Application of game theory on financial benefits and employee satisfaction :

Abstract

In any business organization, there are two parties inside. The company and the employees, the company always tries to maximize their profit as well as employees try to demand their gains or benefits. This is not a linear relationship, because the profit and employee earnings have disproportionate equilibrium. To maximize the profit the management always focuses on the performance of the employees and to reduce the cost. As per the motivational theories, it is clearly indicated that the employees have different types of needs. Therefore, the management should focus on a wide range of factors to satisfy the employees to absorb the maximum strength they are holding. In this research, we focus on both employees and the management of a state bank. Management of the state bank is always eager to minimize the cost and maximize the profit. However, the employees make every endeavor to elevate their earnings, which will be a cost to the company. The conflict begins at this point. The author observed that the problem of the institutions and introduced the Game Theory which provides a mathematical framework for understanding the optimal outcome and what the tradeoffs are to achieve that outcome. Therefore, it has to found the main financial benefits and their effectiveness on employee satisfaction to maximize the profit. To fulfill that objective it has to be observed the benefits given to employees, the effectiveness of those benefits on employees and finally recommend an effective benefits allocation mix to the organization, which will address both employee and the top management. In this game, the top management can be denoted as player and there is using Maximin strategy to maximize their profit. The employees play the game as opponent and they always try to use Minimax strategy to minimize their maximum lost. This is a cooperative game consisting of two parties, which are presenting various strategies to overcome their common issues. Therefore, this game consists of mixed strategies. Management introduced various benefits. The employees’ perspective, their answers are varying according to their needs. Therefore, the accuracy and reliability depend accordingly on the selection of the sample units. The sampling technique is uniquely done by considering various parameters. During the data analysis, it is proven that this game is not having any pure solution. The results are based on the probabilities after using the values in linear programing techniques. According to the results the most suitable allowance is medical allowance to allocate more funds because the probability of that is 0.96. According to the test results, it is clearly state that there are some benefits which are totally useless to provide such as Key Holding, Disturbance and Cash loading and there are some benefits that the management should allocate more to motivate the employees as well as to gain profit.