Mbah Juel

ORGANIZATIONAL PERFORMANCE AS AN OUTCOME OF

EMPLOYEE MOTIVATION

How employees of PEPT OY are committed to their organization

Thesis

CENTRIA UNIVERSITY OF APPLIED SCIENCES

International business

May 2019

ABSTRACT

Centria University

of Applied Sciences

Date

May 2019

Author

Mbah Juel

Degree programme

International Business

Name of thesis

ORGANIZATIONAL PERFORMANCE AS AN OUTCOME OF EMPLOYEES MO-

TIVATION. How employees of PEPT OY are committed to their organization

Instructor

Juha Enlund, PEPT OY

Pages

41

Supervisor

Sara Ahman

The aim of this thesis was to find out the impact of employees’ commitment on the organizational

performance and how the different type of motivations influence their output. It also brought about an

understanding on what motivates an employee to put in more effort for the overall benefit of the organ-

ization, the thesis also provided an avenue for organization to get more information on what employees

have in mind about their job or how employees perceive their present job and what changes the organ-

izations need to improve on.

The thesis also explained various motivational theories and how they can be used by companies. Also,

the thesis studied organizational performance and tried to bring about some aspect the organization

needs to improve on to have a better output from its employees.

Key words

Employee commitment, Motivation, Organizational Performance, Extrinsic and Intrinsic, Satisfaction.

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CONTENT

1 INTRODUCTION ................................................................................................................................ 1

2 COMMISSIONER: PEPT OY AB ..................................................................................................... 3

3 MOTIVATION .................................................................................................................................... 7

Extrinsic motivation ....................................................................................................................... 7 Intrinsic motivation ........................................................................................................................ 8 The Relationship Between Extrinsic And Intrinsic Motivation ................................................. 9 Financial motivation .................................................................................................................... 11 Non-Financial Motivation ........................................................................................................... 11

Organizational performance ....................................................................................................... 12

4 MOTIVATIONAL THEORIES ....................................................................................................... 14

Maslow's Hierarchy of Needs theory .......................................................................................... 14 Herzberg's Motivation Hygiene Theory (two factor theory) ................................................... 16 McClelland's theory ..................................................................................................................... 18

Theory X and Y of Douglas McGregor ...................................................................................... 19 ERG theory of Alderfer (1969) ................................................................................................... 19

5 RESEARCH METHODOLOGY ..................................................................................................... 21 Research Design ........................................................................................................................... 21 Validity of a study ........................................................................................................................ 23

6 PRESENTATION AND DISCUSSION OF RESULTS ................................................................. 24

Dem oragrphic information ........................................................................................................ 24 Evaluation of financial motivation ............................................................................................. 27

Evaluation of organizational performance ................................................................................ 29 Evaluation of non-financial motivation ...................................................................................... 32 Discussions .................................................................................................................................... 33

7 CONCLUSION .................................................................................................................................. 35

REFERENCES ...................................................................................................................................... 38

APPENDICES

PICTURES

PICTURE 1.Energy exhibition.................................................................................................................4

PICTURE 2. Scaffolding construction around tanks...............................................................................5

PICTURE 3. Insulation works on small pipes...........................................................................................6

FIGURES

FIGURE 1. Depiction of Maslow’s Hierarchy of needs.........................................................................16

FIGURE 2. Herzberg motivational hygiene theory................................................................................18

FIGURE 3.The responds to copies of questionnaires issued...................................................................25

FIGURE 4 . Sex distribution of respondents...........................................................................................26

FIGURE 5. Marital status of the respondents..........................................................................................27

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FIGURE 6. How long have you worked with Pept OY..........................................................................27

FIGURE 7. Branch offices of PEPT OY.................................................................................................28

FIGURE 8. Positions held by respondent................................................................................................29

FIGURE 9. Financial motivation triggers me to work efficiently............................................................30

FIGURE 10. Increase in output quality of employees when satisfied with motivation………………...31

FIGURE 11. Employees turn to be more efficient when satisfied with pay package..............................32

FIGURE 12.Emlpoyees become effective when satisfied with pay.........................................................33

FIGURE 13. Increase in organisations sales ……………………………………………………….….34

FIGURE14.Increases output when they are satisfied with motivation....................................................35

FIGURE 15. Evaluation of non-financial motivation ……………………………………………….…36

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1 INTRODUCTION

At a time when good remuneration is seen as one of the major policies organizations adopt to increase

their workers’ performance and thereby increasing the organizational productivity, companies are con-

fronted with numerous challenges such as employee turnover, changing workplace environment, con-

sumer preferences and technological changes among others. Most employers of labor and management

practitioners need to realize the fact that for their organizations to gain competitive advantage and meet

up with the contemporary changes, the performance of their employees has a great role to play. The

performance of these employees is vital, not only for the growth of the organization, but also for the

growth of the individual employees.

For any organization to be adaptable to the changing times and attain its goals and objectives, it must

know its outstanding workers, those who need additional training and those not contributing to the effi-

ciency and welfare of the organization. These can be achieved by putting in place a motivation system

that would trigger the employees to put in their very best in whatever they are assigned to carry out. In

recent years, PEPT OY has witnessed a high rate of employee turnover and this seems to have been

accounted for by the different types of motivation given to them. Some of these motivations take the

form of work content such as increased responsibility, achievement, authority and room to confront more

challenging tasks as well as pay package and the relationship between workers.

The aim of this thesis is to examine the effect of financial motivation on the performance of the em-

ployees of PEPT OY. Motivation is said to be a strategy adopted by management to trigger employees

to act according to management thinking. Specifically, this thesis is also to evaluate the influence of

employee non-financial performance on PEPT OY. The objective of this study was to conduct research

on the employees of PEPT OY regarding if employee’s motivation has any impact on their job perfor-

mance and how they can be motivated to improve on their work efficiency.

The commissioner PEPT OY is a family owned business and it is into scaffolding solutions, insulation

work and industrial maintenance. PEPT OY business policy is built on honest and close relationships

together with a high standard business ethics. The organization recognizes their employees as being

worth their weight in gold and makes sure their employees are supported in managing a healthy lifestyle

with exercise and individual coaching as well as developing professionally through special training.

Considering the high rate of employee turnover on the organization today and the experiences of the

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researcher, this thesis is of paramount importance not only to the researcher as it broadens his frontier

of knowledge in business management and effective managerial decision making. The management of

PEPT OY will have much to benefit from it as it is intended that it provides an in-depth insight on how

satisfactory motivation methods can be adopted to profit both the organization and the employees in the

race of meeting up with the present-day workplace difficulties.

The theoretical part of this thesis talks about motivation and employee’s commitment. The emphasis is

placed on comparing how the different types of motivation influence employees and how leadership

style helps to improve on the organizations output. Part of this thesis comprises of the motivation theories

in business management and administration and brings about the knowledge on how they are applicable

in real life situations. The introduction throws light on the problem statement while the theoretical sec-

tion overviews related literature on the topic under investigation. The methodology section looks at the

instruments used, the methods of data collection and the method of data analysis. The results of the thesis

will be immediately proceeded by discussion and conclusion. The thesis shall end with a list of sources

consulted and a questionnaire that will be used to collect information. The findings are analyzed, and

further suggestions are made on how to improve and handle employees’ work-related matters in the

company for the future.

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2 COMMISSIONER: PEPT OY AB

PEPT Oy Ab is a family owned business and was established in 1992 by Juha Enlund who is now work-

ing as the Sales and Executive Director for the company. PEPT Oy Ab is owned by Juha Enlund who

owns (52%) and his two sons André Enlund (24%) and Tony Enlund (24%) respectively. PEPT has

lately been growing steadily and the actual turnover of the company as of 2017 was 27 million Euros.

The head office is located in Kaustinen, at the Emet Industrial Estate. Additionally, there are separate

units in Pietarsaari and Kokkola. From time to time there are also other national and international work

sites. Since 2015 PEPT Oy Ab also has a subsidiary company in Sweden called PEPT Service Ab. This

company has three most important service sectors of which are scaffolding solutions, insulation work

and industrial maintenance. For industrial upkeep and maintenance shutdowns PEPT offers service, ca-

pacity and know-how, which is leading in its field in Finland currently. It operates in a wide sector of

various industrial maintenance projects. On average PEPT has 230 employees every year. Approxi-

mately 20 persons are working now in the main office.

