Literature review section is crucial for the investigation as it helps in collecting sufficient secondary data for the study. This section of present investigation is going to gather the information about corporate losses and effect on employee motivation. However, some specific points have been quoted in respect to Deutsche Bank in Karachi, Pakistan as the study is focused towards the same. Information is collected from online as well as physical library. Therefore, range of information is gathered from journals and online articles. The section here also deals with the information such as motivation theories and its impact on effect on employees, how motivation theories of financial factors related to financial loss in bank, competition of skilled employees in Pakistan and the affects of financial crisis on employees of Bank.
Explain Deutsch bank recent corporate loss
According the information provided in the report of Deutsche Bank (2013), this bank was established in Pakistan in 1961 at three places i.e. Karachi, Lahore and Islamabad. The bank has its presence in Pakistan with the ability to offer range of corporate and investment banking products and services. The bank has now become a leader in helping Pakistan clients to raise capital in offshore markets. It has also become Pakistan’s first ever global bond and the first private sector equity dealer from Pakistan that is listed in London. The present investigation carried out by (Cutmore, Cosgrave and Matthews (2016) represents that Deutsche Bank reported for a net loss 2.1 billion euros in the fourth-quarter. In addition, fourth-year net loss was of 6.8 billion euros. Instead of providing superior service to its corporate, multinational and financial institutional clients, this bank has faced huge losses that resulted to corporate losses and financial crisis. However, investment bank suffered a loss of 1.2 billion euro along with a high regulatory and litigation costs that also contribute to the loss. In addition, cited bank has also scrapped its 2015 and 2016 dividend. From the investigation carried out by Cryan (2016), it was found that Deutsche Bank has increased staff pay and numbers, instead of having multibillion-euro loss and canceling bonuses for higher level executives.
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Link to effect on employees: motivation theories
The investigation of Plimmer (2015) stated that economic crisis has brought significant changes in the organization. In the similar manner, it has also affected the thinking and perception of employees. Nowadays, motivation is more than the physiological or secure needs for employees. Hence, their motivation is affected by range of situations in the workplace. The recent crisis held in economy has significantly affected the existing economic situation. For most of the people working in the banks, motivation means recognition and professional development. On the other hand, for others, it means to have good pay scales, monetary rewards and job security. From a long decade, role of motivational theories has been argued as an important factor for motivating employees in the workplace. Herzberg, Mausner and Snyderman (2011) stated that motivation influences or drives the actions and behaviours of individual towards a goal and a reward that satisfies needs. It has been further argued that employee motivation is all about influencing individuals for moving in the direction which is set by the organisation or managers, or it is all about creating a condition where workers are influenced for putting their efforts to achieve organisational goals.
From the range of employee motivation theories, Herzberg's Motivation-Hygiene Theory which is a two factor theory is used for better understanding of employee attitudes and motivation. According to Plimmer (2015) The application of Herzberg theory helps in determining the factors which cause satisfaction or dissatisfaction at the workplace so that organization can focus to provide employee satisfaction. Nonetheless, cited theory has undergone criticisms for oversimplification of the factors that lead to job satisfaction. In this respect Chiew and Braver (2011) said that job factors can be satisfaction elements for some individuals where it can be dissatisfaction for others. On the other hand, Maslow need of hierarchy theory aims at assessing individual needs and satiating them in a hierarchical manner. According to the cited theory, employees can be motivated by satisfying their needs. Maslow’s Theory of Motivation has identified five levels of human motivation including Physiological, Safety, Social, Esteem, Self-Actualization etc. and these all needs are to be fulfilled for achieving employee motivation.
From the above analysis, it can be said that Maslow and Herzberg look at the relationship between internal needs and efforts of management to fulfil them. However, Vroom's expectancy theory separates the effort, performance, and outcomes. According to the mentioned theory, performance of individuals is based various factors including personality, skills, knowledge, experience and abilities. However, the investigation carried by Herzberg Mausner and Snyderman (2011) stated that effort, performance and motivation are linked in the process of achieving employee motivation. Three variables of the theory are Expectancy, Instrumentality and Valence. McGregor's Theory X and Y is based on the fact that motivation theory adopted by organizations significantly influences the employee motivation. Theory X assumes that employees are naturally demotivated and dislike their work. Hence, authoritarian style of management is needed. On the flip side of a coin, theory Y assumes that management should adopt participative style of management as employees are self-motivated and creative. According to Taylor´s motivational theory, individuals and workers purely do job for money. Motivation of employees depends on pay scale provided to them in accordance to their roles and responsibilities. This theory states that non-financial factors can motivate employees to improve their output.
Link motivation theories of financial factors to financial loss in bank
In respect to the present context, motivational theories focus on financial factors include higher pay scales, bonus and some monetary rewards. In the similar manner, many of authors () have argued that Herzberg’s Two-Factor Theory can be implied at the workplace where financial factors are important for employees motivation. According to the theory, motivation of individuals is divided into two groups such as motivation factors and hygiene factors. To the view point of Iqbal and Mehri (2011) it can be said that financial factors such as pay scales, higher salaries, hike in salaries, bonus etc. affect the motivation of employee in the banks. Many of the leading banks also make use of non- financial factors for the purpose of motivating people. Employees working in the banks always demand for good pay scales that may put impact on the financial performance of banks in the situation of crisis. Hence, it can be said that in the situation of financial crisis, most of the banks lose their ability to motivate employees via providing them financial benefits. The financial and economic crisis are the situations in which Banks fail to maintain good about of profits and savings that impact the financial rewards provided by banks to their employees. In such situation, if Banks provide addition benefits in terms of monetary rewards to employees then it can be a financial loss to company. The employees of Deutsch bank in Karachi can be motivated by provided financial rewards for their performance, but, it is not required in the situation of financial crisis as it may lead to huge financial losses. On the other hand, in the crisis situation, banks fail at providing salaries on time, that can be the biggest de-motivation for the people working in the bank.
