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1.0 BACKGROUND TO THE STUDY:
All organizations encounter the issue of motivation whether they are in the public or a private
sector. Organizations in both the public and private sectors have objectives which can only be
achieved by going through the right direction and stimulating the employees to get the desired
results through the process of motivation.
Motivation is the inner drive that pushes individuals to act or perform. Specific theories may
propose varying sets of factors influencing motivation (Harder, 2008) but many scholars agree that
motivation is the psychological process that causes the arousal, direction, intensity and persistence
of behavior (Locke and Letham, 2004; Pinder, 1998).
Fundamentally, motivation is the process that leads to behaviour, and this process cannot be directly
measured or observed. Consequently, earlier researchers on motivation have identified various
factors that could be applied in measuring motivation. In particular, Herzberg (1966) empirically
identified satisfaction/no-satisfaction factors and dissatisfaction/no-dissatisfaction factors as the
determinants of staff motivation and staff contentment at work respectively. Satisfaction/no-
satisfaction related factors motivate and/or de-motivate workers, while dissatisfaction/no-
dissatisfaction factors provide hygienic and conducive working environment or non-hygienic and
non-conducive working environment, which could either eliminate or encourage workers’
complaints about working conditions. Jaafar, Ramayah and Zainal (2006) affirm that hygiene issues
can minimize dissatisfaction if handled properly and can only dissatisfy if they are absent. Nelson
and Quick (2003) note that motivation factors are the more important of the two sets of factors
because they directly affect a person’s motivation drive to do a good job. They added that hygienic
factors only support the motivators but they (the hygienic factors) do not directly affect a person’s
motivation to work; they only influence the extent of the person’s discontent.
The problem of scarce resources and the challenges facing manufacturing companies have, in recent
time assumed global dimensions. In companies that operate under these conditions of scarce
resources and the need to enhance performance and productivity, managers as well as other industry
stakeholders are further faced with the problem of how to motivate employees in such a way that
their efforts would bring about motivation, job satisfaction and increase productivity in the
workplace. The success and effectiveness of any organization depends to some extent on how well

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employees are motivated. Conventional human resource management theories in general and
motivation theories in particular, suggest that motivated employees are satisfied employees and tend
to be more creative, loyal, productive and committed to their employers as well as their tasks.
Employees are vital to productivity. The effectiveness and efficiency of organizations to a large
extent is dependent on employee motivation, commitment, job satisfaction and skills. Motivation is
the driving force to pursue and satisfy one’s needs while job satisfaction is an employee’s
(individual’s) emotional response to the current job condition or organization.
Motivation is generally concerned with why people choose a particular course of action in
preference to others and why they continue with a chosen action after over a long period and in the
face of difficulties, problems or challenges. The concept of motivation is multifaceted and has
various characteristics. Buchanan & Hueznski’s (2004) defined motivation as “the cognitive
decision making process through which goal directed behavior is initiated, energized, directed and
maintained”. Other researchers had earlier looked at motivation from the same perspective. For
example, Steers & Peter (1983) and Baron (1991) stated that motivations are the internal processes
that activate, guide and maintain behavior (especially goal directed behavior). Ryan & Deci
(2000.54) explained that “to be motivated means to be moved to do something”. Recently, Butler &
Rose (2011) described motivation as the course of movement, the inspiration behind activity, and
the feeling within an individual that makes him want to achieve personal needs or expectations.
The achievements of individuals’ and organizational goals’ are independent process linked by
employee work motivation. Individuals motivate themselves to satisfy their personal goals;
therefore they invest and direct their efforts for the achievement of organizational objectives to
meet with their personal goals also. It means that organizational goals are directly proportion to the
personal goals of individuals. Robert (2005), reported that the manager’s job is to ensure that the
work is done through employees who are satisfied and the employees are self-motivated towards
their work rather than just being directed. The managers’ involvement is not so much important in
the motivation of employees. The major issue in all service organizations is the motivation of
employees whether they are skilled or unskilled or professionals. Employee motivation is also a
major issue for the commercial banks. It is a today’s challenge for the management in this

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competitive world to motivate employees to offer efficient and good services that customers expect
so far.
Job satisfaction occurs when someone feels he/she has proficiency, value, and is worthy of
recognition. Therefore, job satisfaction is a worker’s sense of achievement and is generally noted to
be directly associated with improved efficiency as well as to personal welfare. Job satisfaction is the
belief of the employee that he/she is doing a good job, enjoying the process, and being suitably
rewarded for the effort. Job satisfaction is a measure of how happy workers are with their jobs and
work environment. Keeping morale high among workers is of fabulous benefit to any company, as
content workers will be more likely to produce more results, take fewer days off, and remain loyal
to the company. Job satisfaction is an essential factor that affects employees’ initiative and
enthusiasm. A lack of job satisfaction can lead to increased absenteeism and unnecessary turnover
in the workplace. Job satisfaction increases the degree of happiness in the workplace, which leads to
a positive work approach. A satisfied worker is creative, flexible, innovative, and loyal. Job
satisfaction in general means the work force is motivated and committed to high quality
performance. Improving the quality of working life will help employees to increase productivity
(the quantity and quality of output per hour worked). It should be noted that job satisfaction is based
on effective management, communication, facilities, and benefits, including salaries, technologies,
and future job directions.
2.0 PROBLEM STATEMENT:
Employees are the most important resources in any organization. They are needed to use inputs to
enhance outcomes. Low productivity in organizations in Uganda in general may be traceable to
poor employee motivation. The objective of this paper therefore is to determine how certain
theories of motivation could be applied to increase productivity in Centenary Bank Uganda
Limited. The paper is theoretical in nature and draws from various literatures on motivation and
performance and concludes that motivation has a link to performance since ‘motivated employees
are performing employees’. The paper further suggests that relevant motivation theories should be
applied to elicit and drive employee performance and increase the level of productivity in
Centenary Bank.

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It should be noted that the bank employs most of the principles of motivational theories and this has
fostered motivation among staff and it has also increased the sense of team work and togetherness
which has in turn increased staff productivity. However, the Bank has of recent experienced a great
exodus of staff because of lack of or limited degree of motivation. There has also been some degree
of staff dissatisfaction because of poorly designed policies especially related to staff transfers
(Bonnie Byaruhanga, Manager Staff Welfare). This paper therefore seeks to identify ways of
reducing the dissatisfying factors among the staff that has increased the rate of staff turnovers. It
should however be noted from the onset that most of the principles advanced by the motivational
theorists have been employed in Centenary Bank though there is need for improvement in some of
them.
This paper also seeks to analyze the relationship between motivation and staff performance with
specific reference to Centenary Bank. The evolution of the human resource management in
organizations can be traced from the mechanistic tradition of bureaucracy to human relations school
of thought. A lot of study has been done on the relationship between the application of the different
motivational theories and employee performance in many organizations, companies, non-
government organizations, but there has not been any work done on the relationship between the
same in Centenary Bank (Uganda) Limited. Hence, I considered it pertinent to write about the level
of staff performance in Centenary Bank in relationship to the application of the motivational
theories. I equally observed that quite a number of bank employees are being taken away by
competition to other players in the banking industry.
3.0 OBJECTIVES:
The objectives of the research paper are:
1) To review the major motivational theories (conventional and contemporary)
2. To determine the relationship between motivational theories and employee performance in
Centenary Bank.
3) To evaluate the extent to which motivational principles are being practiced in Centenary Bank
and their limitations and thus propose better approaches in the Bank.

