Mi Over Over

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MONETARY INCENTIVES
CHAPTER 1
INTRODUCTION
KMEA COLLEGE OF ARTS AND

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INTRODUCTION
One of the major problems facing most employers in both public and private sector is how to motivate
their employees in order to improve performance. Economics is largely based on the assumption that monetary
incentives improve performance. It is generally believed that effect of monetary incentives is unambiguously
positive a large monetary incentive improves employee performance.
The issue of employee performance cannot be over emphasized. The general believed is that employees will not
perform to the best of their ability unless they are motivated to do so. Various researchers have come up with
various ways to motivate people at work. However, because human beings are different from one another in
terms of needs, culture, religion etc. so does what motivate them also varies. Some employees are motivated by
financial and other incentives and some non- financial incentives.
Recent studies have shown that a combination of financial and non-financial incentives can motivates employee
to perform well on their job.
Managers continuously seek for ways to create a motivating environment where employees will work at their
optional levels to achieve the organizational objectives. Work place motivators include both monetary and non-
monetary incentives. Monetary incentives can be diverse while having a similar effect on associates. The
purpose of monetary incentives is to reward employees for excellent job performance through money.
Research shows that desired monetary incentives differ for employees based on career stage and
generation. Since human resource is the most valuable resource of any organization, it must activate, train,
develop and above all motivate in order to achieve individual and organizational goals.
Managers are constantly searching for ways to create a motivational environment where associates (employees)
can work at their optimal levels to accomplish company objectives. Workplace motivators include both
monetary and nonmonetary incentives. Monetary incentives can be diverse while having a similar effect on
associates. One example of monetary incentives is mutual funds provided through company pension plans or
insurance programs. Because it has been suggested that associates, depending on their age, have different needs
pertaining to incentives, traditional incentive packages are being replaced with alternatives to attract younger
associates. Monetary rewards as a motivator is high in developing in countries due to high cost of living and low
quality of lives which they are facing.

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Monetary incentives refer to the exchange prices for labour. They are the base payments which employers use to
compensate time and effort spent by employees towards attaining organizational goals. Monetary incentives can
be understood as payment packages that individual workers earn by virtue of their employment by the
organization. Generally monetary incentives are economic benefits given to employees for the services they
render to the organization. Performance is defined as the ability to meet the set targets in the organization
The prime purpose of monetary incentive towards successful accomplishment is to motivate the employees and
encourage them so as to excel in their job performances.
DEFINITION
1) INCENTIVES
Incentive is an act or promise for greater action. It is also called as a stimulus to greater action. Incentives are
something which are given in addition to wagers. It means additional remuneration or benefit to an employee in
recognition of achievement or better work.
Incentives provide a spur or zeal in the employees for better performance. It is a natural thing that nobody
acts without a purpose behind. Therefore, a hope for a reward is a powerful incentive to motivate employees.
Besides monetary incentive, there are some other stimuli which can drive a person to better. This will include
job satisfaction, job security, job promotion, and pride for accomplishment. Therefore, incentives really can
sometimes work to accomplish the goals of a concern. The need of incentives can be many:-
 To increase productivity,
 To drive or arouse a stimulus work,
 To enhance commitment in work performance,
 To psychologically satisfy a person which leads to job satisfaction,
 To shape the behaviour or outlook of subordinate towards work,
 To inculcate zeal and enthusiasm towards work,
 To get the maximum of their capabilities so that they are exploited and utilized maximally.
Therefore, management has to offer the following two categories of incentives to motivate employees:

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2) MONETARY INCENTIVES
Those incentives which satisfy the subordinates by providing them rewards in terms of rupees. Money has
been recognized as a chief source of satisfying the needs of people. Money is also helpful to satisfy the social
needs by possessing various material iterns . Therefore, money not only satisfies psychological needs but also
the security and social needs. Therefore, in many factories, various wage plans and bonus schemes are
introduced to motivate and stimulate the people to work Monetary Incentives are financial incentives used
mostly by employers to motivate employees towards meeting their targets. Money, being a symbol of power,
status and respect plays a big role in satisfying the social-security and physiological needs of a person. Money
however, seizes to be a motivator when the psychological and security needs are satisfied.
The purpose of monetary incentives is to reward associates for excellent job performance through money.
Monetary incentives include profit sharing, project bonuses, stock options and warrants, scheduled bonuses
(e.g., Christmas and performance-linked), and additional paid vacation time. Traditionally, these have helped
maintain a positive motivational environment for associates.
3) NON-MONETARY INCENTIVES
Besides the monetary incentives, there are certain non-financial incentives which can satisfy the ego and self-
actualization needs of employees. The incentives which cannot be measured in terms of money are under the
category of "Non- monetary incentives". Whenever a manager has to satisfy the psychological needs of the
subordinates, he makes use of non-financial incentives.
Non- financial incentives can be of the following types:-
 Security of service- Job security is an incentive which provides great motivation to employees. If his
job is secured, he will put maximum efforts to achieve the objectives of the enterprise. This also helps
since he is very far off from mental tension and he can give his best to the enterprise.
 Praise or recognition- The praise or recognition is another non- financial incentive which satisfies the
ego needs of the employees. Sometimes praise becomes more effective than any other incentive. The
employees will respond more to praise and try to give the best of their abilities to a concern.

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 Suggestion scheme- The organization should look forward to taking suggestions and inviting suggestion
schemes from the subordinates. This inculcates a spirit of participation in the employees. This can be
done by publishing various articles written by employees to improve the work environment which can be
published in various magazines of the company.This also is helpful to motivate the employees to feel
important and they can also be in search for innovative methods which can be applied for better work
methods. This ultimately helps in growing a concern and adapting new methods of operations.
 Job enrichment- Job enrichment is another nonmonetary incentive in which the iob of a worker can be
enriched. This can be done by increasing his responsibilities, giving him an important designation,
increasing the content and nature of the work. This way efficient worker can get challenging jobs in
which they can prove their worth. This also helps in the greatest motivation of the efficient employees.
 Promotion opportunities- Promotion is an effective tool to increase the spirit to work in a concern. If the
employees are provided opportunities for the advancement and growth, they feel satisfied and contented
and they become more committed to the organization.
The purpose of nonmonetary incentives is to reward associates for excellent job performance through
opportunities. Nonmonetary incentives include flexible work hours, training and education, a pleasant work
environment, and sabbaticals.
POSITIVE INCENTIVES
Positive incentives are those incentives which provide a positive assurance for fulfilling the needs and wants.
Positive incentives generally have an optimistic attitude behind and they are generally given to satisfy the
psychological requirements of employees. For example-promotion, praise, recognition, perks and allowances,
etc. It is positive by nature.

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NEGATIVE INCENTIVES
Negative incentives are those whose purpose is to correct the mistakes or defaults of employees. The purpose
is to rectify mistakes in order to get effective results. Negative incentive is generally resorted to when positive
incentive does not works and a psychological set back has to be given to employees. It is negative by nature.
For example- demotion, transfer, fines, penalties.
NEED FOR THE STUDY
 The success and the survival of any organisation are determined by the way the workers
are remunerated and rewarded
 The reward system and motivating incentives will determine the level of employees"
commitment and their attitude to work. Incentives are the compensation for doing work
well given to a worker in the form of both financial and non-financial incentives.
 For any organization to achieve its objective in any competitive society, employers
of labour must have a thorough understanding of what drives the employees to
perform efficiently and reward them accordingly.
 There is an increasing need for organizations to develop reward systems that

motivate staff to work harder.
 Monetary incentives also may motivate people to invest effort to acquire the skills needed
to perform a task so that future performance and rewards will be higher than they
otherwise would be

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OBJECTIVES OF THE STUDY
1. To provide a conceptual framework for understanding the effects of (performance-

contingent) monetary incentives on individual effort and performance and also to
discuss theories that suggest mediators of the incentives-effort relation.
2. To enumerate and categorize important accounting-related variables that may
combine with monetary incentives in affecting task performance.
3. To review the existing literature of Monetary Incentives
4. To identify and discuss numerous directions for future research in accounting that
would help fill gaps in our knowledge regarding the efficacy of monetary reward
systems.
5. To investigate the impact of monetary incentives in reference with Indus motors
and provide proper suggestions.
STATEMENT OF THE PROBLEM
There have been several problems associated with financial incentives on workers “performance
on the part of workers and managers in various business organizations. These are Poor
incentives package which have been a major factor affecting employees” commitment and
productivity, employees lack of willingness to increase their performance because they feel that
their contributions are not well recognized by their organizations and Management lacks the
necessary skills that could help in the formulation of a good monetary incentive policy. To this
effect, this study attempts to critically analyze the effect of monetary incentives on employees in
reference with Indus Motors, Thevara
SIGNIFICANCE OF THE PROBLEM
Through this study an attempt has been made to explore the views of different researchers on
SR practices by Indian companies. This study will help in finding new areas and aspects of CSR
on which less or no work has been done. It will also put light on new aspects for further

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research.

