Outsourcing and Motivation of Employees in Nigerian Banking Industry: The Mediating Roles of Employment Status and Job Characteristics

Abstract

This study explored the effect of outsourcing on employee motivation in Nigerian banks with employment status and job characteristics as mediators. A mixed-method cross-sectional research design was employed. Semi-structured questionnaire was randomly administered to 359 core and outsourced staff. Six key informant and 20 in-depth interviews were purposefully conducted among branch managers, unit managers and non-managerial core and outsourced staff. Quantitative data were analyzed using descriptive statistics, t-test and linear multiple regression at p<0.05; qualitative data were content analysed. Outsourced staff scored significantly lower than core staff on motivation (df = 347, t=16.535, P<0.05). Disparity in job characteristics contributed to the difference in motivation between outsourced and core staff. Skill variety (β=-0.188, t=-3.205, p=0.001), task identity (β= -0.122, t= -2.465, p=0.014), task significance (β= -0.165, t= -3.582, p=0.001), autonomy (β= 0.166, t= 2.724, p=0.007), feedback (β= 0.195, t= 3.670, p=001), and employment status (β= -0.628, t= 4.837, p=0.001) independently significantly predicted motivation, while outsourcing (β= 0.005, t=0.132, p=0.895) did not. Outsourcing, employment status, and job characteristics significantly jointly predicted motivation (R² = 0.500, F=48.766, df = 7, p<0.05). Banks need to consider employment status, job characteristics and motivation intersectionality in structuring work to improve work quality and enhance employees’ motivation.