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Evaluate The Effect Of Motivation On Employees Productivity Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 5461 words Published: 1st Jan 2015

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There has been a lot of research done on motivation by many researchers but only some research topics have been done on motivation like motivation theories, ways to encourage employee motivation, measures of motivation, principles of motivation, how to motivate your people problem, how to effectively reward employees to motivate them. Very few studies have been done on motivation and productivity of employees that’s why there is a need for further research is necessary on particular topic. This study will help managers and leaders find out what is that employee want from employers to perform at their best.

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This study proposes to investigate the effect of motivation on employee’s productivity in organization. Some previous studies have already proven the relationship between motivation and productivity and majority of the organizations verify the results. However there are several emergent influences of motivation today that have an effect on the employee’s productivity. It is evident that there is really a need for this study because of the many organizations that are constantly spending money on various ways to increase employee productivity.

Employee motivation has always been a central problem for leaders and managers. Unmotivated employees are likely to spend little or no effort in their jobs, avoid the workplace as much as possible, leave the organization if given the opportunity and produce low quality work. On the other hand, employees who feel motivated to work are likely to be persistent, creative and productive, turning out high quality work that they willingly undertake.

Organizational performance at individual, collegial and organization levels are being jeopardized and subjected to various organizational changes. Specifically, as developed organizations became larger, more multifaceted and more challenging, concerns about organizational performance competencies development and how it could likely to impact culture and direction of the organization have been in the forefronts of business dialogues. There had been much to say about the role of motivation and their expansion but very little has been done on developing motivation-based performance and much little movement on investigating organizational performance and its relative effect on employee’s productivity in organizations.

This is the fact that all organizations are relying on their people for the continued survival and growth of their organization. People, or the employees, are the key in sustaining the organization and this importance of their role gives responsibility to the organization to motivate them so that they can work more effectively. Motivation is the process that account for an individual’s intensity, direction and persistence of effort towards attainment of goals. Motivation is the energizer of behavior and mother of all actions. Therefore, motivation is directly related with productivity. Productivity refers to the working effectiveness by which the employees do their job and judged according to their effectiveness and significance. We can also say that motivation is the willingness to work at a certain level of effort. Motivation emerges, in current theories, out of needs, values, goals, intentions, and expectation. Because motivation comes from within, managers need to cultivate and direct the motivation that their employees already have.

People are one of the most important assets in business. They have unlimited potential to contribute in the achievement of objectives. Their aggregate productivity propels the operations of the company. It dictates the overall performance, which creates an attractive corporate culture.

The value of human resource productivity is a managerial concern. Employee motivation is the classic response on this matter. This has been utilized for ages by many different entities, small- and large-scale businesses alike. It fosters mutual growth in an employer-employee relationship. Indeed, motivation increases productivity.

People need motivation just as pieces of equipment need fuel and operators. This is highly demanded to ensure that they are always at their optimum working condition. In turn, this will absolutely lead to optimum productivity.

Now question arises that how can we motivate employees? The answer is that there are only two ways to motivate a person. One is through material satisfaction, by providing tangible rewards called extrinsic motivation. Another is through nonmaterial satisfaction by providing intangible rewards called intrinsic motivation. A balanced mix of motivational tools is significant to serve its purpose. That is to satisfy the idea that motivation increases productivity.

Extrinsic motivation is commonly practiced by most organizations to boost performance. It involves the provision of an attractive compensation and benefits package. This includes salary, health and personal insurance, and bonuses. There are also performance credits given in the form of a quarterly bonus, performance bonuses, gift checks, paid vacation, etc.

Intrinsic motivation is simple and practical. It is an advisable practice to bring out the best in every employee. It can be done through providing effective systems for promotion, training and development, and recognition. The act of praising employees for a job well done is one way to do so. These are priceless tools to motivate them because employees are more motivated if what they are doing interests them. This is much more beneficial if the task delegated to the employee coincides with his interests.