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4.0 CONCEPTUALIZATION OF MOTIVATION:
One of first traditional approaches to motivation was the fear and punishment philosophy. An
example of the fear-punishment tactic lies in the construction of pyramids in Egypt where workers
were abiding to the ‘principles’. Under this approach existed a limited span of control, instant
subdivision in allocating tasks and full dependence of subordinates on superiors. At that time, this
concept was a great success in organizations and a motivating factor (Chintalloo & Jyoti, 2013).
“Motivation refers to the degree of readiness of an organism to pursue some designated goal, and
implies the determination of the nature and locus of the forces inducing the degree of readiness.”
(Heyel, 1982 p.597 cited in Chintalloo & Jyoti, 2013)
Motivation can also be conceptualized “as the willingness to exert high levels of effort to reach
organizational goals as conditioned by that effort’s ability to satisfy some individual needs”
(Robbins & Coulter, 1999 cited Chintalloo & Jyoti, 2013).
Straus and Sayles pointed out two types of rewards, the first one being “naïve paternalism” and the
second one being “subtle paternalism”. The first type of paternalism assumes that employees will
work more and more out of loyalty and gratitude if the manager has a positive attitude towards
them. “Subtle paternalism” explains that workers achieve their task for the good working conditions
and benefits prevailing in the organization. (Heyel, 1982).
According to Chintalloo & Jyoti, (2013), the ‘Taylorism’ theory, “Carrots and sticks” were
examined by a group of researchers led by Professor Elton Mayo at the Harvard University to
overcome its limitations. The Human Relations Movement or the Hawthorn experiments in the
1930s demonstrated that money is not the only factor motivating man, the work environment,
management styles and structures may be a determining factor in that it helps in an informal way of
communication. Employees feel good to share their suggestions and satisfy their social needs in the
organization and as such they are motivated to perform their task even better. Managers had to
guide employees and show what kind of behavior was acceptable in organizations. Also, they were
to put initiatives to boost employee morale and lower absenteeism. (1954 cited by Vroom and Deci
1992 p.363 – p.366).

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4.1 Staff performance:
Staff performance refers to “the level of productivity of an individual employee, relative to his or
her peers, on several job-related behaviors and outcomes” (Babin and Boles, 1998: 82). According
to Ilgen and Klein (1988 cited in Kakkos & Trivellas, 2011), the direct impact of motivation on the
productivity of a unit suggests the need to understand factors that affect motivation; such
understanding helps managers to modify conditions in the work setting and to encourage individual
behaviour so as to remain consistent with the organizational goals set. Nevertheless, job
performance is a multidimensional construct for which an agreement among researchers on how to
conceptualise and capture has not been easy to reach. For example, Suliman (2001 cited in Kakkos
& Trivellas, 2011) suggested six dimensions namely, work skills, work duties, work enthusiasm,
quality and quantity of work and readiness to innovate. Farth et al., (1991 in Kakkos & Trivellas,
2011), captures performance in terms of quality and quantity, while Yousef (1998), suggests the use
of quality and productivity of performance. More, Borman and Motowidlo (1997 in Kakkos &
Trivellas, 2011) distinguish job performance into task and contextual performance.
Task performance refers to behaviors that are directly involved in producing goods or services,
while contextual performance involves behaviors that are not directly related to their main task but
shape the organizational, social, and psychological context (Werner, 2000 cited in Kakkos &
Trivellas, 2011). For example, when employees help each other, cooperate with their supervisors, or
make suggestions about organizational processes, they are engaging in contextual performance
(Van Scotter et al., 2000).
Staff performance is not a single unified construct but a multidimensional construct consisting of
more than one kind of behaviour. Onukwube et al. (2010) affirm that staff performance was
traditionally viewed as a single construct. However, Austin and Villanova (1992) and Campell
(1990) argue that staff performance is a complicated and multidimensional factor. Thus, Campbell
(1990) proposed an eight-factor model of performance based on factor analytic research that
attempts to capture dimensions of staff performance existent (to a greater or lesser extent) across all
jobs:
i. Task specific behaviors which include those behaviors that an individual undertakes as part of a
job. They are the core substantive tasks that delineate one job from another.

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ii. Non-task specific behaviors are those behaviors which an individual is required to undertake
which do not pertain only to a particular job.
iii. Written and oral communication tasks refer to activities where the incumbent is evaluated, not
on the content of a message necessarily, but on the adeptness with which they deliver the
communication. Employees need to make formal and informal oral and written presentations to
various audiences in many different jobs in the work force.
iv. An individual’s performance can also be assessed in terms of effort, either day to day, when
there are extraordinary circumstances. This factor reflects the degree to which people commit
themselves to job tasks.
v. The performance domain might also include an aspect of personal discipline. Individuals would
be expected to be in good standing with the law.
vi. In jobs where people work closely or are highly interdependent, performance may include the
degree to which a person helps out the groups and his or her colleagues. This might include acting
as a good role model, coaching, giving advice or helping maintain group goals.
vii. Many jobs also have supervisory or leadership component. The individual will be relied upon
to undertake many of the things delineated under the previous factor and in addition will be
responsible for meting out rewards and punishment. These aspects of performance happen in a face
to face manner.
viii. Managerial and administrative performance entails those aspects of a job which serve the group
or organization but do not involve direct supervision. A managerial task would be setting
organizational goals or responding to external stimuli to assist a group in achieving its goals. In
addition, a manager might be responsible for monitoring organizational resources.
4.2 Motivation and performance:
The attainment of organizational outcomes and the performance construct in general have been very
popular issues among researchers in the business field while staff performance in particular is
considered to be a key individual outcome (and a driver of success) in a given context including the
financial and banking services context (Gabbott and Hogg, 1997 in Kakkos & Trivellas, 2011). In
this context, frontline bank employees were found to play a decisive role in delivering high quality
services, promoting the corporate image and improving customer satisfaction (Lewis and
Gabrielsen, 1998; Yavas et al., 2003; Karatepe and Tekinkus, 2006).

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Here, the notion of staff performance becomes indeed even more vital particularly because in a
service context, the quality of the services offered cannot be always equally standardized across all
its customers (Kotler and Keller, 2006). Particular attention needs to be paid therefore, to the notion
of employee’s “wellbeing” leading to performance in any given service organisation. By
implication, the issues of motivation and work stress become important aspects of service,
employees’ wellbeing and performance (as explained below). Indeed, this is also reflected in the
findings of a large-scale survey undertaken by the Gallup Management Consulting Group showing
that intrinsic motivation is one of the key talents best salesmen (front-line employees) possess
(Brewer, 1994 in Kakkos & Trivellas, 2011).
Having acknowledged the above along with the fact that the motivation literature has been mainly
dominated by theoretical vagueness (Arnolds & Boshoff, 2002; Miao et al., 2007), the Needs
motivation theory of Alderfer (1967, 1969) has been adopted here to investigate the impact of
employee needs and satisfaction on individual outcomes such as staff performance. In addition to
exploiting the advantages of the Need theory’s robustness and job specification orientation, the
former theory has been attracting attention because it is perceived to be one of the most enduring
ways to understand motivation (Aram and Piraino, 1978 in Kakkos & Trivellas, 2011). The
assumption is that the satisfaction of certain needs is the main driving force for employees’
motivation in order to improve their staff performance.
Furthermore, it is unclear what effect management practices used by banking organizations to
achieve their goals have on their employee’s overall well-being as reflected particularly, on
employee work stress levels experienced, motivation and staff performance. 1 While it is
acknowledged that stress is an inseparable part of everyday life (Certo, 2003), common
management practice often assumes the need of a reasonable amount of pressure, anxiety or fear in
the environment to motivate employees to achieve higher performance; besides motivating
employees, pressure may also have side effects such as the creation of employee dissatisfaction or
1 And this is related to the fact that particular emphasis has to be paid to the notion of employee’s wellbeing leading
to performance in any serviceorganization such as Centenary Bank Ltd

