YASHWANTRAO CHAVAN MAHARASHTRA OPEN

UNIVERSITY
NASHIK 422222

A
Project Report
On
STUDY OF EMPLOYEE
MOTIVATION AND
PERFORMANCE

Submitted By - Guided By –
Sow. Vasudha M. Kulkarni Mansi Kulkarni
MBA II Year ( HRM) Regional Service Manager -
PRN : 2012017001897722 HR
Study Centre: (2107A) HDFC, Mumbai
MIT College ,Aurangabad

For the Academic Year

2015-2016

1
 CERTIFICATE

This is to certify that Sow. Vasudha Milind Kulkarni student

of M.B.A. has successfully completed her project in Name of

the topic “STUDY OF EMPLOYEE MOTIVATION AND

PERFORMANCE”

It is completed as per the requirements of Yashwantrao

Chavan Maharashtra University, Nasik. In partial fulfillment

of Master of Business Administration second year for the

Academic year 2015-2016.

Mansi Kulkarni
Regional Service Manager -HR
HDFC,
Mumbai

(Research
Guide)

2
 YASHWANTRAO CHAVAN MAHARASHTRA OPEN
UNIVERSITY
NASHIK 422222

A
Project Report
On
STUDY OF EMPLOYEE
MOTIVATION AND
PERFORMANCE

Submitted By - Guided By –
Sow. Vasudha M. Kulkarni Mansi Kulkarni
MBA II Year ( HRM) Regional Service Manager -
PRN : 2012017001897722 HR
Study Centre: (2107A) HDFC, Mumbai
MIT College ,Aurangabad

For the Academic Year

2015-2016
3
 Acknowledgement

The gratification and joy that accompanies that

successful completion of any task would be incomplete
without the humble deep-felt expression of gratitude to
the people who made it possible, because success is bridge
between hard work and effort and above all encouraging
guidance and support.

I am also thankful to Project Guide & for helping

me to complete my project work successfully, without her
guidance it would have not been possible.

Place:Aurangabad Name of the student

Date: Sow. Vasudha M. Kulkarni
MBA II Year ( HRM)
PRN : 2012017001897722
Study Centre: (2107A)
MIT College ,Aurangabad

4
 DECLARATION

I hereby declare that, this Project Report submitted

by me in partial fulfillment of Master of degree, it is a
genuine work of mine. It has not been submitted either
fully or partly to any other institute prior, in any other
connection.

Name of the student

Sow. Vasudha M. Kulkarni

MBA II Year ( HRM)
PRN : 2012017001897722
Study Centre: (2107A)
MIT College ,Aurangabad

Preface

5
The topic of this project is employee motivation related to employee

performance in the organisation. And aim of this thesis is to provide

information on how employees can be intrinsically and/or extrinsically

motivated to perform well in organisations.

Since this Project is a literature research and is thus based on the research of

others, references are provided at results, statements and conclusions of

others. This has been done in order to prevent plagiarism.

Summary

6
This project is focused on the relationship between intrinsic and extrinsic

motivation and employee performance. The thesis is a literature research and

thus a review by the work of others.

In earlier research on this topic conducted by Vroom was concluded that a

positive correlation between motivation and performance did not exist.

However, later research proved that it is indeed possible to motivate

employees intrinsically and extrinsically to perform well. It appears that

when the organisation provides certain job characteristics, employees can

be motivated to perform well in the organisation. And it also appeared that

intrinsic factors have more effect on the relationship than extrinsic factors.

This project is divided in five chapters; an introduction to the problem, a

chapter about employee motivation, a chapter about employee performance

and one about how both types of employee motivation have an effect on

performance. At last, in chapter five, the conclusion is presented, together

with a discussion and managerial implications.