So, by keeping above in mind, “Motivation can be represents as a measurable increase in both job satisfaction and productivity. The motivated worker does his job better and likes it more than those folks who are not so motivated”

No doubt, motivation increases productivity. It is but critical to upkeep consistency in the provision of extrinsic and intrinsic rewards for consistent performance. Many researchers have proven the relationship between intrinsic/extrinsic motivation and productivity. Some find that employees are most interested to recognize theirself as they are and get happy with the promotion and willing to perform well with this context and some researchers says that however intrinsic motivation is a part of motivation but it is not a overall motivator to fulfilling the desires of employees. From whom who are self motivated intrinsic motivation can be enough but for those employees who are not self motivated extrinsic motivation plays an important role for their motivation and to increase their morale regarding productivity.

In this research study we will find that what are those factors which have positive relation with productivity and either it’s relate to intrinsic or extrinsic motivation? And how can we best apply these factors to motivate employees in order to achieving the target of 21st century which is productivity.

Problem Statement

There is a need for further research on motivation v/s productivity, therefore my goal is to reveal what is the effect of motivation on employees productivity means after motivation they want to perform at their best and achieve optimal business results at all times or not? And in motivation which factor (intrinsic or extrinsic) has more influence to motivate them for high productivity?

Literature Review

Employees are the strength of any organization and no one organization can succeed without the participation of their employees. For this purpose organizations should boost its employee’s morale and progress which can be done only by motivation because motivation plays an important role to increase employee’s productivity in any kind of condition. Another factor which focused by Bob is money or bonuses which enhance employee interest in their work therefore, numerous researches have been done on the effect of productivity; knowledge sharing etc that is affected by motivation. Researchers have argued that motivation facilitates enhanced productivity by enabling dedication to a cause (Thompson & Bunderson, 2003) motivation is linked with advanced level of productivity across a diversity of tasks, jobs, and extra role behaviors (Bing & Burroughs, 2001; Brewer & Selden, 1998; Grant et al., 2007; Korsgaard, Meglino, & Lester, 1997; Naff & Crum, 1999; Rioux & Penner, 2001; Ilies, R., Scott, B. A., & Judge, T. A. (2006).Scott, & Judge, 2006). Motivation theories are the ways to encourage employee motivation, Measures of Motivation, Principles of motivation, Ways of making your firm more exciting, How to motivate your people problem, The missing link in Strategic Performance, Salary is not a motivator anymore, How to effectively reward employees, Turning Motivation Theory into Practice, Measures of Motivation, Self Theories and Employee Motivation, How do you motivate employees, and Worker Motivation: Unsolved Problem or Untapped Resource?. A multitude of studies have been done on motivation end productivity of employees. From the literature review one can see that a need for further research is necessary. This will help managers and leaders find out what it is that employees want from employers to perform at their best. to begin with some experiential research has proved that motivation can further subdivided into two factors that are extrinsic (expected organizational rewards and reciprocal benefits) and intrinsic (knowledge self-efficacy and enjoyment in helping others (Hsiu-Fen Lin ,2006) hence extrinsic motivation (rewards) that may be monetary incentives or praise , has been shown to significantly effect worker contribution(R. Fenwick and J. Olson,1986) and increased intrinsic motivation has been associated with employee willingness to create a positive mood, resulting in increased learning and inclination to participate in voluntary knowledge sharing M. Osterloh and B. Frey, (2000) (E.L. Deci and R. Flaste,1995). although quite a few revise argue that motivation factors are vital determinants of knowledge sharing behaviors(Hsiu-Fen Lin ,2006)in respective of that this study examine the effect on intrinsic and extrinsic motivation factors on employee productivity earlier Elton Mayo’s Hawthorne Studies there is a positive relation between motivation and employee’s productivity. He proved this by an experiment in which he studied on the effect of physical and environmental condition on employee’s productivity and later on he moved on psychological factors. After the application of these motivational factors he assumed that employees have become more productive and feel that they are the important part of organization. (Mayo’s 1978) there may some content that may the effectors from motivation toward productivity that is recognition , If the needs are satisfied such as their self-esteem need and self-respect, appreciation or recognition, the safety and security of the employee then productive achievement can be in the way of success. (Wright, 2001).Bob Urichuck says that to motivate employees is not as easy as we think. There is a list of motivation factors through which employee can be motivated. We have to apply these factors one by one to increase employee productivity through motivation. In this list Recognition is ranked the number one motivational factor. If you want to increase employee’s productivity then you have to give them opportunity to recognizing them publicly and arrange some meetings, events, spouse dinner, staff recognition awards and a closing party to build and maintain progressive environment in organization. Recognition increase employees self esteem, self confidence and self respect and also increase the ability or willingness to perform well. (Urichuck 2008) recognition may be consider as extrinsic motivation that has shown to significantly effect worker contribution(R. Fenwick and J. Olson,1986) Mayo also stated that need for recognition, security and belongingness are more important to increase employee’s productivity than the physical conditions in which employee works. (Mayo’s 1978) Organization should make the employee feels that his presence is praiseworthy in the organization. Their belongingness in the workplace is an important factor in recognizing the productivity moreover when employees have high self-sufficiency, get reaction about their performance, and have a vital, special piece of work to do which requires expertise multiplicity, they might experience feelings of happiness and thus intrinsic motivation to keep performing well (Hackmam & Oldham1980). Self-control is another means of employee ownership or to give employee full independence to do his work under German law the difference between employees and freelance workers is of exacting significance in formative the request of employment and labor laws, as well as the compensation of social security assistance( Jens Kirchner and Eva Mittelhamm,2010) other content may be the Willingness of the worker on employee productivity augmented intrinsic motivation has been linked with employee willingness to create a positive temper, (M. Osterloh and B. Frey, 2000) (E.L. Deci and R. Flaste,1995).and as above also mentioned that Recognition augment employees self esteem, self confidence and self respect and also increase the ability or willingness to perform well. (Urichuck 2008.) George states that job security create willingness of work in employee (George, 1991). Challenging job

