effect of motivation on employee performance

8/18/2019 Effect of Motivation on Employee Performance

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Vol. 5(5), pp. 199-211, August, 2013

DOI: 10.5897/ JEIF12.08

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Journal of Economics and International Finance

Full Length Research Paper

Impact of motivation on employees‟ performance: Acase study of CreditWest Bank Cyprus

Ukaejiofo Re U!onna

Department of Rural Development and Management, College of Humanities and Development Studies, China Agricultural University, Beijing

Accepted !" May, #$!%

An important role of mana"ement is to #elp make $ork more satisfyin" and re$ardin" for emp loyeesand to make employees‟ motivation consistent $it# or"ani!ational o%jectives& Wit# t#e diversity of contemporary $orkplaces' t#is is a comple task& (any factors' includin" t#e influences of differentcultures' affect $#at people value and $#at is re$ardin" to t#em& From a mana"er)s perspective' t# isstudy tries to understand $#at prompts people' $#at influences t#em' and $#y t#ey persist inparticular actions& *#is study also intends to evaluate motivation of employees in t#e or"ani!ation& A"ood motivational pro"ram procedure is essential to ac#ieve "oal of t#e or"ani!ation& If efficientmotivational pro"rammes of employees are made not only in t#is particular or"ani!ation %ut also in anyot#er or"ani!ation' t#e or"ani!ations can ac#ieve t#e efficiency also to develop a "ood or"ani!ationalculture and t#e attainment of or"anisational "oals at lar"e&

+ey $ords: Motivation, organisational &ehaviour, performance, employee

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Since the &eginning of time, leaders have risen to ta'echarge of societies and ma'e decisions (hese decisionsoften meant the difference &et)een having food andgoing hungry, having shelter or &eing homeless, andsometimes the difference &et)een life and death Associety progressed, there have &een great technologicaladvances )hich have &rought convenience to our livesDespite having advancements, the &asic needs f or humans still remain the same A *uestion often as'ed &y

managers is, +Ho) do )e motivate our employees-.ffectively motivating employees to achieve a desiredoutcome is one of the most important functions of amanager (here is evidence to sho) organi/ations arefacing challenges retaining employees due to limitedopportunities for advancement and the currentcompetitive la&our mar'et 0t does not appear things )ill

get any &etter in the future (he loss of employeerepresents a loss of s'ills, 'no)ledge, and e1periencesand can create a significant economic impact and cost tocorporations as )ell as impacting the needs ocustomers Managers )ho can motivate employeeassist the organi/ation &y improving employee retentioand reinforcing positive &ehaviours and conse*uentlytheir enduring a&ility to motivate )or'ers to achieve thehighest result determines the success of a &usiness

Motivation is the intention of achieving a goal, an a&ilityto change &ehaviour, that inner directing drive, leading togoal2directed &ehaviour to)ards the attaining goaRe)ards can &e either non2monetary or monetary (hfollo)ing is the proposed model of impact omotivation on employees‟ performance (he proposemodel )ould &e tested )ith empirical analysis in ordeto identify the

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model f itBasic to any e1planation of )hy people &ehave in a

certain manner is a theory of motivation As 3ones5!6768, cited in 9a)ler 5!6"68, pointed out that motivationtheory attempts to e1plain :ho) &ehaviour gets started, isenergi/ed, is sustained, is directed, is stopped and )hat'ind of su&jective reaction is present in the organism:(he theory of motivation that )ill &e used to unders tandemployees‟ performance is :e1pectancy theory- 5;room,!6"< as descri&ed &y Ro&&ins 5!66=8 (he e1pectancytheory used is &ased upon 9a)ier and >orter 5!6"?8,>orter and 9a)ier 5!6"=8 as *uoted &y Ro&ert and Hunt5!66!8 Accordin" to t#is t#eory' anemployee)s motivation to perform effectively isdetermined %y t$o varia%les& (he first of these iscontained in the concept of an effort/re$ard pro&a&ility(his is the individual@s su&jective pro&a&ility thatdirecting a given amount of effort to)ard performingeffectively )ill result in his o&taining a given re)ard or

positively valued outcome (his effort2re)ard pro&a&ilityis determined &y t)o su&sidiary su&jective pro&a&ilitiesthe pro&a&ility that effort )ill result in performance andthe pro&a&ility that performance )ill result in the re)ard59a)ler, !6"68

Ro&ins 5!66=8 e1plained thus, :;room refers to the f irstof these su&jective pro&a&ilities as an 0a1 epectancyand to the second as an 0 % 1 instrumentality (hesecond varia&le that is relevant here is the concept of 021 re$ard value or valence (his refers to theindividual@s perception of the value of the re)ard or outcome that might &e o&tained &y performingeffectively Although most e1pectancy theories do not

specify )hy certain outcomes have re)ard value, there)ard value of outcomes stems f rom their perceiveda&ility to satisfy one or more needs Specifically relevanthere is the list of needs suggested &y (aslo$ t#atincludes security needs' social needs' esteemneeds' and self/actuali!ation needs 5Her/&erg,!6=?8 (he evidence indicates that, for a given re)ard,re)ard value and the effort2re)ard pro&a&ility com&inemultiplicatively in order to determine an individual@smotivation (his means that if either is lo) or not e1istingthen no motivation )ill &e present According to 9a)ler 5!6"68, they illustrate a case of a manager )ho verymuch values getting promoted &ut )ho sees no

relationship &et)een )or'ing hard and getting promoted(o him, promotion does not serve as a motivator, just asit is not for a manager )ho sees a close connection&et)een &eing promoted and )or'ing hard &ut )ho doesnot )ant to &e promoted 0n order for motivation to &epresent, the manager must &oth value promotion and seethe relationship &et)een his efforts and promotion‟‟

(hus, for an individual re)ard or outcome the argumentis that a com&ination of its value and the appropriateeffort2re)ard pro&a&ility is necessary Ho)ever, anindividual@s motivation is influenced &y more than oneoutcome (hus, in order to determine an individual@s

motivation it is necessary to com&ine data concerned)ith a num&er of different outcomes (his can &e donefor an individual )or'er &y considering all the outcomehe values and then summing the products o&tained f rommultiplying the value of these outcomes to him &y thei

respective effort2re)ard pro&a&ilities According to thitheory, if changes in jo& design are going to affect anindividual@s motivation they must either change the valueof the outcomes that are seen to depend upon effort, opositively affect the individual@s &eliefs a&out thepro&a&ility that certain outcomes are dependent uponeffort 5;astano, !6=78