Competition of skilled employees in Pakistan
According to the study conducted by The Express Tribunal (2012), it has been witnessed it is quite difficult for Pakistanis to compete with international market of skilled labourers. This all is due to lack of skills in the labour force of Pakistan. The report further explained that Pakistani workers are failed to match the standards of skilled workers all around the world. The same thing has been witnessed by the Standing Committee on Professional and Technical Training institute. The Pakistani workers are lacking behind in holding technical certificates that lead to low level of country’s skilled professionals. However, author has defined that vocational training institutes in rural areas are helpful in providing effective services to the people. The government has now recognised the importance of education for the future of Pakistan that can be said an only way to defeat terrorism and becoming a leading area for labour force. The investigation conducted by Ministry of Labour, Manpower & Overseas Pakistanis (2016) Pakistan started ILO’s Decent Work Country Program (DWCP) in which the strategies and plans are designed for promoting and creation of decent work. In addition, Pakistan has recently designed DWCP, a National Tripartite Forum on Employment and Skills which has been jointly organised by the Labour and Manpower Division of the Ministry of Labour, Manpower and Overseas Pakistanis (MLMOP) and the ILO. This organization aimed at providing a platform to analyse the employment and labour market challenges that are faced by Pakistan. However, terrorism in the country is the major reason for which the labour market is not competitive and less demanded in other countries. Through the study, it was identified that the programme is designed to support Government, Employers’ and Workers’ representatives for the formulation and implementation of real decent work policies and programs. According to Lall and Weiss (2004) there is a huge competition in Pakistan in respect to labour force, however, it is an important to focus on the skills of individuals and labour force. In case, Pakistan wants to survive and prosper under the competitive conditions of global labour force market, than it is important for company to move into more technology and knowledge. From the analysis, it can be said that labour force of Pakistan is not in demand, hence, the Labour market is less competitive. According to the investigation, it can be said in case of financial crisis and job cutting in the banking sectors in Pakistan this will impact to unemployment in the country. The labour industry of Pakistan is less competitive than other markets which can be overcome by making proper use of technology and skilled based programmes.
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Affects of financial crisis on employees of Bank
The investigation carried out by Aftab (2012) represented that financial crisis affects the motivation level of employees at the workplace, as employee motivation changes in situation of crisis. The workers of financial institutions are significantly affected by financial crisis that has lead to loss there jobs. The crisis in the country has provoked major job losses in the financial sector. On the other hand, this has lead to put a break on the long-term increase in employment within v banking sector. The effects of crisis on earnings have seen relatively limited. Many of the studies have represented that the banking sector employees are going to have a huge impact on their jobs that may led to de motivation. Fore example, a recent net loss earned by Deutsch bank of Karachi is going to have a huge impact on earnings of bank employees that will significantly lead to de- motivation among employees. However, tight measures to regulate the sector is the only way to reduce the gap between remunerations and lead employee motivation in Banks as well as in the wider economy. The author has further said that financial crisis in banks are not going to affect only existing workforce who are employed in the sector but also new graduates or future labour. There is a threat among employees of banks of having low wages in crisis situation of Bank. To the view point of Jasra (2011) in the crisis situation many of banks cut down their jobs, that can put a impact on employment of the country. Due to the threat of work in a loss making bank lead to individuals to leave their jobs. In addition, they are also in the threat of earning low wage from banks, in case financial crisis. From the investigation, it is known that the threat of low bonuses is also there to the employees of banks, therefore, they might search for a new job. All the factors lead to de-motivation that increases high turnover.
- Aftab, H., 2012. A Study of Job Satisfaction and IT's Impact on the Performance in the Banking Industry of Pakistan. International Journal of Business and Social Science, 3(19).
- Chiew, K.S. and Braver, T.S., 2011. Positive affect versus reward: emotional and motivational influences on cognitive control. Cognitive and affective control, p.30.
- Hafiza, N.S., Shah, S.S., Jamsheed, H. and Zaman, K., 2011. Relationship between rewards and employeeâ€Ÿ s Motivation in the non-profit organizations of Pakistan. Business Intelligence Journal, 4(2), pp.327-334.
- Herzberg, F., Mausner, B. and Snyderman, B.B., 2011. The motivation to work (Vol. 1). Transaction publishers.
- Iqbal, M.J. and Mehri, M., 2011. Economic crisis and its impact on job motivation and job security: A case of banking sector. Interdisciplinary Journal of Contemporary Research in Business, 3(1), p.105.
- Jasra, J.M., 2011. Financial crises and economic growth in Pakistan: a time series analysis. Middle-East Journal of Scientific Research, 9(3), pp.425-430.
- Lall, S. and Weiss, J., 2004. Industrial Competitiveness: The Challenge for Pakistan. ADB Institute-Pakistan Resident Mission Paper, ADB Pakistan Resident Mission, Islamabad.
- Plimmer, G., 2015.Managing Employee Performance & Reward: Concepts, Practices, Strategies. Cambridge University Press.