the effect of motivation on organizational performance

7/28/2019 The Effect of Motivation on Organizational Performance

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THE EFFECT OF MOTIVATION ON ORGANIZATIONAL

PERFORMANCE

ZORAIZ FAZAL

MUDASSAR AHMED

HASSAM ZIA

RIZWAN SHOUKAT

16th, June, 2011


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CHAPTER TITLE PAGE

1 INTRODUCTION 2

BACKGROUND 2

OBJECTIVES 3

SIGNIFICANCE 3

2 REVIEW OF LITERATURE 4

3 THEORETICAL FRAMEWORK 6

4 HYPOTHESES 8

OPERATIONALIZATION 8

5 RESEARCH DESIGN 11

6 ANALYSIS OF DATA 13

7 CONCLUSION 16

8 APPENDIX 17

QUESTIONNAIRE 17

REFRENCES 20


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CHAPTER: 1 INTRODUCTION

BACKGROUNG:

Organizational performance comprises the actual output or results of an organization

as measured against its intended outputs (orgoals and objectives).According to Richard (2009)

organizational performance encompasses three specific areas of firm outcomes: (a) financial

performance (profits, return on assets, return on investment, etc.); (b) product market

performance (sales, market share, etc.); and (c) shareholder return (total shareholder return,

economic value added, etc.).

Motivation is the driving force by which we achieve our goals. Motivation is said to beintrinsic orextrinsic. The term is generally used for humans but it can also be used to describe

the causes for animal behavior as well. This article refers to human motivation. According to

various theories, motivation may be rooted in a basic need to minimize physical pain and

maximize pleasure, or it may include specific needs such as eating and resting, or a desired

object, goal etc.

Organizations motivate employees by investing in them. Motivating people is not just

about a financial investment though, but also an emotional one. A motivated workforce has

more productive employees and this translates into bottom line cost savings. On the other hand,

motivated employees positively impact corporate culture, resulting in many intangible but

equally important returns.

Motivated employees are indeed better workers and will help to generate a positive work

environment that both customers and employees will better appreciate. Gregory P. Smith

comments on the results of one organization's efforts to satisfy employees in the article Happy

Employees Make Productive Employees, "When employee attitudes improved by 5%, customer

satisfaction jumped 1.3%, consequently increasing revenue by .5%. Seeking ways to motivate

and build worker morale pays dividends to any business or organization. The motivated worker

is more committed to the job and to the customer."

The end result when an organization invests in employees both emotionally and

financially is plain to see-happy customers and increased revenues. A motivated workforce can

truly have bottom line impact and make the workplace somewhere employees look forward to

interacting with instead of just a place to pick up a paycheck.
http://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Objective_(goal)http://en.wikipedia.org/wiki/Motivation#Intrinsic_motivation_and_the_16_basic_desires_theoryhttp://en.wikipedia.org/wiki/Motivation#Extrinsic_motivationhttp://en.wikipedia.org/wiki/Objective_(goal)http://en.wikipedia.org/wiki/Objective_(goal)http://en.wikipedia.org/wiki/Motivation#Extrinsic_motivationhttp://en.wikipedia.org/wiki/Motivation#Intrinsic_motivation_and_the_16_basic_desires_theoryhttp://en.wikipedia.org/wiki/Objective_(goal)http://en.wikipedia.org/wiki/Organization


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OBJECTIVES:

The objective of this research was to measure the level of motivation, how it affects

organizational performance and we also measured the organizational performance.

We also wanted to observe the impact of motivation on individual employee

performance.

SIGNIFICANCE:

There is tough competition in the market and organizations are facing new challenges

these days. Customer demands are changing very quickly and as a result organizations have to

change themselves in order to achieve customer satisfaction that will lead to organizationalperformance. Employees are one of the important factor on which performance of an

organization based. When an organization implements some changes employees are directly

affected by that change. Moreover, employees have to give their hundred and ten percent to

make that change successful. They work all the day and night in achieving the goals and

objectives of their organization

On the other hand, when employees are giving their hundred and ten percent to

enhance organizational performance they also deserve motivation (either extrinsic or intrinsic) to

minimize their pains and maximize their pleasure. When an organization motivates their

employees they perform up to the expectations of the organization that help to achieve

organizational objectives and goals. Employees should be given bonuses, empowerment,

appreciations and sufficient compensations to give them relief. When employees are given

incentives, rewards and appreciations they take more interest in their work and always perform

in the betterment of an organization. This research will determine organizations that higher they

give incentives and compensation to their employees, higher the performance of their

organization will be.