Mullins 5!6668, in his &oo' ‘’Management andOrganisational Behaviour, distinguished &et)een t)'inds of re)ards As previously seen, the first types arethose that are e1trinsic to the individual (hese re)ardsare part of the jo& situation and are given &y othersHence, they are e1ternally mediated and are re)ards thacan &est &e thought of as satisfying lo)er order needs

(he second type of re)ards is intrinsic to the individuaand stems directly from the performance itself (hesere)ards are internally2mediated since the individuare)ards himself (hese re)ards can &e thought of assatisfying higher order needs such as self2esteem anself2actuali/ation Ro&ert and Hunt 5!66!8 go further tillustrate that these re)ards involve such outcomes afeelings of accomplishment, feelings of achievement, andfeelings of using and developing one@s s'ills and a&ilities

Certain tas's are more li'ely to arouse motives li'eachievement and self actuali/ation, and to generateamong individuals )ho have these motives aroused, the&elief that successful performance )ill result in outcome

that involve feelings of achievement and gro)th 0t isprecisely &ecause changes in jo& content can affect therelationship &et)een performance and the reception ointrinsically re)arding outcomes that it can have a stronginfluence on motivation and performance 5.d)in, !66%8

(here appears to &e three characteristics )hich jo&smust possess if they are to arouse higher order needsand to create conditions such that people )ho performthem )ill come to e1pect that good performance )ill leadto intrinsic re)ards (he first is that the individual musreceive meaningful feed&ac' a&out his performance (hismay )ell mean the individual must himself evaluate hio)n performance and define the 'ind of feed&ac' that he

is to receive 0t may also mean that the person may haveto )or' on a )hole product or a meaningful part of it (hesecond is that the jo& must &e perceived &y the individuaas re*uiring him to use a&ilities that he values in order f ohim to perform the jo& effectively nly if an individuafeels that his significant a&ilities are &eing tested &y a jo&can feelings of accomplishment and gro)th &e e1pecteto result from good performance 4inally, the individuamust feel he has a high degree of self2control over se ttinhis o)n goals and over defining the paths to these goals



59a)ler, !6"6 .d)in, !66% httpincentivescomemployee2motivation html Eiscom&e,#$$#8

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Huc/yns'i and Buchanan 5#$$?8 argued that +Motivation-is +A com&ination of goals to)ards )hich human &e2haviour is directed the process through )hich thosegoals are pursued and achieved and the social f actorsinvolved-

9uthans 5!66#8 says, +Motivation is a com&ination of needs, drives and incentives Motivation is defined as theprocess that starts )ith physiological or psychologicaldeficiency or need that activates &ehaviour or a drive thatis aimed at a goal or incentive-

Mullins 5!6668 says, +(he underlying concept of moti2vation is some driving force )ithin individuals &y )hich

they attempt to achieve some goal in order to fulfilsome need or e1pectation- Mullins also distinguishes

&et)een e1trinsic motivation related to tangi&le re)ardssuch as money and intrinsic motivation related to

psychological re)ards such as the sense of challenge andachievement (here are ine1hausti&le definitions of motivation in various pu&lished )or's, articles, te1ts

and journals &y reputa&le fello)s and organisationsstudying the concept

F‟Motivation‟ (he aforementioned definitions are justa fe) to illustrate the concept motivation as used in this)or'

+ey factors

3oals and am%itions: (hese must &e &oth realistic andachieva&le if satisfaction is eventually to occur >ro&lemsarise )hen the goals set are too lo) 5leading to f eelingsof frustration8 or too high 5leading to the constant lac' of achievement8 (hey must also &e accepta&le to theindividual concerned2 in terms of self image, self )orthand self value2 so they are li'ely to &e positive and &asedon the drive for improved levels of comfort, capa&ility and)ell &eing (hey must also &e accepta&le 5or at least notunaccepta&le8 to the society and environment in )hichthe individual lives and )or's, and capa&le of &eingharmonised and integrated )ith them 5>ettinger, #$$#8

Reco"nition: A critical part of process of developing self esteem and self )orth lies in the nature and levels of recognition accorded to the achievement of particular goals (he need for recognition itself therefore &ecomesa drive 0ndividuals tend to pursue goals that )ill &erecognised and valued &y those )hose opinions and

judgement are important to them family, friends, peersand social groups, as )ell as )or' organisations

Dissatisfaction occurs )hen this recognition is not

forthcoming 5>ettinger, #$$#8

Ac#ievement: (he components of achievement are thanticipated and actual re)ards that the fulfilment of aparticular goal &rings High levels of achievement occu)here these overlap completely, a high level alsonormally occurs )here real re)ards e1ceed those tha

are anticipated 9o) levels occur )hen the anticipatere)ards are not forthcoming this devaluates the achievement High and complete achievement is normally seeand perceived as successful 9o) achievement or f ailurto achieve is seen and perceived as f ailure

*#e need for success: >eople tend to set their sights a)hat they 'no) or thin' they can do, or thin' that theymay &e a&le to do, so that success is f orthcoming

-vervie$ of motivational t#eor ies

Motivation is not a simple concept instead motivatiopertains to various drives, desires, needs, )ishes andother forces Managers motivate &y providing anenvironment that induces organisation mem&ers tocontri&ute (he need2)ant2satisfaction chain is some)haoversimplif ied