In 2016 PEPT OY had one of its biggest project in which lasted for 2 years in insulation and mounting

of scaffolds for the construction of a new paper and pulp factory (Metsä) in Äänekoski and was currently

the biggest project going on in the whole of Scandinavia in that year .There were over 1500 workers on

site working for PEPT of which most were subcontracted from other subcontracted companies such as

The Scaffolders from Poland and JE Henkilöstöpalvelut from Pietarsaari where most of the companies

contracted workers are being taken.

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PICTURE 1. Energy exhibition (PEPT 2018)

On scaffolding, PEPT OY can supply, build and dismantle complete scaffolding systems, emergency

lighting and maintenances, insulation and clothing also with sheet metal works. The model of scaffold

used by PEPT is the ALFIX module Plus II-model which is suitable for every construction site in the

whole of the Scandinavia. At PEPT Oy AB the management considers it important with its own attitude

and values to encourage all the different levels of the organization to act based on the organization’s

common quality environment. The effective occupational safety, environmental and quality systems

guarantee an environmentally friendly and safe way to work. The International Organization for Stand-

ardization (ISO)14001 Environmental Standard was audited in May 2012. In addition to that, PEPT Oy

Ab is a partner and member of the Green Company Effect network which is an open green idea bank

which is currently being built in compliance with the Occupational Health and Safety Management Sys-

tem (OHSAS) 18001 Standard which is part of everyday operations. This Standard was audited in May

2012 and focuses strongly on OSH activities. The quality of the operations is ensured by operating in

accordance with our ISO 9001 quality certificate and every site is audited internally every day. On safety

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at PEPT OY, their workers have undergone training to adopt the right attitude at work and the environ-

mental safety and health occupational safety card is required by all workers before they can be allowed

to work on site. Also, the organization sees that the workers are provided with right working kit which

are required by the Finnish law. Through good services and work PEPT OY gets good feedback from

its customers which on the other hand reflects to their common working environment in a positive way.

Also, constructive feedback regularly is also a plus that makes the company grow more and more as

years goes by. PEPT OY provides insulation for pipelines, equipment and tanks from the planning stage

to the finished product. The company uses their own scaffolds to speed up their work. Also, PEPT OY

uses a high customized and a monitoring software for project tracking which helps to efficiently monitor

and report on the progress of the work to its customers’ OY delivers both standard parts that are custom-

ized to the customers’ needs. Also, PEPT design and make customaries parts to suit customers need.

PICTURE 2. Scaffolding construction around tanks. (Äänekoski 2017)

On industrial maintenances PEPT have multi-skilled expertise who can do all scaffolding systems, dem-

olition work, safety lighting, maintenance work as well as insulation and sheet metal work from the same

supplier to save our customers considerable time and costs. This flexible maintenance contract and pro-

active maintenance reduce shutdown time for the customer and the customers. Their capacity and net-

work covering the whole of Finland enable maintenance of large complexes.

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PICTURE 3. Insulation works on small pipes. (Äänekoski 2017)

The area of study gives the boundaries within which the results of the findings will be interpreted. The

study is carried out in Pept OY’s head office located in Kaustinen at the Emet Industrial Estate and its

branch offices of Pietarsaari, Sotkamo, Sodankylä, Seinäjoki and Kokkola located all over Finland.

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3 MOTIVATION

Every organization is pre-occupied with what should be done to achieve high levels of performance

through its workforce. This means giving utmost attention to how individuals can best be motivated

through means such as incentives, rewards, leadership, recognition, promotion among others not leaving

out the organization context within which they carry out the work (Armstrong 2006). The study of mo-

tivation is primarily concerned with why people behave in a certain way. In general terms, it can be

described as the direction and persistence of action. It is concerned with why people choose a course of

action in preference to others, and why they continue with chosen action, often over a long period, and

in the face of difficulties and problems (Mullins 2007). Motivation is therefore said to be at the center

of how innovative and productive things are done within an organization. It has been established that

motivation is concerned with the factors that influence people to behave in certain ways (Arnolds &

Venter 2007). established three components of motivation which are Direction, Effort and Persistence.

Direction which is what the person is trying to do, Effort which is how hard the person is trying and

Persistence which is how long the person keeps on trying. Employees are generally compelled internally

or externally to direct their efforts towards course and stay focus to it in which case we have extrinsic

and intrinsic motivation. (Armstrong 2006.)

Motivation can be classified as intrinsic and extrinsic motivation. Intrinsic or internal motivation and

extrinsic or external motivation both differs in the source of pressure or pleasure that boost each of them.

Kousez and Posner (2012) elaborates further by explaining that individuals are internally motivated

when they seek pleasure, interest, satisfaction of curiosity, personal challenge in their work.Aso that

individuals are externally motivated when they engage in their jobs in order to obtain certain goals that

is different from the work itself .

Extrinsic motivation

It is related to tangible rewards such as salary and fringe benefits, security, promotion, contract of ser-

vice, the work environment and conditions of service. These are what needs to be done to or for people

to motivate them. They are often determined at the organizational level and may be largely outside the

control of the individual managers. Extrinsic motivators can have an immediate and powerful effect but

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will not necessarily last long (Mullins 2007). The intention to act in a way is not from within the indi-

vidual. Psychological forms of extrinsic motivation can include praise and public acclaim like for

example ,a child might clean her room in order to receive positive praise from her parents. An actor

might perform in a role in order to obtain attention and claim from his audience. In both of these

examples, while the reward is not physical or tangible, it is a type of motivating reward that is external

to the actual process of participating in the event. (Sansone & Harakiewicz 2000.)

While the large majority would propose that intrinsic motivation is preferable, it is not constantly con-

ceivable in all situations (Hagemann 1991, 42–43). Now and again, individuals just want to take part in

an action. Though excessive motivation might be risky, yet when used correctly, external motivation can

be a helpful toll. For instance, external motivation can be used to motivate individuals to finish a work

task or school assignment in which they have no inner interest. Eternally motivated person thus turns to

function because of an event such as being noticed and rewarded for a work or a task completed in time.

Such persons are therefore said to have been motivated externally. Extrinsic motivative factors such as

salary and promotion are the policy of the organization and the management to promote and maintain

positive working conditions, supervision and security. (Peltonen 1987.)

Intrinsic motivation

This is also known as internal motivation and it is related to psychological rewards such as the oppor-

tunity to use one’s ability. This reward system also deals with a sense of challenge and achievement,

receiving appreciation, positive recognition, and being treated in a caring and considerate manner. Psy-

chological rewards are those that can usually be determined by the actions and behavior of the individual

manager to drive people to work harder (Mullins 2007). Intrinsic motivators are concerned with the

quality of work life and are likely to have a deeper and longer-term effect because they are inherent in

individuals and not imposed from outside .It is necessary for an intrinsic motivated person to be able to

feel the power to control and to decide on their own things, to feel they are good at what they do and

that they have the needed skills required for their task. (Deci 1975.)

The motivational process begins with an inner drive and needs that triggers to motivate the individuals

to work towards certain goals or objectives. This inner drive may be caused by needs, desire, expecta-

tions or anticipation (Armstrong 2006). The satisfaction of these needs or desires will cause individuals

to behave in a way to achieve the targeted goals. The realization of these goals brings satisfaction which

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serves as a re-enforcement for motivation which is also the inner drive. It should however be noted that,

intrinsic motivation is higher when autonomy, belonginess and competence are high. Thus, induvial

coaching is one of the best ways to motivate people internally and to help them bring out their best not

necessarily depending on the reward but on the internal joy and satisfaction derived after achieving the

goal. (Denny 2009.)

