“EMPLOYEES’ MOTIVATION

AND ORGANIZATIONAL
SUCCESS”
“RESEARCH METHODS &
TECHNIQUES”

FINAL PROJECT

“GROUP CHALLENGERS”

(BBA-4-A)

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 INTRODUCTION:
The category of micro, small and medium-sized enterprises (SMEs) is made up of
enterprises which employ fewer than 250 persons and which have an annual turnover not
exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million
euro. (Extract of Article 2 of the Annex of Recommendation 2003/361/EC). ‘Micro, small
and medium-sized enterprises (SMEs) are the engine of the European economy. They are an
essential source of jobs, create entrepreneurial spirit and innovation in the EU and are thus
crucial for fostering competitiveness and employment. The new SME definition, which
entered into force on 1 January 2005, represents a major step towards an improved business
environment for SMEs and aims at promoting entrepreneurship, investments and growth.
This definition has been elaborated after broad consultations with the stakeholders involved
which proves that listening to SMEs is a key towards the successful implementation of the
Lisbon goals’. (Günter Verheugen, Member of the European Commission)

Motivation is a process of an individual's experience of feeling enabled (Corsun and Enz

1999). Motivation can be operationally defined with the help of resembling variables such as
motives, needs, values, and replacement (Hogan and Hogan, 1990). Motivating employees
and training them is an essential source of firms' sustainable competitive advantage.
Employees should be motivated to believe that they have organization support; it is the
degree to which practices and norms make employees believe that their organization values
their contributions and cares about their well-being (Eisenberger et al. 1986). Employees are
extrinsically motivated if they are able to satisfy their needs indirectly, especially through
monetary compensation. Money is a goal which provides satisfaction independent of the
actual activity itself (Calder and Staw 1975, p. 599).4

Motivating employees is necessary to enhance their autonomy (Kanter 1983), leadership

skills (Burke 1986), team-building experiences (Neilsen 1986), intrinsic motivation or self
determination (Deci 1980), internal locus of control (Rotter 1966), effectance motivation or
competency (White 1959), sense of control (Lawler 1992), need for power (McClelland
1975), and self-efficacy (Bandura 1986). Organizations can gain beneficial outcomes by
employees' motivation and thus enhancing their self-efficacy. Self-efficacy refers to belief in
one's own ability to perform a specific task (Bandura 1982; Gecas 1989; Schwalbe 1985).
According to Bandura (1986), it has nothing to do with opportunities and constraints, as
such; it concerns judgments about what one can do with the existing opportunities and
constraints. Studies have reported motivation as a significant predictor of high performance

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in a variety of organizational domains. (Bandura 1982, 1986). People with high levels of
motivation consider themselves competent and able to influence their jobs and work
environments in meaningful ways. They are more proactive than others in that they
anticipate problems and act independently. They tend to engage actively in the creation of
whatever is new and challenging (Spreitzer 1995). Also, they are less constrained by
technical or rule-bound aspects of work. (Thomas and Velthouse 1990).

Organizations can boost employee’s motivation by supporting them with adequate

resources, recognizing the significance of their work, and showing interest and respect for
their efforts (Yoon, Han, and Seo 1996). In this challenging environment, empowerment has
been proposed as a critical intervention program to boost motivation, proactively, and
mental/physical health (Conger and Kanungo 1988) The results have showed that both
promotion and wages positively effects the relation with employees’ work motivation. A
comparison of the relative strengths of the effects reveals that a reasonable promotion was a
more powerful motivator than wage level and wage increase. (Yoon and Lim 1999).

