The Operation of Incentive Schemes that seek to improve Customer Service and Performance in Organisation

(A Case Study of British Petroleum)

by

ACKNOWLEDGEMENT

I would like to express my thanks to my advisor, for his suggestions, comments, patience and understanding. Very special thanks to my parents, my father, my mother, my brother and my sister who were continuously supporting me throughout my life and leaving me free in all my decisions. I would also like to thank my colleagues for his technical support whenever I needed. I would like to thank to Department, all the university managers, teachers and students with whom I have worked.

I certify that the work presented in the dissertation is my own unless referenced

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DECLARATION

I [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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ABSTRACT

In this study we try to explore the concept of employee incentives in a holistic context. The main focus of the research is on employee performance and its relation with employee incentives. The research also analyzes many aspects of employee compensation and tries to gauge its effect on employee incentives. Finally the research describes various factors which are responsible for employee motivation and tries to describe the overall effect of employee incentives in British Petroleum.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1Background of the Study1

1.2British Petroleum (BP) PLC3

1.3BP Retail4

1.4Reward System and strategy5

1.5Motivation and Incentives6

1.6Research Aims and Objectives7

1.7Research Questions7

1.8Synopsis about the Dissertation8

CHAPTER 2: LITERATURE REVIEW9

2.1Introduction9

2.2Understanding Motivation9

2.3Motivational Theories11

2.3.1Expectancy theory12

2.3.2Goal theory12

2.3.3Equity theory12

2.4Intrinsic Motivation13

2.5Extrinsic Motivation13

2.6Individual Performance14

2.7Managing Employee Performance15

2.8The different elements16

2.9Continuous feedback16

2.10The Performance Manager qualified17

2.11Motivation17

2.12Indicators18

2.12.1The choice18

2.12.2Perseverance19

2.12.3Employee Incentive19

2.13Types of Incentive Plans21

2.14Incentive Plans in BP22

2.14.1BP smile22

2.14.2Payments by results23

2.14.3Straight Piecework23

2.14.4Differential piecework24

2.14.5Measured day work24

2.14.6Group incentive scheme24

2.14.7Plant-Wide scheme24

2.14.8Bonus Schemes25

2.14.9Profit sharing25

2.14.10Profit Related Pay26

2.14.11Sales Incentives26

2.14.12Employee's share & ownership plans and length of service27

2.16Employee incentives and employee reactions30

2.17Organisational Performance32

2.18Short-Term and Long-term Incentives33

2.18.1Purpose of Incentive33

2.18.2Long-Run Consequences33

2.19Effectiveness of Incentives35

2.20Use Incentives Strategically39

2.21Self-esteem as a moderator in the incentive context39

2.22Summary40

CHAPTER 3: METHODOLOGY41

3.1Research Method41

3.2Research Design41

3.3Case study42

3.4Primary methodology43

3.5Philosophical Framework or Paradigm44

3.6Rationale for a Qualitative Study46

3.7Limitations46

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION48

4.1Survey Analysis48

4.2Data Analysis Method48

CHAPTER 5: DISCUSSION75

CHAPTER 6: CONCLUSION79

CHAPTER 7: RECOMMENDATIONS81

7.1The Nature and Objectives of Performance Related Pay81

7.2Control over income82

7.3Engagement/role ownership82

7.4Depiction of incentive scheme82

7.5Stimulation83

7.6Performance Measurement83

7.7Application of Research Findings to other Organisations84

REFERENCES86

APPENDIX99

Appendix A: List of Tables99

Appendix B: List of Figures108

Appendix C: Consent form115

Appendix D: Questionnaire116

Part I. Your Job position with this Company116

Part II. Your current and past experience about incentives scheme in BP117

CHAPTER 1: INTRODUCTION

Background of the Study

Since financial issues have become more and more important, businesses, consumers and government employee's performance has also become significant more than ever (Cranwell, 2002, p. 7). Enterprises can now choose to depend on conventional administration strategies, such as cadre of managing directors and administrators to supervise and guide employees, or they can choose the team based on a number of products in the form of incentives to complement the management of employees' interests more closely (Cooper, 2006, 58). Eventually, a company's accomplishment or collapse may ...