Maslo)‟s theory holds that the human needs form ahierarchy ranging from the lo)est Gorder need5psychological needs8 to the highest G order needs 5 thneed for self actualisation8 According to Her/&erg‟s t)factor theory, there are t)o sets of motivating factors 0one set are dissatifiers, )hich are related to the jocontent of the jo& ;room‟s e1pectancy theory omotivation suggests that people are motivated to reach

goal if they thin' that the goal is )orth)hile and can seethat their activities )ill help them achieve the goa5Ro&&ins, !66= Ro&ert and Hunt, !66!8 (he >orter and9a)ler ‟s model has many varia&les .ssentially, per f ormance is a function of a&ility, the perception of tasre*uired, and effort .ffort is influenced &y the value ore)ards and the perceived effort2re)ard pro&a&ility>erformance accomplishment in turn, is related tre)ards and satisfaction 5Ro&&ins, !66=8 .*uity theorrefers to an individual‟s su&jective judgement a&out thfairness of the re)ard received for inputs in compariso)ith the re)ards of others Reinforcement theory )adeveloped &y S'inner, )ho suggested that people should

participate in setting their goals and should receiveregular feed&ac' )ith recognition and praise Accordingto Ro&ert and Hunt 5!66!8, McClelland‟s theory is &aseon the need for po)er, the need for affiliation and thneed for achievement Mcregor, in his &oo' the Humanside of Enterprise as *uoted &y Mullins 5#$$78, arguedthat the style of management adopted is a function of thmanager ‟s attitudes to)ards human nature and



&ehaviour at )or' he put for)ard to suppositions called(heory I and (heory J )hich are &ased on assumptiona&out )or' and people 5Mullins, #$$78

Content and process t#eor ies

(he motivation theories seen a&ove have &een dividedinto t)o contrasting groups

Content theories: place emphasis on )hat motivatesand are concerned )ith identifying people‟s needs andtheir relative strengths, and the goals they pursue in other to satisfy these needs Main content theories includeMaslo)‟s hierarchy needs model Alderfer ‟smodif ied need hierarchy model Her/&erg‟s t)o factor theory and McClelland‟s achievement motivation theory5Koont/ and Eeihrich, !66$ Child, !6=<8

Process theories: place emphasis on the actual processof motivation (hese theories are concerned )ith therelationships among the dynamic varia&les )hich ma'eup motivation, and )ith ho) &ehaviour is initiated, direc2ted and sustained Major approaches under this includee1pectancy G&ased models, e*uity theory goal theoryand attri&ution theory 5Koont/ and Eeihrich, !66$8

Etrinsic and intr insic

(he various needs and e1pectation at )or' can &ecategorised in a num&er of )ays for e1ample the simpledivisions into physiological and social motives or intointrinsic and e1trinsic motivation

Etrinsic motivation is related to Ftangi&le‟ re)ardssuch as salary and fringe &enefits, security,promotion, contract of service, the )or' environmentand conditions of )or' Such tangi&le re)ards are oftendetermined at the organisational level and may &elargely outside the control of individual managers5Mullins, #$$78!ntrinsic motivation is related to 9psychological‟re)ardssuch as opportunity to use one‟s a&ility, a sense of challenge and achievement, receiving appreciation,positive recognition, and &eing treated in a caring and

considerate manner (he psychological re)ards arethose that can usually &e determined &y the actions and&ehaviour of individual managers 5Mullins, #$$78

iven the comple1 and varia&le nature of needs ande1pectations, the follo)ing is a simple and usefulthree fold classification for revie)ing the motivation to)or' developed &y Mullins 5#$$78Economic re"ards# such as pay, fringe &enefits, pensionrights, material goods and security!ntrinsic satisfaction# derived from the nature of the)or'

itself, interest in the jo& and personal gro)th andevelopment (his is a personal orientation to )or' and&e concerned a&out oneself

$ocial relationships# such as friendships group)or'ings, and the desire for affiliation, status anddependency (his is a relational orientation to )or' and&e concerned a&out other people

A person‟s motivation, jo& satisfaction and )or

performance )ill &e determined &y the comparativestrength of these sets of needs and e1pectation and the1tent to )hich they are fulfilled 4or e1ample, somepeople may ma'e a deli&erate choice to forgo intrinsisatisfaction and social relationships 5particularly in thshort term or in the earlier years of their )or'ing life8 inreturn for high economic re)ards ther people arehappy to accept comparatively lo)er economic re)ardin favour of a jo& )hich has high intrinsic satisfaction andor social relationships 5Mullins, !6668

(otivational tec#niues

>erhaps one of the most effective )ays of motivating ateam is to ensure that they understand and appreciatethe aims of an organisation and are supported &y themanagers in )or'ing to)ards the achievement of thoseaims (here are a range of motivational techni*ues thacan &e used to improve productivity, reduce )or'placestress and increase self2confidence (here are a num&eof )ays of inspiring and motivating a team they are af ollo)s

Team-bu il d i ng

Despite mi1ed feelings a&out team2&uilding activities, thfact that they encourage people to )or' together ou tsidthe office environment can &e a definite advantage (hecan encourage healthy competition and give eacmem&er of staff the opportunity to &e on the )inningteam 0mproving team relationships can result iincreased productivity and morale, and can lead to much happier and healthier )or'ing environment Suce1ercises can also help in the resolution of pre2e1is tinissues )ithin the team 0t is important that all team&uilding e1ercises are carefully &alanced to ensure thathey do not play to the particular strengths, o

)ea'nesses, of employees &ut are designed instead tgive every&ody a chance of success 5Koont/ andEeihrich, !66$ Ro&&ins, !66= ##"8

*rainin"

>eople can &e taught to &ecome more motivated &y



sho)ing them ho) to deconstruct tas's and challenges,and ho) to feel less intimidated &y their jo& rolesDemonstrating to them ho) to cope in the )or'place canlead directly to improved motivation 5Daniel, #$$!8

En#anced communication

Communication does not only mean tal'ing to your team&ut also listening to them 0t is important to ensure their understanding of companies‟ o&jectives and their individual jo& roles &ut it is e*ually important to sho)them the importance of their feed&ac' for theachievement of targets and standards 5Ro&&ins, !666Daniel, #$$!8