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SCOPE OF THE STUDY
This study is focused on the Monetary Incentives of Indus Motors, Thevara. The study was of
importance to the organizations in understanding the relationship between the monetary
incentives and employee performance. The research was of useful to the future researchers on
monetary incentives as a form of motivating factor to employee performance. The study was to
provide the researcher with more research knowledge and skills in monetary incentives and
employee performance in reference with Indus Motors. Thevara.
PERIOD OF STUDY
A total number of 30 days was dedicated to study the monetary incentives at Indus motors.
LIMITATIONS OF THE STUDY
 The time period was inadequate for conducting a detailed study.

 The results depend on the answer received from respondents which may be biased.
 The accuracy of the study is low. Some employees are relevant to give correct
information.
 The time was the major constrain so the number of respondents was strictly restricted to
100 respondents of the total population.
 The opinion of the respondents may be biased.
 Some of the respondents are very busy and they were reluctant to co-operate with the
researcher.

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CHAPTER 2
INDUSTRY PROFILE & COMPANY PROFILE

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INDUSTRY PROFILE
OVERVIEW OF INDIAN AUTOMOBILE INDUSTRY
The Automobile Industry in India the 10th largest in the world with an annual production of approximately 2
million units is expected to become one of the major global automotive industries in the coming years. A no. of
domestic companies produce automobiles in India and the growing presence of multinational investment, too
has led to an increase in overall growth. Following the economic reforms of 1991 the Indian Automobile
Industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions.
According to Mckinsey , the auto sector's drive to lower costs will push outsourcing. The auto sector could be
worth $ 375 billion by 2015, up from $ 65 million in 2002. Mckinsey thinks India could capture $ 25 billion of
this amount. Out of 400 Indian Suppliers, 80 percent have the ISO 9000 certificate- the international standard
for quality management. The production of automobiles in India largely aimed at local consumers
Several Indian manufacturers also export a diverse variety of auto components. Indian passenger vehicles
exports are also expected to rise from 1, 70,000 in 2006 to 5,00,000 in 2010. Tiku (2008) predicts a sale of 4.2
million four wheeler automobiles in India by 2015.
The Indian Automobile Industry is going through a technological change where such firm is engaged in
changing its processes and technologies to sustain the competitive advantage and provide customers with the
optimized products and services. Starting from the two wheelers, trucks and tractors to the multi utility
vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved tremendous
amount of success in the recent years. Development started as early as the 17th century with the invention of
the first steam-powered vehicle, which led to the creation of the first steam-powered automobile capable of
human transportation, built by Nicolas-Joseph Cugnotin 1769. Inventors began to branch out at the start of the
19th century, creating the de Rivas engine, one of the first internal combustion engines, and an early electric
motor. Samuel Brown later tested the first industrially applied internal combustion engine in 1826.
The Ford Model T (foreground) and Volkswagen Beetle (background) are among the most mass-produced car
models in history.
Development was hindered in the mid-19th century by a backlash against large vehicles, yet progress continued
on some internal combustion engines. The engine evolved as engineers created two- and four-cycle combustion
engines and began using gasoline as fuel. Production vehicles began appearing in 1887, when Carl Benz,
developed a petrol or gasoline-powered automobile and made several identical copies.

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Recent automobile production is marked by the Ford Model T, created by the Ford Motor Company in 1908,
which became the first automobile to be mass-produced on a moving assembly line.
The modern era is normally defined as the 40 years preceding the current year. The modern era has been one of
increasing standardisation, platform sharing, and computer-aided design- to reduce costs and development time
and of increasing use of electronics for both engine management and entertainment systems. Some particular
contemporary developments are the proliferation of front- and all-wheel drive, the adoption of the diesel engine,
and the ubiquity of fuel injection. Most modern passenger cars are front-wheel-drive monocoque or uni-body
designs, with transversely mounted engines.
Body styles have changed as well in the modern era. Three types, the hatchback, sedan, and sport utility vehicle,
dominate today's market. [citation needed] All originally emphasized practicality, but have mutated into today's
high-powered luxury crossover SUV, sports wagon[ and two-volume Large MV. The rise of pickup trucks in
the United States and SUVs worldwide has changed the face of motoring with these "trucks" coming to
command more than half of the world automobile market. citation needed] There was also the introduction of
the MPV class (smaller non-commercial passenger minivans), among the first of which were the French
Renault Espace and the Chrysler minivan versions in the United States.
The modern era has also seen rapidly improving fuel efficiency and engine output. The automobile emissions
concerns have been eased with computerised engine management systems.
The financial crisis of 2007-2008 cut almost a third of light vehicle sales from Chrysler, Toyota, Ford, and
Nissan. It also subtracted about a fourth of Honda's sales and about a seventh of sales from General Motors.
Since 2009, China has become the world's largest car manufacturer with production greater than Japan, the
United States, and all of Europe. Besides the increasing car production in Asian and other countries, there has
been growth in transnational corporate groups, with the production of transnational automobiles sharing the
same platforms as well as badge engineering or re-badging to suit different markets and consumer segments.
Since the end of the 20th century, several award competitions for cars and trucks have become widely known,
such as European Car of the Year, Car of the Year Japan, North American Car of the Year, World Car of the
Year, Truck of the Year, and International Car of the Year.

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EVOLUTION OF INDIAN AUTOMOBILE INDUSTRY
In 1953, the government of India and the Indian Private Sector initiated manufacturing processes to help
develop the automobile industry, which had emerged by the 1940s in a nascent form. Between 1970 to the
economic liberalization of 1991, the automobile industry continued to grow at a slow pace due to major
government restrictions. A no. of Indian manufacturers entered the Indian market ultimately leading to the
establishment of Maruti Udyog. A no. of foreign firms initiated joint ventures with Indian Companies.
CAR MANUFACTURERS IN INDIA
Hindustan Motors, Maruti Udyog, Reva Electric Car Company, Daimler Chrysler India Private Limited, Fiat
India Private Limited, Ford India Limited, General Motors India, Honda Siel Cars India Limited, Tota Kirloskar
Motor Limited, Skoda Auto India Private Limited, AUDI AG, BMW, Chevrolet, Force Motors, Nissan Motor
Company limited, Porsche, Rolls-Royce Motor, Son Motors, Tata Motors, Daewoo Motors.
SMALL CAR INDUSTRY IN INDIA
The small car segment is one of the largest car segments in India. Small car in India is defined as a car that has
length between the ranges of 3.8 to 4 meters. It comprises of nearly two-third of the sales in the country. This
car segment has grown by leaps and bounds in the past few years in the wake of growing economy, more
dispensable income and growing richer middle class. The new bread of young executives with fatter pay-checks
has led to more purchasing power. Young India s booming and auto industry is baking under the sun. By the
year 2010, India with major car makers making their foray in India and India will have small cars from General
Motors, VM,Fiat, Ford, Toyota, Honda etc.
Maruti Suzuki is the uncrowned king of the small car industry in India. It has already made India as its
manufacturing and exports hub for its small cars. It also has one of largest product portfolios in India amongst
all the other car makers. It is the largest auto maker in India by sales and has various models like Alto, Wagon-
R, Zen, 800 and Swift. Each car has made its mark in the small car segment with its unique features and price
factor.

