Ready-Made Garments (RMG) industry has been playing a very vital role in the country`s economy and day by day the dependency on this sector is increasing. According to the World Bank (2011) report, the total labor force in Bangladesh was 70,773,870 in 2009 (World Bank, 2011). The size of the industry in GDP has increased from 15% in 2000 to nearly 30% in 2009. According to the Bangladesh Bureau of Statistics (2016), approximately 3.1 million workers are employed in the RMG sector, of which 85% of the laborers are women. Since the RMG sector is the biggest industrial sector in Bangladesh and the economy as a whole depends heavily on the RMG industry, the survival of this sector is very much important for the economic development of the country (Alam, 2012). In addition, the Bangladeshi RMG industry is now competing with RMG sector giants, like India and China, using its relatively cheap labor. Besides, the increasing competition in the international market has put this sector in a vulnerable position recently (Haider, 2014).
Bangladesh has opened up its economy in the 1990s and since then the economy is growing moderately with the increase in the export of RMG products. According to Abedin (2010), in this globalized and highly competitive world, Bangladesh needs to overcome its inefficiencies in production and other irregularities in the RMG industry to gain the highest profit from the low labor cost and also to keep international competitiveness in the RMG exports. For long-run sustainability in the international market, the industry must be concerned about the improvement in productivity (Sadrul and Akhtar, 2015). Since 2000, many medium and large-scale RMG industries have taken some initial steps for their productivity improvement through technology adoption, investment in equipment, human resource and pay strategy, labor incentives etc (Afsar, 2015). However, Bangladesh RMG is facing poor staff motivation and high turnover that is significantly affecting the performance of the industry.
The performance of the organization and employee motivation has been the focus of intensive research efforts in recent times. How well an organization motivates its workers in order to achieve its mission and vision is of paramount concern (Mullins, 2015). Bangladesh garment industry has been facing high staff turnover, staff unrest and other social issues because of poor staff motivation (BGME, 2016). It is creating skills and staff shortages which are reducing overall staff performance in the Bangladesh RMG industry. In addition, when staffs leave frequently Bangladesh RMG industry needs to recruit frequently and need to train and develop the new staffs, which are cost-effective and time-consuming. Furthermore, when new staff joins in workplaces it takes time to perform better, which impacts overall productivity (Ahamed, 2014). In a word, high employee turnover impacts Bangladesh RMG industry sales and profits. Employee motivations with several incentive schemes can improve staff retention levels significantly (Briton and Gold, 2012). Although there are some incentive schemes that existed in the Bangladesh RMG industry, in most cases staff are not happy with that. In addition, the Bangladesh RMG industry is failing to identify its staff’s needs and expectations in many cases (Rubel and Kee, 2013). On the other hand, the Bangladesh RMG industry sometimes ignores these significant issues because of poor knowledge about the effectiveness of incentive schemes on staff retention (Sadrul and Akhtar, 2015). Therefore, it has been an issue for the Bangladesh RMG industry to conduct a study on the effectiveness of labor incentives and employee motivation on organizational performance.
Research aims and objectives
The aim of the proposed study is to evaluate the effectiveness of labor incentives and employee motivation on industry performance. Then, the study will explore the needs and expectations of the Bangladesh RMG industry to suggest the Bangladesh RMG industry. The key aims of the study are: a) to examine the impact of labor incentive and employee motivation on organizational performance; b) to determine the factors that increase the motivation of employees in an organization; c) to understand the employee changing needs and expectations in Bangladesh Ready-Made Garments (RMG) industry, and d) to provide recommendations for Bangladesh RMG industry to improve their staff motivation and organizational performance……………………………….