Targets, rewards and i ncentives

0t is generally accepted that having targets to )or'to)ards, as long as they are realistic, is one of the mosteffective )ays of improving performance Hitting targetsimproves morale and self2confidence &ut remem&er thatthose )ho consistently underachieve )ill end up f eelingdemotivated (arget achievement can &e re)arded notonly )ith financial incentives &ut perhaps )ith the offer of increased responsi&ility or even promotion Diff erentpeople are motivated &y different things so it is importantto ma'e sure that you offer the right incentives to the rightmem&er of the team Motivating a team is al)ays easier if you fully understand that they may not necessarily &emotivated &y the same things as you (he most eff ectiveteams are those that feel valued and supported &ut alsofeel that they are progressing and developing through the

completion of challenging tas's 0f a team understandscompany‟s o&jectives, they are much more li'ely to)ant to )or' harder to)ards their achievement Also,most people tend to respond )ell to &eing giventhe opportunity to ma'e decisions and ta'e on addi tionalresponsi&ilities Ehatever motivational techni*ues )or'the &est, it is al)ays important to ensure that your teamfeels it is ma'ing a valua&le and positive contri&ution5Koont/ and Eeihrich, !66$ Daniel, #$$! Kelly, #$!$8

Encouraging part i c i pat i on

.mployees can contri&ute in a num&er of decisions thataffect them setting )or' goals, choosing their o)n&enefits pac'age, solving productivity and *ualitypro&lems, and the li'e (his can increaseemployees‟ productivity, commitments to )or' goals,motivation and jo& satisfaction 5Ro&&ins, !66=8 0t is alsoa means of recognition 0t appeals to the need for affiliation and acceptance A&ove all, it gives peoplea sense of

accomplishment, &ut encouraging participation should nomean that the managers )ea'en their positions Althougthey encourage participation of su&ordinates on matter)ith )hich they can help, and although they listecarefully on matters re*uiring their decision they musdecide themselves (he &est su&ordinates ever haverespect for a )ea' superior 5Koont/ and Eeihrich, !66$8

Job enr i chment

According to Koont/ and Eeihrich 5!66$8, this is theattempt to &uild into jo&s a higher sense of challenge andachievement A jo& may &e enriched in variety, &y giving)or'ers more freedom in deciding a&out such things as)or' methods, se*uence, and pace or the acceptance orejection of materials giving )or'ers a feeling of personaresponsi&ility for their tas's ta'ing steps to ma'e surethat )or'ers can see ho) their tas's contri&ute to afinished product and the )elfare of an enterprise

involving )or'ers in the analysis and change of physicaaspects of their )or' environment, such as layout of theoffice or plant temperature, lightening and cleanliness

Quality of woring life programs

(hese programs as descri&ed &y Koont/ and Eeihric5!66$8 and Bateman and Snell 5#$$<8 create a )or'placethat enhances employees‟ )ell &eing and satisf action(he general goal of LE9 programs is to satisfy a f urange of employees‟ needs >eople‟s needs ardivided into eight categories Ade*uate and facompensations, safe and healthy environments, jo&s thadevelop human capacities, chance for personal gro)tand security, social environment that fosters personaidentity, f reedom from prejudice, sense of communityand up)ard mo&ility, constitutionalism, or rights opersonal privacy, dissent and due process, )or' rolethat minimises inf ringement on personal leisure andfamily needs and socially responsi&le organisationaactions LE9 programs mean much more than eacperson‟s *uantity of )or' output 0t also indicateturnover, a&senteeism, accidents, theft, sa&otagecreativity, innovation and especially the *uality of )or'

Checing system for e!u i ty

Re)ards should also &e perceived &y employees ae*uating )ith inputs they &ring to the jo& (his shouldmean that e1perience s'ills, a&ilities, efforts and otheo&vious inputs should e1plain differences in performanceand, hence, pay jo& assignments, and other o&vioure)ards 5Ro&&ins, !66=8



"oney

Ehether in the form of )ages, piece)or' 5getting paid f or units produced at a certain *uality level8 or any other incentive pay, &onuses, stoc' options, company2paidinsurance, or any of the other things that may &e given topeople for performance, money is important it could also

mean status or po)er 4or some people money )illal)ays &e of the utmost importance, )hile for others i tmay never &e 0t is pro&a&ly *uite true that in most 'indsof &usinesses and in enterprises money is used as ameans of 'eeping an organisation ade*uately staffed andnot primarily as a motivator >eople in various posi tions,even though at a similar level, must &e given salaries and&onuses that reflect their individual performances (he)ay to ensure that money has meaning, as a re)ard f or accomplishment and as a )ay of giving people pleasurefrom accomplishment, is to &ase compensation as muchas possi&le on performance 5'oont/ and Eeihrich,!66$.d)in, !66%8

#ecognising individual d i fferences

.mployees have different needs 0t is important not totreat them all ali'e 0mportant note should &e made tounderstand )hat is important to each employee (hisallo)s for individualising goals, levels of involvement,and re)ards to align )ith individual needs 5Ro&&ins,!66=8

Impact of motivation on employees‟ performance

According to Her/&erg@s t)o2factor theory of motivation,money is not even a motivator 5Her/&erg, !6=?8 (oday@s)or'force is &ecoming more and more s'ilful and techno2logically inclined Managers have to thin' of ne) )ays tomanage this 'no)ledge )or'force Eith 'no)ledge ands'ills come higher salary demands (hese 'no)ledge)or'ers )ill no longer +)or' for &eans- According toMaslo)@s hierarchy of needs, people have physical,security, social, ego and self2actuali/ation needs >eopleare motivated to fulfil lo)er2level needs &efore they moveon to fulfil higher2level needs, such as ego 5esteem8 andself2actuali/ation 5Her/&erg !6=?8 Kno)ing )hat peopleneed can help us understand ho) to motivate today@s

'no)ledge )or'ers iven the fact that these )or'erscommand high2paying jo&s, )e can infer that moneyalone does not provide enough of an incentive as amotivator for performance (his is, of course, an elementof Her/&erg@s theory of motivation