The Relationship Between Extrinsic And Intrinsic Motivation

The difference between intrinsic and extrinsic motivation is clear, yet analyst contends that intrinsic and

extrinsic motivation additionally affect one another Organ (2005) claims that in a few cases extrinsic

motivation can be same as intrinsic motivation. He argued that if money is regulated contingently, it

minifies intrinsic motivation. Be that as it may, this occasion won't happen if the money is non-unex-

pectedly conveyed. Organ react to this dialog by expressing that although extrinsic motivation can work

contrary to intrinsic motivation, it can likewise have a fortifying impact. "when the platform of extrinsic

motivation is dealt with, intrinsic motivation can prompt elevated amounts of fulfillment and perfor-

mance". He went further to state in his research that both extrinsic and intrinsic qualities can motivate

employees to do their separate work, however both motivational types can have different impacts on

workers (Venter 2007). According to Medonca (2007), it can be explained that employees can be intrin-

sically and or extrinsically motivated to perform their work and reinforce each other. However, in some

cases extrinsic motivators can also minify intrinsic motivation (Deci 1975). Moreover, researchers have

argued that not all people are motivated equally some employees are more motivated extrinsically and

others are more extrinsically motivated.

Motivation in the workplace is a widely researched topic (Holme & Solvang 1997, 163) and earlier

research has been conducted by Maslow (1943) and Herzberg (1968), who were 2 great innovators at

their subject. Also, many definitions have been composed such as Herzberg’s definition of motivation

in the workplace which is performing a work-related action because you want to. Some disagreements

took place concerning the important of certain aspects of motivation, but consensus is in the fact that

motivation is an individual process and can be deliberate, it is multifaceted and that is the reasons why

motivational theories is to predict behavior (Mitchell 1982, 80-88). The relationship between intrinsic

and extrinsic motivation also explained that individuals are intrinsically motivated when they look for

pleasure, interest, satisfaction, enjoyment and curiosity, self-expression or personal challenges in their

work. Also, an individual is extrinsically motivated when they are working so as to gain some goal that

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is different from the work itself (Amabile 1993). Both intrinsic and extrinsic motivators are necessary

in motivating employees. It is therefore argued that managers must not only concentrate on the necessary

factors, since managers need to address all hygiene and motivator factors to motivate employees.

Extrinsic motivation is an external form of motivation. For example,if your boss sets a deadline on a

project and your bonus is tied to the deadline, that is a very clear form of extrinsic motivation. Infact,

this example includes two extrinsic motivators which are your boss's expectations and the bonus. So,

extrinsic motivation doesn't always have to be another person,but it is some outside demand,obligation,

or reward that requires the achievement of a particular goal. Intrinsic motivation, however, is an internal

form of motivation. You strive towards a goal for personal satisfaction or accomplishment. You may

even work towards a long-term reward such as the development of a business or participating in a

competition, but the primary motivator is internal. (Storey 2013.)

Research initiated by Deci offers evidence that when too many extrinsic rewards are provided, work

effort may decline. He found that the introduction of extrinsic rewards for work previously performed

for intrinsic pleasure tends to reduce motivation. Over abundant extrinsic rewards are likely to lessen

the need to seek intrinsic satisfaction. People may perceive extrinsic rewards as diminishing their control

of the work situation. However, if rewards serve primarily as feedback, this negative effect are minimal.

For organisations to get the best from their workers, managers should emphasize anticipated reward

value.So the manager’s job is to strengthen effort performance-reward expectancies. For employees who

have difficulty in attributing outcomes to their performance, managers must make sure they realize

performance-reward connections and provide performance feedback. (Amabile 1993).

Employee motivation system comprise of the organizations joined arrangements, procedures and prac-

tices for motivating its workers with a connection to their commitment, aptitudes and capability and their

market value (Kawesa 2004). The motivational system of employees has a plans and procedures with a

structure which will give and keep up proper kinds and levels of pay, benefits and different types of

remuneration. The motivational system includes financial motivation (Fixed and variable pay) and the

employees benefits, which together sums up as compensation. The system additionally consolidates non-

financial related motivation (acknowledgment, adulate, accomplishment, obligation and self-improve-

ment) and in most cases, performance management processes. (Armstrong 2006,4.)

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Financial motivation

These are motivators that are in terms of money or cash such as salaries, and efficiency wages, direct

financial benefits, life insurance bonus, transport allowance, accommodation allowance, medical allow-

ance, gain sharing, and tax breaks, among others. According to “merit pay” or “performance pay” ap-

proach, a standard for individual performance is set, such as increased worker productivity, and if a

worker meets or exceeds this standard, he or she receives a bonus, or a salary increase (Kawesa 2004)

Merit pay is frequently used in the private sector as a management tool to achieve organizational goals.

The main argument in favor of merit pay is that it can foster individual motivation by recognizing effort,

achievement and rewarding it in a concrete way. Performance-based compensation is another form of

merit pay which emphasizes teams results. In these schemes, incentives are created to encourage workers

to work together to achieve collective goals. For instance, an organization’s performance award that

links bonuses to organizations’ goals and benchmarks. However, in the Finland’s context, it is believed

that organizations motivate individual employees to perform regardless of their academic qualifications.

At times they are rewarded depending on the number of distinctions output produced by workers of the

various units. This system is criticized on grounds that an employee’s performance depends on the sys-

tem in the organization and it is not individual efforts that bring out such results. (Armstrong 2006.)

Non-Financial Motivation

These are described as motivators that are not in terms of money or cash. They include study leaves,

work environment, conditional/occupational/health, safety, recreational facilities, infrastructure, social

amenities, job security, professional development, training opportunities, affection and passion, sta-

tus/prestige, recognition, sense and duty, promotion, respect, achievement and challenging work. Or-

ganizations with positive desires could put in place models with a reasonable degree of motivation which

could be accomplished through non-financial reward frameworks by the arrangement of chances for

learning and improvement of skills. However, personnel management aptitudes still have a vital task to

carry out in situating their own motivational abilities to get individual inside their organization and to

give in their best performance by making great utilization of the motivational system and procedures

given by the organization. (Armstrong 2006, 221.)

Acknowledgment is appreciation of performance by the organization of a work done by the group or

colleague. In common language, it is occasionally expressed as "I caught you doing something great". It

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is a methodology of demonstrating gratefulness for the uncommon or additional effort done by a worker

inside an organization. Acknowledgment has two critical objectives to support the representative or

group to proceed the conduct and to urge different workers to do likewise. Most group acknowledgment

plans fall into celebrating organizational target routinely as an occasion created to concede the achieve-

ment finishing of critical organization objectives. This is to make a greater awareness or to help individ-

uals to remember the significance of the objectives accomplished inside the organization. Still, when

recognition is acting in isolation of motivation and equity rewards, it’s frequently loses much of its

appeal. (Wilson 1995, 330.)

According to Herzberg, supervisors don't motivate employees by allowing workers higher wages, more

advantages or status symbol. Rather, employees are spurred by their very own effort to accomplish

something unmistakable at a demanding task. The administrator's activity at that point isn't to propel

workers to get their assignments achieved, rather, the manager should supply more opportunities for

individuals to accomplish their task, so they will end up being motivated (Marchington and Wilkinson

2005, 368) motivating an employee through an assortment of, divisions or capacities is especially a

phenomenal way to deal with open the workers to more challenging task. This is extremely alluring to

workers who have been on an occupation for quite a while and are never again debated by the activity

however rather who have a firm requirement for activity to change. By giving the chance to change jobs,

the management has positively uncovered the employees to new issues and it will give the employees to

put their best with the end goal to get a chance to achieve to desires (Stone 2003,40–41). In this way

deliver an empowering domain for a greater motivation and performance inside the organization.

Organizational performance

Organizational performance comprises the real output or results of an organization as measured against

predetermined goals and objectives (Virgina 2009). It can also be understood by how well an organiza-

tion is doing to achieve its goals. It is very important for the managers of an organization to know the

performance rate of their organization to be able to know what changes they can introduce to keep abreast

with the evolving evolutions. Without the knowledge of the performance, it will be difficult for the

executives of the organization to know when exactly changes are needed in the organization. From past

literatures, performance seem to be a very complex concept. More attention needs to be given to how

performance is assessed. Superior performance means that the work is done effectively and efficiently.