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Maruti has made India as its small car manufacturing and export hub. It caters to the overseas demands of
Suzuki models worldwide. Hyundai is the second largest auto manufacturer in India and has also made India as
its manufacturing and export hub. It currently has its manufacturing plant in Sriperumbudur, near Chennai,
with an existing capacity of 6,00,000 units. It is planning to expand its production capacity by nearly another
1,00,000 units. Hyundai has strong sales figures in India and has witnessed more than 40 percent growth in the
first four month of 2008 itself. It has strong contenders for the small car segment like Santro, Getz and i-10.
INDIAN AUTOMOBILE SECTOR: - A BOOMING MARKET
De-licensing in 1991 has put the Indian automobile industry on a new growth track attracting foreign auto
giants to set up their production facilities in the country to take advantage of various benefits it offers. This took
the Indian automobile production from 5.3 million units in 2001-02 to 10.8 million units in 2007-08. The other
reasons attracting global auto manufacturers to India are the country's large middle class population, growing
earning power, strong technological capability and availability of trained manpower at competitive prices.
In 2006-07 the Indian automobile industry provided direct employment to more than 30,000 people exported
auto component worth around US $ 2.87 Billion and contributed 5% to the GDP. Due to this large contribution
of the industry n the national economy, the Indian government lifted the requirement of forging joint ventures
for foreign companies which attracted global to the Indian market to establish their plants, resulting in
heightened automobile production.
The Indian automobile market currently dominated by two-wheeler segment but in future, the demand for
passenger cars and commercial vehicles will increase with industrial development. Also, as India has low
vehicle presence (with passenger car stock of only around 11 per 1,000 population in 2008), it possesses
substantial potential for growth.
MARUTI UDYOG LIMITED (MARUTI SUZUKI INDIA LTD.)
Maruti Suzuki India Limited is a publicly listed automaker in India. It is a leading four-wheeler automobile
manufacturer in South Asia. Suzuki Motor Corporation of Japan holds a majority stake in the company. It was
the first automobile company in India to mass produce and sell more than million cars. It is largely credited for
having brought in on automobile evolution to India. It is the market leader in India. On 17th Sep, 2007 Maruti
Udyog was renamed to Maruti Suzuki India Limited. The Company's headquarters remain in Gurgaon near
Delhi. Maruti Udyog Ltd. is the first automobile company in the world to be honored with an ISO 9000:2000
certificate.

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The company has a joint venture with Suzuki Motor Corporation of Japan. It is said that company takes only 14
hours to make a car. Few of the popular models of MUL are Maruti-800, Alto, Baleno, Swift, Wagon-R,
Esteem, A-Star, Versa, SX4 and Zen. MUL established in 1981, had a prime objective to meet the growing
demand of a personal mode of transport, which is caused due to lack of efficient public transport system. The
incorporation of the company was through an Act of Parliament. MUL is the leading 4 wheelers manufacturer
in India.
A License and a Joint Venture agreement was signed between Govt. of India and Suzuki Motor Company (now
Suzuki Motor Corporation of Japan) in Oct 1982.
Suzuki Motor Company of Japan was chosen from seven another prospective partners worldwide. Suzuki was
not only to its undisputed leadership in small cars but also its commitments to actively bring to MUL
contemporary technology and Japanese management practices (that had catapulted Japan over USA to the status
of the top auto manufacturing country in the world.
The Objectives of MUL (MSIL) then are as cited below:
 Modernization of the Indian Automobile Industry

 Production of Fuel-efficient vehicles to conserve scarce resources.
 Production of large no. of motor vehicles which was necessary for economic growth.
The production/R&D is spread across 297 acres with 3 fully integrated production
Facilities. The MUL plant has already rolled out 4.3 million vehicles. The fact says that, on an average 2
vehicles roll out of the factory in every single minute. Maruti Suzuki fits every car buyer's budget and any
dream.

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EVOLUTION OF MARUTI UDYOG LTD (MSIL)
Maruti Udyog was basically formed to cater the problems of insufficient public transport capability of the
Government. During the early 80's, India was facing tremendous problems regarding public transport. And there
was no possible solution to curb this problem. The Indian markets were yet to be opened globalization, hence,
there were very few car manufacturers in the country. However, the need for an alternative was becoming very
necessary, when the Government of India through an Act of Parliament formed Maruti Udyog Ltd. in 1981.
After this, a joint venture agreement was signed by the Government of India and Suzuki Motor Company (now
Suzuki Motor Corporation of Japan) in October 1982.There are almost 307 showrooms across 189 cities. They
are managed by almost 6000 trained personnel. MUL has always concerned about the quality of their services
and products. Accordingly, it has been seen that Maruti owners experience very minimum problems as
compared to other car manufactures of India. Another important aspect of Maruti India is that they provide all
kinds of services and products under one roof.Maruti 800 one of the first city cars, is the largest selling car in
India. Recently Maruti 800 went through some minor face lifts to maintain its dominance in the small segment
cars. Maruti Alto is India's most popular and fuel efficient car.
The maintenance cost of Maruti Vehicles is also low as compared to other manufactures. This is one of the
major USP's of MUL. Even technologically they have attained a benchmark. They have introduced the superior
16*4 Hypertech engines in almost all their models. This technology helps in increasing engine delivery. They
have also introduced Electronic Power Steering in some of their models as well. MUL has here fully integrated
production facilities with a range of 10 models in 50 variants. Their overall sales growth is of 15.8%, which also
makes easier for the Indian to buy cars.
Other successful small and big Maruti Car Models that have ruled the hearts of million of Indians are Maruti
baleno, Maruti Esteem, Maruti Gypsy, Maruti Swift, Maruti Versa, Maruti Wagon-, Maruti Zen, Zen Estilo and
A-star. Maruti was born as a government company with Suzuki as a minor partner to make a people's car for
middle class India over the years, product range of Maruti has widened, ownership has changed hands and the
customer has evolved. MUL's parent company Suzuki Motor Corporation has been a global leader in the mini
and compact cars for three decades.

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COMPANY PROFILE
INDUS MOTORS
Indus Motor Company Private Limited, (trade name, Indus Motors) is the top ranking Maruti Dealer in India.
The Company having its registered office at Indus House, Chakorathukulam, Calicut and Corporate Office at
Thevara, Kochi was incorporated on 11th July, 1984.
The founders of the company were prominent NRI's Dr. P A Ibrahim Haji &Mr TM Nair.
Mr T M Nair arrived in Dubai in 1959 and later he reached out to the well-known company Nissan in Japan and
secured the agency representation of Datsun cars in UAE foreseeing the boom in oil industry. It was the first
time that Japanese cars were introduced in the Middle East. Since then he popularly had known as "Datsun
Nair'.
As the association with Japanese authorities was progressing in the 80s, he became aware that the automobile
giant Suzuki was in talks with Sanjay Gandhi for a collaboration of a new low-cost Indo-Japanese model. Mr
Nair was very excited with the prospect and knew well how the success in the GCC model could easily repeat
itself in India. Hence he mooted the idea of launching an automobile company in India. He founded Indus
Motor Company in Calicut, Kerala, partnering with his longtime friend Haji PA Ibrahim.
Dr P A Ibrahim Haji started his entrepreneurial journey in the UAE in 1974 with his own garments business
before branching out into cosmetics. In 1976, he expanded it to the trading business, starting Century Trading
Company and later into jewellery business.
Dr. P . A. Ibrahim Haji again broadened his horizon of achievements further to education field in 1999 by
setting up the PACE Education Group. He was also founder and vice-chairman of the Indus Motor Company.
In the year 1993 Mr P V Abdul Wahab (Rajya Sabha MP) was taken over as the Director and a
shareholder. Management was later taken over by Mr P V Abdul Wahab in the year 1998.
Now Indus Motors literally reigns as the most sought after Maruti dealer in India with significant and
competitive track records and achievements.
Indus Motors has one of the most prominent showrooms in Thevara, Kochi. We invite you to the elegantly
designed showroom at the prime location in Kochi, to check out the latest models of Maruti car and book one.
Our team of professionals make it convenient for you to check out and choose the right model for you. They
will be there at every step for any help you want, regarding the purchase of the car.