is the another intrinsic motivation factor that can effect on productivity Herzberg states Motivator factors contain such things as responsible work, independence in doing the work, and satisfaction arising from the completion of challenging tasks. (Herzberg, 1966) The characterization of a challenging work environment as overloaded, ambiguous, and politicized draws on the three dominant paradigms of the strategic decision-making literature, which emphasize bounded rationality, garbage can processes, and politics and power (Eisenhardt and Zbaracki,1992). The benefits of knowledge gathering in challenging work environments depend on whether teams work under conditions that enhance or limit their capabilities to utilize this knowledge successfully. (Martine R. Haas, 2006). Martine also states that the ability essential toward advantage from knowledge gathering in challenging work environments thus make the probable value of knowledge gathering even harder to capture than is often assumed. (Martine R. Haas,2006) these were the intrinsic motivation variable or can say factors that may be effective on productivity, motivation also has extinctive motivation factors some of them may be compensation, rewards, performance appraisal etc, if compensation is confer, . Compensation is an important factor to increase employee productivity. It is very obvious that if employee is promised financial benefits provided if they perform well and achieve the targets then they will definitely perform well to achieve organizational goals. (Hunter 2010) Miller wrote, “Only productivity-based incentives actually achieve the goals and aspirations of academic anesthesia departments and medical centers and enhance the anesthesia faculty’s relationship with other specialties….” Productivity-based incentives may decrease salary expenses, increase individual faculty clinical productivity and efficiency, and increase billing effectiveness when faculty compensation is dependent on the completeness and accuracy of the anesthetic record. (Miller, 2005). Rewards Early in the 20th century, scholars and practitioners believed that external controls, incentives, punishments, and rewards were necessary to motivate persistence, performance, and productivity. (Heath, 1999; Steers, Mowday, & Shapiro, 2004). Hsiu-Fen Lin Say that expected organizational rewards did not significantly influence employee attitudes and behavior intentions regarding knowledge sharing (Hsiu-Fen Lin,2006) although rewards has shown to significantly affect worker participation (R. Fenwick and J. Olson,1986) rewards or benefits earned when performing an activity (E.L. Deci and R.M. Ryan,, 1985). The fundamental goals of extrinsically motivated behaviors are to receive organizational rewards or reciprocal benefits (R.J. Vallerand, Deci and Ryan,2000) and J. Kowal and M.S. Fortier,1999) Organizational rewards are useful for motivating individuals to perform desired behaviors (K.M. Bartol and E.A. Locke, 2000) Organizational rewards can range from monetary incentives such as increased salary and bonuses to non-monetary awards such as promotions and job security K.M. Bartol and E.A. Locke, 2000, T. Davenport and L. Prusak, 1998) if employees believe they can receive organizational rewards by offering their knowledge, they will develop more positive attitudes toward and intentions regarding knowledge sharing(Hsiu-Fen Lin,2006). Performance Appraisal or A performance appraisal, employee appraisal, performance review, or (career) development discussion a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor, As competitive pressures have increased, employer interest in differentiating employee performance levels, addressing poor performance and using performance appraisals as constructively as possible, has increased. (Terrence H. Murphy et al, 2004) George Terry says about performance appraisal that it is the periodic valuation of an employee’s performance measured against the job’s stated or presumed requirements. (George Terry, Stephen G. Franklin, 2003) One way to review the performance and potential of staff is through a system of performance appraisal. It is important that members of the organization know exactly what is expected of them, and the yardsticks by which their performance and results will be measured. (Ayaz Khan) Laurie J. Mullins substantiate the necessity of an effective appraisal scheme by saying that it can identify an individual’s strengths and weaknesses and indicate how such strengths may best be utilized and weaknesses overcome (Laurie J. Mullins,1996) since following are the extrinsic and intrinsic motivational factor that can effect on employee productivity with the aid of these factors new factors ways, and look can come in front that can help the organization as well as for the well being of employee.