7
Table of Contents

Chapter 1: Introduction .................................................................................... 9

Problem statement....................................................................................... 10
Research Questions ..................................................................................... 11
Methodology ............................................................................................... 11
Structure of the project ............................................................................... 11
Chapter 2: Employee Motivation ................................................................... 14
The concept motivation .............................................................................. 14
Herzberg and Maslow ................................................................................. 16
Intrinsic and extrinsic motivation ............................................................... 20
The relationship between intrinsic and extrinsic motivation ...................... 21
Conclusion .................................................................................................. 22
Chapter 3: Employee performance ................................................................ 24
Performance in organisations ..................................................................... 24
Job performance .......................................................................................... 25
Measuring job performance ........................................................................ 26
Options for measuring job performance objectively .................................. 27
Chapter 4: Employee motivation and performance ....................................... 30
The relationship between employee motivation and job performance ....... 30
Motivating employees intrinsically to perform .......................................... 34
Motivating employees extrinsically to perform.......................................... 35
Chapter 5: Conclusion.................................................................................... 38
Conclusion .................................................................................................. 38
Discussion ................................................................................................... 40
Managerial implications ............................................................................. 41
References ...................................................................................................... 43
Books, Articles and Journals ...................................................................... 43
Websites ...................................................................................................... 43

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Chapter 1: Introduction

Motivation is a topic that is extensively researched. Halfway the twentieth

century the first important motivational theories arose, namely Maslow’s

hierarchy of needs (1943), Herzberg’s two-factor theory (1959) and Vroom’s

expectancy theory (1964). Those researches focused on motivation in general

and employee motivation more specifically. In the past years various

definitions of motivation were defined, e.g. Herzberg (1959) defined

employee motivation once as performing a work related action because you

want to.

It is commonly agreed that employee motivation can be separated in intrinsic

and extrinsic motivation. One of the first attempts to make that distinction

was in Herzberg’s Two-Factor Theory. Especially important is the discussion

about how intrinsic and extrinsic motivation can contribute to employees’

performances.

The relationship between employee motivation and job performance has

been studied in the past (Vroom, 1964). But high correlations between the

two were not established. However, later research concluded that employee

motivation and job performance are indeed positively correlated. This

relationship is studied in this project and the aim is to provide managers

9
useful information how employees’ performances can be increased by

motivating them intrinsically and/or extrinsically.

Problem statement

To what extent can the different types of employee motivation influence

the performance of employees at the workplace?

10
Research Questions

1. What is motivation and how are its different forms related?

2. What is the importance of employee performance and how can it be

measured?

3. How do the different forms of motivation influence employee

performance?

Methodology

The aim of this project is to elaborate on the relationship between

employee motivation and employee performance and to provide

organisations and managers useful information on this topic. The

answers to all research questions will be based on literature research.

Structure of the project

In the next chapter, chapter two, the concept motivation is explained. After

some basic information and definitions two older motivational theories are

explained (Herzberg (1959) and Maslow’s (1943) theory). After that the

distinction between intrinsic and extrinsic motivation is made. And at last,

the relationship between both and their effects are clarified. Chapter three

will focus on the job performance of employees in the organisation; the

importance of employee performance will be addressed and also measuring

11
job performance is described. This will be the basis for chapter four; the

relationship between employee motivation and performance will be

described in that chapter. Further in chapter four is explained how people can

motivate employees intrinsically and extrinsically. The implications of both

types of motivation are clarified and in chapter five the conclusion is

provided together with a discussion and the managerial implications.

12
Chapter 2: Employee Motivation

13
Chapter 2: Employee Motivation

In the following chapter the concept motivation is explained. It seems that

motivation can be conceived in many different ways; e.g. many researchers

tried to formulate motivation but all proposed different approximations. For

example Herzberg’s theory of motivation (1959) is still used nowadays.

Herzberg was one of the first persons who distinguished between intrinsic and

extrinsic motivation. And that distinction could clarify and therefore help

motivating employees. In this chapter some definitions will be mentioned,

together with an introduction of the theories of Maslow (1943) and Herzberg

(1959). But more importantly a separation between intrinsic and extrinsic

motivation is made. This separation is also helpful to clarify the relationship

between employee motivation and performance.

The concept motivation

The first question that arises is: “why managers need to motivate

employees?”According to Smith it is because of the survival of the company.

It is important that managers and organisational leaders learn to understand

and deal effectively with their employee’s motivation; since motivated

employees are necessary to let the organisation being successful in the next

century. She also argues that unmotivated employees are likely to expend
14
little effort in their jobs, avoid the workplace as much as possible, exit the

organisation and produce low quality of work. In the case that employees are

motivated; they help organisations survive in rapidly changing.