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Indus has about hundred showrooms located across Kerala. We have multiple showrooms situated at the prime
spots in each city. Serving customers with honesty and dedication, for more than thirty years, we are the top
Maruti car dealership in Kerala. Indus Motors also has showrooms in the prominent cities in South India.
Indus Motors Maruti showroom in Thevara has an exclusive collection of all Maruti car models. You can own
any model of your choice without much waiting. The team at the showroom will guide and assist you
concerning everything related to buying your dream car.
Our Maruti car showrooms in Thevara and other parts of Kerala have handpicked professional staff to support
our esteemed clientele. You can discuss everything concerning the purchase of the car with them. We have
exclusively formulated financing options too. Therefore, you can meet the fund requirements, in case you lack
enough funds to own the car.
Indus Maruti showroom in Thevara ensures that nothing prevents you from realizing your four-wheeler dream
KEY FINANCIAL HIGHLIGHTS
Annual growth percentages for latest two years in local currency INR. Absolute financial data is included in the
purchased report.
Net sales revenue -11.21% ▼
Total operating revenue -16.54%▼
Operating profit (BIT) -71.5%▼
EBITDA -42.01%▼
Net Profit (Loss) for the Period N/A
Total assets -3.06%▼
Total equity -27.09%▼
Operating Profit Margin (ROS) -1.51%▼
Net Profit Margin N/A
Return on Equity (ROE) N/A
Debt to Equity Ratio -106.3%▼
Quick Ratio -0.84%▼
Cash Ratio -0.04%▼

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Indus Motor Company Limited (IMC) is a joint venture between certain companies of House of Habib of
Pakistan, Toyota Motor Corporation (TMC) and Toyota Tsusho Corporation (TTC) of Japan. Incorporated in
1989, the Company manufactures and markets Toyota brand vehicles in Pakistan. These include several variants
of the flagship 'Corolla' and "Yaris" in the passenger car segment, "Hilux" in the light commercial vehicle
segment and "Fortuner" in Sports Utility Vehicle segment.
IMC's manufacturing facility and offices are located at a 109.5 acres site in Port Qasim, Karachi. The product is
delivered to end customers nationwide through a strong network of 50 independent 3$ Dealerships spread across
the country. Over 31 years, since inception, IMC has sold more than 961,500 CBU/CKD vehicles.
It has also demonstrated impressive growth in terms of volumetric increase. From a modest beginning of 20
vehicles per day production in 1993, daily production capacity of the Company has now increased to 288 (with
overtime) units per day. This has been made possible through the development of human talent embracing the
'Toyota Way' of quality and lean manufacturing.
IMC has made large scale investments in enhancing its own capacity and in meeting customer requirements for
new products. Corolla is, today, the largest selling automotive brand model in Pakistan. This country is the
highest Corolla-selling nation in the Asia-Pacific region and also has the distinction of being # 1 in Toyota's
Asian market.
The Company has a workforce of 2,943 persons at year end. It invests heavily in training the team members
and management employees and creating a culture of high performing and empowered teams who work
seamlessly across the various processes in search of quality and continuous improvement.
IMC employees are encouraged to pursue high standards of business ethics and safety according to the core
values of the Company; they communicate candidly by giving bad news first and extend respect to people.
Employees rate IMC high on work environment and level of job satisfaction as per the bi-annual TMC morale
survey. IMC has played a major role in the development of the entire value chain of the local auto industry. It is
also proud to have contributed in poverty alleviation at the grass root level by nurturing localization. This, in
turn, has directly created thousands of job opportunities and transferred technology to 52 vendors supplying
parts. The Company is also a major tax payer and significant contributor to the Government's exchequer

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COMPANY PROFILE
ORIGIN OF INDUS MOTORS
Mr. PV Abdhul Wahab is a person who rose from humble background and now is a dynamic entrepreneur
heading the PEEVES and bridge way group of companies.
Today, Mr. Wahab's business portfolio includes conglomerate spread across India and the Middle East. Besides
his business interests, Mr. Wahab is associated with various cultural and social organizations. He is member of
Rajiv Gandhi International Sports Foundation, Malabar Development Board, Malabar Chamber of commerce
and chairman, Malabar Airport Development Action Committee.
HISTORY OF INDUS MOTORS
Indus motors have the first dealership in Calicut in 1986, second in Cochin in 1991, third in Trivandrum in
1994, fourth in Muvattupuzha in 2005, fifth in Royapetta, Chennai in 2007, sixth in Kattupakkam, Chennai in
2008, they have 6 dealerships, 30 workshops, 4 true value outlets, 2 driving schools, and they are the no.1 dealer
in India, with sales record of 28447 cars. Indus motors deliver one Maruthi car every 18 minutes. They deal
with variety of cars. Some of them are,
 Maruti 800
 Zen Estilo
 Wagon R
 Swift
 Omni cargo
 Dzire
 Maruthi Suzuki SX4
 Maruthi gypsy
 Grand Vitara XL-7
 Versa
 Brezza
 Alto 800
 Ertiga
 Baleno
 celerio

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Some of the services provided by Indus motors are,
 Buying a new car

 Buying a pre-owned car
 Selling used car
 Service booking
 Renew insurance
 Driving school
 Customer complaints
 Sales complaints
 Service complaints
VISION AND MISSION
To be the most respected and successful enterprise, delight customers with a wide range of products and
solutions in the automobile industry with the best people and the best technology.
 The most respected

 The most successful
 Delighting customers
 Wide range of products
 The best people
 The best
IMC's Mission is reflected in the company’s slogan
Action, Commitments and Teamwork to become #1 in Pakistan

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CORE VALUES:
 World class production quality

 Achieving the ultimate goal of complete customer satisfaction
 Being seen as the best employer
 Fostering the spirit of teamwork
 Inculcating ethical and honest practices
AWARDS
 National Consumer Choice Award 2005, 2006, 2007, 2008, 2012, 2014, 2015, 2016, Toyota Corolla
2017 and Toyota Revo 2017
 National Consumer Choice Award for "CEO of the year" 2017
 NFEH's Environment Excellence Award 2004, 2005, 2006, 2008, 2012, 2017.
 MAP's Corporate Excellence Awards in Automobile & Parts category - 2010. 2014, 2015 and 2016
(Hat trick)
 Pakistan Advertiser's Society Award for Media Innovation and Automotive & Transportation - 2015
 UN Global Compact's Business Excellence Award 2013-14, 2014-15
 Pak Wheels Awards for Toyota a) Car of the Year, b) Most Popular Car Brand and c) Best Resale Car -
2015
 Management Association of Pakistan's (MAP) Corporate Excellence Awards in Overall
Industrial Category - 2012 and 2013
 MAP's Corporate Excellence Certificates - 2004, 2005, 2006, 2007 and 2009
 Asians CS Awards 2007
PRICING STRATEGY
Companies do not set single price. It normally set a pricing structure, that covers different items in line. This
pricing structure changes overtime because products move through their life cycle. The company adjust product
price so as to reflect the changing cost and demand.
 Pricing as an innovative product

 Pricing as an imitative product
HIGH[H] MEDIUM[M] LOW[L]

Premium strategy Penetration strategy Super value strategy
Over charging strategy Lowing strategy

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AFTER SALES SERVICE

The firm mainly sells their products through various ways. The main way/technique used by the organization is
by catching their customers through tale-marketing. In this way they make the contact with customer within a
small time than direct marketing.
Services provided to customers after sales:
Total seven services are provided to customers after the delivery of the product in which: In 1 three services
customers will not have to make payment for services rendered by firm for oil change. Remaining four services
customer will have to pay a very small amount as their services charge.
Other services rendered to customers are:
 Washing and cleaning

 Waxing up (polishing)
 Engine oil
 Overall-check up
And problems related to product will be solved
VALUES AND BELIEFS

The enduring belief that our corporate destiny is inextricably those of our employees and customers carries us
towards a profit graph business model.
Other Ways of Promoting Their Services
 By putting up paper adds

 Marketing the product through tele-marketing
 Introducing the product through Medias, social networks, news papers, and Also through company
networking sites.
 By calling and asking the customers about the reference of the product like: - it's present condition, its
services, maintenance, its mileage....Etc.
 A By continuously showing the product in order to get more attention and
 Greater promotion.
 By putting up flex boards showing the newly launched bike with greater
 Mileage and power.
 By providing more offers the customers, so that customers will get maximum benefit from purchasing
product

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Following are certain adopted by organization in order to move their product in a successful way:
 Catching-up new customers with their present customer.

 Asking the customer about the status and condition i.e., and make them damage has occurred or not.
 Collecting maximum references from customers and make them aware about the new product.
 By getting maximum feedback and references about their new product, it can Be either positive
or negative.
 They improve their marketing/sales by adding advanced features for the product.
 Providing maximum benefit for customers i.e., sales benefit, service benefit,
 Reducing down payments.
WARRANTY SERVICES PROVIDED BY INDUS MOTORS:

1) Battery Warranty.
2) Media Systems warranty.
3) Service warranty.
4) Indus Motors also provide Warranty for Car Horn.

