Poor Wages and Employee Motivation

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Introduction

Research Background

Victoria’s Secret is one of the leading apparel businesses specializing in women’s fashion products. Over the years, the company has grown into a household name among the middle- and high-income customer segments. Despite having been in the market for more than three decades, the company has been accused of unfair labor practices in their production subsidiaries in Asia and Africa (Sostrin 2013). In the last ten years, Victoria’s Secret has had to deal with legal suits for child labor and minimum wage violation accusations in Burkina Faso (Spinelli & McGowan 2014). Although the company has employed many locals in the Burkina Faso cotton growing and spinning plant, the average wages are estimated at less than $18 per day. Compared to the US branches, where there are strong regulatory laws, employees earn an average of $10 per hour. Due to low wages, there is a high turnover of employees since most of them are subjected to contractual labor rather than on permanent and pensionable modules (Scherer & Stefano 2014). There is a need to establish how these wage variations have had an impact on the level of employee motivation and performance at Victoria’s Secret’s Burkina Faso subsidiary. The findings of this study will enable Victoria’s Secret to modify or introduce effective and sustainable labor practices in its production subsidiaries outside the US in order to reduce employee turnover and boost their morale.

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Research Questions and Objectives

The following questions were formulated by the researcher to relate employee performance and work environment from a remuneration perspective.

  1. How effective are the current labor practices used by Victoria’s Secret in Burkina Faso towards improving performance and motivating employees?
  2. What are the consequences of poor wages in the productivity and sustainability of Victoria’s Secret’s business model in Burkina Faso?

These questions were used to define the following research objectives;

Question 1:

  1. To review the significance of the work environment on the level of employee motivation and output.
  2. To establish the challenges in Victoria’s Secret’s labor practices and their impacts on organizational performance.

Question 2:

  1. To explore the influence of an effective work environment on the level of employee motivation and performance.
  2. To establish the quantifiable effects of labor practices on employee perception towards the company.

From the research background review, the above objectives are adequate in the identification of the impact of labor practices on a work environment, employee motivation, and organizational performance.

Research Significance

Since the focus of this study is to attempt to relate the level of employee motivation to organizational performance at Victoria’s Secret’s Burkina Faso subsidiary, the outcomes will be instrumental in influencing positive adjustments to the current remuneration policies in order to improve the level production.

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Literature Review

Theoretical Literature Review

Several theories have been put forward to explain the relationship between attractive remuneration packages and the level of employee motivation. For instance, transformational labor management theory and leadership expectancy have been modeled as having a positive impact on employee motivation, thus, improved performance (Mangan, Lalwani & Lalwani 2016). The transformational theory highlights the necessary guidelines for the creation of an ideal and sustainable work environment that addresses the needs of all stakeholders (Liu, Shang & Han 2017; Osterwalder & Pigneur 2013). This style of management empowers managers to easily “to convince the employees to be flexible to change and perform at their level best” (Dasgupta, Suar & Singh 2013, p. 183). The expectancy focuses on the aspect of character orientation in the process of decision-making as a labor-management practice. As noted by Obeidat, Masadeh, and Abdallah (2014), the implementation of the expectancy approach would instigate ethical behavior among the parties involved due to mutual respect (Kuhn 1962; Rebelo, Matias & Carrasco 2013). The cordial relationship and a positive work environment would ensure that the performance-effort, outcome-performance expectancy, and valence expectancy are balanced (Baxter 2015).

Another theory that has been put forward to explain the relationship between good remuneration and employee performance is the leading motivational orientation. According to Baxter (2015), this theory explores the aspect of motivation as an instrument for improving the organizational output through desire arousal. For example, Vroom’s expectancy orientation theory associates incentives to the level of employee stimulation and inspirational behavior in executing duties (Sostrin 2013; Koerner 2014). This behavior model incorporates the necessary structures and systems for classifying, defining, and reviewing a given work environment (Arslan & Staub 2013; Vanhala & Stavrou 2013). Another significant theory is the Theory X and Theory Y orientation, which is focused on developing the management tenet as a tool for effective control of factors of production for optimal output (Ardichvili & Jondle 2009). This theory focuses on the instruments for the creation of effective remuneration policies and structured implementation modules for effective and sustainable results (Talib, Ali & Idris 2014). Apparently, the theoretical review suggests that good labor practices, in terms of good wages, have a positive impact on employee motivation and organizational performance.

Empirical Literature Review

The researcher reviewed several journal articles on the link between organizational performance and employee motivation (Callahan 2014). To begin with, research performed by Dasgupta, Suar, and Singh (2013) to establish the effect of employee motivation and the general organization performance, the findings revealed that labor-management practices have a positive and direct impact on the workforce and business sustainability. The authors concluded that organizations which good labor practices and laws have a higher chance of productive employees than organizations with poor management approaches. In another study performed by Arslan and Staub (2013) to establish the effect of Theory X and Theory Y orientation on organizational performance for the service sector in the UK, the findings revealed that organizational management philosophies have an impact on employee motivation. The authors concluded that a stable management approach is a prerequisite for the creation of a healthy and holistic environment that motivates the employees.