The idea of pay-for performance has been adapted by many public agencies as a new means
of enhancing motivation and improving organizational performance in the public sector
under the performance management and recognition system. (Brudney & Condrey, 1993).
employees are provided with three types of opportunities: Promotion, Pay, Challenges at
work in SMEs that also motivate the employee (Ospina, 1996). These three benefits, i.e. fast
improvement in gaining higher positions, a high level of payment, and meeting interesting
and challenging work, they all contribute to the improvement of workers’ motivation, job
satisfaction and hence leading to organizational success. Practices of delay in promotions
and low wage may be less beneficial to maximize employee interests; thus, they may de-
motivate employees and reduce their commitment to the organization (Rosenbaum, 1984).

A number of researchers indicated that employment practices show signs of characteristics

of the internal labor market (Jacoby, 1985 and promotion opportunities increase the level of
motivation among workers in the internal market (Lincoln and Kalleberg, 1990). Therefore,
it is very clear that career advancement influences the workers’ behaviors and viewpoint,
such as motivation and organizational commitment, particularly in the case where
employment is constant. Tournament theory (Lazear and Rosen, 1981) states that when an
organization is unable to monitor its employees in a well organized manner such that it
possesses information which is unsatisfactory, related to employees’ skills and abilities. If
tournament participants recognize that esteemed positions and significant wage premiums
are very attractive, they will have an incentive to work very hard in order to gain those
prizes. (Velthouse 1990)

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In the internal labor markets, employees are motivated by higher positions rather than higher
wages to win the competition. An if the employees value higher positions then Promotion
acts as an incentive mechanism, (Takeuchi 1995), the speed of advancement is lagged
because slow promotion causes employees to stay in the competition of promotion for a long
period, hence sustaining a high level of motivation. It also avoids de-motivating those who
were dropping from the fast track. Incentives are related to promotion. (Hackman and
Oldham 1976) theory of job characteristics suggested that the nature of the job itself is an
important source of motivation. This theory advocated that the nature of the job, rather than
the pay and promotion, has mechanisms to motivate employees.

Incentives that are given along with promotions are relatively larger than wage increases.
The competition which is observed between employees lasts all throughout their company
career from entry to retirement. Employees work hard not only because they want higher
wages but also because they do not want to lose to their rivals (Ishida, 1985).

Employees can be highly motivated and contribute significantly to organizations’ success

(Leavitt et al., 1995). Motivation focuses on judgments to commence the effort for reaching
the goals, exert a definite level of effort, and continue in that effort until the goal is reached.
In deciding what the level of effort should be, employees consider the value of the goal to be
achieved, the probability of reaching that goal, and the attractiveness of the means to the
goal (Farrell et al., 1994; Harrison, 1995).
Managers are challenged to become leaders who transform the performance of the
organization (Bass, 1990; Kouzes and Posner, 1995).

Employees feel rewarded and productive through effective interaction with their managers,
their work relationship is strengthened, and their allegiance to the organization is built
(Becker, 1992). The probability of goal attainment is increased through this interaction by
helping employees gain insight into how to reach their goals and overcoming obstacles in
reaching them and by exchanging resources (Johnson et al., 1981). On more complex tasks,
experiments have found that co-operation is more motivating (Johnson et al., 1981).
Consistent with this evidence, competitive work has been found to undercut the completion
of important organizational tasks such as implementing technology (Tjosvold, 1990). co-
operative goals can be built when managers and employees can together develop shared
goals, integrated roles, common tasks, and shared reward distributions (Hanlon et al., 1994).
Then they feel that they are on the same side so that as one succeeds, others succeed; as one
fails, others too are threatened.

In co-operation, the manager and employee have a vested interest in each other’s success;
they want each other to perform effectively because that helps them both succeed. With this

5
orientation, they discuss issues and opposing ideas fully, communicate information
accurately, and exchange resources and assistance (Deutsch, 1973, 1980; Johnson and
Johnson, 1989; Johnson et al., 1983) Researchers have focused on the motivation of
individual employees (McClelland, 1987), but managers can also affect motivation by
structuring the interdependence and interaction between themselves and their employees
(Leavitt and Lipman-Blumen, 1995). Managers are being advised to motivate people
through teamwork (Koch, 1995)

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 LITERATURE REVIEW:
Human motivation and organizational success are subjects that command the interest of
multiple disciplines.

