DETERMINANTS OF INDIVIDUAL PERFORMANCE IN BRITISH

SOFTWARE SMEs
Abstract
The aim of this research is to determine the impact made by number of motivational
practices on the individual performances of the employee within software SMEs that are located
in London. It is debated that the methods for boosting up the motivation of the employees can be
developed from the key theories that relates to human motivation and the leadership concept. In
order to attain the purpose of outline, the researcher has gathered the primary and secondary
data. It has been evidenced that the employees working in the firms that are being investigated
are primarily impacted by workplace relationships, monetary remunerations, emotional support
and employee development. A statistically significant link between motivation and individual
performance is identified. Generalizability is considered as the main limitation of this study.

Introduction
1.1 Problem statement and Rationale for the study
According to Katz‐Gerro and Lopez Sintas (2019), the valuable part of the economy of
the European Union is constituted by the small and medium enterprises (SMEs), with many as 99
per cent of all firms within the EU being considered as SMEs. By considering the size of these
organizations, it has been expected that a number of challenges are faced by the SMEs with
respect to their operations. It was further explained by Dredge et al. (2019) that SMEs
experiences difficulties and challenges with respect to meet the demands of the end consumer
along with the difficulties relating to the corporate governance. It can be identified through this
statement that for SMEs, in order to compete with large corporations and other market actors, the
issues relating to the employee performance and employee motivation are extremely crucial.
Therefore, in order to account for the outlined dimensions, the managers of these organizations
are required to employ sensible and effective motivational practices within the organization.
Nevertheless, the relation among these methods and performance of the employees is still
underexplored in academic literature within the context of SMEs. For example, Andries and
Stephan (2019) investigated the efficiency of such practices in terms of intensive employee
training; little evidence was attained by the authors with respect to motivations. Onkelins et al.
(2016) were of the opinion that investments in human capital expressed through wages and
employee training increased organizational productivity, but did not consider the dimension of
motivation directly. Keeping this in mind, the research aims to fill this literature gap in the
current study.

1.2 Research focus and Background

The main concentration of tis research is on the software SMEs that are specifically
located in London. The specific concentration on London can be justified by stating that London
is considered to be a crucial area for the digital sector within UK. Considerably, in London
alone, the number of software companies has been increased by 46 per cent over the last few
years along with this, the entire labour force for the sector now equals 200,000 people (Razzak
et al., 2021) Moreover, Oztemel and Gursev (2021) expected that the demand with respect to the
software services would increase in future because of such significant role played by the
software within such areas as social services. Nevertheless, it was also stated by Ghani et al.
(2022) that the software industry of UK was in dire need of clear communication among the
employers and their subordinates as well as highly skilful employees. Both of these challenges
are associated with employee motivation and employee performance, further rationalizing the
choice of the UK and London in particular. With respect to software SMEs, the impact of
technological innovation on SME survival was investigated by Katz‐Gerro and Lopez Sintas
(2019) and he further concluded that it is extremely critical for the organizations to develop the
valuable insights for SMEs. In addition to this, these findings were supported by Dredge et al.
(2019), by stating that knowledge management was significant for Malaysian SMEs. The above
mentioned arguments placed prominence on the employees of SMEs all across the world because
the human capital of SMEs is a noteworthy organizational resource which produces innovation.
Having evidence that software is highly knowledge-intensive setting, these points are specifically
true for the industry, therefore, justifying the choice of the software firms. On the contrary, it has
been admitted that the relationship developed in this research might not be applicable to SMEs in
sectors other than software (for instance, manufacturing).

1.3 Research Aims and Objectives

The aim of this research project is to investigate the determinants of the individual
performance level among the employees of software SMEs in London. This objective would be
achieved by addressed the following research objectives.
 1- To determine the major motivational practices that is adopted by the modern
organizations.
2- To develop a theoretical link among the employee motivation and employee performance
3- To ration the influence of the selected motivational practices on employee performance in
British software sector
4- To recommend new methods and ways through which the individual performance in
software SMEs can be stimulated.