Managers need to provide challenging jo&s in order to&etter motivate today@s 'no)ledge )or'ers Because thephysical or material, and social needs that come )ith the

jo&s are already fulfilled, these 'no)ledge )or'ers tend

to move on to higher2level of needs such as ego 5esteemand self2actuali/ation (he survey )e conducted suggests gro)th opportunities and challenges have apositive effect on a person‟s motivation in the )orplace (he majority of people )e surveyed ran' gro)topportunities higher than pay )hen it comes to jomotivation Most of the people in the survey ans)ere

that they )ould ta'e a high2profile jo& )ith morresponsi&ilities &ut )ithout any pay increase )hen giventhe opportunity (his &ehaviour suggests that peopleprefer recognition associated )ith the jo& Also, th&ehaviour in choosing the jo& )ith more responsi&ilitiesuggests that people are not afraid of challengeassociated )ith the jo& )hen they are presented in theright conte1t 0n this case, &y ta'ing on the challengespeople may e1pect a certain amount of recognitionManagers should 'eep this in mind )hen assigning )orto their employees

Eor' itself is a motivator according to Her/&erg@s t)ofactor theory A )or'er derives a sense of self2)orth i

the process of performing the jo& and, upon completioof that jo&, a sense of accomplishment Studies havsho)n that satisfied )or'ers are more productiv5Schermerhorn et al,, #$$%8 0n dealing )ith today@'no)ledge )or'force, managers need to design jo&s thaare &oth challenging and satisfying 0n order to desigthe +right- jo& for the right person, the jo& designinprocess needs to involve employees &ecause their needhave to &e addressed A significant num&er of jo&s in th)or'place are apparently not very challenging 0situations li'e these, managers can set goals and o&jectives so employees 'no) )hat is e1pected of them(hese goals and o&jectives need to &e specifically statein order to have most motivating effect Having a cleagoal can ma'e a previously routine jo& &ecome more of achallenge Eith this vie), the )or'er &ecomes mormotivated in order to achieve that goal Ehether the jois &y design or &y goal setting, a highly motivated )or'eis li'ely to &e one )ho has the necessary s'ills andsupplies to accomplish the jo&

(he survey conducted also indicated that a majority othe respondents consider the opportunity for gro)th to &emore of a factor in jo& motivation than pay (oday@'no)ledge )or'ers also demand gro)th opportunitiefrom their )or' place (hese )or'ers value ne)'no)ledge and ne) s'ills Companies that can providethese gro)th opportunities reap the &enefits of having a

motivated )or'force )ith improved s'ills (hese gro)topportunities can involve on2the2jo& training or companypaid technical training Managers need to understand thachallenging )or' and opportunities for gro)th really gohand in hand Eor'ers )ho routinely perform challenging)or' inherit personal gro)th and thus &ecome even moremotivated and productive Designing challenging )orand providing gro)th opportunities can &e cost2eff ective



)ays to &oost employees‟motivation

on2cash re)ards also play an important role in anyorgani/ation, as re)ards for e1ceptional performance arevital for employee motivation .mployees )ant and needrecognition on the jo&, and an effective )ay of sa tisf yingthis need is through non2cash re)ards on2cash re2

)ards appeal to employees on a personal level Becausenon2cash re)ards have proven to &e effective motivators,companies that +)ant re)ards to &e cost2effective &utmemora&le are see'ing the services of firms thatspeciali/e in employees‟ recognition According to thesurvey )e conducted, 6<N of those surveyed felt thatnon2cash re)ards can &e very effective in motivatingemployees (his seems to demonstrate that money isnot everything )hen it comes to motivating a person onthe jo& on2cash a)ards play an important role inemployees‟ motivation and 'no)ing their contri&utionscount is vital to employee performance As previouslymentioned, recognition is another important factor thatmanagers must identify in motivating their employeesaccording to the intervie) conducted Recognition cancome in many forms, most of them )ith little or no realcost to a company A compliment such as +a simpleFthan' you‟ still goes a long )ay in motivating employees-5Kelly, #$!$8, or it can &e more formal such as an+employee of the month- a)ard +(he value of recog2nition is the attention they receive- 5Eiscom&e, #$$#8

elleman 5!66#8 states in his &oo', Motivation in t heReal %orld# &he 'rt of (etting Etra Effort FromEver)one * !ncluding +ourself , +0f you are dealing )ithindividuals )ho, regardless of their demographics, )antto ta'e charge of their o)n life, at least to the e1tent thatcircumstances permit them to do that, you can motivate

them Ehat that 'ind of person needs is plenty of opportunity for achievement and recognition- 5ellerman,!66#8 .mployees and people in general )ant to feel li'ethey are individuals and that they can distinguish them2selves &y doing an e1ceptional or outstanding jo& (hisconcept )ould relate to the level of +ego- inMaslo)‟stheory on the hierarchy of needs, )hich deals )ithindependence, achievement, freedom, status, recognition,and self2esteem By ac'no)ledging the e1cellence and)ell2performed activities of employees, managers candetermine the type of recognition re*uired (he level of appreciation from recognition rises if it is an honest and

)ell2deserve recognition &ecause +if employees &elieveyou are a fair, honest and caring &oss, most of them )illremain loyal and respond in 'ind- 5Eiscom&e, #$$#8

(E*4-.-;-3<

Luota sampling 5employees of the Credit E est8 and simpl

random sampling method have &een used to select targe

respondents for the study (he employees of the &an' have &ee

informed on the purpose of the study and the )illing employee

participated in the study Selective *uestions )ere as'ed an

respondents just tic'ed appropriately pen ended *uestionnair

)as used for the pilot study and the result of the open ende

*uestionnaire )as used to formulate the closed end structure

*uest ionnaire (he *uestion2 naire contained *uestions used t

determine the non2monetary motivation techni*ues recognition

trainings, authority, freedom, jo& autonomy, challenging )or

schedules, j o& security, prestigious jo& titles and responsi&ility A

second part contained *uestions used to determine monetar

motivation varia&les such as fringe &enefits, money, &onuses

pensions, profit sharing and performance pay And a final pa

on *uestions used to determine e1traneous varia&les such a

re)ards and incentives, team &uilding activities, participation

recognition of individual differences, performance pay, enhance

communication and jo& enrichment(he statistical tools used for the analysis of the *uestionnaire ar

fre*uency analysis, descriptive analys is, ran'ing method

mean analysis 5Attitude scale8, one sample (2test, and principl

com2 ponent factor analysis, specific model developed t

identify the impact of motivation techni*ues on employees

per f ormance, Cron&ach‟s Alpha relia&ility analysis 5(est ing th

relia&ility and validity of collection instrument8

RE=U;*= A,. .I=CU==I-,

7$N of the respondents )ould prefer the organisation torecognise them for performance )ith higher position#<N of the employee )ould prefer nothing, &oth or all othe a&ove 5#$N8 indicated cash re)ard )hile "N )ouldprefer to &e recognised for performance )ith moreresponsi&ility 5(a&le !8

