Effect Of Motivation On Employees Productivity Commerce Essay

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This study examines the effect of motivation on employee's productivity in an organization which is a pioneer to an organization's success. This study reflects that how can we motivate the employee for which I have analyzed the most important variable that effect the performance of employees productivity that are recognition, promotion, challenging job, self control, rewards, compensation, performance appraisal, & employee satisfaction. The effective motivation program always gives effective results and leads the organization towards the success. The Pearson's correlation coefficient and regression equation also has performed to analyze covariance's and relationship among the variables. As well as the multiple regressions have also performed to know the final outcome and they have found in a high variation and they are useful to make predictions.


Motivation is a factor that creates an energy or interest in work in order to achieve the goals. Motivation has two types i.e. Intrinsic & Extrinsic. Intrinsic is that when an employee perform by himself without any pressure. Extrinsic motivation is when an employee does not perform by himself. By considering both types of motivation it is come to knowledge that employees prefer intrinsic motivation most as compare to the extrinsic motivation however we cannot neglect the importance of extrinsic factor because motivation is a bunch of different variables which we offer someone to be motivate for specific purpose. Another point which is also very important is that every individual has its own perspective, its own way and choice that's why we cannot say that for every one intrinsic motivation is best to motivate them. No, it is not necessary that every one prefer intrinsic motivation for personal motivation. Now question arises that how can we come to know that what motivates a person and for this purpose we have to analyze the individual's needs and wants and always welcome an open communication regarding the motivation. Because effective motivation programs always gives effective results and lead an organization towards the success. With motivation we can reduce cost, increase production, reduce time and many things more which we cannot perform without motivation because it drives the individual's towards attaining goals. It is true that there is always a positive effect of motivation on employee's productivity because high motivation leads to high productivity. Productivity decreases total cost and duration of production, improved quality, give opportunity to the organization to capture high market share which leads the organization to the peak of success and for this purpose motivation is a necessary element.

2. Literature Review

Employees are the strength of any organization and no organization can succeed without the participation of their employees. For this purpose organizations should boost its employee's morale and progress which can be perform only by motivation because motivation plays an important role to increase employee's productivity in any kind of condition. Another factor is money or bonuses which enhance employee interest in their work therefore, numerous researches have performedto know the effects on productivity; knowledge sharing etc that is affected by motivation. Researchers have argued that motivation facilitates enhanced productivity by enabling dedication to a cause (Josse Delfgaauw, 2008) motivation is linked with advanced level of productivity across a diversity of tasks, jobs, and extra role (C. Fred Miao, 2007). Motivation is the tool to increase productivity.

Actions and philosophy of motivation, direction to make your organization prosperous, motivating employees, The strategy to make performance better, Compensation is not only a motivating tool, rewarding employees as per their performances, proper implementation of motivation theory in to your organization, monitoring & measuring the motivation level of employees. Studies have described that implementation of motivation & self theories and using available Resources can motivate your employees, enhance their motivation level and solve their complex problem. Studies have shown that employee's motivation affects the productivity. This study will provide guideline to the managers and leaders in finding needs and wants of employees and their motivation level which affects the productivity.

An experiential research has proved that motivation can further subdivided into two factors that are extrinsic; mutual settlement & estimated managerial rewards and intrinsic; information personality, value and pleasure in serving others (Lisa A. Burke, 2006) Hence extrinsic motivation (rewards) that may be monetary incentives or praise , has shown to significantly effect worker contribution (Miller RD, 2005) and increased intrinsic motivation has associated with employee willingness to create a positive mood, resulting in increased learning and inclination to participate in voluntary knowledge sharing (Jochen Wirtz, 2004). Although quite a few revise argue that motivation factors are vital determinants of knowledge sharing behaviors (Randy K. Chiu, 2002) in respective of that this study examine the effect on intrinsic and extrinsic motivation factors on employee productivity earlier Elton Mayo's Hawthorne Studies there is a positive relation between motivation and employee's productivity. He proved this by an experiment in which he studied on the effect of physical and environmental condition on employee's productivity and later on he moved on psychological factors. After the application of these motivational factors he assumed that employees have become more productive and feel that they are the important part of organization.