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CHAPTER 3
REVIEW OF
LITERATURE

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Chrish J. Berger and Donald P. schwab (1989) studied on pay incentives and pay satisfaction. The study
consists of two types or nay system ie. houriy based and performance based. The payment on latter one was
delivered on two ways ic. a continuous schedule and variable ratio schedule. Their research findings shows
incentives pay does not have direct impact on pay satisfaction and even the variable ratio does not show
negative impact on satisfaction. The study is limited to 77 part time employees.
Entwistle (1987) propounded that rewarded employees have ahigh degree of motivation and it directly impacts
their performances.
Lawler (1985) claimed that rewards leads to increased employees satisfaction and will have a direct impact on
employee's performance.
Hong (1995) proposed that rewards might motivate employees only when they yield rewards due to their
sincere and hard work.
H. Barum et al. (1995) study on incentives and provider payment methods, has realized that there is no single
optimal method for paying providers and therefore desirability of a specific approach depends on the economic,
social and institutional context of a particular setting.
Lazear (2000) confirmed that when salary increases, most of the employees diligently dispose of their duties.
Fairbank and Williams (2001) suggested that to stimulate an employee's creativity.
Schaufeli (2002) found out the need for the rewards in an organization so as to avoid burnouts the situation in
which employees tend to be not satisfied; will have negative outlooks and a little dedication. Well performed
employees should be incentivized with monetary compensation, which is an easier and the best way to
encourage employees so as to effective and efficient managers should use rewards.
Bates (2003) indicated that merit pay could be made as an attractive factor provided the merit pay rise should be
not less than seven percent of the core pay so that it can be perceived as a motivating factor.
Perry, Mesch, and Paarlberg (2006) found that in public sector organizations, financial incentives for
individuals is not that much effective; however, they stated that it depends on the organizational conditions.
Every individual employee may not consider merit pay as a motivating.
Kube, Marechal, and Puppe (2006) confirmed that monetary incentives are effective during the short-term
period and noting the long-term period whereas non-monetary incentives give significant and consistent
satisfaction.

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Bokorney (2007) confirmed that salary plays cculd be designated as an appreciating factor for an individual.
Langton and Robbins (2007) emphasized the fact that an individual can be motivated only when there is a
difference in way between a good performer and an average performer. Salary is one of the determining factors
in job selection.
Dale S. Rose et al. (April 2007) Study on a penny for your thoughts: Monetary Incentives Improve Response
Rates for company sponsored employee surveys. The findings state that there was a remarkably improvement in
employees response with increased incentives. It concludes that prepaid monetary incentives in employees
survey can reduced the cost of survey research.
Sonawane (2008) stated that it is not only important for their cognizing good job performances through rewards
but also should be encouraged through providing proper feedback.
Lemieux, MacLeod, and Parent (2009) performance pay based on a good performance measure can increase
qualitative productivity.
Muralidharan and Sundararaman (2009) claimed that the incentive payment is directly related to the
employees' output, which accelerates their performances.
Danish and Usman (2010) opined that proper usage of rewards as a tool in an organization would produce a
conducive environment so as the employees gets motivated and rise to the occasion.
Pardupa Martin (2010) study on monetary and Nonmonetary incentive measures: which work better in the
Czech betting firm reveals that there is a positive effect of the introduction of the monetary incentives than
nonmonetary incentives.
Marwan AINsour (2012) Organizational study on relationship between incentives and performance for
employees in the Jordanian university. In this milestone study, it is found that financial incentives ranked in first
place while moral incentives ranked in second place. His research findings makes it clear that there is a high
level of organizational performance, customer satisfaction ranked in first place, internal business process in the
second place followed by learning and growth. It concludes that there is a powerful relationship between
financial incentives and moral incentives and o organizational performance as well as between financial and
moral incentives and internal business process and customer satisfaction and in doing so, suggest that there is an
effect of moral incentives on learning and growth but no relationship between financial incentives and learning
and growth

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Sajuyigbe, Olaoye, and Adeyemi (2013) stated that rewards are basic conceptual elements in improving
employee performances.
Dr. Ashraf and Dr. Md.shabieb (2014) Financial incentives. , the role of the incentives and reward system in
enhancing employees performance for the employees of the Jordanian tourism and travel institutions found that
the significant impacts on employee performance relay on four factors i.e., moral incentives, rewards, efficiency
of reward system and promotions. They conclude that most significant impacts on the employee performance
are rewards system while promotion ranked in the last place.
Garba Bala Bello et al. (2017) Performance in Selected Public Schools in Kano State, Nigeria. Study on
Monetary Rewards and Teacher The study considered three dimensions of monetary reward i.e. salary,
allowances, benefit to examine the relationship between monetary rewards and teaches performance in selected
public schools in Kano state, Nigeria. The study shows that teacher preferred allowances as top priority because
it accounts for more variation especially in teacher performance. It also concludes that monetary rewards
significantly affect teacher's performance.
Berger and Berger (2015) argued that employees prefer to have monetary incentives in return to their
successful accomplishments.
Md. Nurun Nabi et al. (2017) A case study of Karmasangsthan Bank Limited, n impact of motivation on
employee performances, describes that for any organization to run smoothly and without interruption, there is a
need of good relationship with employees and top management and among employees. The factors considered
in the study are extrinsic motivation, job enrichment and performance appraisal, Relationships and security,
authority to make decisions; growth opportunity and prospects were also considered. It concludes that if
employees are positively motivated, it increases performance of employee. The researchers failed to mention the
employee's priority of motivation factor which is considered in the study.
Buchbinder and Shanks (2017) differed that monetary incentives motivate only to a certain extent.

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CHAPTER 4
RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY
A research methodology or involves specific techniques that are adopted in research process to collect, assemble
and evaluate data. It defines those tools that are used to gather relevant information in a specific research study.
Surveys, questionnaires and interviews are the common tools of research. Methodology is the philosophical
framework within which the research is conducted or the foundation upon which the research is based.
According to the Oxford Dictionaries, research is defined as the systematic investigation into and study of
materials and sources in order to establish facts and reach new conclusions OR to investigate systematically.
A research methodology or involves specific techniques that are adopted in research process to collect, assemble
and evaluate data. It defines those tools that are used to gather relevant information in a specific research study.
Surveys, questionnaires and interviews are the common tools of research
RESEARCH
Research is common balance refer to a research for knowledge in fact research is act of scientific
investigation. Research can be defined as "a scientific and systematic research for patient in front on a specific
topic".
Research comprises definition and redefinition problems, formulations hypothesis and suggested solutions,
collection and at least carefully listing the conclusion to determine whether they fit in the formatting hypothesis.
OBJECTIVES OF RESEARCH
 To familiarity with the phenomenon or to achieve new success in to it
 To portrait accurately the characteristics of a particular individual situation of a group
 To determine the frequency with which something occurs are with which It Is associated with something
else
 To test the hypothesis of a casual relationship between variables.
RESEARCH METHODS
Research methods are the strategies, processes or techniques utilized in the collection of data or evidence for
analysis in order to uncover new information or create better understanding of a topic.
There are different types of research methods which use different tools for data collections.

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Qualitative Research gathers data about lived experiences, emotions or behaviours. and the meanings
individuals attach to them. It assists in enabling researchers to gain a better understanding of complex concepts,
social interactions or cultural phenomena. This type of research is useful in the exploration of how or why
things have occurred. interpreting events and describing actions.
Quantitative Research gathers numerical data which can be ranked, measured or categorised through
statistical analysis. It assists with uncovering patterns or relationships, and for making generalisations. This type
of research is useful for finding out how many, how much, how often, or to what extent.
RESEARCH DESIGN
The research design refers to the overall strategy that you choose to integrate the different components of the
study in a coherent and logical way, thereby, ensuring you will effectively address the research problem; it
constitutes the blueprint for the collection, measurement, and analysis of data.
Descriptive Research Design
In this study the researcher used the Descriptive Design. In Descriptive Research Design, the scholar
explains/describes the situation or case in depth in their research materials. This type of research design is
purely on a theoretical basis where the individual collects data, analyses, prepares and then presents it in an
understandable manner. It is the most generalised form of research design.
SAMPLE SIZE
The sample size is taken here is a set of 100 employees of Indus Motors. It will be easier to study a
sample rather than a population and then the result can be generalized.
SOURCES OF DATA
Data is collected in two types.
1) Primary data
2) Secondary data
Primary data
The primary data are those data which are collected a fresh and first time and happen to the original in character
the primary data to be collected for the study are, Questionnaire: a set of questionnaire prepared for the cost
collecting different information related to the predetermined objectives the questionnaire prepared is in to forms
targeted toward the doctors and chemist. The format of questionnaire is structured and non disguised.
Direct personal interview; under this method of collecting data there is face to face contact with the person
whom the information is obtained the data collected are from the respective selected doctor and chemist and
people visited regularly the pattern used this structure and in direct interview.