Organizational performance refers to a long-range effort to improve an organizations problem-solving

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capacity and its ability to cope with changes in its external environment with the help of external or

internal behavioral- scientist practitioners, or change agents, as they are sometimes called. According to

Chen (2002), organizational performance is all about goal accomplishments through the transformation

of inputs into outputs. From a content perspective, performance is all about economy, efficiency and

effectiveness. It brings out the relationship between effective and minimal cost (economy), the outcome

and achieved outcome (effectiveness), between realized and effective cost (efficiency). An organization

may access its performance based on, profit, sales volume, market share and staying within the time

bounds.

Researchers have different opinions of what performance is all about. Organizational performance con-

tinues to be an issue in the management research circles. Javier (2002) equates performance to the fa-

mous 3Es economy which are efficiency and effectiveness of a certain programmed of activity. Accord-

ing to (Storey 2013) explanation, he states that organizational performance encompasses three specific

areas of a firm’s outcomes which are financial performance (profits, return on assets, return on invest-

ment), product market performance (sales, market share), and shareholder return (total shareholder re-

turn, economic value added, etc.). Organizational performance is the organization’s ability to attain its

goals by using resources in an effective and efficient manner. We can put organizational performance as

the actual output or results of an organization as measured against its goals and objectives. Performance

should not be confused with productivity; according to Ricardo (2001), productivity is a ratio depicting

the volume of work completed in a given amount of time. Performance is a broader indicator that could

include productivity as well as quality, consistency, effectiveness, efficiency and other factors.

A study by Chien (2004) found that there were five major factors determining organizational perfor-

mance, which are leadership styles and environment, job design, Organisational culture, Model of

motive and Human resource policies. The concept of performance explains both what has been achieved

and how it has been achieved and can be measured in several different ways. The most obvious way to

measure what has been achieved and the approach used in many studies is by reference to key perfor-

mance indicators (KPIs) which are usually to do with financial results (profitability) or productivity.

Measuring the ‘how’ is more difficult. It must rely extensively on qualitative assessments of organiza-

tional capability or effectiveness. (Nworgu 2006.)

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4 MOTIVATIONAL THEORIES

This thesis is based on motivational theories, equity theories, Herzberg’s two factor model, Theory X

and Y, the needs hierarchy theory, ERG theory and Instrumentality theory. Equity theory is concerned

with the perceptions of people have about how they are being treated compared with others. To be dealt

with, equitably is to be treated fairly in comparison with another group of people (Armstrong 2006).

Equity involves feelings and participation and is always a comparative process. It is not synonymous

with equality which means treating everyone the same since it would be inequitable if they deserve to

be treated differently. Equity theory states that employees will be motivated if they are treated equitably

and demotivated if they are treated inequitably. It explains only one aspect of motivation and job satis-

faction although it may be significant in terms of morale.

Maslow's Hierarchy of Needs theory

Abraham Maslow believed that man is inherently good and argued that individuals possess a constantly

growing inner drive that has great potential. The needs hierarchy system, devised by Maslow (1943), is

a commonly used scheme for classifying human motives. It involves five categories of motives arranged

with lower-level needs on the bottom which must be satisfied first, before the higher-level needs come

into play .That is, it explains that only when workers get to be satisfied by the lower level of need they

want before they get to be motivated to go for the opportunity of having their next need up in his hier-

archy of satisfaction. For instance, a hungry man will need a wage to satisfy just his hunger at the present

before getting worried about securing a job contract. These needs were also explained that when they

become satisfied, it then stops from being a motivator (Wallace 2007, 277). These needs are displayed

on the graph below.

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FIGURE 1. Depiction of Maslow’s Hierarchy of needs (Adapted from 21st century 2015)

Physiological needs: These are basically the needs which are needed for live such as food, water, shelter,

clothing and sleep.

Safety needs: Protection against danger, threat, and deprivation. Behavior which arouse from uncertainty

with respect to continued employment or which reflects favoritism or discrimination, unpredictable ad-

ministration of policy are powerful motivators of the safety needs in the employment relationship at

every level.

Social needs: Giving and receiving of love, friendship, affection, belonging, association, and acceptance.

(If the first two levels are well gratified a person becomes keenly aware of the absence of friends).

Ego needs: Need for achievement, adequacy, strength, and freedom. This is the need for autonomy or

independence. Status, recognition, appreciation, and prestige. This is the need for self-esteem or self-

worth. Self-actualization needs: The need to realize one's potentialities for continued self-development

and the desire to become more and more of what one is and what one can become. (The conditions of

modern industrial life afford only limited opportunity for the self-actualizing need to find expression.

(Haimann Theo 2004.)

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The esteem needs, respect and trust: This type of need explains that human have a need to feel respected

and have self-esteem. This esteem presents the typical human desire to be accepted and valued by others.

People usually involves themselves in an occupation or what pleases them to gain recognition. These

activities give the person a feeling of recognition and some value.

Personal development need: According to Maslow, this need is mainly to get out of condition which are

mainly material to reach fulfillment. This level of needs is the desire to accomplish everything that one

can and to become the most that one can be. Two major postulates can be derived from Maslow's hier-

archy of need which are that a satisfied need is not a motivator of behavior. To the extent that lower

order needs become satisfied, the next higher order level of needs becomes the most proponent determi-

nant of behavior (Hamner & Organ 2005, 139). The extent that jobs incorporate elements that satisfy

some higher order human needs and determines their potential for motivating workers, A person's level

of motivation is closely related to the hierarchy of needs and attitudes. These needs will then determine

the individual route which the persons will take for the satisfaction of his ultimate need categorically

described by Maslow as self-actualization. This belief served as the basis for the assumptions of

McGregor's Theory Y point of view on motivation which was based on self-direction, self-control, mo-

tivation and maturity. (Mullins .2007, 258-260.)

Herzberg's Motivation Hygiene Theory (two factor theory)

Herzberg's motivation hygiene theory (Herzberg 1968, 53-62) is often called the two-factor theory and

focuses on those sources of motivation which are pertinent to the accomplishment of work. Herzberg

concluded that job satisfaction and dissatisfaction were the products of two separate factors which are

motivate factors (satisfiers) and hygiene factors (dissatisfiers) respectively. The motivative factors are

those factors that gives employees the reasons to work harder and gives them satisfaction. While the

hygiene factors are those that can lead to dissatisfaction and turn to slow down workers from given in

their best if they are absent such as companies benefit, good relationship with managers and a prospec-

tive future in the company. This theory further explains that there is a certain factor in a job place that

cause work satisfaction while a few others causes work dissatisfaction all of which act independently

from each other. It further explains that in a workplace, all the employees are different in that what can

motivate one employee will not be the same to make another employee feel motivated. Nathan (2007.)

17

Those factors that bring about motivation among others include achievement, company policy, recogni-

tion and supervision, work itself, working conditions, responsibility, interpersonal relations, advance-

ment, salary, growth, status, job security and personal life (Management Study Guide 2015). Herzberg

used the term "hygiene" in the medical sense, the sense that it operates to remove hazards from the

environment. (Duttweiler 2011) Herzberg identifies and compares the dynamics of hygiene and motiva-

tion as illustrated below.

FIGURE 2. Herzberg motivation hygiene theory (basic marketing and Global Approach14th ED 2012.)

According to Herzberg, hygiene cannot motivate, and when used to achieve this goal it can produce

negative effects over the long run. A "hygienic" environment prevents discontent with a job, but such an

environment cannot lead the individual beyond a minimal adjustment consisting of the absence of dis-

satisfaction. A positive “happiness" seems to require some attainment of psychological growth (Her-

zberg 1968). The hygiene’s have always been and probably always will be easier to measure, control,

and manipulate than the motivators. The motivators are more complex and subjective, and often too

elusive to measure but to the extent that management concentrates on hygiene’s, while at the same time

neglecting motivators. The proper management of hygiene is an important first step in applying Her-

zberg's two factor theory which is shown in a five-part process which are Identify the type of hygiene,

give hygiene for hygiene purposes, give hygiene for what hurts management of hygiene, keep hygiene

administration simple, give it and shut up about it. (Master class 2015.)

