CHAPTER ONE

1. Introduction
This chapter contains the introduction part that includes:- background of the study, statement of
the problem, objective of the study, research question, the rationality of the study, significance of
the study, scope of the study, limitation of the study, definition of key terms and organizational
study.

1.1 Background of the study

Motivation is the most important matter for every organization public or a private sector. For the
success of any organization motivation play an important role. All organization encounters the
matter of motivation whether they are in the public or private sector. According to Chaudhary &
Sharma (2012).success of any business depends largely on the motivation of the employees.
Human resource is essential to prosperity, productivity and performance of any company.
Motivation is the key to creating an environment where the optimal performance is possible
(Fredluthan, 2005). The development and growth of business organization in competitive
business environment is depends on the efficient utilization of resource. The performance of
organization is affected by different factors such as motivation, working condition and job
security. Taking this in to account motivating employees helps organization to get competitive
advantage.

No doubt that the survival of an organization largely depends on effective and efficient
management of its resource. Human resource is one of these that need to be well managed. It
plays a crucial role in achieving both the long- run and short- run objectives of an organization.
Managing people is not as easy as managing resource. This is due to the complex nature of
human being and as a result in as single organization different people may have different
personalities, attitudes, beliefs and values. Commercial Bank of Ethiopia has its own
motivational system and it can improve employee performance productivity themselves.
Motivational feedback uses to promote the employ level of production. So, Managers must use
different strategies and skills to wards motivating employee for the survival and best
performance of organization.

Study assessing the impact of employee’s motivation on productivity and the level of
understanding and attention given by the management Commercial Bank of Ethiopia (CBE)
Tebase branch has its own motivational practice that helps to achieve objectives. So, some of the
reasons for doing this study are there is no good motivational practice in this branch which
means employee unpunctual, not properly doing their work and no good grooming style in the
Bank.
1.2 Statement of the Problem

A work will be more productive if the workers are motivated, when employees are not motivated
and dissatisfied with their job, they will be less productive and begin to show unwanted
behaviors like carelessness in work, late coming, absenteeism and grievances and breaking the
rules of the organization. Employee motivation always has been a central problem for leaders
and managers. Unmotivated employees are likely to spend little or no effort in their jobs, avoid
the workplace as much as possible, exit the organization if given the opportunity and produce
low quality work. On the other hand, employees who feel motivated to work are likely to be
persistent, creative and productive, turning out high quality work that they willingly undertake
(Ganta, 2014). Motivation levels within the workplace have a direct impact on employee
productivity. Workers who are motivated and excited about their jobs carry out their
responsibilities to the best of their ability and production numbers increase as a result
(Armstrong, 2008).

Many researches are conducted in abroad and Ethiopia regarding employee motivation and
productivity. According to research conducted by (Aden, 2010), on Barclays Bank, Nairobi
country in Kenya find that, motivated employees help organizations to perform well since they
are more productive. The other research study result on effects of motivation on employee
performance, a case study of Ghana Commercial Bank, Kumasi Zone revealed that, management
can make use of different strategies and policies to motivate employees in the Banking
environment. Employees are interested in enhanced salaries, fringed benefits, promotion and car
loans as motivating elements sufficient to push employees of the Bank to give out their best
(Owusu, 2012

Organizations need to understand the factors that affect employees’ performance because such
insight will help them make decisions that will inculcate improved performance from the
employees and to an extension the overall performance of the organization (Nelson and quick
(2003). opportunity for training has insignificant relationship with employee’s motivation to put
more efforts in their job (Cheema etal, 2013).

In Ethiopia the research conducted on employee motivation finds that employees are highly
motivated with reward motivational factors and employees are less motivated with interesting
work, training and development and working environment motivational factors of the Ambo
mineral water factory. Finally, the regression analysis also indicated that unlike interesting work
all others motivational factors have positive and significant influence on employee retention
(Tizazu, 2015).
Similarly other research conducted in Ethiopia on the effectiveness of job rotation practices in
improving employee motivation, commitment and job involvement. The case of Commercial
Bank of Ethiopia found that job rotation practices have a moderate effect and positive
relationship with motivation, commitment and job involvement of the employees of CBE.
Moreover, job instructional training and coaching are widely used methods to develop the
knowledge and skill towards the employees in CBE. Findings suggested that by boosting job
rotation practices, employees of CBE could be motivated, committed and involved. It Will found
that when employees are rotated, they become more motivated, communicated and job involved
(Woldemedhin, 2015).
Even though many researches are conducted in Ethiopia and abroad their focus is not on
motivational techniques such as encouraging participation and recognition. Furthermore,
published researches on the impact of employee motivation on productivity are not available in
the case of Commercial Bank of Ethiopia in Tebase branch the recognition, reward and
encouraging employee participation perspective. After all as the information the researchers
obtained from the manager of Commercial Bank of Ethiopia in Tebase main branch, no research
has been conducted regarding the impact of employee motivation on productivity. Generally, the
above mentioned problems of the Bank motivated the researchers to conduct the research and
forward some possible recommendations

1.3. Objectives of the study

1.3.1. General objective

The general objective of this research is assessing the impact of employee’s motivation on
productivity Commercial Bank of Ethiopia in Tebase main branch.