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CHAPTER: 2 LITERATURE REVIEW

Organizational performance:

Organization performance refers to what extent an organization succeeded in achieving

its objectives. (Beal et al., 2003). Other researchers defined as a business firms is compared in

terms of sales, profit, stock prices, market share, debt ratio and productivity. (James & Rebert,

1997). is defined as the flexible organizational culture. (Ouchi & Wilkins, 1983). One researcher

defined as is based on the extent of control on the processes, operations and environment of

the organizations. (Arnold, 1962). An organizational performance based on following factors

such as continuous improvement, reducing their operating costs, introducing innovative

products time to time, improving quality of their products and responding quickly to the market.

(Becker, 1996). Organizational performance is recognized on the basis of their competitive

advantage. (Charles & Lawrance, 1980).

Motivation:

Motivation provides direction, energy and sustains action by bringing an inner desire in a

person to make efforts. (Latham & Pinder, 2005). The power that rejuvenates directs and

sustains the behavior towards the goal. (Baron, Pintrich & Schunk, 1996). The set of external

and internal forces that initiate work-related behavior and determine its forms, direction, intensity

and duration. (Ambrose & Kulik, 1999). Other Researchers defined as the direction, intensity,

and persistence of learning-directed behavior. (Colquitetal, 2000). Motivation has been defined

as a persons tendency to find learning activities meaningful and benefit from them.

(Wlodkowski, 1999). The collection of accounts of choices, intensities, and feelings of acts.

(Edwards, 1999). The central idea of economics is that intrinsic and extrinsic motivation always

enhances efforts, interest, performance and response. (Tirole, 2003). Involvements in decision

making process bring devotion, enthusiasm and responsibility in performance of their duty.


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(Ford, 2005). Aspiration, efforts and persistence are important determinants of motivation.

(Atkinson, 1968). Mens are significantly higher in achievement motivation than women.

(Srivastava, 1948).

Organizational performance and motivation:

Organizational performance is influenced by a variety of macro level organizational

characteristics such as structure, policy and reward system. (Schneider, Guzzo & Brief, 1996).

Organizations show high level of performance when they experience prosocial and intrinsic

motivation in tandem. (Grant, 2008). Incentives bring healthy competition among employees at

every level that increases the peace of work and performance. (Fyfe, 1994). Some researchers

say it as the factor that creates opportunity, growth and worthwhile work. (Grote, 2000). Others

said that creates aspiration, persistence and efforts in employee to do well. (Hoque & Ali, 1998).


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CHAPTER: 3 THEORETICAL FRAMEWORKS

Theoretical framework helps us to determine the relationship among the variables. It

also specifies the direction of the relationship. Here, in this theoretical frame work,

dependent variable is organizational performance and independent variable is

motivation. Motivation can be extrinsic or intrinsic. The set of external (extrinsic) and

internal (intrinsic) forces that initiate work-related behavior and determine its forms,

direction, intensity and duration. (Ambrose & Kulik, 1999). If we motivate employees

either through extrinsic or intrinsic or both then employee will be stroked internally and

will get committed to perform his or her duty. As a result, employee will make more

efforts to perform his or her duty. The central idea of economics is that intrinsic and

extrinsic motivation always enhances efforts, interest, performance and response.

(Tirole, 2003). Motivation brings an internal desire in an employee to make efforts.

(Latham & Pinder, 205). When an employee get committed and make more efforts to

perform his or her duty then individual employee performance will also go up.

Consequently, organization will be able to achieve its objectives. Like an organization

achieve its objectives, like the performance of an organization would be. Organizational

performance refers to what extent an organization successive in achieving its objectives

(Beal et al., 2003). So, the relationship of our variable is positive as higher you motivate

your employee, higher the commitment, interest, efforts he will show that will enhance

his or her performance. Higher the employee performance, higher the organization will

be able to achieve its objectives which ultimately will lead to higher organizational

performance.