Accommodating to a survey which was conducted to compared rankings by employees and supervisors on employee motivation factors which influence on productivity the ranked factors from supervisors are: High wages, Job security, Promotion in the organization, Good working conditions, Interesting work, Personal loyalty of supervisor, Tactful discipline, Full appreciation of work done, Help on personal problems, Feeling of being in on things. But according to the employees the list of factors is ranked as: Full appreciation of work done, Feeling of being in on things, Help on personal problems, Job security, High wages, Interesting work, Promotion in the organization, Personal Loyalty of supervisor, Good working conditions, Tactful discipline. Here we can see the difference between employee and supervisors mentality because the top three employee motivating factors are the last three felt to be important for them by their supervisors. These top three factors show that employee want to recognize in their work place Employee motivation is constructive reinforcement which influence on employees productivity. Positive reinforcements are what construct our self-esteem. Our self-esteem is the approach we observe and consider about ourselves also internally, through our own beliefs, or externally through what we admit as the beliefs of others. If we believe well about ourselves and we believe others think well about us, we perform better than we would when we see the opposed side of the coin. Employee motivation starts from within. People perform in an approach that is reliable with how they perceive themselves conceptually. So, the key is to help people build their self-esteem. That is the foundation of employee productivity through motivation. (Urichuck 2008.)

There are several productivity surveys and case studies indicate that increased worker motivation and satisfaction can increase worker output. Progressive, innovative managers now achieve productivity gains with human resource management techniques that go beyond pay incentives. This study discusses that how we can increase the worker output by motivation factors in the light of motivational theories. According to Maslow there are five needs (Physiological needs, Security needs, Belongingness need, Esteem needs, Self actualization) through which organizations can enhance their productivity and progress by motivating employees. Employee motivation and productivity depends on management that is how better they manage these issues (i.e. providing a work environment) that will help to achieve organizational goals by increasing productivity. Getting high productivity from your employees depends on giving employees opportunities for their personal growth, achievement, responsibility, recognition, and reward.