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even mental alienation (Sdrolias et al, 2005) which in turn, may compromise individual and/or
organizational performance thereby affecting customer satisfaction, too.
Indeed, high quality service delivered to customers is rather more likely to be achieved if
employees are viewed and treated as internal customers/clients (Gummesson, 1991 in Kakkos &
Trivellas, 2011). Understanding the link between job motivation and staff performance becomes
vital particularly for firms experiencing the adverse effects of the recent crisis affecting the world’s
various industries. For example, given that many developed and developing countries have been
lately subjected to the effects of this crisis, employees in general and those currently working in the
banking sector in particular), may well face the challenge of remaining competitive in their
industries and jobs (or even forced to experience a likely merger or acquisition situation) where
they are required to meet higher performance standards in a period of economic recession and
uncertainty while watching the rising unemployment levels along with their own disposable income
shrinking due to the harsh economic measures taken.
Wanyama (2010) notes that employee productivity depends on the amount of time an individual is
physically present at a job and also the degree to which he or she is “mentally present” or efficiently
functioning while present at a job. Companies must address both of these issues in order to maintain
high worker productivity, and this may occur through a variety of strategies that focus on employee
satisfaction, health, and morale. Highly satisfied groups of employees often exhibit above-average
levels of the following characteristics: customer loyalty (56%), productivity (50%), employee
retention (50%), safety records (50%), and profitability (33%). The practice of maintaining a
collegial, flexible workplace is associated with the second-largest increase in shareholder value
(nine percent), suggesting that employee satisfaction is directly related to financial gain. Human
resources practices like employee satisfaction, motivation, and punctuality lead to positive financial
outcomes. Therefore, for organizations to achieve high performance, the interests of customers and
employees should be taken into account like satisfaction, motivation, product, quality and
manpower competence.
Hameed et al. (2009) investigated the relationship between office design and productivity using
subjective productivity measurement method. The performance of an employee is measured by the
output that the individual produces and it is related to productivity. Productivity is defined variously

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as (i) “that which people can produce with the least effort”; (ii) “output per employee hour, quality
considered” (iii) “the increased functional and organizational performance, including quality” (iv)
“a ratio which measures how well an organization (or individual, industry, country) converts input
resources (labour, materials, machines etc.) into goods and services. The measures of subjective
productivity measurement method are based on personnel’s subjective assessments and not based
on quantitative operational information. Subjective productivity/ performance measure as an
indicator used to assess individuals’ aggregated perceptions, attitudes or assessments toward an
organizations product or service. Subjective productivity data which can be descriptive or
qualitative is usually collected using survey questionnaires or by interviews. Subjective productivity
data is gathered from employees, supervisors, clients, customers and suppliers. In the case, of
banking sector there are increases in performance when there is less absenteeism, fewer employee
leaving early and less breaks; whereas in a factory setting, increase in performance can be measured
by the number of units produced per employee per hour.
Khan et al. (2010) analyzed the role reward plays in motivating employees of commercial banks of
Kohat, Pakistan. They specifically analyzed the variance explained by predictor variables (payment,
promotion, benefits and recognition) in criterion variable (employee motivation). They noted that
commercial banks play important role in worldwide economy and their employees are the best
sources of delivering good services to their customers. Excellent services provided and offered by
employees can create a positive perception and ever lasting image in the eyes of banks’ customers.
The individual motivation of a commercial bank employee plays a major role in achieving high
level satisfaction among its customers. With increase in the growth of the service industry, the
commercial banks at present struggle for retaining employees possessing the capabilities of quality
service. Satisfaction of banks’ customers depends on the quality of services and the way
commercial banks employees render these services to their customers. Commercial banks
employees’ satisfaction, loyalty, commitment and motivation ensure the satisfaction of customers.
It is of great importance to note that motivation is a process in which people are convinced to move
forward for performing something special to fulfill their needs and get satisfaction. They found out
that employee work motivation in commercial banks of Pakistan in the form of payment,
promotion, recognition and benefits led to higher productivity and that among the four independent
variables promotion has greater effect in productivity.

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In light of all the above, coupled with the fact that few studies (only) on employee motivation
provide vigorous empirical evidence in a more integrated perspective while most attempts seem
quite theoretical in terms of adopting global constructs and linking work motivation to employee
outcomes leading thus, to inconclusive findings, this empirical study aspires to bridge the former
gap. This paper investigates the relationship between motivational theories and staff performance in
Centenary Bank (U) Limited and identifies the limitations in the practice of these theories and thus
proposing some remedies for the same.
For purposes of discussion, this paper will focus on the following motivational theories; the
hierarchy of needs theory, the ERG motivational theory, the Expectancy theory and theories X and
Y as below expounded:
4.3.1 The Hierarchy of needs theory:
This theory is based on the premise that individuals are ‘wanting animals’ whose needs depend on
‘what we already have’. Maslow (1964) believed that people have instinctual basic needs and they
desire those needs to be met. These needs, although initially strong, can appear to become weak and
therefore be easily repressed or ignored. These can be drowned out by learning, fear, and
expectations. Maslow further argued that these needs, except in exceptional cases, are present in
every human being.
Abraham Maslow developed the hierarchy of needs model in 1940-50s and this theory remains
valid today for understanding human motivation, management training and personal development.
Abraham Maslow’s book ‘motivation and personality’ published in 1954 introduced the hierarchy
of needs. Each worker is motivated by needs and our basic needs are inborn. Maslow’s hierarchy of
needs states that we must satisfy each need in turn, starting with the first which deals with the most
obvious needs for survival itself. It is only after satisfying the lower needs of physical and
emotional well-being that we get concerned with the higher needs of influence and personal
development.

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Maslow’s original hierarchy of needs model was developed between 1943- 1954 and first widely
published in Motivation and Personality in 1954. At this time, the hierarchy of needs model
comprised of five needs. Maslow in his article, “Theory of Motivation” (1954) found out that an
individual experiences five categories of needs during his lifetime. They are arranged in a
hierarchical manner. The pyramid classes the order of importance of needs that are satisfied starting
from the lower levels (1, 2) and moving up the pyramid to the higher needs (3-5). Maslow argued
that these needs are to be satisfied in a first up to second, second up to third way. When a need is
satisfied, it is no longer a motivator. The needs that are not yet satisfied become the driving force of
motivation. These needs according to Maslow are:
Psychological needs: These are the ones that assure yourself that you have satisfied your basic
needs. They are also called biological needs and few examples of these needs are breathing, food,
shelter, clothing, and sleep. According to Maslow, you have to fulfill these needs to move up to the
next level.
Safety needs: These are also called security needs and they are to be felt and fulfilled in order to
move on, such as job security. Private organizations’ workers are the one that mostly feel that their
work is at risk during financial crisis. Examples of these needs are the security of property,
morality, family and thyself. Private organizations are nowadays promoting safety and health plans,
emergency fund and accident cover benefits for their staff.
Belonging needs: The needs in this level are also known as social needs. People need to feel that
they belong to a group (social ties) and are accepted the way they are. With that they are not to be
excluded from any relation (e.g. family). These are feelings of friendship, love, and sexual
intimacy. At work, having colleagues and not feeling you are wanted is a lack in a person’s life. To
counteract this, a manager could force them to work in groups to achieve an organizational goal and
thus promote teamwork. In addition, some private firms cater for assistance and counseling in
which case workers feel free to share their views. Also, employees can enhance their relationship
with the subordinates from welfare committees.