The term motivation arose in the early 1880’s; before that time the term

“will” was used by philosophers as well as social theorists when discussing

effortful, directed and motivated human behaviour. According to them

motivation used to be considered as: an entity that compelled one to action.

Lately, various researchers proposed different definitions of motivation.

Motivation has been defined as: the psychological process that gives

behaviour purpose and direction; a pre disposition to behave in a purposive

manner to achieve specific, unmet needs; an internal drive to satisfy an

unsatisfied need; and the will to achieve.

It is also said that although there is some disagreement about the importance

of different aspects in the definition of motivation, there is consensus about

some underlying properties. Namely, that motivation is an individual

phenomenon, it is described as being intentional, it is multifaceted and that

the purpose of motivational theories is to predict behaviour. Mitchell (1982)

also argues that motivation is concerned with action and the internal and

external forces that influence one’s choice of action. And that motivation is

not the behaviour itself, and it certainly is not performance. In relation to this,

15
Mitchell (1982) proposes his own definition of motivation: “motivation

becomes the degree to which an individual wants and chooses to engage in

certain specified behaviours”.

The overall success of the organizational project depends on the project

team’s commitment which is directly related to their level of motivation. As

employees are the main resources for organizations’ business activities, the

issues of employees’ motivation will critically decide organizations’ success.

It is evident that mangers need to motivate employees to obtain the desirable

results for the organisation. And it can be stated that there is consensus about

the facts that motivation is an individual phenomenon, it is described as being

intentional, it is multifaceted and that the purpose of motivational theories is

to predict behaviour. It seems that Herzberg and Maslow were among the first

researchers at this topic and their theories are still being used today. Since

these theories clarify the concept of motivation and they are useful for the

separation of motivation in intrinsic and extrinsic motivation, they are

explained in the next paragraph.

Herzberg and Maslow

Herzberg (1959) developed a well-known motivation theory, namely the Two-

Factor Theory; he distinguishes in his theory between motivators and hygiene

16
factors. Important is that factors are either motivators or hygiene factors, but

never both. Motivators are intrinsic motivational factors such as challenging

work, recognition and responsibility. And hygiene factors are extrinsic

motivational factors such as status, job security and salary (intrinsic and

extrinsic factors are further described in the next paragraph). Motivating

factors can, when present, lead to satisfaction and hygiene factors can, when

not present, lead to dissatisfaction, but the two factors cannot be treated as

opposites from each other. Herzberg defines motivation in the workplace as:

performing a work related action because you want to.

Below a table is presented with Herzberg’s motivators and hygienes. As seen

in the figure, motivators are intrinsic conditions to the work itself and

hygienes extrinsic conditions to the work.

Motivators (leading to satisfaction) Hygienes (leading to dissatisfaction)

Achievement Company policy
Recognition Supervision
Work itself Relationship with boss
Responsibility Work conditions
Advancement Salary
Growth Relationship with peers
Security

17
The Two-Factor Theory of Herzberg is related to Maslow’s theory of

motivation, named Hierarchy of Needs. Maslow (1943) states in his need-

hierarchy that there are at least five sets of goals, which are called the basic

needs, namely: physiological, safety, love, esteem and self-actualization. And

“we are motivated by the desire to achieve or maintain the various conditions

upon which these basic satisfactions rest and by certain more intellectual

desires” (Maslow, 1943). When the first, physiological, need is satisfied the

next “higher-order need” has to be satisfied. Maslow distinguishes between

lower- and higher-order needs; the lower-order needs are physiological, safety

and love and the higher-order needs are the last two. Lower-order needs have

to be satisfied in order to pursue higher-level motivators along the lines of

self-fulfilment (Maslow, 1943). However, the five needs differ in type of

motivation, e.g.: self-actualization is intrinsic growth of what is already in the

organism, or more accurately of what is the organism itself. He also argues

that self-actualisation is absolutely not something extrinsic that an organism

needs for health, such as e.g. “a tree needs water”. Hereby, Maslow refers to

the lower order needs as being more extrinsic and the higher order needs more

intrinsic. Below, in figure 2.2, a chart of Maslow’s hierarchy of needs is

presented.