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Secondary data
Secondary data means the data that are already available they refer the data which have already been collected
and analysed by someone else. When the researcher utilizes secondary data then he has to look into various
sources from where he can obtained then in this case certainly not confronted with the problem that are usually
associate with the collection of original data. Usually public data’s are available in,
 Books, magazines and newspapers

 Data provided by the company.
 Internet.
TOOL FOR ANALYSIS

Tool of analysis used for the study is.
• Simple percentage analysis
The percentage is used making comparison between two or more series of data. It is used to classify the opinion
of the respondent for different factors. The following are the formula of percentage analysis,
Percentage of respondent = Number of Respondents/Sample Size × 100.

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CHAPTER 5
DATA ANALYSIS AND INTERPRETATION

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WELFARE FACILITIES
Rating scale No of respondents Percentage

Strongly Disagree 1 1%
Disagree 1 1%
Neutral 1 1%
Agree 83 83%
Strongly Agree 14 14%
TOTAL 100 100%
Source: Primary Data
Table 5.1
90%
80%
70%
60%
50%
40%
30%
20%
10% Strongly Disagree Disagree Neutral Agree Strongly Agree
0%
Figure 5.1
Inference: The above table shows that 83% of the respondents agree that employee welfare facilities provided
by your organization are helpful in getting best out of the employees and 14% of the respondents strongly agree
that employee welfare facilities provided by your organization are helpful in getting best out of the employees.

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EMPLOYEES PERFORMANCE

Disagree 1 1%
Neutral 3 3%
Agree 38 38%
TOTAL 100 100%
Table 5.2
60%
50%
40%
30%
20%
10%
0%
Strongly Disagree Disagree Neutral Agree strongly Agree
Figure 5.2
Inference: The above table shows that 57% of the respondents strongly agree that employees perform better
when the organization provides them with fringe benefits and 38% of the respondents agree that employees
perform better when the organization provides them with fringe benefits.

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OPINION ABOUT PERFORMNCE IN TERMS OF RECEIVING BONUS

FREQUENTLY

Disagree 1 1%
Neutral 1 1%
Agree 40 40%
TOTAL 100 100%
Table 5.3
60%
50%
40%
30%
20%
10%
0%
Strongly Disagree Disagree Neutral Agree Strongly Agree
Figure 5.3
Inference: The above table shows that 57% of the respondents strongly agree employees at the organization is
affected positively when they get the bonus frequently and 40% of the respondents agree that employees at the
organization is affected positively when they get the bonus.

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OPINION ABOUT PERFORMANCE BASED INCENTIVES

Disagree 3 3%
Neutral 5 5%
Agree 27 27%
TOTAL 100 100%
Table 5.4
70%
60%
50%
40%
30%
20%
10%
0%
Figure 5.4
Inference: The above table shows that 63% of the respondents strongly agree Performance based cash
incentives inspire the employees at your organization to perform efficiently and 27% of the respondents agree
that Performance based cash incentives inspire the employees at your organization to perform efficiently.

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EXPERIENCE IN RECEIVING BONUS REWARDS
Rating No of Percentage
scale respondents
Yes 77 77%
No 23 23%
TOTAL 100 100%
Table 5.5
Figure 5.5
Inference: The above table shows that 63% of the respondents strongly agree Performance based cash
incentives inspire the employees at your organization to perform efficiently and 27% of the respondents agree
that Performance based cash incentives inspire the employees at your organization to perform efficiently.

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OPINION ABOUT BONUS REWARD

Monetary compensation 71 71%
Recognition from your supervisor 21 21%
Promotion 5 5%
Other 3 3%
TOTAL 10 100%
0
Table 5.6
80%
70%
60%
50%
40%
30%
20%
10%
0% Recognition from Promotion Other

your supervisor
Figure 5.6
Inference: The above table shows that 71% of the respondent’s states that they received monetary
compensation at their current job, 21% of the respondents states that they received recognition from their
supervisor at their current job, 5% of the respondents states that they received promotion at their current job,
and 3% of the respondents states that they received other rewards.

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OPINION ABOUT HOW FAIR ENOUGH THE COMPENSATION

Highly Dissatisfied 5 5%
Dissatisfied 47 47%
Neutral 40 40%
Satisfied 7 7%
Highly satisfied 1 1%
TOTAL 100 100%
Table 5.7
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
Highly Dissatisfied Dissatified Neutral Satisfied Highly satisfied
0%
Figure 5.7
Inference: The above table shows that 47% of the respondents are dissatisfied with the employee
compensation, 40% of the respondents are having neutral state of being with the employee compensation, 5%
of the respondents are dissatisfied with the employee compensation and 7% of the respondents are satisfied
with the employee compensation. Majority of the employees the compensation is not fair enough for the work
they perform.

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SIMILARITY OF PAY WITH OTHERS

Yes 41 41%
No 59 59%
TOTAL 100 100%
Table 5.8
Figure 5.8
Inference: The above table shows that 59% of the respondents states they doesn't believe that your pay is
competitive with the similar positions and other companies pay.

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SATISFACTION WITH THE COMPENSATION

Yes 37 37%
No 63 63%
TOTAL 100 100%
Table 5.9
Figure 5.9
Inference: The above table shows that majority of the respondents states that the compensation package (basic
salary, incentives, bonus and other financial benefits) is not enough to fulfil the needs and wants.

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OPINION ABOUT REWARDS ENCOURAGED TOWARDS ORGANIZATIONAL

GOALS
Yes 69 69%
No 31 31%
TOTAL 100 100%
Table 5.10
Table 5.10
Inference: The above table shows that majority of the respondents states that the rewards encourage the
employees towards organizational goals and 31% of the respondents states that the rewards doesn't encourage
the employees towards organizational goals.

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SIGNIFICANCE OF REWARDS

Very significant 38 38%
Fairly Significant 28 28%
Neutral 23 23%
Fairly Insignificant 6 6%
Very insignificant 5 5%
TOTAL 100 100%
Table 5.11
40%
35%
30%
25%
20%
15%
10%
5%
0%
Very significant Very significant Neutral Fairly InsignificantVery insignificant
Figure 5.11
Inference: The above table shows that 38% of the respondents state that total rewards are very significant, 28%
of the respondents state that total rewards are fairly significant, 23% of the respondents state that total rewards
have a neutral stand, 6% of the respondents state that total rewards are fairly insignificant and 5% of the
respondents state that total rewards are very insignificant

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PREFERENCE OF MONETARY REWARDS AND NON-MONETARY REWARDS

Completely Disagree 6 6%
Disagree 2 2%
Neutral 73 73%
Agree 11 11%
Completely Agree 8 8%
TOTAL 100 100%
Table 5.12
80%
70%
60%
50%
40%
30%
20%
10%
0%
Completely Disagree Disagree Neutral Agree Completely Agree
Figure 5.12
Inference: The above table shows that 73% of the respondents they have a neutral stand they prefer monetary
rewards instead of non-monetary rewards, 11% of the respondents agree to prefer monetary rewards instead of
non-monetary rewards and 8% of the respondents completely agree to prefer monetary rewards instead of non-
monetary rewards and 6% of the respondents completely disagree to prefer monetary rewards instead of non-
monetary rewards and 2% of the respondents disagree to prefer monetary rewards instead of non-monetary
rewards

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OPINION ABOUT THE ALLOCATION OF REWARDS
Yes 45 45%
No 55 55%
TOTAL 100 100%
Table 5.13
Figure 5.13
Inference: The above table shows that 55% of the respondents state that the procedure of how the rewards is
allocated is not fair and 45% of the respondents states that the procedure of how the rewards is allocated is fair.

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BELIEVING INCENTIVES AFFECT MOTIVATION
Yes 67 67%
No 23 23%
TOTAL 100 100%
Source: Primary data
Table 5.14
Figure 5.14
Inference: The above table shows that majority of the respondents states that they believe that incentives affect
motivation of the employees.

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OPINION ABOUT REWARD SYSTEM ENCOURAGED PERFORMANCE

Disagree 1 1%
Neutral 5 5%
Agree 30 30%
TOTAL 100 100%
Table 5.15
70%
60%
50%
40%
30%
20%
10%
0%
Figure 5.15
Inference: The above table shows that 63% of the respondents strongly agree reward systems encourage job
performance improvement and 30% of the respondents agree with reward systems encourage job performance
improvement.

