Pakistan. The company has diversified

into different industries like food, power generation, fertilizers, chemicals and terminal storage

industries. Engro subsidiaries include:

Engro Fertilizers Limited

Engro Foods Limited

Engro PowerGen Limited

Engro Polymers and Chemicals Limited

Elengy Terminal Pakistan Limited

Engro Foods

Engro foods is an 87% owned subsidiary and the products that come under Engro foods

are mainly dairy products, frozen desserts (ice-creams) and fruit drinks. The company is

involved with manufacturing, processing and marketing of all the products. There are two milk

processing units that are located at Sukkur and Sahiwal. There is also a dairy farm at Nara,

Sindh.

Engro foods has many brands that are famous in all the households of Pakistan like

Olper’s, Dairy Omung, Tarang, Omore Ice-cream and Mabrook that has just recently been

introduced in the market.

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At Engro, Innovation is considered to be the key success factor for the success of their products

in Pakistan. The main focus is to develop such products that will gain maximum customers

preference with superior value.

Problem

The management of employee motivation and engagement has become a critical element

for organizational success and performance across the globe. In order to be successful, it is

extremely important for line managers to be able to appraise the performance of employees to fill

in any gaps. This report analyses the inefficiency of Engro Foods Corporation in maintaining

high levels of motivation amongst its workforce.

Background of the study

A study of employee dissatisfaction and disengagement by the Harvard Business School

in United States Of America, found that employee engagement is a measurable degree of an

employee's positive or negative emotional attachment to his job, colleagues, and organization

which profoundly influences his willingness to learn and perform at work. For example, a well

renowned organization in the state of Los Angeles suffered a loss $3.6 million linked to litigation

by employees when appraised poorly.

Job Satisfaction

Job Satisfaction can be defined as any combination of psychological, physiological and

environmental Circumstances that cause a person truthfully to say I am satisfied with my job.

According to this approach although job satisfaction is under the influence of many external

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factors, it remains something internal that has to do with the way how the employee feels. There

are certain factors attached within the job environment, the job role and organization itself, that

leads to the satisfaction of the employees.

Job Motivation

The main job of any manager or a supervisor is to get things done through the employees.

The employees need to be given certain amount of motivation to achieve goals in an

organization. The employees need some continuous acknowledgment by their supervisors to

perform well at their job.

The need for effective workforce motivation is emphasized in many studies like that of

Herzberg's Two Factor Theory. There are several ways in which the supervisors and the

managers can motivate the workforce. Supervisors could enhance the strong link between the

workforce with positive feedback and by associating such feedback with job challenge and job

involvement. Such a linkage could serve to enrich the supervisor's knowledge of the employees’

performance and move towards supervisor-initiated development. People from Western cultures

are more motivated by the needs for achievement, relationships, and authority over work.

Factors leading to job satisfaction and motivation of the employees

Most companies have the potential to substantially improve multiple aspects of the

performance of their workforce. By paying greater attention to the management of their

compensation plans, they can improve the motivation of their work force and boost their chances

of meeting revenue targets. Companies across the world and even in Pakistan, they are

considering total compensation management, which is to say that they are evaluating

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opportunities to streamline their compensation processes and to make pay policies more

transparent - and perhaps more logical. Total compensation management is the practice of

centralizing management of the processes and systems responsible for the full compensation of

every individual in an organization, including base pay for both hourly and salaried employees;

benefits; and merit or variable pay in the form of cash, stock, and other incentives.

When we talk about a motivated workforce or employees with job satisfaction, we

identify those factors which led to this motivation and satisfaction. What we need to know is that

only hiring right employee and implementing motivational theories doesn’t help an organization.

An organization is full of departments, each interconnected to one another and at every level the

system and its management plays a very crucial role which can’t be ignored.

If right employee is hired and he is presented with all motivational factors but the system

he works in is highly inefficient so this will eventually lead him to a pool of uncertainties and

result in demotivation. Motivation and satisfaction of the employees is not only restricted to the

job you are performing but it covers a variety of other factors relating to the job environment, the

organization, its cultures and the values prevailing there.

Methodology

The research was conducted at Engro Foods, Karachi. The research was restricted to full-

time employees and they were given a questionnaire that was constructed with questions based

on intrinsic and extrinsic motivation and factors leading to demotivation at work.

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Findings of the Research

Kinds of Benefits

Engro foods is a huge organization mainly known for the benefits they provide to their

employees, especially non-monetary by providing travelling expenses to the sales task force who

travel abroad frequently. This chart below clearly shows that 66% of the employees are

motivated through the non-monetary benefits, whereas other 34% were satisfied with an extra

pay increase here and then.

66%

34%

Engro FoodsMonetary Benefits Non-monetary benefits

At Engro, employees are given motivation through proper monetary benefits in the form

of effective salary and compensation packages designed for the organization. The employees are

satisfied with the compensation plans that Engro offers to them. These compensation and

benefits plans help in retaining the large number of employees working for the corporation.

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Factors important to Motivate Employees

The chart below shows the various factors that are used for motivation at Engro Foods.

The most important are salary and benefits plans and favorable relationship with bosses that keep

the employees the most motivated at Engro.

Salary and Benfits Future Opportunities Learning Culture Relationship with your bosses0

1

2

3

4

5

6

7

8

9

10

Rate on a scale of 1 to 10 which factor is most important for employee motivation

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Factors causing Dissatisfaction to the Employees

The most common reasons for switching jobs at Engro and the decreasing satisfaction of

the employees have been highlighted in the chart below. The reason that has been given most

preference when switching jobs is that of a lack of properly designed salary and benefits

packages in the organization.