Motivation is one of the focal research interests to many public administration scholars
(Crewson, 1997). Responding to the concerns about the decline of morale and motivation of
public employees, many scholars began to pay close attention to motivational issues, job
satisfaction, and organizational success in different organizations. (Volcker Commission,
1989).

Motivated employees are needed in our rapidly changing workplaces. Motivated employees
help organizations survive. Motivated employees are more productive. The significance of
employee motivation, influencing the behaviors of their employees to behave in certain
ways, can ultimately decide the success or failure of an organization (Crewson, 1997).

Kovach (1987) suggests that if a company knows why its employees come to work on time,
stay with the company for their full working lives, and are productive, then the company
may be able to ensure that all of their employees behave in that way. Such a company would
have a decided marketplace advantage over competitors suffering from absenteeism, costly
re-training programs, and production slowdowns.

Moreover, Wiley (1997) also suggests ensuring the success of a company, employers must
understand what motivates their employees, and such understanding is essential to
improving productivity.

Despite the multiplicity of meanings and apparent ambiguity of the concept of employee
motivation, it has been argued that employee motivation is a better measurement of human
behavior in organizations than some other related measures including job satisfaction and
job involvement (Steers & Porter, 1983). Crewson also summarized that “motivation” has
been operationalized as a combination of three distinct factors: a strong belief and
acceptance of the organization's goals and values, eagerness to work hard for the
organization, and a desire to remain a member of the organization" (1997).
Classical motivation theories generally suggest that there are two qualitatively different
motivation dimensions-extrinsic factors and intrinsic factors. The two factors jointly affect
human behaviors (i.e., organizational commitment or job satisfaction) in work organizations,
but these researchers differ on how motivation factors actually contribute to organizational
success (Herzberg, Mausner, & Snyderman, 1959).

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Some studies even explore the relationship between organizational success and employee
motivation. Angle and Perry studied organizational success as an independent variable to
explain multiple dimensions of employee motivation (1981).

Balfour and Wechsler's (1991) study provided an interesting observation: that organizational
success tends to have a positive association with motivation of employees’ and their desire
to stay at a job but not necessarily with their willingness to put forth extra effort for the
organization. They attempted to verify a theoretical construct and measures of
organizational success by developing a causal model of employee motivation in
organizations. This model posits the causal relationships among motivation antecedents,
organizational out-comes (turnover) and organizational success. Balfour and Wechsler's
(1996) study found that individual and organizational characteristics (working experiences,
organizational arrangement, and job nature) jointly affect the degree of organizational
success. One of their most insightful findings is that the willingness to do extra work for the
organization is closely associated with internal motivation factors.

Motivation refers to the forces either within or external to a person that arouse enthusiasm
and persistence to pursue a certain course of action. These concepts of motivation suggest
that motivation has something to do with a person’s behavior, a cause of behavior, or the
reasons of individual behavior, and the causes of individual behaviors may differ because of
different individual needs. The intuition of these concepts to managers is that they must first
understand and discover these individual differences and their needs, and develop proper
models to motivate employees by fulfilling these different needs toward common
organizational objectives ( Daft and Marcic,2004 ).

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 PROBLEM STATEMENT
With every job there is one common problem that people face, which is getting stuck in the
machine of time and routine. This leads to, and is known to be a de-motivator by the experts.
It is for this reason that human resource managers are asked to ensure that there are activities
and varied ways and means to keep employees well motivated from time to time. The
importance of motivation multiplies at the workplace. This is because an adult spends most
of his or her hours in the office. Targets and goals have to be met. As long as employees are
motivated, it would benefit the organization in a number of ways, for instance increase in
productivity, improved performance, etc., which would further lead to organizational
success.
A growing demotivated work-force marks a pervasive problem for organizations today and
could determine the context of the future economies. Demotivated employees do not identify
with their jobs but often see themselves as having to do what they are told and feel that there
is little point in doing more than the minimum to get by. If employees are not motivated or if
the top-level management fails to do so the organization would face downfall. Hence
employee motivation is essential for the organization to do its best.