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(Figure: 1)

MOTIVATION

COMMITMENT

EFFORTS

EMPLOYEE

PERFORMANCE

ORGANIZATIONALPERFORMANCE


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CHAPTER4: HYPOTHESIS AND ITS

OPERATIONALIZATION

Higher the level of motivation of employees, higher the organizational performance

would be

In our theoretical framework, we have displayed that if we increase the level of motivation

of employees, the performance of an organization also increases. Moreover, if we motivate our

employee either through intrinsic (empowerment, appreciation, recognition etc) or extrinsic

(compensation, commission, bonuses etc) or both it will create commitment in them due to

which they will make more efforts to perform their job. When they make more efforts, it will

increase their performance. Since employee performance will increase, organization

performance will also increase. So, there is positive relationship between motivation and

organizational performance.

OPERATIONALIZATION

Organizational performance:

Organizational performance is the comparison between the actual performance and the

projected performance.

Organizational performance is compared in terms of change customersatisfaction,

employee satisfaction, stakeholder performance

Dimensions:

Customer satisfaction.

Employee satisfaction.

Stakeholder performance.

We are measuring organizational performance on the basis of following dimensions which

are customer satisfaction, employee performance and stakeholder performance. We are

choosing these dimensions to gather primary data to measure organizational performance.


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DIMENSIONS AND ELEMENTS

Dimensions Elements Statements

Customersatisfaction

Retention

Feedback

policies

(see questions from 10 to 12 inquestionnaire)

Employeesatisfaction

Commitment

Behavior performance


Stakeholderperformance

Employees

Competitors

Government

(see question13, 14 and 9 inquestionnaire)


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Motivation:

Motivation is used to call a driving force by which we accomplish our goals.

Aspiration, effort and persistence are important determinants of motivation

Dimensions:

Efforts

Punctuality

Responsibility

We are going to use efforts, punctuality and responsibility as dimensions to measure the level of

motivation of employees. We are measuring that how much effort they make, how punctual they

are and how responsible they are to examine their level of motivation.

DIMENSIONS AND ELEMENTS

Dimensions Elements Statements

Efforts Performance of duty

Achieving objectives

Helping others


Punctuality

Work completion Arrival

Meetings


Consistency Performance

Behavior

commitment



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CHAPTER5: RESEARCH DESIGN

In our research project our target population is basically middle level employees of

banks of Gujranwala more specifically we can say that our focus is only on the employees of

UNITED BANK LIMITED (UBL) and HABIB BANK LIMITED (HBL). The population is

homogeneous because we have only taken the middle level employees.The logic to choose

only UBL and HBL in Gujranwala is just that we are comfortable to find the data of employees of

UBL and HBL and also there was shortage of time, we were unable to visit various banks just

because of shortage of time. We have chosen middle level employees for our target population

because employees themselves can more easily give perfect answers by understanding the

questions from questionnaire about their motivation and their satisfactions.

We used the probability sampling in our research project. We have chosen the simple

random sampling because it assures that element in the population have an equal chance of

being included in the sample. In it we assigned each member of the sampling frame a

number, and then selected sample units by a random method.

The sampling frame being used is the list of the employees of UBL and HBL. These

banks maintain a computerized database for the records of their employees and we have

taken some help from them to confirm the data which we have collected from our survey.

The sampling frames which we are using are the UBL and HBL of Gujranwala and

from that list we have taken sample size 300 for our research. In our survey we have used

this sample size to collect data to approve our hypothesis. The sample size can be of any

gender (male or female).

For observing the overall situation we have used the employees as a unit of

observation and to analyze all the data which we have collected by doing survey we again

used the employees as the unit of analysis.

The success of a researcher depends on the data one has collected. In order to

measure level of motivation of employees and level of organizational performance we have

used the survey technique. For this purpose, we have used Questionnaire. We have given

the questionnaire to employees to collect the relevant data for our research report.


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We have used the questionnaire because our target population was educated. We

did not need to take interviews since our population was educated and can answer our

questions sensibly because interviews take lots of time and no one has a time to give us

interview.