4rom the a&ove analysis, 7$N indicated higher postion 0t can &e inferred that the majority of the respon

dents used for this study prefer higher positionRecognition scored <$7 and ran'ed !

st, authority has

"$" and it is ran'ed #nd

, advancement and opportunitscored 76% and it is ran'ed %

rd, autonomy has 77! score

and it is ran'ed <th 3o& security scored 7<% and ran'ed

7th, responsi&ility ran'ed "

thscoring 7#$, jo& title ran'ed

?th

scoring 7!$ )hile challenging )or' scored <#?ran'ing =

th

0t can &e seen from the a&ove analysis that &othrecognition and authority have the highest score and theare &oth ran'ed !

stand #

ndrespectively (his sho)s tha

&oth factors are the most important in the e1pected nonmonetary motivation varia&les Career advancement andopportunity is the ne1t e1pected non2motivation varia&le

that most respondents choose to &e important f ollo)ed&y autonomy, jo& security, responsi&ility, jo& title andchallenging )or'

Recognition scored "7< and ran'ed !st, advancemennd

(his research )or' is carried out )ithin the )or'force of the

and opportunities scored %6% and ran'ed # , challenging

CreditE est Ban' Cyprus a centralised human resourcedepartment of the &an' helped in conveying the *uestionnaire tothe !% &ranches of the &an', and !%< respondents )ereintervie)ed

)or' scores <6= and ran'ed %rd

, responsi&ility scored <6#and it is ran'ed <

th 3o& security scored <6! and ran'ed

7th, authority scored <?6 and ran'ed "

th, autonomy



*a%le >& Ran'ing of Kinds of recognition e1pected &y employee for performance

Reco"nition for performance ,um%er of respondents ? of Respondents

Cash re)ard #? #$

Higher position "= 7$

More responsi&ility = "

Mull %# #<(otal !%< !$$

scored <?= and ran'ed ?th

and lastly jo& title scored <"6and ran'ed =

th

0t can &e seen from the a&ove analysis that recognition

scored the highest and ran'ed !st

follo)ed closely &yadvancement opportunities, challenging )or',responsi&ility, jo& security, authority, autonomy and jo&

title scoring last all in the #nd

, %rd

, <th, 7

th, "

th, ?

thand =

th

categories respectively (his sho)s that recognition andadvancement opportunities are the actual non monetary

motivation varia&les implemented &y the &an'Challenging )or' is the ne1t actual non2 monetaryvaria&le that most respondents choose to &e importantfollo)ed &y responsi&ility, jo& security, authority,autonomy and lastly jo& title

n n n

5Actual output2.1pected output8

Aoi O Actual output 5Happiness of employee on nonmonetary motivation8.oj O .1pected output 5.1pectation of employee on nonmotivation motivation845nmiepj8 O 0mpact of non2monetary motivation varia&leson employee per f ormance

0t is evident from the a&ove that the non2monetarmotivation techni*ues have high and lo) impact on theemployees‟ performance (he follo)ing factorportray the high impact of non2monetary motivatiotechni*ues on employees‟ performance such aauthority, autonomy, jo& security, jo& title, anresponsi&ility (he non2 monetary motivation varia&lehaving lo) impact include

recognition, advancement and opportunities and challenf5nmiepj8 @ ∑ Aoi −∑ Eoj ÷ ∑ Eoj

ging )or'

i =1 i =1 i =14rom the a&ove analysis it is sho)n that authority

autonomy, jo& security, jo& title and responsi&ility are

Aoi O Actual output 5Happiness of employee on non2monetary motivation.oj O .1pected output 5.1pectation of employee on non2monetary motivation845nmiepj8 O 0mpact of non2monetary motivation varia&leson employee per f ormance

0t is evident from the a&ove that the non2monetarymotivation techni*ues have positive and negative impacton the employees‟ performance (he follo)ingf actors portray the positive impact of non2monetarymotivation techni*ues on employees‟ performance suchas recogni2 tion and challenging )or' Advancement andoppor2 tunities, authority, autonomy, jo& security, jo& title

and responsi&ility tend to have a negative impact 0t could &e seen from the a&ove analysis that

recognition and challenging )or' have a positive impacton employees‟ performance, )hile advancement andopportunities, authority, autonomy, jo& security, jo& titleand responsi&ility have a negative impact on employees‟performance

High impact on employees‟ performance 5P2#?8 9o) impact on employees‟ performance5Q2#?8

sho)n to have a high impact on employeesperforman2 ce, )hile recognition, Advancement anopportunities and challenging )or' have a lo) impact onemployees‟ performance

4ringe &enefits scored 7?% ran'ing !st, salary scored

7#? and ran'ed #nd

, performance pay scored 7!6 anran'ed %

rd Bonuses &ecame <

thscoring 7$$, prof

sharing is 7th

scoring <<?, )hile pensions scored <!$ran'ing "

th

0t can &e seen from the a&ove analysis that f ring&enefits and salary have the highest score and they are&oth ran'ed !

stand #

ndrespectively (his sho)s tha

&oth factors are the most important e1pected monetarmotivation varia&les >erformance pay is ne1t e1pecte

monetary motivational varia&le that most respondentchoose to &e important follo)ed &y &onuses, prof sharing and lastly pensions

4ringe &enefits scored <=? and ran'ed !st, &onus has

<#$ score and it is ran'ed #nd

, salary has %== score and is ran'ed %

rd, performance pay has %=? score and it i

ran'ed <th >rofit sharing scored %?# and ran'ed 7

th

)hile pensions scored %<7 and ran'ed "th

0t can &e seen from the a&ove analysis that f ring&enefit has the highest score and it is ran'ed !