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Esteem needs: These are also called ‘egoistic’ needs and are difficult to satisfy in some industries.
People need to feel that they are respected; we have self-esteem so we have to be valued while
respecting others. We humans have the urge to be respected. Examples of these needs are
achievement and confidence. If the manager talks to his subordinate, the latter feels recognized at
work. He should however adopt a participative management style. For instance, in a private sector,
workers will have to be valued for what they do, as they are the main key to success. If a worker
steps back, an organization may feel a drastic change.
Self – actualization: We feel a need to grow at work and feel that we have the potential of doing
things. Morality, acceptance of facts, lack of prejudice, creativity, spontaneity and problem solving
are all examples of self - actualization needs. It is based on doing what we can, in other words we
must be what we are able to be. (Vroom and Deci 1992 cited in Chintalloo & Jyoti, 2013).
In the long run, physiological needs may be satisfied by the person’s pay cheque, but it is important
to remember that pay may satisfy other needs such as safety and esteem as well. Providing generous
benefits that include health insurance and company-sponsored retirement plans, as well as offering
a measure of job security, will help satisfy safety needs. Social needs may be satisfied by having a
friendly environment and providing a workplace conducive to collaboration and communication
with others. Providing promotion opportunities at work, recognizing a person’s accomplishments
verbally or through more formal reward systems and job titles are ways of satisfying esteem needs.
Finally, self-actualization needs may be satisfied by the provision of development and growth
opportunities on or off the job, as well as by work that is interesting and challenging. By making the
effort to satisfy the different needs of each employee, organizations may ensure a highly motivated
workforce. The important aspect of Maslow's model is that it provides for constant growth of the
individual. In the long run, these needs of employees may not be met as the employees rise through
the bank and this can serve as demotivating to the employees.
It should be noted however that despite Maslow’s identification of the different levels of needs, it is
not always so that all human beings follow these steps in fulfilling their needs. People’s
preferences, perceptions and expectations differ and therefore this model cannot be used in isolation
of other models.

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4.3.2 ERG motivational theory:
ERG theory, developed by Clayton Alderfer, is a modification of Maslow’s hierarchy of needs
theory. Alderfer proposed that basic human needs may be grouped into three categories, Existence,
Relatedness, and Growth needs. The number of years employees stay in an organization, the more
their needs keep on changing and this theory recognizes the multiple needs that may be driving
employees at a given point to understand their behaviour and management can properly motivate
them.
Clayton Alderfer introduced his theory as a substitute of Maslow’s theory in 1969. He brought a
simple approach with three categories of needs. Alderfer produced a modified need hierarchy
theory that converts Maslow’s five levels of needs into three levels. This model became known as
the ERG theory (or Existence – Relatedness – Growth Theory). The theory demonstrates a
‘satisfaction-progression principle’ which can also be denoted from the pyramid of Maslow. The
needs governing Clayton’s theory are described below:
• Existence needs that mean the basic needs of a person such as physical comfort and being alive.
They are concerned with sustaining human existence and survival, and cover physiological and
safety needs of a material nature.
• Relatedness needs that require people to feel together i.e. share a relationship and have a sense of
their being. This class concerns how people relate to their surrounding social environment and
includes Maslow’s need for meaningful social and interpersonal relationships.
• Growth needs are the needs to achieve higher and to become self-determined. It is the sense of
having conquered something for self and others. This group of needs is thought to be the highest
need category and includes Maslow’s needs for self-esteem and self-actualization.
Needs can be satisfied simultaneously and a person experiencing difficulties to satisfy a need may
rank it as a lower need. Hence, the theory possesses a “frustration – regression dimension”
(Clayton, 1972). Like Maslow, Alderfer suggests that individual’s progress through the hierarchy

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from existence needs, to relatedness needs, to growth needs becomes great as the lower-level needs
become satisfied. However, Alderfer suggests these needs are more a continuum than hierarchical
levels. More than one need may be activated at the same time and individuals may also progress
down the hierarchy.
Alderfer proposed a number of basic propositions relating to the three need relationships. Some of
these propositions followed Maslow’s theory and some were the reverse of the theory. A number of
studies were undertaken to test these propositions across different samples of people in different
types of organizations and results from the studies were mixed. For example, the proposition that
the less existence needs are satisfied the more they will be desired received constant support from
all six samples. However, the proposition that satisfaction of existence needs activate desire for
relatedness needs was not supported in any of the six samples (Chintalloo & Jyoti, 2013). Unlike
Maslow’s theory, the results of Alderfer’s work suggest that lower-level needs do not have to be
satisfied before a higher-level need emerges as a motivating influence. The results, however, do
support the idea that lower-level needs decrease in strength as they become satisfied.
ERG theory states that an individual is motivated to satisfy one or more basic sets of needs.
Therefore if a person’s needs at a particular level are blocked then attention should be focused on
the satisfaction of needs at the other levels. For example, if a subordinate’s growth needs are
blocked because the job does not allow sufficient opportunity for personal development, then the
manager should attempt to provide greater opportunities for the subordinate to satisfy existence and
relatedness needs. Alderfer also suggests unlike Maslow that more than one need may be operative,
or activated, at the same point, in time.
The priority of these needs differs from person to person, but Alberger’s ERG theory prioritizes in
terms of categories’ concreteness. Existence needs are the most concrete, and the easiest to verify.
Relatedness needs are less concrete than existence needs, and depend on a relationship between two
or more people. The growth needs are the least concrete in that their specific objectives depend on
the uniqueness of each employee.
There are some relationships among the different categories in the ERG theory: the satisfaction and
progression from one need to another is not dependent on satisfying the previous need as in the

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Maslow’s hierarchy of needs theory. In the ERG theory, the progression upwards from relatedness
need to growth desires does not necessarily presume the satisfaction of a person’s existence needs.
It also suggests that if a higher level need remains unfulfilled, a person may regress to lower level
needs that are easier to satisfy. Satisfaction- strengthening means that strengthening a current level
of satisfied needs can maintain satisfaction or strengthen lower level needs.
An already satisfied need can become active when a higher need cannot be satisfied. Thus, if a
worker is continuously frustrated in his attempt to satisfy the growth needs, relatedness needs may
resurface as the key motivators. It is therefore important for managers to recognize their employees’
multiple simultaneous needs. In ERG theory, focusing exclusively on one need at a time will not
motivate workers.
4.3.3 Vroom’s Expectancy Theory:
Vroom’s (1964) theory is based on the belief that employee effort will lead to performance and
performance will lead to rewards and rewards may be either positive or negative. The more positive
the reward, the more likely the employee will be highly motivated. Conversely, the more negative
the reward, the less likely the employee will be motivated. Skinner's theory simply states that those
employees' behaviours that lead to positive outcomes will be repeated and behaviours that lead to
negative outcomes will not be repeated. Therefore, managers should positively reinforce employee
behaviours that lead to positive outcomes and negatively reinforce employee behaviours that lead to
negative outcomes. According to Lewis et al. (1995), expectancy theory is the most comprehensive
motivational model that seeks to predict or explain task-related effort.
Vroom’s expectancy model is based on three key variables: valence, instrumentality and
expectancy.
r performance level will lead to a
specific outcome.