1.3.2. Specific objective

 To assess the impact of employee recognition on productivity of the Bank.
 To understand how encouraging employee participation affects productivity of the Bank.
 To assess what extent rewards have impact on productivity of the Bank.
1.4. Research Question
The basic question of this research would be:-
 What is the impact of employee recognition on productivity of the Bank?
 How encouraging employee participation affects productivity of the Bank?
 What is impact of reward on productivity of the Bank?
1.5. The Rationality of the study
Motivated employees are happy on behavior of the job and strive for increasing productivity on
business. They also try to develop a new mechanism of doing a job so as to improve their
productivity. On the other hand, poor motivation leads to eradicate the productivity of the
organization by means of unpunctual and employees are not properly doing their work in the
Bank.
Commercial Bank of Ethiopia in Tebase main branch we have seen gaps the researches on the
impact of employee motivation on productivity are not available in recognition, reward and
encouraging employee participation perspectives and service delivery system. Employee in this
branch has not good grooming style, unpunctuality and not motivated in their work. Therefore,
due to the above problems the researchers are initiated to conduct researchers on this area and
provide them possible recommendations to resolve the problems.
 - We have learned to related courses like human resource management, change
management, organization study and introduction to management.

1.6. Significance of the study

This study enables the organization to know their strength and weakness and then to follow the
way to motivate and increase their productivity in easy way. The study also provide relevant
information to those on varies level of management, employees and labor union leads to
understand the importance of motivational factors on performance of employee. In addition, the
study it creates awareness to minimize the problem relate to employee motivation. Lastly, the
study also uses at a base for other individuals and researchers for further study.
1.7. Scope of the study
The scope of this study Will limited to the impact of employee motivation on productivity in case
of Commercial Bank of Ethiopia in Tebase main branch. The study focused on permanent
employees because of reaching this employee is manageable. So, the scope of the study would be
limited only on Commercial Bank of Ethiopia in Tebase main branch. Specially, even though
there are many factors that have impact on motivation, due to time, resource and capacity. The
delimitations of the study focus on employee recognition, encouraging employee motivation and
impact of reward on productivity.

1.8. Definition of key terms

 Motivation is a theoretical construct used to explain behavior. It gives the reason for
people’s actions and desires or needs that energizes behavior and directs it towards a goal
or incentive.
 The employee motivation is combination of fulfilling the employee’s needs and
expectations from work and the workplace factors.
 Productivity is an economic measure of output per unit input of input. Inputs include
labor and capital, while output is typical measured in revenues and other gross domestic
product (GDP) components such as business inventories.
 Employee productivity is an important consideration for business. It is sometimes
referred to as workforce productivity an assessment of the efficiency of worker or group
of workers.
 CHAPTER TWO
2. REVIEW OF RELATED LITERATURE

2.1. Introduction

This chapter includes review of related literature, definition of motivation, intrinsic vs. extrinsic,
motivational techniques, theoretical review of motivation, empirical review and conceptual
frame work.

2.2 Definition of motivation

Motivation is the driving force for moving and directing employee behavior resulting to better
productivity. The overall success of an organization in achieving its strategic objectives relies
heavily on the motivation level of employees. De-motivated employees are likely to put in little
or no effort in their jobs, produce low quality work, mostly avoid their workplace and even exit
the organization if provided opportunity. On the other hand, employees who are motivated to
work are likely to be determinant, innovative and competent. In organizations today, employees
can be motivated both financially (pay, bonuses, allowances, insurance, incentives) and
nonfinancial (work condition, training, recognition, promotion) (Cheema, 2013).

Employees expect financial and non-financial rewards for their efforts. Especially in a world in
which everything is expensive and inflation rates are higher, employees need financial rewards
for them to continue to perform as required but still non-financial rewards cannot be
discriminated. In the absence of equitable pay, training, recognition and comfortable
environment the employees become dissatisfied and that lead them to be de-motivated.
Organizations with positive ambitions could make an availability of a framework within which
high levels of motivation could be accomplished through non-financial reward systems by the
provision of opportunities of training, recognition, job security, empowerment (Armstrong,
2008).