st (his



*a%le 2& .1pectation of non2monetary motivation varia&les

.eterminants =core Rank (ean ratios ;evel of a"reements

Recognition "!< ! <7! Highly agree

Advancement and opportunity 76% % <%" Highly agree

Authority "$" # <<7 Highly agree

Autonomy 77! < <$7 Highly agreeChallenging )or' <#? = %!% Agree

3o& security 7<% 7 %66 Agree

3o& title 7!$ ? %?7 Agree

Responsi&ility 7#$ " %=# Agree

sho)s that this factor is the most important actual mone2tary motivation varia&le Bonuses are the ne1t actualmonetary motivation varia&le that most respondentschoose to &e important follo)ed &y salary, performancepay, profit sharing and lastly pensions

0t is evident from (a&le = that the monetary mo tivationtechni*ues have positive and negative impact on the

employees‟ performance (he follo)ing factors portraya negative impact of monetary motivation techni*ueson employees‟ performance they include fringe&enef its, salary, &onuses, pensions, profit sharing andperfor2 mance pay

of monetary motivation techni*ues on employeesperformance they include fringe &enefits, salary andperformance pay 0t also reveals &onuses, pensions andprofit sharing have a lo) impact on employeesperformance

4rom the a&ove analysis it is sho)n that fringe &enef itssalary and performance pay have a high impact oemployees‟ performance, )hile &onuses, pensions anprofit sharing have a lo) impact on employeesperformance

Relia%ility analysis scale 0A;54A1

n n

n

f5nmiepj8 @ ∑ Aoi −∑ Eoj ÷ ∑ Eoj

Relia&ility analysis of overall collection tool

i =1 i =1 i =1

Relia&ility coeff icients

Aoi O Actual utput 5Happiness of employee on monetarymotivation8

.oj O .1pected utput 5.1pectation of employee onmonetary motivation845nmiepj8 O 0mpact of monetary motivation varia&les onemployee per f ormance

4rom the a&ove analysis it is sho)n that all the varia&leshave a negative impact on employees‟ performance

um&er of cases O !%<$ um&er of items O

<#

Alpha O =#=7

(he relia&ility 5alpha8 analysis has &een done to identif the relia&ility of the *uestionnaire (he analysis producedrelia&ility coefficients of =#=7 )hich is on the very higside (he design of the *uestionnaire and therespondents‟ response )ere relia&le and duly validated

n n f5nmiepj8 @ ∑ Aoi − ∑ Eoj i =1 i =1 Findin"s

Aoi O Actual utput 5Happiness of employee on monetarymotivation.oj O .1pected utput 5.1pectation of employee onmonetary motivation845nmiepj8 O 0mpact of monetary motivation varia&les onemployee per f ormance

0t is evident from the a&ove that the monetary motivationtechni*ues have high and lo) impact on the employees‟performance (he follo)ing factors portray a high impact

Majority of the respondents used for this study )ouldprefer to &e re)arded for performance )ith a higheposition 5(a&le !8

2 4rom the data collected from the respondents it can &eseen that majority of respondents agree that recognitioand authority are the most important of e1pected nonmonetary motivation varia&les, follo)ed closely &advancement and opportunities, autonomy, jo& securityresponsi&ility, jo& title and challenging )or' 5(a&le #8



*a%le & Actual of non2monetary motivation varia&les


Recognition "7< ! <=$==#%7#6 Highly agree

Advancements and opportunities 7=? # <%!"!?"<?! Highly agree

Authority <?6 " %7##$7==#< Agree

Autonomy <?= ? %7!<?$7==# AgreeChallenging )or' <6= % %""!?"<?$" Agree

3o& security <6! 7 %"!$#6<!!= Agree

3o& title <"6 = %<<=7#6<!# Agree

Responsi&ility <6# < %"!?"<?$76 Agree

*a%le & Modelling of the impact of non monetary motivation on

employee performance

,on/monetary motivation (odel value Rank Impact

Recognition "7!<"7?6= # >ositive impact

Advancements and opportunities 2!$!!=$<%= % egative impact

Authority 2#$67?$67? = egative impact

Autonomy 2!%#<="%== ? egative impact

Challenging )or' !""#?"%<"" ! >ositive impact

3o& security 267?"<#?#" " egative impact

3o& title 2=$%6#!7"6 7 egative impact

Responsi&ility 27%=<"!7%= < egative impact

*a%le D& uaging the impact of non monetary motivation varia&les on

employee performance

,on/ monetary varia%les (odel impact Impact

Recognition <$ 9o) impact Advancements and opportunities 2" 9o) impact

Authority 2!#? High impact

Autonomy 2?% High impact

Challenging Eor' ?! 9o) impact

3o& security 27# High impact

3o& title 2<! High impact

Responsi&ility 2#= High impact

2 0f all actual non2motivation varia&les are consideredit can &e seen that recognition ran'ed highest follo)ed &yadvancement and opportunity, challenging )or', res2ponsi&ility, jo& security, authority, autonomy, and jo& title

5(a&le %82 Recognition and challenging )or' have a positiveimpact on employees‟ performance, )hile advancementand opportunities, authority, autonomy, jo& security, jo&title and responsi&ility have a negative impact onemployees‟ performance 5(a&le <82 Authority, autonomy, jo& security, jo& title and res2ponsi&ility are sho)n to have a high impact on

employees‟ performance, )hile recognitionadvancement and opportunities and challenging )orhave a lo) impact on employees‟ performance 5(a&le782 4ringe &enefits and salary have the highest scoresho)ing that &oth factors are the most importane1pected monetary motivation varia&les >er f ormancpay is ne1t e1pected monetary motivational varia&le thamost respondents choose to &e important follo)ed &&onuses, profit sharing and lastly pensions 5(a&le "82 4ringe &enefit has the highest score and it is ran'ed !

s

sho)ing that this factor is the most important actuamonetary motivation varia&le Bonuses are the ne1



