EFFECTS OF EMPLOYEES' MOTIVATION ON ORGANIZATIONAL PERFORMANCE

EFFECTS OF EMPLOYEES' MOTIVATION ON ORGANIZATIONAL PERFORMANCE

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CHAPTER ONE

INTRODUCTION

1.1   Background to the Study

Generally most businesses, organizations and their managers are faced with numerous challenges. One of such challenges is in the area of management which refers to the utilization of resources effectively and efficiently in order to achieve an organizations goals and objectives. Some of these managerial challenges are obvious in matters concerning employees such as reimbursement, recruitment, performance management, training and career development, health and safety, benefits, motivation and administration amongst others. The human resource is the most vital of all resources among other factors of production and the human capital is what distinguishes one organization from the other (Maimuna & Rashad, 2013). Therefore, for organizations to survive and remain relevant and competitive, it is essential for them to be able to entice and maintain efficient and effective employees in a bid to enhance productivity (Sunia, 2014). This study however is centered on the aspect of motivation and focuses on the effects of employee motivation on organizational productivity.

Hellriegel (1996) viewed motivation as any influence that portray, direct, or maintain people’s goal directed behaviors. It refers to the driving force that makes an individual to act in a specific way. It is an inner drive that causes an individual to behave in a certain manner. The goal of most organizations is to improve productivity therefore factors of motivation play significant roles in improving employee job satisfaction levels. This will in turn aid in improving an organization’s productivity levels.

Employees make up the workforce of any organization as such they are an integral part of the organization. Aluko (2014), stated that an organization is only as good as the workforce that runs the organization. This is to say that when employees are motivated chances are that their morale would be high as such performance and productivity levels would increase thereby to a large extent boosting overall organizational performance level. In order to achieve high levels of productivity as such boost organizational performance or productivity, managers therefore need to continually seek ways of ensuring that their employees stay motivated. This is because a lack of employeemotivation leads to reduced productivity which is harmful to organizational performance and continuous success.

Jennifer and George (2006) defined employee productivity as the level of effort put forth by the workforce of an organization towards achieving organizational goals and objectives. There are several ways by which a workforce can be motivated so as to enhance organizational productivity. George and Jones (2012) states that motivation can be categorized into two classes namely intrinsic and extrinsic. Intrinsic motivation arises from an employee’s internal cravings to execute a task out of self-interest rather than a need or wish for some external reward. External motivation is the type of motivation that arises when an employee is compelled to act in a specific way either as a result of that employee’s desires for external rewards or to avoid punishment.

Extrinsic motivation also helps boost an employee’s effectiveness and efficiency levels. This is because certain external factors such as adequate compensation, work environment as well as training and career development appeal to employees as such are essential in inspiring them to resourcefully and successfully discharge their duties. An organization that fails to provide a conducive work environment, compensate its workforce adequately, create room for proper training and career advancement is at risk of having a demotivated workforce. This means that such a workforce being demoralized would fail to effectively and efficiently discharge their duties leading to low performance and productivity levels (Nwachukwu, 2004). This study therefore focuses on showing the effects of motivation on organizational productivity.

1.2   Statement of the Problem

James (2014) cited three warning signs of a demotivated workforce these include poor workplace atmosphere, slipping job standards and decreased productivity. He further stated that if any of these factors is observed to be trending downwards then there is a great chance that the organization is dealing with a demotivated workforce. Most businesses and organizations especially manufacturing industries have failed to recognize the importance of motivation as a concept be it intrinsic such as employee well-being, relationship with co-workers, relationship with managers, organizational policies etc. or extrinsic such as training and career development, good working conditions, compensation, promotion amongst other factors that enhance or improve employee performance as well as organizational productivity levels.