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CHAPTER6: ANALYSIS OF DATA

SCORING:

As we have shown above the elements on each dimension we also have number of

statements on each element (see on pg no. for questionnaire). We have used 3 point

scale in our questionnaire. There are positive as well as negative statements in our

questionnaire.

Employee

Adequately

completes assigned

duties?

agree

3

neutral

2

disagree

1

Score Index:

1. Score index for level of motivation:

There were 9 statements related to the above variable; on each statement a

person could get a score of 1 to 3. Total score for a person could range from a

minimum of (9*1) =9 to a maximum of (9*3) =27. Lower score will show low

motivation and high sores will show high motivation level of employee.

Minimum score maximum score

9 27

To make categories class interval 27-9

9-15 lowest level Low motivation

15-21 Medium level Medium motivation

21-27 highest level highest motivation


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2. Score index for level of organizational performance:

There were 9 statements related to the above variable; on each statement a

person could get a score of 1 to 3. Total score for a person could range from a

minimum of (9*1) =9 to a maximum of (9*3) =27. Lower score will show low

performance and high scores will show high performance of banks.

Minimum score maximum score

9 27

To make categories class interval 27-9

9-15 low level low performance

15-21 medium level medium performance

21-27 high level high performance

Bivariate table:

There is a positive relationship between level of motivation of employees and organizational

performance. As stated in the table that organizations whose employees are highly motivated,

they are performing high but on the other hand those organizations are performing low where

the motivation level of their employees are low.


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(Table 1)

level oforganizationalperformance

level of motivation

low medium high total

f % f % f % f %

high 15 25.00% 40 44.44% 125 83% 180 60%

medium 20 33% 45 50.00% 15 10.00% 80 27%

low 25 41.66% 5 5.55% 10 6.67% 40 13%

60 90 150 300 100%

(Figure 2)

linear positive relationship

HIGH

MEDIUM

LOW

LOW MEDIUM HIGH


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CHAPTER: 7 CONCLUSIONS

Organization performance can be raised by motivating employees of the organization.

We reviewed the literature and found that motivation positively influenced an employee to

perform well which ultimately leads to higher organizational performance. We have also studied

the effect of motivation on organization performance and on individual employee performance in

this research. We found that there is positive relationship between the organization performance

and motivation. If an organization increases the motivation level of the employees, consequently

commitment level of employees increases, they put more efforts in performing their jobs as a

result individual employee performance increases that further leads to higher organization

performance. If an organization want higher organizational performance than they should

motivate their employees regularly so employee will get committed and perform their duties

better which will increase organizational performance.

ABSTRACT

We studied in our research that motivation positively influenced level of organizational

performance. We studied how motivation impacts on the performance of an organization. For

this, we took sample size of 300. We used questionnaire to find the level of motivation of an

employee and its impact on performance of an organization. We found that higher the

motivation of an employee, higher the performance of an organization would be. In other words,

it can say like that like motivation like organizational performance. We show result in our

bivariate table, when level of motivation was low organizational performance was also low but

on the other hand when motivation level was high the organizational performance was also

high.


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CHAPTER: 7 APPENDIX

Questionnaire

Do employees

Q#1: Adequately completes assigned duties?

Agree

Neutral

Disagree

Q#2: appropriate efforts to achieve desired objectives?

Agree

Neutral

Disagree

Q#3: help others in performance of their duties?

Agree

Neutral Disagree

Q#4: completion of work in given time?

Agree

Neutral

Disagree

Q#5: attend all meetings?

Agree

Neutral

Disagree


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Q#6: Comes office in time?

Agree

Neutral

Disagree

Q#7: show same performance level every day?

Agree

Neutral

Disagree

Q#8: behave badly when responsibility is given?

Agree

Neutral

Disagree

Q#9: lack of commitment at times?

Agree

Neutral

Disagree

Q#10: customers are loyal with the bank?

Agree

Neutral

Disagree

Q#11: customers do not provide feedback?

Agree

Neutral

Disagree

Q#12: customers are satisfied with the policies of bank?

Agree

Neutral

Disagree


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Q#13: government positively influence bank?

Agree

Neutral Disagree

Q#14: competitors are giving more and better services?

Agree

Neutral

Disagree

Q#15: show consistent performance every day?

Agree

Neutral

Disagree


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