Stubbs, Higgins, and Milne (2013) performed research on the relationship between organizational commitment matrix and management practices established that knowledge process in an organization that provides adequate wages are effective in motivating the employee to exceed the expectations. The findings also suggested that an application or selection of effective labor-management practices would create an effective work environment that is committed to optimizing output. Other past studies reviewed (Bansal et al. 2017; Battor & Battour 2013; Habib et al. 2014; Guiso, Sapienza & Zingales 2015; Hahn & Kühnen 2013; Harrison & Wicks 2013; Hyland, Lee & Mills 2015; Karatepe 2013; Kafetzopoulos, Gotzamani & Psomas 2013; Kiran 2016; Kim-Soon, Rahman & Ahmed 2014; Manning 2013; Manning & Soon 2013; Singh & Singh 2014; Searcy & Buslovich 2014; Strom, Sears & Kelly 2013) concurred with these findings. Lastly, Baxter (2015) performed a study on the process of creating an effective labor regulation and implementation and its impact on employee outcomes. The findings revealed that an effective employee management approach is a prerequisite for an effective and sustainable level of motivation (Nunes & Machado 2014). The author also established that the creation of healthy work culture and communication is only practical when there is balance in the competing factors within labor as a function of production. This means that balancing the aspects of salience, time and morale would improve organizational performance.

Current Victoria Secret’s Motivational Practices in Burkina Faso

Victory Secret is known for its adherence to due process in its entire supply chain network. The company is registered in Burkina Faso as a subsidiary of the mother organization in the US. The company has over the years been consistent in adhering to the business regulations in the local and international locations (Oakland 2014). The company average wage is above Burkina Faso’s minimum wage requirements. This means that an average hourly rate of $3 is almost three times the local ceiling. Although 60% of the workforce is on a contractual basis, the company offers other benefits to this group such as a medical cover of up to $2,000 per year and is ranked among the top 100 best employers in Burkina Faso (Myerson 2015). Despite these positive ratings, the company has had to deal with numerous labor-related lawsuits from employees and other stakeholders. These accusations are often focused on the unfair wage variation in the company employment charter, poor wages, inflexible working hours, and other malpractices in the process of employment (Baxter 2015). Although the company has never been convicted by the local or international labor courts, these allegations continue to taint its image in the local and international business arena (Martelo, Barroso & Cepeda 2013). In fact, there was even an attempt by online bloggers to run a name-tainting campaign against the company as one of the international cartels with unfair supply chain networks (Monks and Minow 2014). In the last 12 months, several international media houses have run stories of child labor abuse and meager earnings in Victoria’s Secret’s production plants across the globe despite super-profits the company declares each year (Suma & Lesha 2013). These malpractices have painted a bad picture of this global women’s fashion and beauty giant (Daft & Marcic 2016). Therefore, there is a need to carry out research on what the company should address to reverse these worrying trends.

Literature Review Relevance and Gap

The theoretical and empirical literature review indicates that there is a link between organizational performance and employee motivation. This means that negative wage variations have an impact on reducing the morale of a workforce, especially when the policy is seen as discriminative (Tranfield, Denyer & Smart 2003). The literature review has confirmed that there is a link between the level of employee motivation and the general output of an organization. However, little research has been carried out to relate the perception of discriminative and lower wages on employee motivation and organizational performance (Kallahan 2014). Therefore, this study aims at filling this literature gap by focusing on poor wages and their impacts on employee motivation and organizational production output at Victoria Secret’s Burkina Faso subsidiary.

Methodology

Research Design

Since this study is subjective and focused, the researcher selected a quantitative survey design (Denzin & Lincoln 2005). An online questionnaire was developed and thirty employees of Victoria’s Secret in Burkina Faso filled the forms (Saunders, Lewis & Thornhill 2016). The research created a guiding personal information section to balance the aspects of work experience, level, and gender of the participants (Mason 2017). In order to ensure that the process of data collection is effective, the researcher carried out a pre-test of the questionnaire to make the study focused (Kothari 2013).

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Data Analysis

The researcher subjected the collected data to a systematic transcription using the SPPS software (Miller et al. 2013). The results were then tabulated to facilitate the process of comparing the data (Mason 2017). The transcribed data were then coded using the analysis of variance (ANOVA) software (Ciesielska & Jemielniak 2018). The ANOVA analysis was focused on the presence or absence of statistical variations in the responses in order to establish a trend (Bryman & Bell 2015). The computation identified the variations in the average means of each response category Formulaand department Formula. The following null and alternative hypotheses were formulated in order to perform the ANOVA analysis.

Null hypothesis

Ho: µ1 = µ2

The null hypothesis indicates that the sampled departments’ mean is equal to the mean of the entire organization.

Alternative hypothesis

Ho: µ1 ≠ µ2

The alternative hypothesis indicates that the sampled departments’ mean is not equal to the mean of the entire organization.