*a%le & .1pectation of monetary motivation varia&les


4ringe &enefits 7?% ! <#! Highly agree

Salary 7#? # %=? Agree

Bonuses 7$$ < %"? Agree

>ensions <!$ " %$! Agree>rofit sharing <<? 7 %#= Agree

>erformance pay 7!6 % %=! Agree

*a%le & Actual of monetary motivation varia&les


4ringe &enefits <7? ! %%" Agree

Salary %== % #=7 Disagree

Bonuses <#$ # %$= Agree

>ensions %<7 " #7% Disagree

>rofit sharing %?# 7 #?% Disagree>erformance pay %=? < #=< Disagree

*a%le G& Modelling the impact of monetary motivation on employee performance

(onetary motivation (odel value Rank Impact

4ringe &enefits 2#$#<<%#=! < egative impact

Salary 2#"%?7?!!7? " egative impact

Bonuses 2!" # egative impact

>ensions 2!7=7%"7=7< ! egative impact

>rofit sharing 2!"??=7#%<6 % egative impact

>erformance pay 2#7<%%7#"$! 7 egative impact

*a%le H& auging the impact of monetary motivation varia&leson employee motivation

( on e t a r y m o ti v a t i o n ( od e l im pac t Im p a c t

4ringe &enefits 2!!" High impact

Salary 2!%6 High impact

Bonuses 2=$ lo) impact

>ensions 2"7 lo) impact

>rofit sharing 2?7 lo) impact

>erformance pay 2!%# High impact

actual monetary motivation varia&le that most respon2dents choose to &e important follo)ed &y salary,performance pay, profit sharing and lastly pensions5(a&le ?82 4rom the analysis, modelling the impact of monetarymotivation varia&les, fringe &enefits, salary, &onuses,pensions, performance pay and profit sharing all have a

negative impact on performance 5(a&le =82 4rom the analysis, monetary motivation varia&lesf ringe &enefits, salary and performance pay have a higimpact on employees‟ performance, )hile &onusespensions and profit sharing have a lo) impact oemployees‟ performance 5(a&le 68

Conclusion

(his empirical study )as carried out to identify the impacof monetary and non2monetary motivation on employee(he non2monetary motivation varia&les discusseinclude Recognition, challenging )or', advancement andopportunities, jo& autonomy, authority, jo& securityprestigious jo& titles and responsi&ility (he monetarmotivation varia&les discussed include 4ringe &enef itssalary, &onuses, pensions, profit sharing and performance pay 0dentifying the impact of each of thesevaria&les on employees‟ performance from the data



#!$ 3 .con 0nt 4inance U'aejiof o #!$

IMPACT OF

MONETARYMOTIVATION

ON EMPLOYEE

PERFORMANCE

HIGH IMPACT

F*+g' '+')ts

!%l%*4'*o*%+$' 4%

LOW IMPACT

o+us's

4'+s)o+s

4*ot !,%* )+g

POSITIVE

IMPACT

"o V%*)%l'

NEGATIVE

IMPACT

F*+g' '+')ts

!%l%* o+us's

4'+so+s

4*ot !,%*)+g

4'*o*%+$' 4%

Fi"ure >& 0mpact of monetary motivation varia&les on employee performance

analysis and interpretation, the follo)ing conclusions)ere dra)n

0f managers )ish to &e effective, they need to have a tleast a &asic understanding of motivation and thedifferent motivational theories that try to e1plain theconcept of motivation (hey must &e a&le to grasp the'ey components of theories such as Maslo)‟s hierarchyof needs, and Her/&erg‟s t)o2factor theory and ma'e aneffort to truly understand their employees 0t is only &ygrasping these concepts that they can hope to eff ectively&ring a&out continual high performance in their )or'ersur research, survey results, and intervie)s have givenus some valua&le insight into motivation and its rolein the )or'place Managers need to provide gro)th

opportunity and challenging jo&s in order to &etter

ur research and intervie)s have confirmed that the useof non2cash re)ards can &e an effective and costefficient )ay to motivate employees, and the majority oour survey respondents agree )ith this statement 0conclusion, )hen it comes to &ringing out the &esperformance of employees, gro)th opportunities andchallenges, recognition and non2cash re)ards are moreeffective motivators than money

(he follo)ing model sho)n in 4igure ! depicts theimpact of motivation of employees‟ performance ostaff at CreditEest Ban'

REFERE,CE=

Bateman (S, Snell SA 5#$$<8 Management (he ne) competitiveth

motivate today@s )or'ers Eithout these challenges and landscape Mc ra) Hill, e) Jor'"

.d, pp<$?2<!=

opportunities for gro)th, employees may not see a needto perform highly at )or' Ee have seen that recognitionplays a major role in employees‟ motivation and that itis a very effective motivator .mployees )ant and needto feel that their contri&utions ma'e a difference andrecognition is one )ay to satisfy those )ants or needs

Child 3 5!6=<8 rganisation A guide to >ro&lems and >ractice, >C>>u&lishing, #

nd.d pp!?#2!=$

Daniel K3 5#$$!8 (he effects of employee satisfaction, organisationaciti/enship &ehaviour and turnover on organisational effectiveness

A unit level, longitudinal study >ers >sychol 7<5!8!$!2!!<.d)in A 5!66%8 Comparism and Motivation ma1imising employe

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Her/&erg 4 5!6=?8 F‟Bne more time Ho) do you motivate your

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.d 0r)in BostonMullins 93 5!6668 Management and rganisational Behaviour, 7

th.d

>itman 4(UK pp!$#2", !$$%

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http://www.orcpa.org/pressroom/hotnews/







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.d pp == <%!, !$7#2!$7=

>ettinger R 5#$$#8 0ntroduction to Management >algrave >u&lishers ltd, e) Jor' %rd

.d pp7!=27<!Ro&&ins S> 5!66=8 rganisational Behaviour >rentice Hall, e)

3ersey, USA =th

.d pp!?<26# !?!2?% A!# !6$2!6#Ro&ert KH, Hunt DM 5!66!8 rganisational Behaviour >E S2Kent

>u&lishing company, Boston USA pp<#6, <%?,<<!27# <%?2<! <#6,<%?, <7#2<"=

Schermerhorn 3R, Hunt 3, s&orn R 5#$$%8 rganisational

Behaviour =

th

.d 3ohn E iley and sons, 0nc e) Jor';astano A 5!6=78 Ho) to increase employee competence >ers>sychol %=5#8<=?2<=6

Eiscom&e 3 5#$$#8 F‟E or'force‟‟ =!5<8

effect of motivation on employee performance

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