EMPLOYEE ENGAGEMENT: AN ASSESSMENT OF THE BEST PRACTICES FOR ENHANCING MOTIVATION AND PRODUCTIVITY AMONG EMPLOYEES IN MICROFINANCE INSTITUTIONS IN CAMEROON

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The origins of microfinance, dating back to cooperative savings and credit activities in 1849 with Raiffeisen's first cooperative society, are closely intertwined with poverty alleviation. However, it was the establishment of the Grameen Bank by Yunus in 1976 that marked the emergence of what we now recognize as "modern microfinance." Initially conceived as an alternative to traditional banks, which typically only serve a small fraction of the population in developing countries, along with informal moneylenders, microfinance has since evolved significantly. Today, microfinance institutions boast over 100 million clients and demonstrate impressive loan repayment rates, reflecting the sector's growth and impact (Cull et al, 2019).  Additionally, Microfinance banks, licensed by the Bank Of Central African States (BEAC)  , are limited liability companies authorized to provide financial and non-financial services to customers, particularly those underserved by traditional commercial banks. The key distinction between microfinance banks and conventional banks lies in their operational scope (FXOGOR, 2017). Previous research has indicated that motivated employees tend to perform better in their jobs and exhibit lower intentions to leave their organization (Eneh, 2016; Nabi et al., 2017).

Like any other business entity, microfinance institutions especially, banks are established with the aim of coordinating the efforts and activities of individuals to offer products, including goods and services, for profit. As formal organizations, these institutions share common characteristics such as governance structure, objectives, resource management policies, employment conditions, and legal regulations governing their operations (Abdolshah et al., 2018, 2016). While employees are drawn to bank jobs primarily due to the attractive salaries offered, which enable them to meet their financial needs despite the demanding nature of their work. The microfinance sector operates in a volatile and competitive market environment, exacerbated by global economic downturns, such as those experienced in developing economies like Cameroon. Consequently,  during the Covid 19 pandemic, banks, including microfinance institutions, were compelled to devise strategies to reduce operational costs, including downsizing their workforce (Wijesundera, 2018). This situation has led banks to focus on retaining only top-performing employees, often without increasing salaries, while expecting them to shoulder increased workloads to maintain productivity. Under such circumstances, job satisfaction among employees decreased, potentially affecting their performance, particularly when faced with uncertain futures. Recognizing this, Shkoler & Kimura (2020) argue that businesses, including microfinance institution, should prioritize motivating their employees to retain them, as talented individuals may seek more appealing job opportunities elsewhere. Basically, a successful organization  needs to be good at attracting, keeping, and helping its employees grow. On the other hand, the human resource management of every organization aims to make employees more productive and make the company better in the long run. Every part of a company works together to make sure it does well, using different strategies (Bandara & Weligodapola, 2018). According to what experts have written, employee productivity is measured by how much work they do and how good it is, over a certain time.  However, lots of organizations wonder how they can get the most out of their employees (Forson, 2022). While some think that motivating, attitude, and behavior play a big role in how well employees do (Kawara, 2019).  Forson (2022) explained that giving employees good reasons to work hard is one of the best ways for a company to do its job well using the least amount of resources and the people it has. But sometimes, there are problems with motivation, especially when workers come to work with different ideas and feelings and aren't as committed to the company. How well employees do their job really depends on a lot of things like how motivated they are, how much training they get, how they're evaluated, if they're happy with their job, how much they're paid, if they feel secure in their job, and how the company is set up (Hussein and Simba, 2017). Nevertheless, it is imperative for researchers to investigate how motivation influences employees' attitudes and behaviors towards their jobs, particularly in the microfinance sector, an area that has not received much attention according to available literature. Therefore, a survey will be conducted in order to assess the best practices for enhancing motivation and productivity among employees in microfinance institutions in Cameroon.

1.2 Statement of the Problem

Institutions in the fiercely competitive and ever evolving microfinance market work hard to offer financial services to low income people and communities. The retention of talented and driven staff is one of the major issues facing microfinance institutions. These organizations frequently have limited resources, which might restrict their capacity to provide benefits and competitive pay. Additionally, many workers could feel demotivated and disengaged from the organization as a result, which could result in decreased output and subpar performance. Moreover, Microfinance Institutions (MFIs) might face challenges in offering avenues for career progression and growth, which can significantly affect employee motivation and productivity. Also, the dynamic and rapidly evolving nature of the microfinance sector may present difficulties for employees in maintaining a harmonious work-life balance, potentially resulting in burnout and increased rates of employee turnover. This issue of employee motivation in microfinance institutions represents a notable challenge that could hinder the organization's capacity to fulfill its goals and effectively cater to its clients' needs (Joel, 2019). Thus, it is in the light of these that the study seeks to assess the best practices for enhancing motivation and productivity among employees in microfinance institutions in Cameroon.

1.3 Objectives of the Study

The main purpose of this study is to assess the best practices for enhancing motivation and productivity among employees in microfinance institutions in Cameroon. Specifically, the study will;

1.Determine whether there is a significant relationship between motivation and  employee productivity in microfinance institutions in Cameroon

2.Investigate on the underlying factors that influence employee productivity in microfinance institutions in Cameroon

3.Investigate the impact of motivation on employee productivity in microfinance institutions in Cameroon

4.Identify the motivational practices which enhances employees productivity in microfinance institutions in Cameroon. 

1.4 Research Questions

The following questions have been prepared for the study:

Is there a significant relationship between motivation and employee productivity in microfinance institutions in Cameroon?

What are the underlying factors that influence employee productivity in microfinance institutions in Cameroon?

How does motivation impact employee productivity in microfinance institutions in Cameroon?

What specific motivational practices enhance employee productivity in microfinance institutions in Cameroon?

1.5 Research Hypotheses

Ho: There is no significant relationship between motivation and employee productivity in microfinance institutions in Cameroon

Ha: There is a significant relationship between motivation and employee productivity in microfinance institutions in Cameroon.

1.6 Significance of the Study

The significance of this study lies in its potential to offer practical guidance to microfinance institutions in Cameroon on how to enhance employee motivation, productivity, and engagement. The study will provide actionable recommendations for organizational policies and interventions. This will lead to the improvement of employee satisfaction, increased productivity, and better service delivery within microfinance institutions, ultimately contributing to their overall success and impact in serving communities and promoting economic development in Cameroon. Additionally, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to assess the best practices for enhancing motivation and productivity among employees in microfinance institutions in Cameroon.

1.6 Scope of the study

The scope of this study is to assess the best practices for enhancing motivation and productivity among employees in microfinance institutions in Cameroon. Empirically, this study determine whether there is a significant relationship between motivation and  employee productivity in microfinance institutions in Cameroon, investigate on the underlying factors that influence employee productivity in microfinance institutions in Cameroon, the impact of motivation on employee productivity in microfinance institutions in Cameroon and identify the motivational practices which enhances employees productivity in microfinance institutions in Cameroon. 

Geographically, the study will be delimited to employees of some selected microfinance institutions in Douala, Cameroon

1.7 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents.In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

1.8 Definition of Terms

Employee engagement: refers to the emotional and psychological connection that employees have with their work, their colleagues, and their organization.

Motivation: is the internal drive or incentive that energizes and directs behavior toward achieving goals

Productivity: the efficiency and effectiveness with which resources (such as labor, capital, and technology) are utilized to produce goods or services.