Relationship Between Employee Motivation And Performance-related Pay In Australian Auditing Companies

Literature Review

There was a rapid development in the field of audit during the 18^th century after the industrial revolution. Bellé, (2015) has explained that auditing is a process of evaluation of the records of accounting with an understanding to ascertain the financial reports of the organization which is free of the misstatements of the materials. The function of the auditors in a company is to look into the accounts and books in the aspect of preciseness of the report in order to understand the financial status of the company. Mostafa et al., (2015) has cited that the role of the auditors is to undertake an effective scenario of the places of wherever they go. Auditing is a process of learning which is identified effectively by the practitioners and the experts and with the assistance of effective auditing, the companies are able to accomplish their future results and objectives. The function and work of the internal auditors is to assess the efficiency and the consequences of the measurement of the performances of their clients (Nyberg et al., 2016). This research paper therefore evaluates the measurement of the motivation and the performance standards among the employees and to concentrate on the correlation among the two aspects that have been determined.

This research paper will be constructed with the help of the following steps and the steps are inclusive of the introduction, research objectives and aims along with the research questions. The other segments that would be constructed is the literature review, methodology and the analysis and discussion of the data that would be gathered in order to undertake the conclusion segment and thereby gain the results that is appropriate for the researcher.

The problem statement that is associated with this research involves the understanding of the performance standard of the employees in the auditing companies according to which payments are made to the employees by the management and thereby having a direct effect on the motivation of the employees. The performance of a company is dependent on the performance given by their employees as it aids in the improvement in the standard quality of the organization. The management accordingly pays their employees according to their performance so that the ones who are performing effectively would be able to receive better rewards. The payment of the employees has an impact on the degree of motivation and thereby a proper research is being undertaken in order to understand the issue and gain effective results for the same.

Motivation and Performance-related Pay

The research aim of the study looks to answer and discover the process with the help of which the research problem that has been constricted can be answers in an effective manner. The aim of the research study is as follows:

• Explain whether there exists a relationship among the payment related to performance and the extent of motivation in the auditing companies functioning in Australia.

The research questions tries to take the research forward in accordance to the issues that have been identified by the researcher earlier. The research question is the basis with respect to which the researcher can take the research ahead and accordingly gain precise results for the paper. The research question has been given as follows:

RQ: Is there a relationship among the motivation of the employees and the performance related pay in the auditing companies in Australia?

It is known that money is one of the most influential motivator. Hameed et al., (2014) has expressed that pay is linked directly to the employee performance in a company but there are certain researchers who have debated that payment processes are just a mechanism to motivate the employees to perform effectively in association with motivational theories. It is even seen that payment can even lead to demotivation (Barrick et al., 2015). If the payment given to the employees is lower than what they have been anticipating, then it can lead to the demotivation towards their level of performance and thereby make it difficult for the companies to recruit and select skilled employees. Gerhart, & Fang (2014) has debated that employee performance is interlinked with the rank an employee has in their company.

The external rewards like the increase in pay, benefits and bonuses have the influence to motivate an employee to perform effectively in a company as money is looked upon as a significant incentive. Hence, pay is considered as vital employee motivator as it explains the level of commitment of an employee towards their work. Conversely Gupta, & Shaw (2014), has debated on this matter and has expressed that the factor of money like the rise in payment can encourage an employee for a little while but it is not efficient for a long time and thereby is not able to improve the performance of the employees in a drastic manner. There have been several studies that have offered variant reviews regarding the payment related to performance but it has not discovered that the key objective of making use of this process was to motivate or encourage the employees and even reward them for performing in an effective manner (Olafsen et al., 2015). Conversely, the performance concept associated to payment has been a challenging issue and there has been a question that has aroused whether the real intention of this has been attained. It is not clear which is the more influencing factor; the impact of the level of the reward system or the process through which is payment is associated interlinked to the employee performance (Noe et al., 2014). Therefore the employees are not sure about the degree of performance they require to achieve in order to receive a certain reward process.

Data Collection and Research Design

Motivation can be explained as an influential mechanism that concentrates on continuing towards giving their optimum best in the work they perform (Jayaweera, 2015). In other words, motivation is even known as the intrinsic force in order to fulfil the demand of an employee to attain their future aim and goals. An employee who has motivation in doing something needs to perform effectively not only for the company but even for themselves.