18
In fact, Herzberg, Mausner and Snyderman (1959) redefined Maslow’s

(1943) Hierarchy of Needs into their two categories named: hygienes and

motivators. This is one of the first attempts to make up the difference

between intrinsic and extrinsic motivation. And they emphasized that

satisfaction and dissatisfaction cannot be treated as opposites from each

other. It can even be stated, that the motivator needs of Herzberg are very

similar to the higher-order needs in Maslow’s Theory of Needs.

It can be stated that Herzberg’s Two-Factor Theory and Maslow’s

Hierarchy of Needs are two related theories. And it seems that these two

theories form the basis for later motivational theories, since they make a

19
very clear distinction between intrinsic and extrinsic motivation. Intrinsic

and extrinsic motivation are explained in the next paragraph.

Intrinsic and extrinsic motivation

As described earlier, motivation can be separated in intrinsic and extrinsic

motivation. It is explained as follows:

• Individuals are intrinsically motivated when they seek enjoyment,

interest, satisfaction of curiosity, self-expression, or personal challenge

in the work.

• Individuals are extrinsically motivated when they engage in the work

in order to obtain some goal that is apart from the work itself.

Often extrinsic motivation is defined as, money and verbal reinforcement,

mediated outside of the person, whereas intrinsic motivation is mediated

within the person. And a person is intrinsically motivated to perform an

activity if there is no apparent reward except the activity itself or the feelings

which result from the activity. Amabile (1993) argues that employees can be

either intrinsically or extrinsically motivated or even both.

It seems that intrinsic and extrinsic motivators apply differently to persons.

Vroom (1964) argues that some employees focus on intrinsic outcomes

20
whereas others are focused on extrinsic outcomes. Individuals high in

intrinsic motivation seem to prefer challenging cognitive tasks and can self-

regulate their behaviours, so offering rewards, setting external goals, or

deadlines, will do little for them, unless they are also high inextrinsic

motivation. For employees high in intrinsic motivation, emphasis could be

placed on engaging nature of the task and encouragement of self-set goals

and deadlines (Story et al., 2009). Hackman and Oldham (1976) even argue

that people have individual differences in response to the same work; they

differentiate between employees high and low in growth need strength.

People high in growth need strength are most likely to be motivated by jobs

with high skill variety, task identity, task significance, autonomy and

feedback. And people low in strength are relatively insensitive for these

factors according to them. This statement is supported by Furnham et al.

(1998); they argue that introverts are more extrinsically motivated and

extraverts more intrinsically motivated. However, it not only seems that

persons are differently motivated but intrinsic and extrinsic motivation also

have effect on each other.

The relationship between intrinsic and extrinsic motivation

The distinction between intrinsic and extrinsic motivation is evident,

however researchers argue that intrinsic and extrinsic motivation also have

21
an effect on each other. In some cases extrinsic motivators can decrease

intrinsic motivation. He argues that if money is administered contingently,

it decreases intrinsic motivation. But this event will not occur if the money

is non-contingently distributed. Amabile (1993) reacts to this discussion by

stating that although extrinsic motivation can work in opposition to intrinsic

motivation, it can also have a reinforcing effect: “once the scaffolding of

extrinsic motivation is taken care of, intrinsic motivation can lead to high

levels of satisfaction and performance”. She also states in her research that

both intrinsic and extrinsic values can motivate employees to do their work,

however intrinsic and extrinsic motivation can have very different effects

on employees.

In conclusion can be stated that employees can be intrinsically and/or

extrinsically motivated, to perform a certain task. And that extrinsic and

intrinsic motivation can reinforce each other, but in some cases extrinsic

motivators can also decrease intrinsic motivation. Furthermore, researchers

argue that not all people are equally motivated; some employees are more

intrinsically and others more extrinsically motivated.

Conclusion

Motivation in the workplace is a broadly researched topic. Earlier research

22
has been conducted by Maslow (1943) and Herzberg (1959), who were

pioneers at their subject. Lots of definitions have been composed, e.g.

Herzberg’s definition of motivation in the workplace is: performing a work

related action because you want to (Herzberg, 1959). And some

disagreements took place about the importance of certain aspects, but

consensus is in the factsthat motivation is an individual phenomenon, it is

described as being intentional, it is multifaceted and that the purpose of

motivational theories is to predict behaviour (Mitchell, 1982).

The distinction between intrinsic and extrinsic motivation is also explained.