18

Th fact that job satisfaction is made up of two unipolar traits and it is not unique but remains a difficult

concept to explain. The opposite of job satisfaction would not be job dissatisfaction, but rather no job

satisfaction. Similarly, the opposite of job dissatisfaction is no job dissatisfaction (Herzberg 1968). Her-

zberg also says, "A deprivation in hygiene factors can lead to job dissatisfaction, but their amelioration

does not lead to job satisfaction". Hersey describes hygiene saying, Hygiene factors when satisfied, tend

to eliminate dissatisfaction and work restriction. But they do little to motivate an individual to superior

performance or increased capacity. There are three primary psychological states that significantly affect

worker satisfaction which are experienced meaningfulness of the work itself, experienced responsibility

for the work and its outcomes, knowledge of results, or performance feedback. The more that work is

designed to enhance these states, the more satisfying the work will be (Wallace 2007, 275). The dimen-

sion of job dissatisfaction differs psychologically from job satisfaction, but it is also associated with an

escalation phenomenon or what some have called she principle of rising expectations. The more people

receive, the more they want this clarifies Herzberg's escalating zero-point statement. According to

Mathis, hygiene factors provide a base which must be carefully considered if dissatisfaction is to be

avoided. Even if all the maintenance needs are taken care of, the people will still not necessarily be

motivated to work harder. (Medonca 2007.)

Herzberg suggested that the factors that lead to job satisfaction are primarily intrinsic, whereas those

leading to job dissatisfaction are primarily extrinsic. The cluster of intrinsic factors was found to include

the work itself, achievement, advancement, recognition and responsibility (kermally 2005). The cluster

of extrinsic factors was found to include supervision, interpersonal relations, working conditions, salary,

company policies, and administration at times, Herzberg seems to indicate that intrinsic factors will not

lead to job satisfaction if the extrinsic factors present in the work setting are deficient. An employee

experiencing a state of intrinsic motivation tends to be committed to the job and self-fulfillment through

it in a state of intrinsic motivation and the employee attributes job behaviors to outcomes which are

derived from the work itself. Such intrinsic outcomes are experienced by employees independent to the

involvement of others. (Lahti 2008.)

McClelland's theory

McClelland's concept of achievement motivation is also related to Herzberg's motivation-hygiene the-

ory. People with high achievement motivation tend to be interested in the motivators. People with low

19

achievement motivation are more concerned about the environment (Hersey & Blanchard 1982, 61).

Although not stated specifically in Maslow's need hierarchy, the need for achievement underlies self-

actualization (kermally 2005). McClelland proposed no lower order needs. While his need for achieve-

ment is not identical with Herzberg's motivators or Maslow's higher order needs, there are some simi-

larities. The major difference is McClelland's emphasis on socially acquired needs. Maslow is helpful in

identifying needs or motives and Herzberg provides us with insights into the goals and incentives that

tend to satisfy the needs (Hersey & Blanchard 1982, 59). One major means of increasing an employee's

level of intrinsic motivation is through changing the work. This can be done through job rehabilitation

which is also known as job enrichment (Herzberg 1968). However, (Aldag 1979) has said "Employees

dissatisfied with extrinsic factors are unlikely to respond well to job enrichment attempts". Job enrich-

ment, a significant intervention within OD (Organizational Development) and a critical element of qual-

ity of work life (QWL) projects is a direct application of Herzberg's theory and at least an indirect ap-

plication.

Theory X and Y of Douglas McGregor

McGregor (1960) places money in his theory X category and contends that it is a poor motivator. Praise

and recognition are placed in the theory Y category and are considered stronger motivators than money.

McGregor’s theory X and Y is relevant to this study as it conceptualizes the aspects of non-financial and

financial motivation and their effect on the performance of employees. This theory is in line with the

objectives of the study. Maslow’s Needs theory and Herzberg two-factor model are very fundamental as

they attribute the performance of employees to non-financial motivation. They argue that if money is

the only reward that someone receives by doing his/her job right, this undoubtedly will have a negative

reflection on an organization as the employees will always be money-minded and ignore the goals and

operations of the organization. The rewards must have the form of influencing the employee to feel

better concerning his or her achievements inside the company and from this success to feel as part of

this business. (Management Study Guide 2015.)

ERG theory of Alderfer (1969)

In trying to address the deficiencies of Maslow’s work, Alderfer (1969) formulated another model that

conceptualizes the hierarchy of needs known as ERG theory. This approach clusters Maslow’s five needs

20

into three groups of existence which corresponds to Maslow’s physiological and safety needs which are

relatedness like the love needs and growth, parallel to the esteem and self-actualization needs. Hypoth-

esized that an individual could focus on all three groups simultaneously without any specific order. In-

strumentality theory states that if we do one thing it will lead to another. In its crudest form, instrumen-

tality theory states that people only work for money. It assumes that people will be motivated to work if

rewards and penalties are tied directly to their performance, thus rewards are contingent upon effective

performance. This theory has a significant relevance in investigating the impact of financial motivation

on the performance of employees. It is in support of the most current systems of salary scale where

employees are rewarded basing on the number of years spent in an organization rather than performance.

(Odden 2000.)

About these studies, the above theories, most especially Maslow’s hierarchy of needs and instrumentality

theory, (Maslow 1943) are relevant to this investigation. Maslow’s hierarchy of needs is significant in

this study since it establishes in detail the effect of non-financial motivation like respect, recognition,

job security, and self-actualization on the performance of workers. The philosophy of instrumentality

theory is also admired in the study of organizational performance as it brings out clearly the impact of

financial motivation like permanent increase in pay for employees on performance. These theories have

a common principle that managers must determine the needs of their employees within the organization.

This will make them happy when they work and by that they will be motivated to perform at high levels

and more efficiently for the achievement of the organization’s goal. (Management Study Guide, 2015.)

21

5 RESEARCH METHODOLOGY

Research methodology is essential to settle prior to initiate research activities. It is needed to state basic

design, method and tool of research so that researcher can chose right instruments and process to

accomplish research objectives.This chapter presents the scope of the study, research area, research de-

sign, population of study, sample size, sampling procedure, research instrument, validity and reliability

of research instruments, administration of research instruments, scoring of instruments, and method of

data analysis and operational definition of key variables. On the theoretical part of the study which stands

on scientifically based research, books, articles and audio-visual material were utilized as the establish-

ment for the theoretical frame work. In the theoretical part the point was to build up an-up-to- date view

over the subject examined in the observational part of the study. This is accomplished by auditing present

and applicable sources of data.

Research Design

According to Nwogur (2006), a research design is a plan or blue print which specifies how data related

to a given problem should be collected and analyzed. It provides the procedural outline for the conduct

of any given investigation. This study was conducted using the survey research design which according

to Ezeh (2005) is a plan of study which enables researchers to use reliable techniques to collect data

from a well-defined population or systematically selected segment of the population for the purpose

determining the attributes of the population. This research design was used to assess the effect of em-

ployees’ motivation on the performance of PEPT OY. The adoption of this research design was influ-

enced by its low cost, greater efficiency, accuracy, flexibility, less time consuming and above all it pro-

vided the possibility of understanding the opinions of respondents without imposing any condition on

them. Therefore, the researcher could only describe, explain and or predict events following the opinions

of respondents. The major instruments of data collection were questionnaire and an interview that the

researcher used to collect information from the respondents on the study under consideration. Kothari

(2004), defined population as a member of any well-defined class of people, events or objects. The

intended populations of this thesis were exclusively the employees of PEPT OY’S head office and those

of its branch offices of Pietarsaari, Sotkamo, and Kokkola in all their grades and ranks as well as the

laborers on the field, gender, ages, race, tribe, culture, language, just to name this few ranging from 18

to 45 years and above.

22

The fact that the researcher could not afford a nationwide tour to all the over 6 sales points of PEPT OY

(Sodankylä and Seinäjoki) due to financial constraints and for economic reasons explains why the tar-

geted population of 160 employees was chosen from Kaustinen, Pietarsaari, Sotkamo, and Kokkola.

Sampling is the process of taking a subset of the subjects that is a representative of the entire population.

To achieve this objective, the researcher adopted the purposive and convenient sampling techniques in

selecting branch offices while the simple random sampling technique was used to select 150 respondents.