Bozeman, & Su (2015) have explained about the two kinds of motivation which are known as the external motivation and internal motivation. Motivation has even been segregated into two kinds: the motivators that associates to enhanced performance; development of responsibility and the degree of accomplishment that provides optimistic satisfaction  towards the work and the other is the factor of hygiene which associates to benefits, working scenarios, bonuses and interpersonal relationship and in case this does not exist it may lead to dissatisfaction towards the work but does not motivate an individual in the long run (Gerhart & Fang 2015). According to Connelly et al., (2016), in accordance to the Civil Service Reform Act of 1978, it was discovered that the employees functioning in the public sector gets motivated by a sense of accomplishment from their work rather the amount of payment they are entitled to receive (Shin, & Konrad 2017). The researchers have debated that rewarding the accomplishments of the employees with greater identification and high status rather than awarding them with an increase the payment or the bonuses would be successful to raise the employee performance in the public sector. Belle, & Cantarelli (2015) have explained that there are three kinds of factors that motivate the employees to perform in an effective manner. They are based on the norm, rational and affective motivations. The process of rational motives is the ones where they perform for the intention of their own individual interest, norm-reliant motive stresses on the public interest and on the other hand affective motives are known as the motivation to assist others (De Gieter, & Hofmans 2015).

It is seen that external motivation enhances improved performance but most of the researchers have debated on this topic and have sad that reward can bring a negative effect on the level of the performance (Oswald et al., 2015). Additionally, it is explained that a rise in payments, benefits and bonuses can the factor to motivate the employees in order to give out their best but the job is observed to be less enjoyable.

Analysis and Discussion

This segment of the research has the idea of explaining the method of gathering the data that is precise and authentic that would be helpful in discovering the answer demanded by this paper and thereby addressing the problems that have been recognised by the researcher in the earlier chapters. In order to have an understanding about performance related pay on the motivation of the employees, it is essential for the researcher to collect quantitative data (Malik et al., 2015).

The key aim and objective of collecting the data and the process that would be used has been to disclose the impact of performance related payments on the motivation of the employees in the auditing companies in Australia. Therefore, in line with the research topic, the researcher has the idea of making use of the descriptive research design in order to highlight the information and the data that has been obtained from various researches that are secondary in nature (Fernandez, & Moldogaziev 2015). The research has looked to collect secondary data from several sources in order to undertake significant amount of assessments which can be helpful in providing the results that is desired. The researcher has looked to gather the data from the general sources that are available to them in accordance to the research topic. The researcher has taken assistance of the internet websites, annual report of the companies that have been selected, corporate social responsibility report of the companies, government annual reports and websites, articles and journals associated with the companies that have been chosen. The researcher has even looked to go through previous researches constructed by the earlier researchers on similar topics and thereby connecting them to the current research paper and thereby have an effective knowledge about the outcome that can lead to answering of the research issues (Kallio, & Kallio 2014). The data gathering with the assistance of the selected sources will be minimising the expenses and this process is regarded as cost effective as well. The secondary data even explains the present issue by nt taking any help of other sources that the researcher has.

The data related to the companies that have been selected have been gathered from the annual report of the companies and even from the corporate social responsibility report disclosed by the companies annually (Cerasoli et al., 2014). The data is even available on the company website and one can download the same from the website with ease and thereby reducing the cost of attaining it.

Conclusion

The process of data analysis is the machismo of planning the process fir undertaking the researches in order to discover the data that is valid. A quantitative process is utilised in order to evaluate the data in this study to examine the relationship among the two performance variables associated to the payment and the motivation of the employees of the top five Australian auditing organizations (Shaw, & Gupta 2015). In the quantitative research process, the outcome rises directly from the interpretation of the data of the huge number of population pools. The outcome is numerical in nature rather than being subjective and the researchers have more authority over how the information is assessed and gathered. Quantitative research is undertaken in order to examine the theory and in the conclusion either hypothesis of the research supported or is rejected (Samnani, & Singh 2014).

The statistics and the data is collected from the annual report of the top five Australian auditing companies. In this research the dependent variables will be evaluated have an impact on the individual motivation and affect the relation of work and the independent variables are the measurement of the performance, evaluation quality and the external and the internal motivation. The evaluation process that would be utilised is the analysis of the correlation and regressions. The collected data are assessed to have knowledge about whether there exists a negative or positive relationship among the payment related to performance and the motivation of the employees in the top five Australian auditing companies.

This section of the paper has the idea of collecting the data that is associated to the performance related payments and the motivation of the employees in the top ten auditing companies. The top ten auditing companies that have been chosen are: PwC, Deloitte, KPMG, BDO and Moore Stephens Australia. The data from the annual report has been selected and the data in regards to the remunerations of the directors have been considered with the help of which the performance related payments can be attained and performance management and motivation of the employees can be understood with the help of the net profit margin that has been attained. The net profit margin is an outcome of the performance in association to motivation and this data would be used in order to calculate the correlation and the regression analysis.    