Namely, individuals are intrinsically motivated when they seek enjoyment,

interest, satisfaction of curiosity, self-expression, or personal challenge in

the work. And individuals are extrinsically motivated when they engage in

the work in order to obtain some goal that is apart from the work itself

(Amabile, 1993). Both intrinsic and extrinsic motivators are important in

motivating employees (Herzberg, 1959). It must be argued that managers

must not focus on the most important factors solely. Since, according to

Herzberg (1959) managers need to address all hygiene and motivator

factors to motivate employees.

In the next chapter, employee performance is explained, since the scope of

this thesis lies in influencing employee performance by intrinsic and extrinsic

motivation.

23
Chapter 3: Employee performance

Performances can be separated in organisational and employee performance.

Employee performance is also known as job performance. However, it seems

that job performance is mostly subjectively measured in organisations and it

will appear that there are few alternative options. In this chapter, at first the

distinction between organisational and job performance is made. After that

the concept job performance is highlighted, together with measuring it and its

implications.

Performance in organisations

Performance in organisations can be separated in organisational

performance and job performance. According to Otley in 1999, the

performance of organisations is dependent upon the performance of

employees (job performance) and other factors such as the environment of

the organisation. The distinction between organisational and job

performance is evident; an organisation that is performing well is one that is

successfully attaining its objectives, in other words: one that is effectively

implementing an appropriate strategy (Otley, 1999) and job performance is

the single result of an employee’s work (Hunter, 1986). Since the aim of this

project is to provide a link between motivating employees and their

24
performance, organisational performance lies outside the scope of this

research and only job performance is addressed.

Job performance

A good employee performance is necessary for the organisation, since an

organisation’s success is dependent upon the employee’s creativity,

innovation and commitment.

Employee production and employee job performance seems to be related;

e.g. performance in some cases measured as the number and value of goods

produced. However, in general productivity tends to be associated with

production-oriented terms (e.g. profit and turnover) and performance is

linked to efficiency or perception-oriented terms (e.g. supervisory ratings

and goal accomplishments).

According to Hunter and Hunter (1984) crucial in a high job performance is

the ability of the employee himself. The employee must be able to deliver

good results and have a high productivity. Hunter and Hunter (1984) also

argue that this is something the organisation can know at forehand; they can

select employees with the required abilities or they can recruit those

employees themselves. Of course the latter is more time consuming, but can

25
obtain better results in the end.

However, job performance is more than the ability of the employee alone.

According to Vroom (1964) an employee’s performance is based on

individual factors, namely: personality, skills, knowledge, experience and

abilities. Some researchers even argue that a person’s personality has a more

specific role in job performance. However, according to various researchers,

it is not what performance exactly means, but how it is composed and how it

is measured.

Vroom’s (1964), Hunter & Hunter’s (1984), Hunter’s (1986), etc. results are

evident. Namely, Job performance can be divided in personality, skills,

knowledge, experience and abilities. Some researchers even argue that

personality has a more specific role in job performance. However, according

to Bishop (1989) and others, job performance contains a problem; namely

the measurement of performance.

Measuring job performance

In most organisations performance is measured by supervisory ratings,

however these data are not very useful since they are highly subjective.

In most jobs an objective measure of productivity does not exist. This

26
makes it even harder to measure performances objectively. According to

Perry and Porter (1982), the performance of many employees probably

will be measured despite the lack of availability of generally accepted

criteria.

It is stated before that some researchers argue that a person’s personality

plays a more specific role in job performance. It can be stated that job

performance contains a problem; the measurement of it. Job performances

are commonly measured by supervisory ratings and those ratings are not

perceived as objective. However, it seems that there are alternative options

to measure job performance; these are addresses in the next paragraph.

Options for measuring job performance objectively

Breaugh (1981) states in his research that there are four different

performance dimensions on which employees are measured, named: quality,

quantity, dependability and job knowledge. This theory combined with

Vroom’s theory results. He designed the route in which most employers can

rate their employee’s productivity. His theory is presented in figure.

27
Hunters Job Performance Scheme

According to Hunter learning the job is the key to job performance, and

general cognitive ability predicts learning. Therefore general cognitive

ability is the key predictor of job performance. General cognitive ability

together with job knowledge indicates job performance and allows the

employee’s supervisor to rate performance. According to Hunter this is a

simplified but an effective and objective way to measure employee

performance. Kostiuk and Follmann (1989) add to the statement of Hunter

that employees with good abilities in combination with sufficient experience

are twice as productive after two years and therefore learning the job is

28
indeed a key to performance.