17. 17
Vroom’s expectancy theory assumes that behavior results from conscious choices among
alternatives whose purpose is to maximize pleasure and to minimize pain. Vroom realized that a
worker’s performance is based on individual factors such as personality, skills, knowledge,
experience and abilities. He stated that effort, performance and motivation are linked in a person’s
performance. He uses the variables expectancy, instrumentality and valence to account for this.
Expectancy is the belief that increased effort will lead to increased performance that is if one works
harder it should lead to better performance. This is however affected by conditions outside one’s
hard work like; having the right resources available, and having the necessary support to get the job
done for example supervisor support.
Instrumentality is the belief that if one performs well, a valued outcome should be received. The
degree to which the first level outcome will lead to a second level outcome that is if I do a good job,
there is payment for it to me. This is however affected by a clear understanding of the relationship
between performance and outcomes like the rules of the reward ‘game”, trust in the people who
decide who takes the decisions on who gets what outcome and the transparency of the process of
who gets what outcome.
Valence is the importance that the individual places upon the expected outcome. For the valence to
be positive, the person should prefer attaining the outcome to not attaining it. For example, if one is
mainly motivated by money, he might not value offers like holidays, letters of recognition for
particular achievements.
According to the expectancy theory, an individual's motivation to vary effort is arrived at by means
of a rational calculation in which individuals evaluate the situation they are in. This theory suggests
that individuals ask themselves three questions: if their effort will translate into high performance;
whether the performance will lead to an outcome; and whether the outcomes are desirable. These
three questions show attention being paid to effort, performance and rewards, and their associated
perceptions are labeled as expectancy, instrumentality and valence respectively (Bauer & Erdogan,
2010).
A manager has a number of options at his disposal to influence expectancy, instrumentality and
valence in the workers so as to motivate them to participate and pass the tests. Expectancy can be

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influenced by ensuring that the participating employees are capable of understanding the material
being taught and that the environment in which they are taught facilitates good performance, as
these factors could be causing them to fail. In addition, the participants should be encouraged into
believing that their efforts do make a difference to how they perform in the training. Instrumentality
can be influenced by ensuring that good performance in the test is properly rewarded and that the
rewards are well publicized as being based solely on performance. The rewards chosen have to be
attractive to the trainees and they should induce perceptions of fairness so as to influence valence.
In addition, the trainees need to be given an array of rewards from which they can choose their
preference (Bauer & Erdogan, 2010).
Theory X and Y:
Social psychologist Douglas McGregor expounded two contrasting theories on human motivation
and management in the 1960s: the theory X and theory Y. The theories look at the manager’s
perception of what motivates his team members and affects the way he behaves.
4.3.4 Theory X:
This assumes that employees are naturally unmotivated and dislike working and this encourages an
authoritarian style of management. According to this view, management must actively intervene to
get things done. This theory assumes that workers dislike work, avoid responsibility and need to be
directed, have to be controlled, forced and threatened to deliver what is needed. The workers must
be supervised at every step, with controls put in place. They need to be enticed to produce results
because they have no ambition or incentive to work. Organizations that use theory X tend to be top
heavy with managers and supervisors required at every step to control workers. There is little
delegation of authority and control remains firmly centralized. McGregor recognized that theory X-
type workers are usually the minority and that in large organizations, such as large scale production
environment, theory X management may be required.
4.3.5 Theory Y:
This theory expounds a participative management style that is decentralized. It assumes that
employees are willing and happy to work, are self-motivated and creative, and enjoy working with

19. 19
greater responsibility. It assumes that workers take responsibility and are motivated to fulfill the
goals they are given, they seek and accept responsibility and do not need much direction, consider
work as a natural part of life and solve work problems imaginatively. In this management style,
people in the lower ranks in the organization are involved in decision making and have more
responsibility.
5.0 BACKGROUND OF CENTENARY BANK:
Centenary Bank (Uganda) Limited is a commercial bank licensed by Bank of Uganda to provide
banking services to the people of Uganda. It started as an initiative of the Uganda National Lay
Apostolate in 1983 as a Credit Trust and begun operations in 1985. In 1993, Centenary Bank was
registered as a fully-fledged commercial bank. Centenary Bank is one of the leading micro finance
and commercial loans providers in Uganda with a client base of over 1,300,000. The bank is owned
by; the Uganda Catholic Secretariat with 31.3% shareholding, the Catholic Dioceses of Uganda
with 38.5% shareholding, Stichting Hivos- Triodos Fonds with 18.3% shareholding, SIDI with
11.6% shareholding and individual Ugandans with 0.3% shareholding. The mission of the bank is
‘to provide appropriate financial services especially micro finance to all people in Uganda,
particularly in rural areas in a sustainable manner and in accordance with law.’ The Bank also has a
vision which is; ‘to be the best provider of financial services especially micro finance in Uganda.
The bank is managed following the core values that guide the way the operations are done. These
core values are; superior customer service, integrity, teamwork, professionalism, leadership,
excellence, and competence. All these core values are a reflection of the bank’s use of the principles
of the different motivational theories above discussed.
The bank currently has 63 branches spread across the country with more than 50 offsite Automated
Teller Machines (ATMs) (as of December 2014). Centenary Bank has a workforce of more than
1,400 employees both at the headquarters and in the branch networks.
The bank is managed by a Board of Directors which makes most of the strategic planning and
decision making. The Board of Directors is headed by the Chairman. However, the day today

20. 20
management of the operations of the Bank is under the senior Management team that is headed by
the Managing Director who is deputized by the Executive Director. The Bank also has a company
Secretary who is also the Head of the legal department. Each of the departments of the Bank is
headed by the General Manager and some of the departments include; credit, operations, business
development, information technology, risk, audit, to mention.
The bank also has middle managers who include the Chief Managers in charge of the different
sectors in the departments who in most cases assist and deputize the General Managers. At the
branch level, each branch has a Manager and Assistant Managers for both Credit and Operations.
This is done to ease the flow of work and to improve staff performance and productivity.
6.0 ANALYTICAL FRAME:
There has been a lot of debate on the issue of motivation and level of staff performance in
organisations. Many scholars have concentrated on motivation in state owned organisations and
manufacturing industries. Little has been covered in the setting of a private organization dealing in
financial services whose objective is profitability and sustainability. This paper will therefore
interest it-self in Centenary Bank; a private financial institution.
This paper will focus on the hierarchy of needs theory, ERG motivational theory, expectancy theory
and theories X and Y and confirm if the assumptions of these theories are being applied in
Centenary Bank and to what extent. The paper will also try to relate the application of these theories
to the level of performance in the bank and give a way forward.
6.1 Hierarchy of needs theory and the ERG motivational theory:
There is no clear cut distinction between Maslow’s hierarchy of needs theory and Clayton .P.
Alderfer’s ERG theory. The ERG motivational theory is a condensation of Maslow’s theory and
Alderfer identifies three needs of existence, relatedness and growth which Abraham pointed out.
Since these needs are the same, they will be discussed in conjunction.
Centenary Bank realized that employees are ‘wanting beings’ and as such, the bank has a
compensation plan for all the workers and as a matter of policy, the bank endeavors to give the