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 RATIONALE OF THE STUDY

Many times businesses and organizations have policies that negatively affect the
performance of their customers as well as their employees. These policies or even lack of
policies and subsequent enforcement do as much if not more damage to the organization's
overall work productivity than anything else. If an organization truly wants to master
success by increasing work productivity, before attempting to motivate its employees, all
demotivating obstacles must be identified and removed. Most people want to do a good job.
However when there is no course (strategic plan), no identification of acceptable behaviors
(values statement) and no consistently communicated goals (mission statement), the crew
begins the trip already behind. And this demotivation is supported by business productivity
research.
Many people do not actually realize this, but the fact is that most human beings spend a
maximum number of waking hours at the workplace. This is one place that gives the means
for survival in the form of monetary returns. And in spite of this, there are various situations
and circumstances that occur at the workplace that lead one downhill - down the path of de-
motivation; which could prove harmful for the organization. Motivation has a strong
relationship with organization’s success and it is necessary to maintain this relationship and
help grow it stronger with every day. And it is through the organization’s employees it could
be achieved. Top-level management plays the vital role in motivating the employees and
driving organization towards success.

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 OBJECTIVES OF THE STUDY
The main purpose of this study is to examine the relevance of employee motivation to
organizational success. The objectives of this study would be:

• To identify all the possible key factors influencing an employee to work as a

diversified force towards organizational success.

• To improve employee performance for better productivity levels.

• To make the employees work as a team for the betterment of the organization.

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 RESEARCH DESIGN
A survey based primary data will be used to examine relationship between employess
motivation and organization success. It will also examine the moderating impact of
motivation towards women participation in SMEs.

There are two kinds of variables used in this study:

Independent variables:
 Performance
 Productivity
 Turnover
 Organization commitment
 Job satisfaction
 Employee motivation

Dependent variables:
 Organization success

Organization Employee
success motivation

PRODUCTIVIT
Y
PERFORMANC
E

JOB SATISFACTION ORGANIZATIONA

L COMMITMENT

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 HYPOTHESIS

In the present study the set of following hypotheses have been developed:

H1: Organizational success tends to have a positive association with motivation of

employees’ and their desire to stay at a job.

H2: If employees are not motivated or if the top-level management fails to do so the
organization would face downfall.

METHODOLOGY

The study basically aimed to investigate the affect of employees’ motivation on organization
success. A survey will be conducted through different interviews and questionnaire will be
used and administered to the respondents directly. The available instruments concerning
related variables will be explored for reliability and validity, this survey will be conducted in
the geographical areas that is in islamabad and rawalpindi in private sector organizations.

DATA ANALYSIS

After data collection and coding, the appropriate data analytic techniques including
descriptive analysis will be carried out keeping in view the objective of the study by using
latest version of SPSS.

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 CONCLUSION
Hence this study shows that motivaton of employees is very crucial for a company’s
success. Employee motivation is an intricate and sophisticated subject; however,
contemporary managers must face and deal with this topic to obtain organizational success.
To enhance understanding of employee motivation, mangers must recognize the
imperativeness of employee motivation, its concepts, and differences in individual needs.
Subsequently, managers need to be aware of a variety of employee motivational factors and
the changes in priorities of these factors over time. Moreover, managers have to learn
previous or current motivational programs, examples, and theories behind them because
understanding of these fundamentals can enhance their ability to identify rewards systems
that can be matched with employee needs.

Managers must understand the significance of employee motivation before proceeding

further because managers as employees should have reasons to prompt their actions.
Increasing production and decreasing employee absenteeism or employee turnover are some
of the reasons that motivate mangers to proceed to next step.

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