Research Methodology
This assignment is prepared through the critical and analytical research. The researches
taken for this assignment are both, primary and secondary as well. The materials from which a
pure non plagiarized research has been abstracted are magazines, internet resources, historical
books, past newspapers and articles are part of primary research of this assignment. On the
second hand, the secondary research which is conducted to make it an enhanced assignment
includes interviews of the employees working in different organisations.

Literature Review
Measurement of Employee Performance
Before moving towards the issues with respect to motivation, it is suitable to determine
that how performances of employees are conceptualized within the modern companies. For
example, it was noted by Karim et al. (2021) that the procedure of the performance assessment
was basically two-dimensional. In particular, the main idea of the author was that the employees
are required to display appropriate workplace behaviours along with achieving the goals and
objectives of the organization in order to become more effective and efficient. The main
implication of this model is that performance could be defined as the degree to which the
conducts of the staff correspond to what is expected by the company as well as efficiency. Aşkun
et al. (2021) evaluated this measurement technique as positive. It was further argued by the
scholars that by providing the employees with rewards even though it resulted in failure could
foster innovation culture within the organisation. Simultaneously, this approach can be criticised
because of the fact that no clear guidelines with respect to what specific conducts and goals must
be considered significant across the different organisational context.
Leadership as a Motivational Strategy
Soomro et al. (2018) illustrated that the dimensions of leadership must be considered
whenever the issues with respect to employee motivation and individual performance are raised.
It has been claimed by the authors that the communication between the leaders and the
subordinates could be significant in attaining the goals and objectives of the organisation;
moreover, this statement was justified by Vu (2020) who further demonstrated that the
connection between the leadership and performance both at individual and organisational levels
was significant. On the contrary, Toharudin and Ghufroni (2019) did not preferred to define the
leadership styles as a motivational practices, instead of considering them as a dedicated unit of
analysis.

Connecting Employee Motivation and Individual Performance

This section of the research is associated with the relationship between employee
motivation and individual performance. According to van der Kolk et al. (2019) the
organisations that treat their employees well produced more innovations and patents as compare
to all other organisations, which was attributed to the individual effectiveness of their employees.
However, it is questionable whether, the definitions used refer to the framework of the employee
motivation that is examined above. For example, the authors clearly stated that the result that is
mentioned was not caused due to job security, which is considered to be vital component of the
approaches of Maslow (1943) and Herzberg (2003).
Theoretical Framework

Monetary
Remuneration

Job Design

Internal
Promotions
Employee Employee
Motivation Performance
Enhanced
Security

Setting Clear
Goals

Emotional
Support

Employee
Development

Source: Developed for this Research

The following hypotheses are given considering the displayed framework.

H1: Monetary Remuneration has a positive and significant impact on employee motivation and
employee performance.
H2: Job design has a positive and significant impact on employee motivation and employee
performance.
H3: Internal promotion has a positive and significant impact on employee motivation and
employee performance.
H4: Enhanced security has a positive and significant impact on employee motivation and
employee performance.
H5: Setting clear goals has a positive and significant impact on employee motivation and
employee performance.
H6: Emotional support has a positive and significant impact on employee motivation and
employee performance.
H7: Employee development has a positive and significant impact on employee motivation and
employee performance.

Conclusion
It is concluded that this research aims to determine the influence made by number of
motivational practices on the individual performances of the employee within software SMEs
located in London. It is discussed that the methods for boosting up the motivation of the
employees can be developed from the key theories that relates to human motivation and the
leadership concept. In order to attain the purpose of outline, the researcher has gathered the
primary and secondary data. It has been evidenced that the employees working in the firms that
are being investigated are primarily impacted by workplace relationships, monetary
remunerations, emotional support and employee development. A statistically significant link
between motivation and individual performance is identified.
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