But today companies don’t depend on the supervisory ratings alone, they

have started to implement the 360 degree feedback mechanism. 360 Degree

Feedback is a system or process in which employees receive confidential,

anonymous feedback from the people who work around them. This typically

includesthe employee's manager, peers, and direct reports.

29
Chapter 4: Employee motivation and performance

It is already argued that managers need to motivate employees to perform

well in the firm, since the organisation’s success is dependent upon them.

However, it is only later research that succeeded in establishing a positive

correlation between employee motivation and job performance. In this

chapter, at first the relationship between employee motivation and

performance will be explained. After that, it will be described how

employees can be intrinsically and/or extrinsically motivated to perform

well. It will appear that there are several options for intrinsic motivation and

extrinsic motivation, but extrinsic factors alone will not lead to an increase in

employee motivation.

The relationship between employee motivation and job performance

The viewpoint that motivation causes performance comes from human

relations theory. The relationship between employee motivation and job

performance has been studied for a long period. However, earlier research

could not succeed in establishing a direct relationship between the two. Yet it

seems that that the factors do influence each other. The results of their

research indicate that the relationship between individual, overall job

satisfaction and individual job performance is more consistent than reported

30
in previous researches (e.g. Vroom, 1964). And Hackman and Oldham

(1976) argue that when employee satisfaction is added, a circular relationship

is formed with performance, satisfaction and motivation. The term

satisfaction is also used by Herzberg (1959); he argues that when intrinsic

factors (motivators) are present at the job, satisfaction is likely to occur as

well as an increase in employee motivation. It is also stated that work

performances are dependent upon the individual’s level of motivation; the

individual’s level of motivation can be intrinsically and/or extrinsically

based. It is also argued that certain job characteristics are necessary in

establishing the relationship between employee motivation and performance.

Hackman and Oldham (1976) defined five job characteristics, which are

based on the Two-Factor Theory from Herzberg (1959). Those

characteristics are: skill variety, task identity,task significance, autonomy and

feedback. The results of their study indicate that employees who work on

jobs scoring high on the five characteristics, show high work motivation,

satisfaction and performance (Brass, 1981). Hackman and Oldham (1976)

conclude that employees can be motivated through the design of their work;

they argue that by providing certain intrinsic and extrinsic factors an

employee can be motivated to perform well.

The five job characteristics (skill variety, task identity, task significance,

31
autonomy and feedback) can bring the employee to three “critical

psychological states”, namely: (1) experienced meaningfulness of the work,

(2) experienced responsibility for outcomes of the work and (3) knowledge

of the actual results of the work activities. And according to Hackman and

Oldham, the three critical psychological states will lead to high motivation,

satisfaction and performance.

Hackman and Oldham (1976) also argue that the growth need strength of the

employee has a role in the relationship; employees who have a high need for

personal growth and development will respond more positively to a job high

in motivating potential than employees with a lower need for growth

strength. According to them, growth need strength has a moderating effect

on the relationship. They state that personality differs in extent to how

employees react to intrinsic and extrinsic values. Their research concludes

that for introverts extrinsic factors are more important, and extraverts are

more intrinsically motivated. Therefore introverts are less satisfied than

stable individuals and perform to a lesser extent. This concludes that there

presumably also a relationship between personality and performance exists.

However, the exact relation among motivation, satisfaction and performance

is not yet defined. Petty et al. (1984) argue that the relationship is circular

and starts by a high performance causing satisfaction. According to them,

32
when the employee performs well on a particular task, satisfaction will

occur. Because of the internal satisfaction of the employee, the employee is

motivated to try to perform well in the future. The circular relationship

between performance, satisfaction and motivation is shown in figure below.

According to Hackman and Oldham (1976) the result is “a self-reinforcing

cycle of work motivation, powered by self-generated rewards (satisfaction),

that will continue until one of the three psychological stages is no longer

present, or until the employee no longer values the internal rewards

(satisfaction no longer occurs) form his/her good performance”. However,

Hackman and Oldham’s (1976) theory is based on intrinsic factors because

they argue that an increase in extrinsic factors does not lead to an increase in

performance. However, other research suggests that the self-reinforcing

circle also could work for extrinsic motivators.