According to Lewis and Thornhill (2009), simple random sample is a type of sampling technique where

by every member of the sample size is chose by chance for the study and every member of the population

stand an equal opportunity of being selected from the chosen population fraction. 150 copies of ques-

tionnaires were designed and given to these respondents randomly selected amongst which included

junior and senior staff members as well as the laborers. As such, the target population was regarded as

been homogenous and could give the much-needed information for reliable results since it gives few

chances for sampling statistical errors.

To collect information on how employee motivation, affect the performance of PEPT OY, the researcher

used structured copies of a questionnaire and as a major instrument to sample the opinions of the re-

spondents. A questionnaire according to Uzoagulu (1998), is a carefully designed instrument for collect-

ing data in accordance with the specification of the research questions and hypotheses. It may be used

to ascertain facts, opinions, beliefs, attitudes and practices. Questionnaire is just a list of questions de-

signed to obtain certain information from whoever is mandated to answer the questionnaire.

A questionnaire was constructed in relation to the research objectives which was to find out the effect

of financial and non-financial motivation on the performance of PEPT OY and with the help of literature

information. This questionnaire was developed for completion by the employees and management of

PEPT OY. The questionnaire provided information on the employee motivation features and how they

are implemented at PEPT OY. The questionnaire was made up of four sections. Section A dealt with

demographic characteristics of respondents, Section B focused on financial motivation, section C fo-

cused on non-financial motivation while Section D concentrated on the various aspects of an organiza-

tion’s performance emanating from employee motivation. This questionnaire comprised closed ended

questions use for ensuring uniformity and more effective comparison between responses given by the

various respondents in each category. This is because closed ended questions are easily coded and ana-

lyzed. The questions were developed on a four-point Likert scales ranging from 1(strongly agree) to 5

(strongly disagree). This questionnaire was developed and reviewed by the researcher and his mates to

ensure it validity and reliability.

23

Validity of a study

Validity can be tested in different ways depending on the methods used by the researcher to conduct

the research and one of the ways to measure validity when carrying out a quantitative research is to

observe if the questions in the survey are understood equally by both the researcher and the respondents.

This identifies the fact whether an instrument measures what it is supposed to measure, (Hernon and

Schwartz 2009). The instruments used for this research was developed based on the objective of the

thesis. The researcher’s mates/colleagues made corrections and suggestions on the questionnaire. Reli-

ability of study Shows that if the same study yields similar results if repeated (Wilson 1995). This

means the results should be consistent over time by using a similar methodology. For quantitative re-

search, usually reliability is measured on three factors, i.e. the extent to which an instrument yields

similar results if repeated, results should be stable over time and results should be similar within a time

span. (Bryman & Bell 2007.)

There are three different ways to assess the reliability of a study which are test retest reliability, internal

consistency reliability and alternative forms reliability (Malhotra 2007). The test retest reliability is

conducted twice, being that the condition provided should be similar in both cases to give similar re-

sults. In alternative form reliability, the survey is answered two times in two different forms while

internal consistency reliability summarizes the survey items. The copies of the questionnaire were per-

sonally administered by the researcher in the head office and in the Pietarsaari branch office. A research

assistant assisted the researcher to do the administration in Sotkamo, and Kokkola. Before these assis-

tants embarked on the administration of the questionnaire, the researcher had meetings with them whom

they were enlightened on how to carry out the exercise. This method though time consuming and labo-

rious, was adopted to ensure accuracy and reduce refusal, non-responsive or incomplete responses.

24

6 PRESENTATION AND DISCUSSION OF RESULTS

This section focuses on the presentation, interpretation and discussion of findings generated from the

field by the use of the questionnaire with 14 statements. There was a total of 160 coppies which was

aimed at the workers of PEPT OY to respond to and of which were from different nationality.This

coppies were distributed to the suppervisors to hand to the workers on the various work sites that were

going on during the time of the survey like the construction of tanks in UPM pietasaari and the repaires

of the YARO stadium.This data was colllected from the period of April to june 2018. The questionnaires

were printed out in papers and handed to the respondent to fill individually.It begins with the presentation

of demographic information, quantitative results, test of hypothesis, and discussion of findings.

Dem oragrphic information

Since the sample size comprised of both sex with people from different nationalities and age groups ,the

questions of this section was aimed at figuring out the total number of questionnaires answerd and

returned.Then follewed by the sex distribution and the marrital status of the employees of PEPT OY.

FIGURE 3. The response rate of the copies of questionnaires issued

The figure above shows the returned rate of the administered copies of the questionnaire. It indicates

that out of the 160 copies of questionnaire issued out to the respondents, 150 were correctly answered

94%

6%

Response rate of questionnaires

Number answerd and return

Number not returned

25

and returned giving a percentage returned of 94 while 10 copies were not returned giving a percentage

of 6.On he whole more copies of the questionnaire were returned than those withheld by the respondents.

FIGURE 4. Sex distribution of respondents

The figure above shows the sex of the respondents from which it is observed that 96 respondents

representing a percentage of 64 were males while 54 respondant representing a percentage of 36 were

females. Overall,there were more males than females.Also on work sites there were mostly males due

to the reasons that the work requires so much man power of which most of the females were not capable

of so most of them thus have most of the offices post and also post which are less strainous.

FIGURE 5. Marital status of respondents

Figure 5 above shows the marital status of the respondents from which it is observed that 112

respondents representing a percentage of 75 were single while 38 respondents constituting a percentage

of 25 were married. It is observed that there were more single respondents than those who are married.

64%

36%

Sex discription

male

female

75%

25%

Marrital status

Single

Married

26

FIGURE 6. How long have you worked with Pept OY

Figure 6 above depicts the longevity of service of the respondents with Pept OY from which it is

observed that 30 respondents constituting a percentage of 20 have served in this organization for a period

of 1-5 years, 52 constituting a percentage of 34 have worked with Pept OY for a period of 6-10 years,

31 respondents which make up 20% have served in the organization for a period of 11-15 years while

37 respondents which constitute 24% have worked in this organization for 15 years and above. On the

whole, majority of the respondents have served in this organization for a period of 5-10 years.

FIGURE 7. Branch offices of PEPT OY

Figure 7 above shows the number of respondents in each branch that answered and returned the

questionnaire from which it is observed that 34 respondents from branch A constituting 23% of the

respondents answered and returned the copies of questionnaire administered to them, 41 from branch B

constituting 27.3% answered the questionnaire, 21 respondents from branch C that make up 14.0%

answered the questionnaire while 54 respondents from branch D constituting a percentage of 36.0

answered the questionnaire.

20%

34%21%

25%

Longitivity of service

1-5years

5-10years

11-15years

above 15years

23%

27%14%

36%

Frequency

A

B

C

D

27

FIGURE 8. Positions held by respondent

Figure 8 above shows the posts occupied by the respondents who answered the questionnaire from which

it is observed the position of a general manager constituting a percentage of 0.7, while the branch

managers who makes up 2 percent answered the questionnaires.The 140 employees constituting a

percentage of 93.3 answerd the questionnaire while 6 board members that constitute 4.0% responded to

the questionnaire. On the whole, there were more employees who are the main labourers who work on

site than any other set of respondents who took part in the survey.

Evaluation of financial motivation

The second part of the questionnaires was is to examoine the effects of financial motivation on the

employees of PEPT OY.So the statements in this section are all related to know the if employees are

motivated financially will have any outcome on their job performance,if the employyes are satisfied with

the oay packages, and also if the are often offerd bonuses and promoted.

1, 1%

3, 2%

93%

4%

Post held by Respondents

General Manager

Branch Manager

Employees

Board Member

28

FIGURE 9. Financial Motivation triggers me to perform effectively and efficiently towards the

organisations goal

In respond to the main objective, the data presented above reveals that 47% of the sample size responded

answed the questioneer agreed that financial motivation gives them an eurge to perform effectively to

give in their best for the organisations growth.33% agree also to supporrt the fact that financial

motivation gives them a positive influence to workk more for the organisations growth.10% where not

for either the fact that they agree or disagree that financial motivation gives them the urge to increase on

their productivity.7% strongly disagree while 3% disagree that financial motivation has notin to add to

their outpot for the growth of PEPT Oy.

FIGURE 10. Increase in output quality of employees when satisfied with motivation offered them.