21. 21
employees a competitive salary in the 75th percentile within the industry. Every employee of the
bank is notified in writing upon engagement of the amount of salary and allowances to be paid to
him/her. As Maslow notes that human beings must meet their biological and physiological needs of
food, shelter, clothing, salary reviews and increments are a component of the human resource policy
to cater for inflation and other economic market conditions so that the staff do not fail to meet the
cost of living due to the depreciation of the currency. This helps the staff to be able to afford the
basic needs despite the economic situation in the country. For example, salary increments to counter
inflation are very common in Centenary Bank. This motivates the staff and increases their
performance. The need for shelter has also been given great emphasis; the bank advances the staff
with staff real estate loans at concessional rates to enable them construct houses and live descent
lives.
The safety needs have not been ignored either; the bank provides protective gears for the workers to
protect them from harm. For example according to Mr. Bonnie Byaruhanga, the credit officers who
ride motor cycles are provided with helmets and rain coats, the cleaners are provided with gum
boats and gloves. This is very important because the workers are protected from harm and disease
which would have affected their health and reduced their performance.
The bank also encourages belongingness. There is a common term “Cente family” which refers to
all the staff members of the bank and their immediate families. This cements cohesion and
encourages team work which in turn increases staff motivation and performance. Every year, the
bank facilitates team building workshops for each of the branches and also end of year parties are
usually organized at a regional level to encourage a sense of belongingness, friendship and a spirit
of love. This is very important because each and every member of the team feels important hence
motivation and higher performance.
The esteem needs are catered for by encouraging delegation of duties through the business
continuity plan. For example, if the Branch Manager is absent, then there is someone at the branch
to act, if he/she is not also available, there is a next person in the queue. This increases people’s
confidence which in turn increases their motivation and their performance. There are Tuesday
morning briefs across the network where staff at different levels share their ideas and bring
suggestions for performance improvement. This increases their realization that they are valued and
as a result their commitment to the bank is enhanced. The bank also encourages monthly meetings

22. 22
at branch and department levels. During these meetings, performance indicators are discussed and
action points agreed. This increases the staffs’ confidence by knowing that they are part of decision
making and not merely implementers which increases their motivation levels and thus their
productivity and performance.
The bank also encourages career growth which is the way of making people realize their potential.
It is very common to find workers in the bank who were recruited at officer level but are now at
executive level. This encourages the workers to put in more morale in their work and thus
increasing their performance.
However, there have been some instances of stagnation on the same positions for some staff
especially in credit department and the bank has tried to outsource staff especially in management
levels from other institutions thus hindering career growth. Much as the bank advances the staff
with facilities to establish their residences, the policy is selective and staff only qualify after serving
for a number of years and thus some of them do not qualify for this product. Further still, the bank
has not embraced in totality the concept of relatedness needs as evidenced by the distant transfers
usually given to the staff that in most cases leave their families behind. For example, it is common
to find a staff who built in Wakiso district and his family is living in the same area but the staff is
transferred to Lira without even being consulted. This reduces the staff’s concentration at work and
hence reducing staff productivity and performance because of the long distances travelled on a
regular interval to visit the family. It has been one of the major causes of staff turnover as they
avoid being separated from their families.
6.2 The Expectancy theory:
Vroom’s expectancy theory assumes that behavior results from conscious choices among
alternatives whose purpose is to maximize pleasure and to minimize pain. Vroom realized that a
worker’s performance is based on individual factors such as personality, skills, knowledge,
experience and abilities. He stated that effort, performance and motivation are linked in a person’s
performance. He uses the variables expectancy, instrumentality and valence to account for this.

23. 23
Expectancy is the belief that increased effort will lead to increased performance that is if one works
harder it should lead to better performance. Centenary Bank believes in effort rewarding. For
example, the salary of credit officers is based on incentive. The more they work that is by
advancing more loans and recovering the already advanced ones, the more incentive payment they
receive and thus in the appointment letter of the credit staff, it is stated that they are entitled to
performance based incentives. This increases the productivity of the staff because they expect a
higher pay as a result of increased effort.
Instrumentality is the belief that if one performs well, a valued outcome should be received.
Centenary Bank uses a competence based performance management system for appraisal purposes.
The overall purpose of this system is to enhance the operational efficiency of the Bank as well as to
improve the productivity and development of the employees (that is information, motivation and
development for employees). The result of the performance appraisal forms the basis of reward for
example performance bonus and career growth and development. This motivates the workers to
increase performance.
Valence is the importance that the individual places upon the expected outcome. The bank has
many preferential offers for the staff. This is very important because different people are motivated
by different things. The bank has preferential treatment of staff by giving them staff advances at
lower interest rates than the prevailing market rates, providing medical cover for staff and their
immediate family, and sponsoring some of them for further education in addition to their salary
payments. This increases their commitment to the institution as well as creating a sense of
belongingness to the company.
However, the appraisal system in the bank is not yet developed and is decentralized at the different
departments or branches and as such it is common for staff members from a particular department
or branch to be rated highly while those from other departments are rated low; which has at times
caused disappointment thus demotivating staff. It is therefore important that the performance
appraisal system be centralized and staff be subjected to same appraisers so as to have a same
advantage. The performance management system in place is much inclined to parameters that can
be quantitatively measured. This implies that some important aspects of performance that cannot
easily be measured are not considered which makes the exercise prone to abuse by rewarding non-
performers and punishing performers.

24. 24
It should also be noted that much as the bank has tried to reward efforts, the calculation of the
incentive based pay has been a source of discomfort among the staff. This is because the payment
of this incentive is based on performance and the performance is affected by some conditions that
are beyond the control of the staff like availability of customers, the economic conditions prevailing
in the country to mention. So to base someone’s payment on performance parameters like number
of loans advanced, total loan collections is far much like making the staff a slave of work. The
payment should be better based on other parameters that the staff have control on so that fewer
complaints are registered. Therefore a more proactive approach to staff payment and rewards needs
to be developed to reduce staff dissatisfaction.
6.3 Theory X and Y:
6.3.1 Theory X:
This assumes that employees are naturally unmotivated and dislike working and this encourages an
authoritarian style of management. According to this view, management must actively intervene to
get things done. This theory assumes that workers: dislike work, avoid responsibility and need to be
directed, have to be controlled, forced and threatened to deliver what is needed. The workers must
be supervised at every step, with controls put in place. They need to be enticed to produce results
because they have no ambition or incentive to work. Organizations that use theory X tend to be top
heavy with managers and supervisors required at every step to control workers. There is little
delegation of authority and control remains firmly centralized.
Centenary Bank applies the principles of theory X by emphasizing effective and efficient time
management as a primary responsibility of all bank employees; and takes it instrumental to the
successful operation of the bank. Punctuality and daily attendance constitute key requirements and
are a must for all employees of the bank. According to the human resource policy; ‘an employee
shall not absent him/herself from duty without plausible excuse or permission of the Head of
Division/ Department/Branch Manager.’ The assumption that human beings are naturally lazy and
don’t want to work is further evident in the human resource policy which states; ‘any employee
who is unable to report for duty due to genuine sickness, or any other justified reason, should
communicate to his Branch Manager or Head of Department by the quickest means possible,