3. Research methodology

It is the basic structure of the study. This study has done in year 2011. The data gathering plan for this study is to conduct participative survey and this research is qualitative and causal research such that I am going to make use of primary and secondary data. The primary data has collected through questionnaire and the proposed sample of the employees was 115 but 15 of them have dropped out due to the fake or incomplete information, finally 100 sample size has chosen to collect data from employees. The sample technique that i have used for research is Non Probability sampling. In non probability sampling method i have chosen Convenience sampling and the data has collected from convenient places.

4. Hypothesis Testing

The main part of the study where I have to test my hypotheses by analysis of T-test and F-test where significance level must be less than 0.05 (P<0.05) which will be the acceptance or rejection of hypotheses and this will be decide on the basis of the significance. I have made two main hypotheses in order to prove my research for which I have created, (null hypothesis) H0 = High motivation leads to high productivity, and the another (alternate hypotheses) H1 = High motivation leads to low productivity. The primary data which I have collected through survey has Cronbach's Alpha (α) = 0.865 which means data is 86.5% reliable.

Table 4.1: Results of Testing Hypothesis

Motivation Effects Productivity

Model 1

Constant α0

Coefficient β1



Adj. R2

F (P-Value)

Coefficient's P-value

H0 Results

Total Sample




81.758 (0.000)









118.158 (0.000)









320.814 (0.000)



Challenging Job

Self Control



Performance appraisal

Employee Satisfaction































148.592 (0.000)

121.418 (0.000)

308.540 (0.000)

159.845 (0.000)

139.918 (0.000)

185.842 (0.000)














This study is to examine the effect of motivation on productivity and what factors motivate the employees. The valuable variable of this study is motivation in which i have to analyze the effect or variation of other variable, Here median is 5 and range is 4 which represents maximum employees are strongly agree and minimum employees are strongly disagree that motivation effects on productivity. As far as recognition is concerned that it enhances productivity, recognition having medians "5" and range "4" which represents maximum employees are strongly agree and minimum employees are strongly disagree that Recognition enhances motivational level & bring positive impact on employees performance. In analyzing the promotion effects on productivity, having median "5" which represents majority of employee are strongly agree that If they get promotion, they will be highly motivate to perform well, and the range is 4 which represents maximum employees are very highly motivate with promotion and minimum employees are very low motivated. Self control or in other words employee ownership gives better results as compare to dictatorship because if we give them a feeling of self control or power to take decisions and do work with their own style they will become more innovative, creative and productive rather than in comparison, dictatorship does not lead to high productivity because employees feel restricted which led down their morale. Self control having median "5" and range "4", which represents maximum employees are strongly agree and minimum employees are strongly disagree that Self control motivate employees and help them to enhance their performance. Challenging job is also another important variable which motivates the employees because in challenging jobs they have to face difficult tasks, different challenges and problems which effect their interest, work involvement and desire. Here, Median is 5 and range is 4, which represents maximum employees are strongly agree and minimum employees are strongly disagree that the Challenging job motivates them in order to improve performance. Reward represents something given or received in return or recompense for service, merit, hardship, etc. When employees work effectively and complete their tasks according to the expectations then manager should give them some rewards to encourage them and to boost their morale for next task. If management does not appreciate the hardworking or tasks achieving employees and negotiate their efforts then they won't perform well in next time. Here, the median is 5 and range is 4 which shows that maximum employees are strongly agree and minimum employees are strongly disagree that Rewards effects the motivational level of employees which leads them towards high productivity. Compensation pays to the employee for which they are hired. Compensation has median "5" and range "4" has found which shows that maximum employees are strongly agree and minimum employees are strongly disagree that compensated employees are motivated which leads to high productivity. During the survey i have asked a question to the employees that performance appraisal activities helps them to be motivate in order to lead high productivity because performance appraisal is a very important tool to effect employees efficiency and effectiveness. Hence the median "5" and the range "4" which represents that maximum employees are strongly agree and minimum employees are strongly disagree that Performance appraisal creates the motivation which leads to high productivity. The factor that motivates them to lead high productivity because the above seven variables are equally important and have equal significance but every respondent has its own opinion so i have analyzed that emplyees wants promotion in their work place to be motivate because most employees have chosen promotion to their personal motivation 13% employees has chosen Recognition, 33% employees has chosen Promotion, 12% employees has chosen Challenging Job, 07% employees has chosen Self Control, 16% employees has chosen Rewards, 14% employees has chosen Compensation and 5% employees has chosen Performance Appraisal to be motivate for high productivity. Here, the mode is "2" which represents that most of the employees prefer Promotion to be motivated and Promotion leads to high productivity. Further study has given further clarification about personal preferences regarding factor. In this study i have asked to employees that are they agree with the above selected factor to motivate them for high productivity?. The outcome has come in the shape of median which is 5 and range is 4 which proves that maximum employees are strongly agree and minimum employees are strongly disagree that the above selected factor is enough to motivate their selves for high productivity and they don't need anything inspite of promotion. Every organization must motivate their employees to achieve its goals but some organizations seems to be succeed in order to motivate them or some are not, and obviously entire employees are not motivated with the provided motivational techniques of the organization because the nature of every employee is different. Employee satisfaction having median "5" and range "4" which represents that maximum employees are strongly agree and minimum employees are strongly disagree that they are satisfy with the motivational techniques that are providing by their organizations. First I have designed a model in which I have taken Motivation as a dependent variable and recognition, promotion, challenging job, self control, rewards, compensation, performance appraisal and employee satisfaction have taken as an independent variable. The Pearson's correlation coefficient and regression equation has analyzed to covariances and relationship among the variables to evaluate the effect of motivation on employee's.