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OPINION ABOUT MONETARY REWARD INCREASE THIS MORALE

Disagree 62 62%
Neutral 4 5%
Agree 1 1%
Strongly Agree 1 1%
TOTAL 100 100%
Table 5.16
70%
60%
50%
40%
30%
20%
10%
0%
Figure 5.16
Inference: The above table shows that 32% of the respondents strongly disagree that monetary reward increases
the morale to put extra effort in task assigned and 62% of the respondents disagree that monetary reward
increases the morale to put extra effort in task assigned

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OPINION ABOUT CRITERIA FOR MONETARY AWARD

Disagree 7 7%
Neutral 11 11%
Agree 67 67%
TOTAL 100 100%
Table 5.17
80%
70%
60%
50%
40%
30%
20%
10%
0%
Figure 5.17
Inference: The above table shows that 67% of the respondents agree that there is clear criteria for monetary
reward criteria in the organization, 12% of the respondents strongly agree that there is clear criteria for
monetary reward criteria in the organization and 11% of the respondents has neutral stand in stating that there
is clear criteria for monetary reward criteria in the organization.

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OPINION ABOUT GETTING AWARD FROM MANAGER

Disagree 21 21%
Neutral 16 16%
Agree 56 56%
Strongly Agree 4 4%
TOTAL 100 100%
Table 5.18
60%
50%
40%
30%
20%
10%
0%
Figure 6.18
Inference: The above table shows that 56% of the respondents agree that they are rewarded by the manager for
putting extra effort in their work, 21% of the respondents disagree that they are rewarded by the manager for
putting extra effort in their work, 16% of the respondents has neutral stand in stating that they are rewarded by
the manager for putting extra effort in their work.

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OPINION ABOUT REWARDED PERIODICALLY FOR THE PERFORMANCE

Disagree 56 56%
Neutral 16 16%
Agree 5 5%
Strongly Agree 2 2%
TOTAL 100 100%
Table 6.19
60%
50%
40%
30%
20%
10%
0%
Figure 6.19
Inference: The above table shows that 56% of the respondents disagree that they are rewarded periodically for
their performance, 21% of the respondents strongly disagree that they are rewarded periodically for their
performance and 16% of the respondents has neutral stand in stating that they are rewarded periodically for their
performance.

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OPINIONS ABOUT PROVISION BONUS

Disagree 1 1%
Neutral 4 4%
Agree 82 82%
TOTAL 100 100%
Table 5.20
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Figure 5.20
Inference: The above table shows that majority of the respondents states that their employees at this branch are
given bonuses at the end of the year by the organization

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OPINIONS ABOUT PROFIT SHARING

Disagree 7 7%
Neutral 11 11%
Agree 67 67%
TOTAL 100 100%
Table 5.21
80%
70%
60%
50%
40%
30%
20%
10%
0%
Figure 5.21
Inference: The above table shows that 67% of the respondents agree that Profit sharing is one of the factors that
has improved employees job performance, 12% of the respondents strongly agree that Profit sharing is one of
the factors that has improved employees job performance and 11% of the respondents has neutral stand in
stating that Profit sharing is one of the factors that has improved employees job performance.

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OPINION ABOUT DECREASE IN MONETARY INCENTIVES

Disagree 3 3%
Neutral 8 8%
Agree 70 70%
TOTAL 100 100%
Table 5.22
80%
70%
70%
60%
50%
40%
30%
20%
14%
10% 8%
5%
3%
0%
Figure 5.22
Inference: The above table shows that 70% of the respondents states that they agree that decrease in the
monetary incentive would lead to dissatisfaction of the employees in their work and 14% of the respondents
states that they strongly agree that decrease in the monetary incentive would lead to dissatisfaction of the
employees in their work.

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OPINION ABOUT FINANCIAL MOTIVATION

Disagree 1 1%
Neutral 4 4%
Agree 82 82%
TOTAL 100 100%
Table 5.23
90%
82%
80%
70%
60%
50%
40%
30%
20%
12%
10%
4%
1% 1%
0%
Figure 5.23
Inference: The above table shows that majority of the respondents states that Financial motivation comes ahead
of non - financial motivation in terms of job satisfaction.

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MONETARY INCENTIVES
SATISFACTION LEVEL IF SALARY WAS ONLY FORM OF REWARD

Disagree 82 82%
Neutral 4 4%
Agree 1 1%
Strongly Agree 1 1%
TOTAL 100 100%
Table 5.24
90%
82%
80%
70%
60%
50%
40%
30%
20%
12%
10%
4%
1% 1%
0%
Figure 5.24
Inference: The above table shows that majority of the respondents states that they disagree that would never be
satisfied if their salary was my only form of reward in the workplace.

60
MONETARY INCENTIVES
OPINION ABOUT FAIR AND ADEQUATE INCENTIVES ON RETIREMENT

Disagree 30 30%
Neutral 4 4%
Agree 50 50%
Strongly Agree 6 6%
TOTAL 100 100%
Table 5.25
60%
50%
50%
40%
30%
30%
20%
10%
10%
6%
4%
0%
Figure 5.25
Inference: The above table shows that 50% of the respondent’s states that they agree that the organization
provides fair and adequate incentives on retirement. 30% of the respondents disagree the organization provides
fair and adequate incentives on retirement. 10% of the respondents strongly disagree the organization provides
fair and adequate incentives on retirement.

61
MONETARY INCENTIVES
CHAPTER 6
FINDINGS &SUGGESTIONS

62
MONETARY INCENTIVES
FINDINGS
 From the study it is found that employee welfare facilities provided by your organization are helpful in
getting best out of the employees.
 Employees perform better when the organization provides them with fringe benefits. An employee at the
organization is affected positively when they get the bonus frequently.
 Performance based cash incentives inspire the employees at your organization to perform efficiently.
The company provides bonus rewards at their current job.
 The study reveals that the monetary incentive has a direct impact on employee
motivationi.e.an attractive financial incentive will boost most of the employee’s' motivation to
work hard.
 Among the motivation stimuli factors, Feel motivated at work' ranked first followed by the Attractive
financial incentive will boost motivation to work hard and Money motivates higher performance.’
Among the monetary incentive factors, 'Importance of monetary incentives ranked first followed by
the 'Monetary incentives are not timely, and 'Monetary incentive offered matches the work effort.
 Among the other beneficial factors 'Financial incentives encourage employees towards work
productivity? ranked first followed by the Financial incentive increases employees to get job satisfaction'
and 'Monetary incentives helps to develop employee attitude toward organizational success
 Profit sharing is considered as one of the factors that has improved employees job performance. In many
contexts financial motivation comes ahead of non - financial motivation in terms of job satisfaction. The
organization provides fair and adequate incentives during the time of retirement

63
MONETARY INCENTIVES
SUGGESTIONS
 Financial incentives can be an extremely beneficial motivator in the workplace. Companies that provide
some type of monetary reward for exceptional work performance.
 Employee bonuses are one of the most common types of financial incentives that companies use as
regular reward incentives and as a way to show employees appreciation.
 Employee referral programs are a type of financial incentive that encourages employees to locate
potential candidates to work for their organizations. When their organizations hire referred
candidates, the referring employee receives a monetary reward.
 Employee referral programs are successful because companies can rely on their staff to make
connections with potential talent that can contribute to the growth of their organizations.
 Referral programs provide a way for staff to take part in the growth of their companies while
benefiting from monetary rewards.
 Commissions are common financial incentives for professionals who work in sales.
 Sales professionals earn a specific amount in commissions for every product or service they sell
to customers.
 Periodically providing incentives to the employees which will boost the employees to have an
interest and achieve the goals of the organization.
 Profit-sharing is a popular financial incentive that employers may offer to staff members in addition to a
regular salary.
 Profit-sharing gives employees of an organization a percentage of the organization's profits plus their
regular wages. This type of incentive can be highly beneficial for both employees and their employers
because the opportunity to earn a share of company profits can be an effective motivator for
employees to exceed profit goals.

64
MONETARY INCENTIVES
CHAPTER 7
CONCLUSION

65
MONETARY INCENTIVES
CONCLUSION
It is very clear that the management needs to recognize the right kind of monetary incentive to their staff so that
the employees get highly motivated to put their best effort towards completing their jobs. This will enhance
employees' loyalty towards the organization, encouraging them to be more productive with job satisfaction. So it
is recommended to introduce monetary incentive policy in the College as an active agent towards success.
Further, the research confirms that the employees of the College are not always looking for financial benefits.
However, Managers should consider offering monetary incentives so as to improve their performances.
Monetary incentive has a direct impact on employee motivationie.an attractive financial incentive will boost
most of the employees' motivation to work hard.
Therefore, it can be predicted that the employees prefer and expect monetary incentives.
Financial incentives are the best option to motivate employees for excellent performance in the organization
and they affect the motivation level of employees in a significant manner. Salary increase has been rated as the
incentive factor that motivates the employees most followed by recognition, healthcare and promotion leave.