Frederick Herzberg, distinguished professor of Management at the University of Utah and Behavioral theorist conducted studies on worker motivation in the 1950’s. He developed the Motivation-Hygiene theory of worker satisfaction and dissatisfaction. This incredible researcher concluded that hygiene factors such as salary, fringe benefits, and working conditions can prevent dissatisfaction, but they do not motivate the worker. He found that motivators such as achievement, recognition, responsibility, and advancement increase satisfaction from work and motivate people toward a greater effort and performance. Herzberg and other behavioral theorists were influenced by the writings of Abraham Maslow, a theoretical psychologist who analyzed what human beings seek in their lives and developed the Needs-Hierarchy concept.

Of the many theories of work motivation, Herzberg’s (1966) motivator-hygiene theory has been one of the most powerful in current decades. Basically, the theory divides motivating factors into two categories: Motivator factors, which have something to do with the work itself, and Hygiene factors, which have something to do with the surrounding context.

There are still unresolved questions about the need-achievement theory of motivation, and not all research has been supportive. This theory is judged to be high scientific validity and in its usefulness in application to the world of work.

According to Maslow, most of what we know of human motivation comes not from psychologists but from psychotherapists treating patients. He explains that these patients are a great source of error as well as of useful data, because they constitute a poor sample of the population. The motivational life of neurotic sufferers should be rejected as a paradigm for healthy motivation. Any theory of motivation must deal with the highest capacities of the healthy and strong man.

This great psychologist says that it is important that we should not only study sick people but healthy men as well. Dr. Maslow’s theory has received little research support and is judged to have low scientific validity and low usefulness in application. The theory continues to be very popular among managers and executives who have accepted a need for self-actualization as a motivating force to be reckoned with on the job.

The most worrisome problem American business are facing today is the low employee work productivity. In the past, America’s industrial gains have been the highest in the world, but lately our productivity growth has declined, particularly when compared with some of our industrial competitors. The decline in employee motivation and in commitment to high-quality work performance may well be one of the major causes of this productivity slowdown. Productivity is defined as the efficient and effective use of resources with minimum waste and effort to achieve outcome. A decline in productivity is a cost that many companies cannot afford and that the United States, with its high standard of living, cannot tolerate. Increasing foreign competition already has caused many of our firm’s serious problems and failures. (Maslow)

Motivation emphasis that the concerned people should be move and act according to different state of affairs. People are motivated based on their need and sometimes based on the difficulty they get from the working environment. Often, people consign to do a certain task because they want to do extremely well in their field and their interest and values that they place on their work. Most of the time, the actions or the practice of the employees might be the representation of the culture (Ryan and Deci, 2000). Motivations can deliver the power, curiosity, anticipation, courage and self-confidence, which in return manifested in enhancing performance, persistence and creativity. If the approach of the motivation is applied continuously, then doubtlessly every individual will reach at the glorious peak of success. Motivation is mostly useful in the workplace and it can deliver the best performance of the employees. The interaction of the employees with the other people and their working environment is a great advantage to apply the motivation. In the long-term use of this skill of motivation and its ideology, it delivers positive result in meeting a quality job performance. First of all, satisfaction must first be met to understand that there is an improvement in their job.

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Satisfaction means answering the needs of the person and as an employee, the organization should plan different strategies. The performance of an employee is mutually determined by the two key factors which is the target placed to accomplish the output and the degree of effort. Satisfaction produces several interesting thought concerning the motivation and the job skill involvement of the employee. Since the employees are satisfied if the needs are met and then the employees can create a happy mood which most of the firms needs to judge as the employees can be transformed in to more productive people. Dedication of the employees is the effort of the employees to have the controls wherein the whole organization has an influence in their job. The job satisfaction from performance can be achieved by the importance of the job design and its involvement and when the employee is fit his educational background on the nature of his work then there is a productive result on the process of performing the specific job.