Based on these assumptions, the researcher will reject the null hypothesis when the F-calculated is bigger than the F-critical.

Research Ethics

The researcher appended an online consent form to authenticate the study. Moreover, the process of planning, actual study, and analysis were carried out within the scientific research guidelines (Burrell & Morgan 1979). The identity of the respondents remained anonymous and only represented by either a number or a letter in the alphabet.

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Methodology Limitation and Delimitation

The sample space of 30 online respondents were not adequate for the creation of a comprehensive inference due to biases and vulnerability of a small sample population (Kristi & Bazeley 2013). It was not also possible to verify the authenticity of the respondents, age, and work experience since the researcher only used the information filled in the questionnaire (Bryman 2006). However, the researcher ensured that the questions are pretested to reduce the degree of sampling biases (Smith 2017).

Findings, Analysis, and Discussion

As captured in tables 1 and 2, all the targeted 30 respondents participated in the study by duly filling out the forms and clicking the submit button. This means that the response rate was excellent.

Table 1: Demographic distribution of the respondents

Respondent groups Number Percentage (%)
Female respondents 15 50
Male respondents 15 50
Total 30 100

Table 2: Summary of the number of respondents per department

Department Number of respondents
Picking and Packing 5
Spraying and Pest Control 5
Finance 5
Supply and Marketing 5
Human Resource 5
General Work 5
Total 30

The collected data was then coded for rank, mean and standard division for four sets of questions. Four attributes of motivation were reviewed as captured in table 3. These attributes are salary, good work environment, flexible work schedule, and accommodation.

Table 3: Summary of mean, standard deviation, and rank for the four attributes

Motivation Factor Sample size Mean Standard deviation Rank
Salary 30 5.2939 0.9095 1
Good work environment 30 4.8559 1.1121 2
Flexible schedule 30 4.4896 0.8644 3
Accommodation 30 4.1757 1.1321 4

As illustrated in table 3, salary had the highest mean (5.2849). The good work environment was ranked at the second position with a mean of 4.8349. The attribute of flexible scheduling and accommodation was ranked at positions 3 and 4, respectively. This means that salary or wage has the highest influence on employee motivation followed by the nature of a work environment. The attribute of accommodation has the least influence on the level of employee motivation. All the means are within similar digital variance, thus, it is factual that there was some level of consistency among the respondents.

A correlation analysis was performed on the four attributes and employee motivation among the respondents in order to establish an existing trend (see table 4). The hypotheses that were proposed earlier had to be modified to get a clear insight into the most relevant indicator as indicated below.

The null hypothesis, Ho: There exists no correlation between the four attributes and employee motivation at the organization.

The alternative hypothesis, H1: There is a correlation between the four attributes and employee motivation at the organization.

Table 4: Results of the correlation analysis

Employee motivation Salary Work environment Flexible schedule Accommodation
Employee motivation 1
Salary 0.667 1
Work environment 0.641 0.532 1
Flexible schedule 0.446 (0.458) (0.374) 1
Accommodation 0.427 (0.448 (0.386) 0.312 1

The findings illustrated in table 4 confirm a positive correlation between the attributes and level of employee motivation in the population sampled. Again, the wage or salary attributed a correlation coefficient of 0.0677, which is the highest followed by the attribute of the work environment at 0.641. However, the accommodation attribute had the least score of 0.427. In order to establish the existence of any specific correlation, as captured in table 5, the researcher performed ANOVA analysis.

Table 5: Results of the ANOVA analysis

Attribute In terms of work experience In terms of gender In terms of nature of employment (contract)
Mean S.D Rank Mean S.D Rank Mean S.D Rank
Salary 5.53 0.63 1 6.56 1.64 1 7.82 1.45 1
Work environment 5.51 0.42 2 4.32 1.05 3 6.74 0.86 2
Flexible schedule 4.62 1.33 4 3.53 0.86 4 3.08 0.89 4
Accommodation 4.81 1.12 3 5.93 1.26 2 4.85 1.07 3

The results illustrated in Table 5 confirmed that salary has the highest influence on employee motivation. However, accommodation had the least impact. The findings also indicated that there is a positive correlation between employee motivation and the indicators of age, work experience, and nature of employment. As confirmed in the literature review, this study has successfully associated the attribute of wage as having the highest impact on the level of employee motivation.

Conclusion

Conclusion

The study aimed at establishing the link between poor wages and low employee motivation at Victoria’s Secret subsidiary in Burkina Faso. The findings confirmed that wage has the highest impact on employee motivation. This means that the currently poor motivational levels at the company could be addressed by balancing the discriminative wage variations.

Research Limitations and Area of Future Research

The research limitations are a small sample space, inability to capture personal insight using quantitative design, and the virtual nature of the study. Since the scope and time for the study were also limited, it was not possible to expound on the empirical and theoretical frameworks. Therefore, a further study might be necessary to establish other underlying issues that might have influenced the setting of these discriminative wages.

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