The correlation table tries to assess the relationship among the performance related payments and the net profit margin that associates to the employee motivation. The positive correlation to one would determine the relationship among the two variables. The correlation is as follows:

Company	Bonus	Net Profit Margin
PWC	24	179
Deloitte	17.7	568
KPMG	22	374
BDO	31	261
Moore Stephens	27	260

	Bonus	Net Profit
Bonus	1
Net Profit	-0.7508	1

Implications for Management

The correlation table that has been constructed for the selected five companies indicate that there exists a negative correlation among the performance related pay and the net profit for the companies. The value comes to -0.7508. This indicates that performance related pay may nt have significant impact on the employee motivation on the companies that have been selected.

Regression Statistics
Multiple R	0.750759774
R Square	0.563640238
Adjusted R Square	0.418186984
Standard Error	3.834979714
Observations	5

ANOVA
	df	SS	MS	F	Significance F
Regression	1	56.99079177	56.99079177	3.875061046	0.143654171
Residual	3	44.12120823	14.70706941
Total	4	101.112

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	32.55703489	4.512822661	7.214339524	0.00549071	18.19521908	46.91885069	18.1952191	46.91885069
X Variable 1	-0.025021422	0.012710795	-1.968517474	0.143654171	-0.065472844	0.01543	-0.0654728	0.01543

The analysis of the regression table indicates that the adjusted R square comes to 0.418186984 and this value indicates that there exists a variation in the independent and the dependent variable chosen for this topic. The multiple regressions come near 75% and this value does not explain any kind of similarity among the two variables. The F value of the regression table has a value of 3.87061046 and this value is higher than 1.05 indicating that there exists a huge amount of variation among the two variables. The intercept variable explains that there is a negative value and therefore it explains that variation still exists. The answers indicate that performance related to pay does not have an impact on the employee motivation of the companies that have been selected.

The companies that have been chosen for the analysis of the paper are PWC, Deloitte, KPMG, BDO and Moore and Stephen. The corporate social responsibility of the PWC has indicated that the company looks to motivate their employees with the help of training and development programmes and by providing challenging jobs for them. Deloitte on the other hand in their report has explained that motivation to their employees is given with the assistance of an effective leadership style with the help of which the company is able to bring out the best out of their employees (Jacobsen et al., 2014). KPMG on the other hand have their unique technique as they provide non-financial records and recognition to the employees in accordance to the performance they provide within their organization and thereby motivate their employees. The idea of BDO is similar to that of Deloitte as they motivate the employees with the help of effective leadership style and competent leaders who are helpful in improving the performance of the employees (Campbell, 2015). Moore and Stephens look to motivate their employees by taking assistance of the empowering the employees with critical responsibilities and taking their advices in the process of decision making. This has led to the motivation of the employees and thereby improvement in the organizational activities of the company.

By making a comparison to the corporate social responsibility of the companies and the data gathered from the annual reports, it is seen that there exists no relationship among the performance related payments and motivation among the employees. The value that is attained is negative and thereby proving completely that there exists no relation among the two variables.

The answer that has been attained from the regression table even indicates that there exists a tremendous amount of variation among the two selected variables and thereby indicating the same that performance related pay does not have any impact on the employee motivation of the auditing companies that have been selected.

Chapter 6: Conclusion, Recommendation and Limitation

The completion of the paper has been able to identify the issue that was existent with the topic and has been able to answer the research questions and objectives. The results have been able ti answer the fact that for the selected companies, performance related payments cannot lead to employee motivation as there are other factors that have been able to satisfy the employees and have been able to motivate the employees in order to give out their best at work.

Recommendations refer to the ways and the processes with the help of which improvements can be made and thereby better level of performance can be attained from the employees. It is recommended that the companies have some communication and discussion with their employees from time to time in order to discover their discrepancies and their suggestions in improving the motivational policies of the company. The management should even look to assess the policies adopted by their rival firms and make changes in their policies accordingly in order to maintain motivation among their employees. The management needs to assess the market and understand the needs of the employees accordingly so that measures can be taken with the help of which the companies would be able to enhance motivation among the employees.

The limitation that is existent with this research has been that the data that has been gathered from the annual report and the corporate social responsibility report may not be precise as the companies may manipulate them and make changes according to their wish in order to create a good reputation in the market. This may lead to ineffective results. The other limitation has been the time constraint because of which the researcher could not collect more data with the help p which results would have been obtained in accordance to the topic that has been taken into consideration.

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