Non-financial motivation is seriously essential for workers. Among other things, it puts
employees into action that their managers care about their feelings. Apart from that, it leads to
the completion of organizational goals; it builds friendly relationship it leads to stability of the
work-force. Since individuals are special in their own ways, it is important that managers
identify the individual needs of their employees and motivate them accordingly so as to bring out
the greatest in them. Knowing the employee problems and trying to solve it, makes them
motivated which will let them put more effort in their productivity (Broni, 2012).

It is important to know that the concept of non-financial recognition does not mean the
motivation provided should have no financial value, it simply means whatever given is not
monetary. Non-financial recognition provides employees with something tangible that they will
remember like a special day out or great meal (Silverman, 2004). Recognition, either informal
(oral) or formal (written remarks and events), has been the most cost effective way to strengthen
required actions for productivity within an organization (Wilson, 2003).

2.3. Intrinsic Versus Extrinsic Motivation

According to (Ganta, 2014), There are many frameworks, models, and theories that focus on
employee motivation. A few of the most common are quickly summarized below. While they are
each based on good research and have some degree of universal applicability, none are the
absolute doctrine on motivation. In fact, few motivation concepts are universal. However, one
idea that is acknowledged by all frameworks that address motivation is that there are extrinsic
and intrinsic motivational factors.

A. Extrinsic Motivation

Extrinsic motivation is motivation that comes from things or factors that are outside the
individual. For example being motivated to work hard at the office because you are looking for a
promotion is a type of extrinsic motivation. Social recognition, money, fame, competition or
material achievements are all examples of extrinsic motivation (Ganta, 2014)

B. Intrinsic Motivation

Intrinsic motivation is motivation that comes from within. It comes from the personal enjoyment
and educational achievement that we derive from doing that particular thing. For example for
people who love music, their motivation to practice the instrument, attend classes etc, is intrinsic
motivation. Intrinsic motivation is crucial in today's work environment. Research shows that it is
a key factor in performance and innovation. At a personal level, intrinsic motivation makes your
work fulfilling. It's a major reason for deciding to stay on a job. It helps keep your stress level
down (Ganta, 2014).

2.4. Motivational techniques

According to (Uzonna,2013),one of the most effective ways of motivating a team is to ensure

that they understand and appreciate the aims of an organization and are supported by their
managers in working towards the achievement of those aims. There are a range of motivational
techniques that can be used to improve productivity, reduce workplace stress and increase self-
confidence. There are a number of ways of inspiring and motivating a team, they are as follows.

2.4.1 Reward

Contemporary ideas have been produced to try and cater in the best possible way for both
extrinsic and intrinsic motivators for employees. Total reward is a strategy that fuses variables
such as learning and employee development along with factors from the work environment, as
part of a benefit package available to employees (Mikander, 2010). The idea of total reward
allows an employee to avail of both financial and non-financial incentives as a means of
attracting, motivating and indeed retaining employees. The five elements that make up total
reward are compensation, benefits, work life, performance and recognition and development and
career opportunities (Payne, Cook, Horner, Shaub, Boswell, 2010).

According to Pappas and Flaherty (2005), which any of the elements of the total reward model
from World at work, could serve a motivating factor, although it Will important to note that
individual values with regards the various rein forcers must be accounted for. The aim of total
reward is to maximize the positive impact that a wide range of rewards can have on motivation,
job engagement and organizational commitments. High performance can still be realized without
the need for conflict-threatening incentives or rewards if upper management gives proper
direction with constraints removed, and the employee has adequate knowledge and skills. A
workforce will be motivated to attain higher skills that will lead to higher morale and
performance when management provides the tools for necessary training, proper recognition, and
appropriate communication (Mikander, 2010).

2.4.2. Recognition

According to (Silverman, 2004), recognition is defined as being a non-financially orientated

bestowed in recognition of an accomplishment that did not solely rely on achieving pre-
established targets. Recognition can take shape in many different forms within an organization.
Simply, recognition in the workplace can be seen from the very basic of gestures which include:
 A manager showing gratitude or praise by means of saying thank you.
 Formally recording the recognition by means of a written letter of recognition to the
employee.
 Running schemes such as ‘Employee of the month’ within the workplace in other
words there is a hierarchy: recognition becomes more formal and public
commensurate with the perceived value of the action.