25. 25
seeking official permission to be away from duty. Failure to report without reasonable cause will
result in the employee concerned being issued with a warning letter and the number of days of
absence will be deducted from annual leave entitlement.’ Sick leave that exceeds three days
requires formal certification by a competent doctor acceptable to the bank. This certificate must be
submitted to immediate supervisor and Human Resource Division before or upon resuming duty.
Where an employee absents himself from duty without permission or reasonable cause and for more
than five working days, he is considered to have absconded from duty. Accordingly, a report is
promptly filed to the Human Resource Division. The Human Resource Division then institutes
disciplinary action, in accordance with the policy on discipline. In the Bank, each division
maintains an attendance register where every bank employee registers his name and signs, to
indicate the time of reporting and departure from duty. The attendance register must be ruled across
to indicate the time of start for each day. This is the responsibility of the Head of
Division/Department/ Branch Manager and this should be done before 8.30 a.m. each morning. It is
the responsibility of every head of department or Branch Manager to monitor and enforce discipline
in regard to staff attendance. Monthly attendance returns/reports are sent to Human Resource
Division by the 10th of the following month for record purposes.
As theory X suggests, human beings have to be directed: the bank enforces discipline of the staff.
There are the disciplinary committees with disciplinary procedures whose primary purpose is to
help employees to achieve and maintain prescribed standards of conduct, attendance and staff
performance. The powers to discipline are vested in both the management and the board. The power
to discipline senior management staff lies with the board; the power to discipline managers lies with
senior management and the Board Human Resource Committee and the power to discipline staff at
lower levels lies with the Chief Executive Officer or his delegate. It is the responsibility of
immediate supervisors to issue formal verbal, written warnings and make recommendations for
disciplinary action against the staff. Any employee who commits an offence is subject to
disciplinary action, including warning, suspension, interdiction, and termination of service,
demotion and surcharge.

26. 26
The bank also believes in strict controls and commands. Every official reports to someone above
him and most of the time, important decisions are taken centrally. For example, decisions on staff
transfers, salary increments, and bonus payments are usually taken by top management without
consulting the middle and lower management. This is an indication of high level control and
command as emphasized by theory X.
However, it should be noted that in all cases, the employee is entitled to a hearing with the relevant
disciplinary committees as circumstances may warrant. It is also important to note that by the nature
of the commodity the bank deals in (cash), a lot of control and supervision becomes very essential if
losses are to be minimized. The kind of business the bank is involved in is the service industry
where the products traded have no tangible results and it becomes very important to encourage strict
time management especially for the staff who are in operations like the tellers, customer service
consultants since their productivity depends on their availability on the work stations.
6.3.2 Theory Y:
This theory expounds a participative management style that is decentralized. It assumes that
employees are willing and happy to work, are self-motivated and creative, and enjoy working with
greater responsibility. It assumes that workers take responsibility and are motivated to fulfill the
goals they are given, they seek and accept responsibility and do not need much direction, consider
work as a natural part of life and solve work problems imaginatively. In this management style,
people in the lower ranks in the organization are involved in decision making and have more
responsibility. This increases staff involvement in decisions making and as thus increases
motivation and performance.
Centenary Bank recognizes that all Bank staff are key stakeholders to its business as well as active
and important participants in the day to day running of its affairs at the various levels of
management. The bank therefore considers it good management practice and requires that all
divisions and branches convene staff meetings regularly, at least once a month, to enable the bank
staff (stakeholders) officially and collectively review, share and /or deliberate upon or communicate
important policy issues or developments of common concern or interest. Copies of the minutes of
these staff meetings are availed to Human Resource Division for noting and follow up. The bank
also has ensured that the performance agreements are made between subordinate staff and

27. 27
supervisors. During this exercise, the two discuss and agree on the areas of interest which forms the
basis of performance appraisal during the period. Even at the time of appraisal, the subordinate and
supervisor sit together and agree on a mark for each of the Key Result Areas before the division/
branch moderation team gives the final marks.
The bank believes in delegation of duties as evidenced in the statement; ‘An acting appointment is
one whereby an employee is appointed to act in a vacant senior post or an office higher than his
substantive position. An employee appointed to act shall hold a post lower than the one he is to act
but not more than three grades below the vacant post. An employee will receive a written letter of
appointment to act for a continuous period of not less than two calendar months. It should not
exceed six months.
The bank recognizes and promotes excellence in various aspects of individual employees work
responsibilities and profession, in the course of one’s career with the bank. Merits awards are
implemented based on a merits award system based on systematic and objective assessment,
recognition and appreciation for exemplary contribution, input and/or productivity or achievement,
at individual employee, unit and branch levels. This is aimed at promoting the culture of merit and
professionalism in the bank and to systematically identify, recognize and/ or reward outstanding
performance, conduct and/ or contribution to the overall operation of the bank. It is also intended to
motivate staff and retain excellent performers. Long service award according to Mr. Kato Kachope
is given for every ten consecutive years’ service and thereafter every five years’ service completed
with the bank. The employee is awarded with a long service certificate and an appropriate gift or
award. This award is however subject to the employee’s achievements and relative contribution to
the bank’s operation. On honorably leaving the bank, an employee is furnished a certificate of
service, a testimonial or commendation letter.
Recruitment is based on established and confirmed need for the staff to fill existing vacancies. All
the posts are filled on the basis of the defined competencies for the respective position and on merit
through a competitive selection system. This implies that the recruited personnel meet the skills,
knowledge, experience and the competencies needed for the specific jobs for which they are placed.

28. 28
The bank’s performance management system according to Mr. Businge Edgar is competence based
and for appraisal purposes. The overall purpose of the Performance Management is to enhance the
operational efficiency of the Bank as well as to improve the productivity and development of all
Bank employees (i.e. information, motivation, and development of employees) and to promote a
culture of accountability for results. This is what theory Y proposes in the selection of a leadership
style. The staff are appraised against agreed upon and/ or prescribed objectives and targets. At the
end of every cycle, performance planning commences and the supervisors throughout the Bank sign
performance agreements with all staff under their supervision. The supervisors and the supervisees
agree on a work plan for the period. The work plan indicates the outputs/targets and milestones to
be used for monitoring progress and appraisal as earlier noted.
Safety and security: The bank also influences environmental characteristics in order to enable the
staff to achieve. These include safety/ security. The Human Resources Policy emphasizes this in
that it states: ‘the Bank will provide such requirements and /or facilities that are necessary for
security and/ or safety of the staff and Bank properties; occupational health, fire prevention, and
environmental protection’. The bank also endeavors to have and maintain healthy employees. In
trying to achieve this objective, medical treatment is provided to all employees, their registered
legal spouse and four biological or legally adopted children below the age of 18 years. This
increases staff commitment to the Bank’s work and thus increasing staff productivity. The Bank
operates two medical covers under Jubilee insurance and AAR Insurance.
Wage, salary and allowances: The reward for labor is salary and wages. However, employee
rewards are of two types- financial and non- financial. Wages and salaries are financial rewards,
and include such forms as insurance cover, profit sharing and pensions. The non- financial rewards
include good working conditions, recognition for exceptional performance and other types of job
benefits. A company should be careful in the administration of wages and salary because if workers
are underpaid, they become dissatisfied and if they are overpaid, a company’s goods and services
may be over priced in the competitive market. To avoid the above scenario, Centenary Bank has
tried to maintain the salaries with in the 75 percentile within the industry. According to Mr. Bonnie
Byaruhanga, upon engagement, every employee is notified in writing of the amount of salary and
allowances to be paid to him and the bank reviews salaries periodically in line with the Bank’s