From the figure above 60 persons giving a percentage of 43 from the sample size of 150 employees who

responded to the questioner strongly agree to the fact that there is an increase in output quality of the

47%

33%

3%7%

10%

Influence of financial motivation

Strongly agreed

Agreed

Strongly disagreed

Disagreed

Nutral

43%

29%

14%

7%7%

Increase output

SA

A

D

SD

N

29

employees of PEPT OY when they are motivated. Also 40 respondents agree that motivation leads to an

increase in the output of the employees of PEPT giving a percentage of 29.10 persons were not for or

against the fact that motivation has an impact on their productivity.20 persons disagree that motivation

has an impact on the productivity giving a total of 14 percent while the remaining 10 persons strongly

disagree to the fact that motivation has an impact on their productivity giving a tot al of 7 percent.

FIGURE 11. Employees turn to be more efficient when satisfied with pay package

From the figure above ,out of the 150 respondents, 80 of them given a percentage of 53 strongly agree

to the fact that when ever they are satisfied with their paypackage, they turn to be more efficient.4o agree

that they too turn to be more productive when they are satisfied with their pay package making a total

of 27 percent.20 respondents were neither on the side to agree or disagree that they turn to be more

productive when they are satisfied with the paypackage with their reasons being that they are not

motivated byn money but by the working conditions and job satisfaction.10 persons disagree to the fact

that they are motivated when satisfied with their pay package while there was no one who strongly

disagreed to the fact that their out put turn to be more when satisfied with pay package.

Evaluation of organizational performance

The statements in this section is related to how the motivation given to employees by the organization

turn to have an impact on the organization’s growth, if pay package increase turn to have an influence

on the output of the employees for the organization.

53%27%

0, 0%7%

13%

Satisfied with pay package

Strongly Agree

Agreed

Strongly disagree

Disagreed

Neutral

30

FIGURE 12. Whenever employees of my organization are satisfied with their pay package, they tend to

be more efficient

From the figure above, out of the 150 persons who responded to the questionnaire ,60 of the give a

percentage of 40 strongly agree to the fact that when they are satisfied with their pay package they turn

to be more efficient. Also, 40 persons making 27 percent agree to support that whenever they are satisfied

with their pay package they turn to be more efficient.30 persons from the total respondents had a neutral

opinion and were not for against that a satisfactory pay tend them to be more efficient. A total of 20

persons strongly disagree and disagree that a satisfactory pay has no effect on their efficiency.

On figure 13, the aim here is to know if the there is an increase in the sales of the organisation when the

workers are satisfied with the level of motivation offered to them or there is no effect on the organisation

sales related to the motivation given to the employees.

40%

27%

6%

7%

20%

More efficient with satisfactory pay

Strongly agree

Agree

Strongly disgree

Disagree

nutral

34%

20%13%

13%

20%

Increase in organisations sales

SA

A

D

SD

N

31

FIGURE 13. There is always an increase in the organisations sales when workers are contended with the

motivation offered to them.

From the figure above,50 persons from the total of 150 who responded to the questioner strongly agreed

to the fact that there is always an increase in sales of PEPT Oy sales when employees are contented with

their motivation. In support 30 persons which gives 20 percent accepts to the fact that whenever em-

ployees of PEPT are contended with their motivation the company’s sales turn to increase.30 persons

strongly disagree while 20 also join to disagree to the fact that it is the motivational satisfaction that

turns to lead to an increase in PEPT OY sales.13 percent were neither for or against the support to the

fact that the employees motivation have any impact on the company’s sales.

In figure 14, the statements aim was to find out how much employees are satisfied with the motivation

given to them and to know if this motivation given to them now turn to have any impact on their job

such as an increase in efficiency and output.

FIGURE 14. The quality of employees’ output increases when they are satisfied with the motivation

offered to them

From the figure above, 80 percent of the respondents strongly agree that the quality of their output in-

creases whenever they are satisfied with the motivation given to them. Also 40 persons given a total of

27 percent agree to the fact that their quality of output increases whenever they are satisfied with the

motivation given to them.10 persons were neither for or against so remained with a neutral opinion .20

person with 10 each Disagreeing and strongly disagreeing to the point that their output increases each

time they are satisfied with their motivation offered to them.

53%27%

6%7%

7%

my output increases when satisfied with motivation

SA

A

SD

D

N

32

Evaluation of non-financial motivation

I this section, the aim was to evaluate the effects of non-financial motivation on the employees and to

know how much the employees are satisfied with the non-financial motivation offered to them and the

effects of this non-financial motivation on the company. So, in this section, some of the statements were

know if management recognize and acknowledges the contribution of employees, if the workers are

being promoted on a regular basis, and if the management acknowledges and respect their employees

and the safety measures and how secured the job is.

FIGURE 15. Evaluation of non-financial motivation

With reference to above figure 18 above, it is read that three of the four items meet the accepted criterion

of 3 where majority of the respondents opine that management recognizes and acknowledges the

contribution of all employees giving it a mean score of 3.04. It is equally realized from the table that

promotion of workers to higher grades is not done regularly as this item scored a mean value of 2.63

which did not meet the accepted criterion of 3.Moreover, it is also read from the table that safety

measures and recreational facilities are available in PEPT OY as this item scored a mean value of 3.11.

Finally, it is also noticed from the figure that management gives extra responsibilities to employees as

this item scored a mean value of 3.32. on the whole, PEPT OY puts in place nonfinancial motivation

schemes to its employees except for the fact that it does not promote employees to higher grades

regularly.

29%

25%14%

32%

Non financial motivation

Recognizes contributions ofemployees

Regular promotion of workers

Safety measures

Extra responsibility toemployees

33

Discussions

When looking at the survey as a whole, the majority of the responds were positive though there was

some respondents that were negative on all of their responds thus proving that they are not satisfied with

their job or working situations or the pay package and motivation giving to them or even personal

issues.The analysis of the results of this thesis confirms to Herzberg’s hygiene theory which states that

the performance of employees is either influenced by satisfiers (motivating factors) such as promotion,

responsibility and recognition among others as the analysis of the results in figure 14 showed that recog-

nition, safety measures and recreational facilities and responsibilities all met the accepted criterion of 3

except for promotion which failed to meet this criterion. This means that these elements of non-financial

motivation to employees have an influence on employees’ performance and hence the organisation. It

equally confirms to this theory as it is realised that the analysis of the results in figure 10 as it is noticed

that the demotivating factors influence the organisation’s performance. The results of the thesis also

relate to the theory X and Y of McGregor and the ERG theory of Aldefer as we notice that most of the

items in 10,11 and 12 met the accepted criterion of 3 which is interpreted to mean that both financial

and nonfinancial motivation have an influence on the performance of PEPT OY. This is particularly

evidenced in figure 12 where the analysis of results indicated that there are always improvements in

PEPT OY’S performance whenever employees are satisfied the both the financial and nonfinancial mo-

tivations offered to them. It equally showed that an increase in an individual’s pay package without a

corresponding increase to that of his counterparts will not affect any change in the performance of PEPT

OY. This is strictly in line with the ERG (Existence, Related and Growth) meaning that the existence,

relations between employees and the growth of all the employees all have an influence on the organisa-

tion’s performance.

Lahti (2008) proposes deserting the basic means where all workers are dealt with and viewed similarly.

She implies that organisations can take cover behind this system and abstain from dealing with complex

inquiries, for example, multicultural issues. The initial phase in raising the awareness of multi-

multicultural issues is to straightforwardly discuss the subject regardless of whether it feels new and

awkward to the employees.So PEPT OY would profit by gathering a group of its foreign workers to

further analyze the opportunities for widening their multi-cultural mindfulness. Dialog with the group

of both outside and national workers could be brought together to open up the topic and conceptualising

thoughts before making further decisions on how to motivate their employees.

34

Also another means to motivate the employees is have a recreational day in which the topic could be

employees motivation and multiculturalism and it should include all the employees of PEPT OY. On the

event,representatives from different societies could demonstrate some of their cultures and traditions by

dansing and singing songs to display their culture so as to help educate other employees of their own

ways of life so as to help each other better have an understang about their differnt culturs. Awards could

be handed to employees with good performance and also talks of motivation to all the employees to help

strenghtening their team work.The organisation could have its own spatial discount prices for their

employees who wish to render the services of the company such as free transportation of the materials.