It can be concluded that the relationship between employee motivation and

performance seems to be circular. Starting by a high performance causing

satisfaction, this increases the employee’s motivation to try to perform well

33
in the future. This circular relationship can be caused by providing

opportunities for high scores on the five job characteristics; skill variety, task

identity, task significance, autonomy and feedback. And according to other

research the circular relationship can also cause by certain extrinsic factors.

However, as described in chapter three, the employee must also have the

abilities to perform well. In the next paragraphs it is explained how

employees can be intrinsically and/or extrinsically motivated to perform. At

forehand mustbe stated that in organisations it is likely that both intrinsic and

extrinsic motivators are present for most tasks that people do in their work

Motivating employees intrinsically to perform

An organisation has to be able to provide high scores on the five job

characteristics. In case the organisation does not succeed in this, the cycle

of performance, satisfaction and motivation will no longer be a reinforcing

but a downward cycle. When an organisation does not provide the right

characteristics for a good performance, a person will not derive internal

satisfaction and motivation to perform.

However the type of personality of an employee also has a role in the

employee’s level of intrinsic motivation; this seems to be related to the level

34
of commitment of an employee.

In conclusion, it can be argued that organisations need to score high on the

five job characteristics (skill variety, task identity, task significance,

autonomy and feedback). This is order to intrinsically motivate their

employees for generating a high performance. However, it also seems that

the personality and ability of an employee have a moderating effect on the

relationship.

Motivating employees extrinsically to perform

It is argued by Amabile (1993) that there exist numerous jobs which are

purely extrinsic motivated. However, when taking Herzberg’s (1959) Two-

Factor theory into account, it is argued that extrinsic factors (or hygiene

factors) cannot cause motivation or satisfaction, so it is likely that those

factors are not causing high performances. Hackman and Oldham (1976)

argue that an exclusively increase in extrinsic factors will not lead to an

increase in performance. However, it seems that there are some extrinsic

factors which can (in combination with intrinsic factors) lead to higher

performances.

Extrinsic motivators are not a logically inherent part of the work. She states

that they are intended to control the performance of the work. Examples are:

35
promised rewards, praises, critical feedback, deadlines, surveillance and

specifications on how the work needs to be done. An example of a purely

extrinsic task is doing formal performance reviews ofemployees; that’s a

task which is barely intrinsically motivated. A person who is extrinsically

motivated can be described as an employee who perceives his work

orientation as “a job”; this kind of worker performs his job for the pay at the

end of the month.

Salary is an extensively researched extrinsic motivator. Since it is labeled as

an extrinsic factor, it is not perceived as causing motivation in the workplace

by Herzberg. However recent research of Ansar, Cantor & Sparks (1997)

resulted in considerable evidence that higher wages directly affect job

performance. They also argue that in the case that labour turnover is costly

for an organisation (because of severance, training and hiring costs), firms

could pay higher wages to decrease quit rates and save on turnover costs.

They argue that pay is probably the most important motivational factor.

However it is argued that pay can decrease intrinsic motivation. Example is

NGO Work.

It is argued by researchers that extrinsic factors do not contribute to an

increase in performance. However, it seems that for some forms of extrinsic

factors the opposite is true. It is stated that salary, commitment to supervisors

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and peers and job security can increase job performances. Through providing

one or more of these factors a higher performance is established, therefore

the employee gains external satisfaction and is motivated to perform well in

the future. But managers should be careful with extrinsic motivational

factors, since in some cases they can decrease intrinsic motivational factors.

Figure: Intrinsic and extrinsic factors leading to a high performanc

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Chapter 5: Conclusion

This chapter will give an answer to the problem statement of this thesis. The

problem statement is known as: to what extent can the different types of

employee motivation influence theperformance of employees at the

workplace? In the first paragraph the conclusions of the literature research

will be provided, after that the discussion points are described and in the last

paragraph some managerial implications will be given.