29. 29
performance and the prevailing market and regulatory conditions. To enhance staff motivation and
retention, the bank operates a salary range system within which performance related salary
increments are administered as per approved budget. The allowances are also paid out to staff that
do specific duties. These include responsibility allowance, out of pocket and subsistence allowance,
acting allowance, duty allowance, safari day allowance, allowance on weekends and gazetted public
holidays and extra duty allowances. This intended to enable the staff members to accomplish their
tasks with relative ease. It is also a common practice for employees in salary scale MGI and above
to get reimbursement for entertainment expenses if they entertain official visitors and clients during
the course of their duties. The Executives and staff of the rank of Manager and above that use
personal mobile phones to perform official duties are also entitled to airtime re-imbursement. It
should be noted that all the above are intended to facilitate the staff to be more productive in the
performance of their duties.
However, it should be noted that despite the above attempts to motivate staff, at times the rotation
from one department to another or one position to another has not be done to motivate worker but to
punish them. Some of the staff feel bad when they are rotated as a punishment and not as a sign of
appreciation and the need for them to learn more about the different bank products and processes. It
is worthwhile to note that much as the bank tries to encourage staff involvement in some decision
making during the different staff meetings, this has remained much in theory but practically all the
decisions that are of great impact on the institution are being done centrally and the meetings held
are usually for rehearsing on the performance of head office targets and identifying the areas that
need improvement rather than making decisions to affect staffs’ wellbeing.
7.0 CONCLUSION:
Motivation of workers in Centenary Bank has been a major factor in enhancing productivity and
profitability of the organization. The aim of this paper was to find out which motivation theories
relate to staff performance and which ones were considered as the most important by staff of
Centenary Bank. It is therefore worth noting that, the application of motivational theories is
important to the bank though there is need for more emphasis on an all-inclusive motivational
approach in order to increase staff performance and hence the profitability of the bank and also to
reduce on the rampant staff turnover.

30. 30
The theoretical part of this paper showed that the nature of motivation is very complex and there are
no simple answers to the question of what motivates employees but gave amazing insights into the
aspect. The results of the research conducted in order to find and analyze factors that motivate
employees from Centenary Bank demonstrated that both intrinsic and extrinsic motivators are top of
the list. Those results suggest that human resource professionals and bank managers who deal with
new job entrants (employees) in companies should not base only on money as a primary motivation
tool.
On the other hand, although non-monetary motivators are definitely powerful, they are not likely to
lead to the optimal performance if they are the only sources of motivation. The results of this
research, suggest that the most appropriate motivation and reward system should try to satisfy a
variety of needs from more than one category. The perfect job for future business person should be
interesting, well-paying and the work environment should create the feeling of involvement,
appreciation and safety and there should be also a great chance for promotion. The described job
definitely would motivate employees to perform very well. Although, it might be hard to offer a
position that satisfies all those needs, organizations should be aware of their existence.
Centenary Bank should meet the challenge of attracting, motivating and retaining employees by
being prepared for a variety of the expectations they have. The information gained from this paper
might be a good starting point for creating motivation systems for fresh graduate employees as well
as for planning recruitment campaigns focused on employees from other companies. In further
research, it should be determined whether findings from this paper would be confirmed in other
banks and service companies.
8.0 CONTRIBUTIONS:
Methodological Contributions:
On the methodological level, the paper proposed to enrich the content analysis elaborated for the
measurement of motivation and the assessment of motivation regulation strategies in bank
employees, and, at the same time, to supply instruments for the assessment of bank employees. To

31. 31
my knowledge, no other recent, multidimensional instruments designed for the assessment of
motivation and motivation regulation strategies exist at present.
Practical Contributions of paper to Policy and Practice:
The results offer information about the motivational factors which may have a significant effect on
the performance of bank employees and this paper can be used in the process of designing courses,
learning environments, etc. elaborated for bank employees. I also examined the effectiveness of
motivation enhancing interventions in the above-mentioned group of bank employees. Although we
could not demonstrate the effectiveness of the intervention, the experiences we gathered during this
program helped us phrase indications for future intervention programs.
In the results, in order to provide a better understanding of human performance measurements and
the influence of motivation, there were proposed ten appropriate performance criteria, related to
individual and behavioral terms. A performance criterion represents the principle on the basis an
appreciation or classification is made (Hutu & Avasilcai, 2011). The staff performance criteria
needed for banking sector could include the following: temporal criteria (permanent preoccupation
for accomplishment of clients’ demands in the established terms), numeric criteria (the degree of
specific tasks realization, the acquirement of work related skills, work quantity accepted
qualitatively, the ability of proposing or developing ideas and initiating new projects), financial
criteria (the degree of persistence in achieving the predicted profit), procedural criteria (the
compliance with external and internal rules, the ability and accuracy of completing work tasks, the
procedure of collaboration with colleagues regarding the accomplishment of work tasks)
representation criteria (errors in realizing the products designed for clients).
The above combination can help to check methods of assessing employees’ performance, based on
characteristic features and individual behavior.
Theoretical Contributions:
On the theoretical level, the paper proposed to identify the motivational factors of staff performance
of bank employees and the methods for enhancing these factors. In the theoretical part of the paper,
we presented a summary of the main theoretical approaches used in the study of motivation and of
the most important empirical evidence regarding bank employees, generated by these approaches.

32. 32
Based on this information, we made a sketch of the interrelations between motivational constructs.
Such syntheses are rare in the scientific literature, most of the research being fundamental on one
theory of motivation. In our paper, in turn, we based our analyses on a comprehensive model, thus
offering results regarding a relatively large number of motivational constructs.

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9.0 REFERENCES:
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10.0 APPENDICES
Appendix A: Summary of some of the theories of motivation
Table 1: Summary of some of the theories of motivation
Name Summary
Maslow's need-hierarchy
theory (1943)
Ranks human needs hierarchically in a five level pyramid where
people seek to satisfy their needs from bottom to top starting from
Physiological, Safety, Belongingness, Esteem, and moving to Self-
Actualization needs
Alderfer’s modified
hierarchy of needs ERG
(1967)
Groups Maslow’s needs into 3 levels: (E) existence, (R) relatedness
and (G) growth. Satisfaction at one level leads to progression to the
next level, while dissatisfaction at one level drives regression to the
previous one.
Expectancy theory
(Vroom, 1964)
It advances that motivation is the product of an individual’s
“expectancy” that a certain effort will lead to the intended
performance, the “instrumentality” of this performance to achieve a
certain result and “valence” which is the desirability to achieve that
result.
Douglas McGregor’s
Theory X and Y
Theory X assumes that human beings are naturally lazy, and hate
work and such they have to be forced to work.
Theory Y assumes that human beings are willing and happy to work,
they are self-motivated and responsible.