Since motivation varies from culture to culture. Employees from out side Finland that work at PEPT OY

could get individual training programmes and also a help in learning the national language organised by

the company as an added point and as a means of motivation for the employee and also as a stepping

stool for them to have a carrier in the organization. During this training the distinctions in cultural

motivation could be raised and the representatives would get the opportunity to straightforwardly talk

about their arrangements and dreams for their future in the company.

35

7 CONCLUSION

For employees to decide on their future in a company,it greatly depends on the approach in which they

are being treated by the management within the company. For a manager to be successful, it is necessary

to have an idea about the wishes of the employers you are about to lead. Employee motivation has an

influencee on the profitability of the organisation and therefore, the managing board must continuously

design an put in place strategic motivational structure that will at least be able to meet the desires of their

employees. Due to the importance of employee motivation in achieving the success of a company, many

scholars have developed theories aiming to explain how best employees can be motivated so that

maximum performance can be achieved. However, we must have in mind that human behaviour is very

complex and dynamic by its very nature in effect and cannot be exhaustively explained by just

theories.The basic truth is that theories are sometimes ideological and are aimed at satisfying the

researchers inquisitiveness. This explains why the theories used in this research are guided and focus on

the research topic. A relationship between theoretical ideologies and practical realities on how

motivation could be used as a tool to improve employees’ performance was aided with the help of a

questionnaire that eased the researcher’s way to understand the opinions and believes of the employees

of PEPT OY. The research work also brings out the reality of the fact that every individual has a different

need and ambitions as soon as they step foot into an organization as an employee. Motivating these

employees now depends on the organisations ability to identify and satisfy its employees needs and

ambitions. In general, this study highlights those areas that need to be improved upon to ensure the

success of the organization.

This thesis has so far explored the effect of the motivation on the performance of an organisation using

PEPT OY as commisioner. Two key elements of motivation (financial and nonfinancial motivation)

have been examined and how they affect the performance of an organisation.The results obtained

indicated that these two elements have a great effect on the performance of PEPT OY. Therefore,

motivation is one of the most essential activities that should not be undermined by an organisation no

matter the size of the organisation and how minimal the motivation may be.The process of writing this

thesis was quite educating and the writer decided to chose the topic organisational performance as an

outcome of employees motivation of which i am so thankfull for the collaboration of PEPT Oy and its

employees for making it posible for me to have all the data and information needed for this work.After

discusions with the management of PEPT OY about the best ways to conduct this study,a quantitative

36

survey was chosen as the most appropriate for the reserch. The based on the assumptions of truthful

responds would be cultivated when the respondent had the opportunity to be completly impersonal.

The process of collecting the data was not so smooth in that the respondents were from different

nationalities and most could not speak english too well so collecting the data had to take a longer time

than normal for one had to be present to translate the questions and explain so as for the respondent to

understand.The writer was satisfied with the responds of the questionaires even though it took 2 months

get 150 copies of out of 160 of questionnaires which was given out. Though the opportunities to elaborate

of the responses was limited so would have been better to add more opend ended questions to figure out

why they responded in a particular manner.

Although the motivation offers adopted by PEPT OY may have proven successful in the past, current

knowledge tells us that technological innovations and the business environment are posing a lot of

changes on the factors motivating human beings to work effectively. Organisations needs to be dynamic

and accustom themselves to the changing times and needs to gain competitive advantage over competi-

tors. Thus, providing these organisations with the knowledge to be proactive to these contemporary

challenges is the major preoccupation of modern researchers. Based on the aforementioned challenges

and the limitations of this study, the researcher heartily recommends the following to the case study

organisation and other organizations. That it should put in place good motivation schemes like rewards

that will enable the employees to put in their best and help the organisation to attain its stated goals and

objectives.

Furthermore, the theoritical part of this thesis talks on financial motivation such as salary,

commissions and bonuses offered to employees a s compensation for services rendered should be in

line or above those offered by competitors in the same area.The organisation should equally involve

its employees during any decision making process in the organisation by consulting them before taking

major decisions that affect their job roles and accepting criticisms from subordinates and making

necessary amendments for the betterment of the organisation if they are positive.Also,management

should encourage employees who record high performance and exhibit a high sense of duty

consciousness by ways of praises, recognition and even promotion

The results of this thesis showes that a majority of the employees of PEPT OY are satisfied with the

motivation given to them and the way their managers are leading them and also with the working

conditions and job safety.This chosen sample size seemed to agree that that the level of motivation and

37

employee commitment in PEPT OY seems different from other companies.The results shows that the

employees are satisfied with the management and their opend relationship with their employer.Though

a few employees seems very unsatisfied from their responds and thus the writer wish the management

should have concern on this employees so as to get them satisfied and get the best out of them as well.

Another area of concern revealed during the study was the failure of workers to completely use their

skills. The organistion ought to subsequently organise training programs so that workers can improve

on their knowledge and skills so that significant errand could be appointed to them allowing the workers

to completely utilize their ability and also this makes an inclination inside them that they are a significant

part of the organisation .Further more, it was likewise understood that compromise strategies were not

the best and was totally neglected so there are conflicts which frequently break out among workers that

influence their working habits and causing some to quite and also discouraging team work.This could

be mitigated by making a leading body of individuals which holds regular meetings and bring out

answers for issues in a reasonable way.

Furthermore, it was noticed that some of the respondents gave their opinion that the relationship and

communication flow between workers and manager is poor. So, to solve this problem and keep

employees comfortable and happy, the management of PEPT OY should give chance to the flow of

information and ideas complimented with a possibility for feedback. This will therefore have a

motivational effect since employees will now feel free to tell the organisation their problems and

contribute useful ideas for the growth of the organsation.

38

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Appendix

Questionnaire

Dear respondent,

I am Mbah Juel Mundua final year student of Centra University of Applied Sciences studying

International Business.I am carrying out research on the topic Organisational Performance As An

Outcome Of Employees Motivation In PEPT OY .I will be very grateful if you can create time out of

your schedule and answer these questions. Your information will be treated with strict confidentiality

and for the purpose of this study.

Thank you for your cooperation.

SECTION A: DEMOGRAPHIC INFORMATION

Please place a tick (✓) on the option that corresponds to your opinion

Sex: Male Female

Marital status: Single Married

Age: 18-25 years 25-32years 32-39 years 39 years above

Level of education: Basic education Secondary Education University graduate others

How long have you work: 1-5 years 5-10 years 10-15 years above 15 years?

Name of branch……………………………………………………………………………

Post held…………………………………………………………………………………...

Place a bold tick (✓) on the various forms of motivation you are given in your job.

Key: SA= Strongly Agree, A=Agree, UN= Undecided, D=Disagree, SD=Strongly Disagree

SECTION B: EVALUATION OF FINANCIAL MOTIVATION

S/N ITEM SD D UN A SA

1 Financial motivation triggers me to perform effectively and

efficiently towards the achievement ofthe organization’s goals

2 I am satisfied with the pay package my organization offers me

3 Financial motivation to my colleagues triggers them to put in

extra effort towards the attainment of the organization’s goals

4 I am often given commission, bonuses and allowances on

regular basis

5 In my organization, we are often paid for overtime

43

SECTION C: EVALUATION OF NON-FINANCIAL MOTIVATION

S/N ITEM SD D UN A SA

6 In my organization, management recognizes and

acknowledges the contribution of all employees

7 Promotion of workers to higher grades in my

organization is done regularly

8 I am respected by management at my job site and myjob

is also secured

9 Safety measures and recreational facilities are available in my

organization

10 Management gives me extra responsibilities which boast my

morale

SECTION D: EVALUATION OF THE ORGANISATIONAL PERFORMAMNCE

S/N ITEM SD D UN A SA

11 Whenever employees of my organization are satisfied with

their pay package, they tend to be more efficient

12 The quality of employees’ output increases when they are

satisfied with the motivation offered to them

13 The productivity of my organization tend to increase

when management promotes employees and recognizes

the great role the play in the organization

14 There is always an increase in the organization’s sales and

profit when workers are contented with the motivation offered

to them