Conclusion

At first it can be concluded that it is indeed possible to motivate employees

to perform well for an organisation and that is a critical task for mangers. It

seems that there exists a self-reinforcing circular relationship between the

performance, satisfaction and motivation of an employee; an employee

achieves a high performance, therefore internal satisfaction arises and the

employee is motivated to perform well in the future. It is stated that a high

performance can be reached when the organisation provides certain job

characteristics.

Secondly, it is stated that employees can be both intrinsically and

extrinsically motivated to perform well. Most jobs are even both intrinsically
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and extrinsically motivated (Amabile, 1993). It can also be concluded that

intrinsic factors can contribute in a greater extent to employee motivation

than extrinsic factors. Some researchers even argue that an increase in

extrinsic factors solely does not lead to an increase in performance. Research

proved that to intrinsically motivate employees, the organisation needs to

score high on five job characteristics: skill variety, task identity, task

significance, autonomy and feedback. And to extrinsically motivate

employees, the organisation needs to score high on salary, commitment to

supervisors and peers and job security. These job characteristics together

with the ability of the employee provide the opportunity for a high

performance, which is the start of the self-reinforcing circle (Hackman &

Oldham, 1976). It is important that managers provide all job characteristics,

since that will lead to the highest employee performance. However, it must

be argued that this relationship is not infinite; it could be that the employee

does not longer derive satisfaction from his performance or that one of the

three psychological stages is no longer present. Therefore organisations must

make sure that performances can be continuously improved.

At last, it can be argued that there are numerous other ways to increase the

performance of employees in organisations (e.g. diversity, leadership, etc.),

thus management should not focus on motivation solely. But it can be

concluded that particularly intrinsic factors can greatly contribute in

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increasing employee productivity.

Discussion

However, not all findings in the available literature were complementary.

Some researchers made contradictory statements on the fact how extrinsic

motivators can contribute to motivation and performance. E.g. on the topic

of how salary influences employee motivation; some researchers argue that

salary does not increase and others argue that it is the most influencing

motivator for employees. An explanation could be that not all researchers

follow Herzberg’s (1959) theory of motivation or that researchers confuse

satisfaction and dissatisfaction.

There also is some confusion noticeable at the topic of how motivation

influences performance. Earlier research conducted by Vroom (1964)

resulted in the conclusion that employee motivation and performance were

uncorrelated. However, later research by Petty et al. (1984) concluded that

there indeed is a relationship, by using the 15 researches Vroom (1964) used

and 20 more recent researches. According to Petty et al.(1984) the

differentiated results were possibly due to the fact that in Vroom’s research

40% of the variance of correlations across the study was due to sampling

error and the other 60% to a combination of error of measurement,

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restriction in range, other artifacts, or real differences between some of the

studies. Petty et al. (1984) overcome these problems by conducting their

research in a more scientific manner.

Managerial implications

Intrinsic factors can lead to motivation when they are present in the

organisation. However, extrinsic motivators, when they are not present in

the organisation, can lead to de-motivation of employees. Therefore it is

important that managers address both intrinsic and extrinsic motivational

factors. Managers should not make a selection of extrinsic motivational

factors, since a single extrinsic factor can cause dissatisfaction. And

managers also need to take into account the effects extrinsic factors can

have on intrinsic motivation.

Secondly, it is argued by researchers that personalities of employees react

differently to motivational factors. Some persons are more intrinsically and

others are more extrinsically motivated and this causes different

performances among employees. It is generally accepted that an

employee’s performance is based on individual factors, namely:

personality, skills, knowledge,experience and abilities. Managers need to

take these differences into account when hiring and motivating employees.

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At last, managers should be careful when measuring employees’ job

performances. In most organisations job performances are measured by

supervisory ratings, however these ratings are highly subjective. Objective

measurements do exist, but they are scarce. Therefore it could be difficult for

managers to see the actual result of their attempts to motivate employees to

perform. Designing an objective way to measure job performance is also an

option for future research, since it could be very helpful for organisations.

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References

Books, Articles and Journals

1) Human Resource Management - YCMOU

2) Intrinsic and Extrinsic Motivation: The Search for Optimal Motivation and
Performance by Carol Sansone, Judith M. Harackiewic

Websites
 http://www.academia.edu/4990542/Impact_of_Employee_Motivation_on_
Performance_Productivity_In_Private_Organization
 http://www.nwlink.com/~donclark/performance/motivation.html

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