As it is clearly suggested by the employees at Engro, a well-designed compensation plan

is the only source of motivation for them. It is important that the company puts all of its focus on

providing the employees with the needed perks and benefits to keep them satisfied in the

workplace.

Greater opportunity Salary plans Commission Goodwill0

10

20

30

40

50

60

70

80

Most obvious reason for employees to switch job

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Use of Feedback

In the chart below, the frequency of taking feedback from the employees is highlighted.

At Engro, the managers/supervisors make use of feedback to keep a check on the performances

of the employees. The employees are given feedback on their performances, mostly on quarterly

basis during the year. And also at year-end, analysis is done on the employees’ job and the

results they are providing during the year. This helps the organization to create such

compensation plans that accordingly helps in improving the employees’ performances as well.

Yearly Quarterly Monthly Daily0

2

4

6

8

10

12

Use of feedback by supervisors

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Conclusion

To conclude, the results obtained after the questionnaires, the fact that since Pakistan is a

developing country, with an increasing level of poverty, monetary funds are focused more when

it comes to motivating employees in organizations. Engro Foods is self-sufficient in resources,

therefore huge motivational activities can be observed, and therefore non-monetary rewards also

play a vital role in improving the productivity of the sales task force.

From this study it has been shown that Engro is efficient in their decision making

policies, further their recruitment process is based on highly recommended practices. Engro

clearly focuses on the transparency of goals and the communication regarding them between the

top to bottom level of the hierarchy, which is important to the employees as well as mutually

beneficial to the organization in executing the ultimate tasks in achieving the required goals.

Lastly, the study suggests that high focus has paid to the feedback provided to the work

force by the executives of the organization , this simply keeps an eye towards the employees

approach , whether it’s on track or not. In this context Engro Foods provides its employees with

non-monetary rewards such as dinner vouchers, allowances, accommodations etc. just to keep

the force focused and motivated towards their goals.

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Recommendations

The possible strategies that would be carried out in order to motivate employees could be :

Organizational design should incorporate non- monetary rewards that would boost up an

employee’s self-esteem to a great extent. Such non- monetary rewards include giving

appreciation, recognition over a specific project completion, awarding them with small

shields and certificates, mentioning names on the ‘Wall of Fame’ and nominating and

‘Employee of the Month’.

The firm should focus on developing compensation plans for different clusters such as for

star performers and laggards. This would ensure that everyone is rewarded on the basis of

their actual performance and would allow employees to refrain from developing hostile

feelings and indulge in deviant workplace behavior.

Transparency is the backbone of organizational success. Consequently, the firm should

focus on developing policies and procedures that are open, transparent and avoid hidden

biases.

Open door policies and whistle blowing should be encouraged in order to allow

employees to air their grievances. Employees perceive an organizational as equitable if

they are given a voice and express their feelings about their work situation. Whistle

blowing is an effective exercise ensuring a fair organizational system.

National and international training sessions and seminars should be held in order to create

a healthy workplace environment in which employees are motivated to build

Organizational Citizenship Behavior and counter balance any negative connotations

revolving around the work itself.

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Feedback is the food and fuel for star performers and it has to be timely and consistent in

order to display the overall performance of the employees. Employees should be aware of

the fluctuations in their performance and should be evaluated on the basis of the executed

performance.

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Appendix

Questionnaire

Q1) Rate on the scale of 1 till 10 as to which factor is most important to the sales people:

a) Salary and benefits

b) Learning

c) Future opportunities

d) Culture

e) Relationship with your bosses

Q2) What makes a sales person switch to some other organization?

a) Employee empowerment

b) Company’s goodwill

c) Sales commission

d) Open communication

Q3) Are the job activities significant and meaningful to the sales people?

a) Yes

b) No

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Q4) In your opinion what is the most obvious reason for employees to switch jobs?

a) Greater opportunity

b) Salary, perks and benefits

c) Commission

d) Goodwill

Q5) How do you prepare motivational plans keeping in mind the aspiration level of each

individual?

a) Be good for people

b) Nice to subordinate

c) Organizational activities

d) Incentives

e) Salary on time

Q6) Are your motivational plans for the core performers, laggards and the star performers

of the company are the same or different?

a) Same

b) Different

c) We do not have any differentiation

d) Mixed bag

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Q7) How are tasks set at your Organization?

a) Hierarchy wise

b) Previous record

c) Target wise

d) Market scenario

Q8) Do you personally believe task clarity is important to achieve results?

a) Very Important

b) Important

c) Neutral

d) Not Important

Q9) What is your view on compensation Plans? Is it important for the employee?

a) Very Important

b) Important

c) Neutral

d) Not Important

Q10) What type of compensation tactics your company uses to motivate its workforce?

a) Commission

b) Basic pay

c) Monthly incentives on performance

d) Perks (car, fuel, mobile assistance and etc.)

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Q11) Does compensation plans at your firm have produced remarkable results?

a) Very significantly

b) Significantly

c) No change

d) Adversely

Q12) Is it important to encourage feedback from sales force?

a) Very Important

b) Important

c) Neutral

d) Not Important

Q13) On what basis do company takes feedback on performance of its sales persons?

a) Quarterly

b) Weekly

c) Monthly

d) Yearly