This in turn has continued to represent major managerial concerns for decades as employee productivity levels has relatively declined which has been acknowledged as a subject of growing concern in the aspect of business and management research (Akerele, 2001). Although a lot of factors may also be responsible or even cause a decline in productivity such as poor strategic and structural changes in decisions and executions, lack of infrastructure, leadership styles and organizational culture amongst others. Contemporary investigations that connects the concept of workforce motivation and productivity has laid an emphasis on employee perspective, needs and expectations as factors affecting their performance and productivity levels respectively. As such investigating those factors of importance to employees in the discharge of their duties at work has taken a new dimension.

Motivation through factors such as employee wellbeing, adequate compensation, promotion, good relationships with co-workers and relationships with managers can enhance an employee’s level of effectiveness and efficiency in the workplace. This is because good relationships with co- workers promote unity and gives the employee a sense of belonging and acceptance which in turn boosts employee performance and productivity levels. Employees who enjoy such relationships both within and outside the work environment tend to be more effective and efficient as such very productive in discharging their duties. Therefore organizations should promote harmony amongst employees by organizing social functions in a bid to bring employees together (Jibowo, 2007).

Therefore an organization’s best strategy is to provide suitable work environs that allow their workforce to meet or exceed expectations as well as offer a range of motivators to improve enthusiasm, performance and productivity levels.

1.3      Objectives of the Study

The primary objective of this study is to acquire a deeper comprehension of how employee motivation affect performance of workers in manufacturing organizations as well as recognize the effects on organizational productivity. This research therefore seeks to:

i.    Determine the effect of employee well-being on the level of effectiveness of the workers.

ii.   Determine the effect of employee relationship with managers on the level of efficiency of the workers.

iii.   Examine the effect of compensation on the level of effectiveness of the workers.

iv.   Examine the effect of training and career development on the level of efficiency of the workers.

v.   Determine the influence of employee motivation on organizational productivity.

1.4      Research Questions

i.    What effect does employee well-being have on the level of effectiveness of workers?

ii.   How does employee relationship with managers affect the level of efficiency of the workers?

iii.   What effect does compensation have on the level of effectiveness of the worker?

iv.   How does training and career development affect the level of efficiency of a worker?

v.   What influence does employee motivation have on organizational productivity?

1.5      Research Hypotheses

i.    Employee well-being has no significant effect on the level of effectiveness of the worker

ii.   Employee relationship with managers have no significant effect on the level of efficiency of the worker

iii.   Compensation has no significant effect on the level of effectiveness of the worker

iv.   Training and career development has no significant effect on the level of efficiency of the worker

v.   Employee motivation does not influence organizational productivity

1.6      Significance of the Study

For this study not to be an effort in futility, it has to be useful to a number of people and institutions among which are;

i.    Organizations: The aim of this study is that the outcomes, results or findings should be beneficial to business owners, managers and organizations especially in the locality where this study is being conducted. This is to enable them understand the concept of motivation and its effect on productivity. It also gives an insight to managers and business owners on the importance of knowing their employees and ensuring adequate motivation in their organizations.

ii.    Research Institutions: This study is also relevant to research bodies and institutions in the nation as a whole because findings would also be relevant to students and users of information in conducting further research in areas similar to this study.

iii.    Government Agencies: This research is also of paramount importance because it would aid government agencies in making and implementing policies that would enhance the stability, growth and development of businesses throughout the region in matters concerning organizational productivity by seeking ways ensure that employees are adequately motivated in their various organizations thereby increasing overall productivity and performance levels.

1.7         Scope of the Study

The scope of this study is limited to Ethiopian airlines in Addis Ababa State, Ethiopia where the study is being conducted. This study examines employee motivation and its resulting effects on the organization’s productivity levels. The aviation industry is being considered because research has not been done on this area prior to now. Ethiopian airlines was selected because it is the first airline company in Ethiopia and is one of the fastest growing airline companies currently situated in Addis Ababa and Addis Ababa state.

1.8                                      Limitations of the Study

The demanding schedule of respondents at work made it very difficult getting the respondents to participate in the survey. As a result, retrieving copies of questionnaire in timely fashion was very challenging. Also, the researcher is a postgraduate (student) and therefore has limited time as well as resources in covering extensive liter


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