Appreciation in form of recognition by management must be shown to those individuals that

engage in efficient practices as a way of stimulating motivation. Proper recognition should offer
suitable publicity, or other public show of appreciation. A critical part of process of developing
self-esteem and self-worth lies in the nature and levels of recognition accorded to the
achievement of particular goals. The need for recognition itself therefore becomes a drive.
Individuals tend to pursue goals that will be recognized and valued by those whose opinions and
judgment is important to them: family, friends, peers and social groups, as well as work
organizations. Dissatisfaction occurs when this recognition is not forthcoming (Pettinger, 2002).

Many employees need recognition from their employers to produce quality work. Recognition
and employee reward systems identify employees who perform their jobs well. Acknowledging a
job well done makes employees feel good and encourages them to do good things. Employers
recognize workers by tracking progress and providing feedback about how they have improved
over time. Public recognition is also a motivating factor that drives worker productivity. As
previously mentioned, recognition is another important factor that managers must identify in
motivating their employees according to the interview conducted. Recognition can come in many
forms, most of them with little or no real cost to a company. A compliment such as “a simple
thank you” still goes a long way in motivating employees” (Kelly, 2010), or it can be more
formal such as an “employee of the month” award.

2.4.3. Encouraging employee participation

Employees can contribute in a number of decisions that affect them; setting work goals, choosing
their own benefits package, solving productivity and quality problems, and the like.

This can increase employee’s productivity, commitments to work goals, motivation and job
satisfaction (Robbins, 1998). It is also a means of recognition. It appeals to the need for
affiliation and acceptance. Above all, it gives people a sense of accomplishment, but encouraging
participation should not mean that the managers weaken their positions. Although they
encourage participation of subordinates on matters with which they can help, and although they
listen carefully on matters requiring their decision they must decide themselves. The best
subordinates ever have respect for a weak superior (Robbins, 1998).

2.4.4. Money

According to (Uzonna,2013), Whether in the form of wages, piecework (getting paid for units
produced at a certain quality level) or any other incentive pay, bonuses, stock options, company-
paid insurance, or any of the other things that may be given to people for performance, money is
important; it could also mean status or power. For some people money will always be of the
utmost importance, while for others it may never be. It is probably quite true that in most kinds
of businesses and in enterprises money is used as a means of keeping an organization adequately
staffed and not primarily as a motivator. People in various positions, even though at a similar
level, must be given salaries and bonuses that reflect their individual performances. The way to
ensure that money has meaning, as a reward for accomplishment and as a way of giving people
pleasure from accomplishment, is to base compensation as much as possible on performance.
2.5. Theoretical Review

2.5.1. Herzberg’s Two-Factor Theory

Herzberg’s theory emphasizes mainly on the factors that satisfy or dissatisfy employees (Riley,
2005). In his theory Herzberg mentioned a number of key points that are similar to Maslow’s
hierarchy of needs. Herzberg’s Two-Factor Theory divides motivation into two groups known as
the motivation factors and hygiene factors and the researcher provided a strong link between
motivation and productivity. According to (Herzberg, 1959), the motivating factors are the six
job content factors that include achievement, recognition, works itself, responsibility,
advancement, and possibility of growth. Hygiene factors are the job context factors, which
include company policy, supervision, relationship with supervision, work conditions, relationship
with peers, salary, personal life, relationship with subordinates, status, and job security.

Kiruja and Mukuru (2013), argue that when institutional hygiene factors do not exist (e.g. salary,
job security, working conditions, level and quality of supervision, company policy and
administrative and interpersonal relations), employees are dissatisfied and if these factors exist it
still does not mean that employees are motivated or satisfied.

Furthermore, (Riley, 2005), asserts that direct approach to work is the motivational factors.
Supporting and recognizing employees’ effort will help them to feel more valued within the
organization, as well as giving a sense of achievement and responsibility. If the employee does
not feel some responsibility associated with a certain task or department, he/she will not feel like
their efforts are worthwhile.

2.5.2. Adam’s Equity theory

Equity theory, developed in the early 1965 by behavioral psychologist John S. Adams, is
concerned with defining and measuring the relational satisfaction of employees. His theory states
that employees strive for equity between themselves and other workers. Equity is achieved when
the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs. He
also, suggested that employees try to keep a balance between what they give to an organization
against what they receive, and base satisfaction with their own balance on perceptions of the
same balance in colleagues (Kaur et al., 2004).

2.5.3 Goal Setting Theory

The theory bases its proponents on Locke and Latham (2002) who state that motivation and
productivity are higher when individuals set specific goals, when goals are difficult but
acceptable and when there is feedback on productivity. They reveal that goals have a pervasive
influence on employee behavior and productivity in organizations and management practice
(Locke & Latham, 2002). They also argues that every organization seek high productivity which
can be attained by challenge and reachable goals.