Justification and Likely Benefits

Employee plays vital role in the organization and for its development, now a day’ employees are unmotivated which effects the productivity. This research has importance for employees & organization because this research will provide the guidelines to them how to handle or treat with the problems of employee’s motivation that effect productivity.

Research Objectives

The research objectives of this research are as follows:

To determine the reasons that effects employee motivation.

To determine the effect of motivation on employees productivity.

To what extent or whether motivation effect employees productivity.

Plan of Work and Methodology

It represents the basic structure of the research.

Type of Research

The study which evaluates the effect of motivation on employee’s productivity is a causal research in which we find the relationship between motivation & employee’s productivity with qualitative approach.

Data Collection

The data gathering plan for this study is conducting through qualitative techniques such that it is going to make use of primary and secondary data. I collect primary data through questionnaire. By secondary data, I am going to collect pertinent published sources – books and academic journals from local and foreign universities.

Sampling Unit

There are several methodological approaches available to gathering data. In order for me to find reliable and valid data I choose to obtain it from different business owners, executive managers and employees from different organizations in the city. This is a very diverse group and it is going to allow me to test my hypotheses which consist of gathering information on a group of employees and managers to discover the effects of motivation on employee’s productivity.

Sampling Size

The proposed sample of the respondents is 150 but 50 of them have been dropped out due to the fake or incomplete information, the data have collected from 100 employees according to need of research objectives.

Sampling Method

The sample technique that I have used for research is Non Probability sampling. In non probability sampling method I have choosed Convenience sampling in which I collect data through convenient places.

Place of work and Facilities Available

This research will be done in year 2010 Karachi, Pakistan. There are facilities available to the students of Federal Urdu university, Gulshan campus Karachi for the research work, and I have avail the facilities of Published Articles, websites, L.E.J digital Lab (University of Karachi), Maulvi Abdul Haq Library (Federal Urdu University of Science and Technology, Gulshan Campus, Karachi) as well as I have to collect secondary data from Karachi university.


Hypothesis testing is the most valuable part of the research and one of the most important tools of application of statistics to real life problems. It is a statement made about the result of an experiment which we then test. So, to prove my research, I have made two statements and then perform tests on the basis of primary data. The primary data which I have collected through survey has Cronbach’s Alpha (α) = 0.777 which means my data is 78% reliable. After reliability test I did T-test and F-test through which I determine the significance level, Significance value is 0.000 which is less than 0.05 (P < 0.05). It means that Ho (Null Hypothesis) is rejected & H1 is proved and accepted on the basis of analysis and significance level because the significance value is less than 0.05 (P < 0.05). Here H1 is proved, it means that it has been proved that high motivation leads to high productivity or the effect of motivation on employees productivity is always positive because proving H1 is the evidence of proving the research.

Ho: High motivation leads to low productivity.

H1: High motivation leads to high productivity.

Scope of Study

The main scope of this study is to determine or highlight the effect of major motivational factors that influence on employee’s productivity in organizations & the factor which has more influence either its relate to intrinsic or extrinsic motivation?. And to assess the importance of motivation from the perspectives of employees to perform well and also is to aware of the application of motivation in the organization.

This projected research is needed to improve employees’ performance at the workplace, to retain employees and to help companies establish a good image. If a company’s employees do not acquire this motivation then the company could lose large amounts of money, customers or even go out of business. On the other hand if that company’s employees are well trained and motivated by their employers it could have great income potential, keep loyal customers and gain a lot of market share.

This study which evaluate the effect of motivation on employee’s productivity help’s firms and organizations to improve their motivation programs which will open new dimensions to increase employee’s productivity which will help to enhance the progress of organization to reduce competition by understanding employee’s needs and issues such as;

How employee thinks, feel, act & react in organization.

How employee is influenced by his/her environment for better performance.

What is the behavior of employees in chaotic c


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