66
MONETARY INCENTIVES
APPENDIX

67
MONETARY INCENTIVES
APPENDIX-1
QUESTIONNARE
A STUDY ON THE IMPACT OF MONETORY INCENTIVES ON EMPLOYEES

PERFORMANCE
Respected Sir/Madam,
I am HAMZAS K.M Student of KMEA COLLEGE OF ARTS AND SCIENCE, KUZHIVELIPADY, studying
BBA ,As part of my curriculum, I have undertaken to conduct a study on "Impact of Monetary Incentives on
Employee Performance" undertaken at Indus Motors. I assure that all the data collected will be only used for
academic purpose only.
PERSONAL INFORMATION
Name :
Age :
Service :
1) Does the employee welfare facilities provided by your organization are helpful in getting best out of the
employees?
 Strongly disagree  Disagree  Neutral
 Agree  Strongly Agree
2) Do the employees perform better when the organization provides them with fringe benefits?
 Strongly Disagree  Disagree  Neutral
3) Does the performance of employees at your organization is affected positively when they get the bonus
frequently?

68
MONETARY INCENTIVES
4) Do the Performance based cash incentives inspire the employees at your organization to perform
efficient?
5) Do you have experience in receiving 'bonus rewards' at your current job?
 Yes  No
6) Which of the following bonus rewards did you receive at your current job?
 Monetary compensation  Recognition from your supervisor
 Promotion  Other
7) Does the employee compensation is fair enough for the work they perform?
 Highly Dissatisfied  Dissatisfied  Neutral
 Satisfied  Highly Satisfied
8) Do you believe that your pay is competitive with the similar positions and other companies pay?
Yes No
9) Does the compensation package (basic salary, incentives, bonus and other financial benefits) is enough
to fulfil my needs and wants?
 Yes  No
10) Do the rewards encourage you to work towards organizational goals?
 Yes  No

69
MONETARY INCENTIVES
11) Please choose to which extent the total rewards are relevant and significant enough?
 Very Significant  Fairly Significant  Neutral
 Fairly Insignificant Very Insignificant
12) Do you prefer monetary rewards instead of non-monetary rewards?
 Completely Disagree  Disagree  Neutral
 Agree  Completely Agree
13) Do you think that the procedure of how the rewards are allocated is fair?
 Yes  No
14) Do you believe incentives affect motivation?
 Yes  No
15) Do you believe that rewards systems encourage job performance improvement?
16) Monetary reward increases my morale to put extra effort in task assigned?
17) Is there a clear criterion for monetary reward criteria in our organization?
 Strongly Disagree Disagree Neutral
Agree Strongly Agree

70
MONETARY INCENTIVES
18) You are rewarded by my manager for putting extra effort in my work?
19) Do you agree that you are rewarded periodically for your performance?
20) Employees at this branch are given bonuses at the end of the year?
21) Profit sharing is one of the factors that have improved employees job performance?
 Agree Strongly Agree
22) A decrease in the monetary incentive would lead to dissatisfaction?
23) Financial motivation comes ahead of non - financial motivation in terms of job satisfaction?
 Strongly Disagree  Agree  Disagree
 Strongly Agree Neutral

71
MONETARY INCENTIVES
24) I would still be satisfied if my salary was my only form of reward in the workplace?
25) The organization provides fair and adequate incentives on retirement?


72
MONETARY INCENTIVES
BIBLIOGRAPHY

73
MONETARY INCENTIVES
BIBLIOGRAPHY
1) Alonso P., & Lewis G. B. (2001), "Public Service Motivation and Job Performance Evidence from
the Federal Sector," The American Review of Public Administration, Vol.31, issue.4, pp. 363-380,
2) Al-Zoubi, M.T. (2012), "The Shape of the relationship between Salary and Job Satisfaction: A
Field Study," Far East Journal of Psychology and Business, Vol.7, issue.3, pp.1-12.
3) Bokorney J. (2007), "Salaries Still Rising," Evaluation Engineering, vol.46, issue.4, pp.12-14.
4) Kiruja EK. and Mukuru, E. (2013), "Effect of Motivation on Employee performance In Public Middle-
Level Technical Training Institutions in Kenya.,"International Journal of Advances in Management and
Economics, vol.2, issue.4, pp. 73-82.
5) Hislop, D. (2003), "Linking human resource management and knowledge management via
commitment: A review and research agenda," Employee Relations, vol.25, issue.2, pp. 182-202.
6) Muralidharan K. And Sundararaman V. (2009), "Teacher performance pay: Experimental Evidence
from India," National Bureau of Economic Research, vol.1, issue. 1, pp. 1-48.
7) Pink D.H. (2011), "Drive The Surprising Truth about What Motivates Us," Riverhead Books, New
York, ISBN- 10-1594484805, U.S, Penguin Group Inc.
8) Sajuyigbe, A. S, Olaoye B.O. and Adeyemi M.A. (2013), "Impact of Reward on Employees
Performance in a selected Manufacturing Companies in Ibadan, Oyo state, Nigeria,"
International Journal of Arts and Commerce, vol.2, issue.2, pp. 27-32.
9) Sonawane, P. (2008), "Non-monetary Rewards: Employees choices and organizational practices,"
Indian Journal of Industrial Relations, Tata Institute of Social Sciences, Vol.44, issue.2, pp.256-271.
10) Yongsun P., Barbara S., and Christy M. 2002), "How to improve repatriation management: are
motivationsand expectations congruent between the company and expatriates," International Journal
of Manpower, vol.23, issue, 7, pp. 635-675.

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MONETARY INCENTIVES
WEBSITES
1) https://www.marketing91.com/monetary-incentives/ (Retrieved on 19/07/2022)

2) https://edis.ifas.ufl.edu/publication/HRO16 (Retrieved on 19/07/2022)
3) http://shodh.inflibnet.ac.in:8080/jspui/bitstream/123456789/8173/3/03literatuге%20review.pdf
(Retrieved on 20/07/2022)
4) https://www.indeed.com/career-advice/career-development/incentives-types(Retrieved on 20/07/2022)
5) https://www.indusmotor.com/ (Retrieved on 20/07/2022)
6) https://www.achievers.com/blog/employee-incentive-programs/ (Retrieved on20/07/2022)
7) https://www.marketing91.com/monetary-incentives/ (Retrieved on 20/07/2022)

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1

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

For example- demotion, transfer, fines, penalties.

NEED FOR THE STUDY

 There is an increasing need for organizations to develop reward systems that

KMEA COLLEGE OF ARTS AND

OBJECTIVES OF THE STUDY

1. To provide a conceptual framework for understanding the effects of (performance-

STATEMENT OF THE PROBLEM

SIGNIFICANCE OF THE PROBLEM

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

SCOPE OF THE STUDY

LIMITATIONS OF THE STUDY

 The time period was inadequate for conducting a detailed study.

KMEA COLLEGE OF ARTS AND

INDUSTRY PROFILE & COMPANY PROFILE

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

OVERVIEW OF INDIAN AUTOMOBILE INDUSTRY

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

EVOLUTION OF INDIAN AUTOMOBILE INDUSTRY

CAR MANUFACTURERS IN INDIA

SMALL CAR INDUSTRY IN INDIA

KMEA COLLEGE OF ARTS AND

INDIAN AUTOMOBILE SECTOR: - A BOOMING MARKET

MARUTI UDYOG LIMITED (MARUTI SUZUKI INDIA LTD.)

KMEA COLLEGE OF ARTS AND

The Objectives of MUL (MSIL) then are as cited below:

 Modernization of the Indian Automobile Industry

KMEA COLLEGE OF ARTS AND

EVOLUTION OF MARUTI UDYOG LTD (MSIL)

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

KEY FINANCIAL HIGHLIGHTS

Net sales revenue -11.21% ▼

Total operating revenue -16.54%▼

Operating profit (BIT) -71.5%▼

Net Profit (Loss) for the Period N/A

Total assets -3.06%▼

Total equity -27.09%▼

Operating Profit Margin (ROS) -1.51%▼

Net Profit Margin N/A

Return on Equity (ROE) N/A

Debt to Equity Ratio -106.3%▼

Quick Ratio -0.84%▼

Cash Ratio -0.04%▼

KMEA COLLEGE OF ARTS AND

KMEA COLLEGE OF ARTS AND

ORIGIN OF INDUS MOTORS

HISTORY OF INDUS MOTORS

KMEA COLLEGE OF ARTS AND

Some of the services provided by Indus motors are,

 Buying a new car

VISION AND MISSION

 The most respected

IMC's Mission is reflected in the company’s slogan