On the other hand, if the goal is too easy it will not bring out the desirable productivity required
by the organization to succeed (Lunenburg, 2011). Goal setting is important, it increases the
motivation, and then the organization can get better productivity, since employees feel more
responsible when they set the goals with their managers. Their theory further suggests that the
joint setting of objectives, feedback and involvement, which are all part of a managerial
approach, can improve motivation. The theory places particular emphasis on goal-setting
behavior and stipulates that the goals need to be clear, specific and achievable if they are to
motivate (Kiruja & Mukuru, 2013).

2.6. Empirical Reviews

(Aisha, 2013), conducted a research on the effects of working ability, working condition,
motivation and incentives on employee multi-dimensional productivity in Indonesia. The results
showed that working conditions, incentives and motivation had a statistical significant effect on
employee productivity. The findings also revealed that workload, facilities, and expectancy had a
negative effect on employee productivity. On the other hand Swalhah et al. (2013) carried out a
study on the relationship between job stress and job productivity in Jordan. The objective of this
study Will to find if there Will any significant relationship between the internal work stress (role
conflict, physical working conditions, and job security) and job productivity.
Furthermore, (Elnag&Imran, 2013) conducted a study to determine the effects of training on
employee productivity in Kingdom of Saudi Arabia. They investigated the meaning and
importance of training and explored the relationship between Training and employee
productivity with exploratory research. Similarly, (Khan, 2012) conducted a research on the
impact of training and motivation on productivity of employees in Pakistan. The researcher
found out that there is positive correlation between training and motivation. The researcher
concluded that, if employees are effectively trained, they perform better and their productivity is
increased as proven by the study.

Finally, according to the research conducted by (Gohari, 2013) on the relationship between
rewards and employee productivity in Malaysia. Their research focused on the relationship
between intrinsic motivation factors such as recognition and extrinsic factors like salaries,
bonuses and commission on employee’s productivity of Persian Travel firms as the target
sample. Their findings showed that it is better to have a good reward system in the organization
and evaluate it on the employee productivity (including intrinsic and extrinsic).
2.7. Conceptual framework
The conceptual frame work for this study Will be taken by dependent and independent variables.
The relationship of the conceptual frame work is described under the following diagrams.

Independent variable
Dependent variable
Recognition

Encouraging Productivity
participation

Reward

Source: developed by own researchers (2021)

CHAPTER THREE

3. Research Methodology

Introduction
This chapter includes research methodology, research design, target population of the study,
sampling size and sampling technique, source and type of data and collection technique and
methods of data analysis and interpretation.

3.1. Research Design

In this study descriptive research design Will applied, because it tries to describe the nature of
existing problems and come up with appropriate solution. The study area will conducted at
Tebase town which is found on 328 km from the capital city of Addis Ababa. This study Will
conducted on impact of employee motivation on productivity in case of Commercial Bank of
Ethiopia Tebase branch. Since, the data Will collected once from the population, the study Will
applying cross section at research design.

3.2. Target Population of the study

The target group of this study Will 58 permanent employees of Commercial Bank of Ethiopia
Tebase branch. Out of this 13 are females and the rests 45 are males.

3.3. Sampling technique and sample size determination

The study Will used census method to collect data from the whole employees. The rational to use
census method is that the numbers of employees in the organization is small. The total
employees were 58, so the study included all of the employees in Commercial Bank of Ethiopia
in Tebase branch.

3.4. Source and type of Data and collection technique

In this study both primary and secondary source of data Will used. The primary data Will
collected by self-Administered questionnaire for employees and structured interview for
mangers. Secondary data Will collected from organizational records and source written about the
organization.

3.5. Method of data analysis and interpretation.

In this study different types of raw data were collected. This raw data will process, analyzed and
interpreted. The study Will employed using descriptive analysis. Finally, the data Will effectively
analyzed and interpreted by using percentage, frequency, table and diagram. Lastly the
processed, analyzed and interpreted data leads to conclusion and recommendation of the study.
 CHAPTER FOUR
4Taime and Budget plan
Table 4.2 Budget plan
Item Quantity Per unit (Birr) Total Cost (Birr)
Equipment and Paper
stationary
Pens
Pencil
Binder
Total Cost
Personal cost Transportation

4.1 Time Plan

The accomplishment of the study will be performed in the time frame of the following schedule.
Table 4.1 Time plan
Activities to be accomplished Months in which activities are to be accomplished
March April. June July August
Preliminary study
Data Distribution
Data collection and
processing
Data analysis
Report writing
Final research
submission
Presentation of
Research finding