MTit = α0 + β1* REC it + εit ----- eq. (1) (Model 1)

MTit = α0 + β1* PR it + εit ----- eq. (2) (Model 1)

MTit = α0 + β1* CJ it + εit ----- eq. (3) (Model 1)

MTit = α0 + β1* SC it + εit ----- eq. (4) (Model 1)

MTit = α0 + β1* REW it + εit ----- eq. (5) (Model 1)

MTit = α0 + β1* COM it + εit ----- eq. (6) (Model 1)

MTit = α0 + β1* PA it + εit ----- eq. (7) (Model 1)

MTit = α0 + β1* ES it + εit ----- eq. (8) (Model 1)

MT is Motivation, REC is Recognition, PR is Promotion, CJ is Challenging Job, SC is Self Control, REW is Rewards, COM is Compensation, PA is Performance Appraisal and ES is Employee Satisfaction.


This study defines the motivation effects on Employees performance which affects the productivity. From the review of the study, certain conclusions could be made that there is strong positive relationship between Motivation and productivity. Hence the Pearson's coefficient of correlation has shown that the Recognition, Promotion, Challenging job, Self Control, Rewards, Compensation and Performance appraisal having strong positive relationship with Motivation effects on productivity & clarified the variation as well as valuable to have predictions. I have performed multiple regression which is use to know the combine effect in reasons of Motivation effects on productivity which is the reflection of total sample as you can see in (Table 4.1) and the combination of equation (from eq.1 to eq.8) which has predictor i.e. Recognition, promotion, challenging jobs, self control, reward, compensation, performance appraisal & employee satisfaction. R= 0.954 which is extremely correlated which predicts motivation extremely best, where R denotes multiple correlation coefficient and R square = 0.911 means 91.1% of the variation in motivation can be predicted by the combinations of Recognition, promotion, challenging jobs, self control, reward, compensation, performance appraisal & satisfaction and the adjusted R Square = 0.900, F11,88 = 81.758 and p = 0.000 represents the significance level which is less than 0.05 (p<0.05).

MT = 0.438-0.306REC+0.822PR+0.094CJ-0.172SC+0.688REW 0.175COM+ 0.288PA - 0.331ES __ eq. (9)

The findings and conclusions of this study, the subsequent recommendations are accessible in an endeavor to motivate employees for high productivity: (1) Current employees of the organization must be recruited first rather than external hired. (2) Conduct meetings with each employees of the department once a month in order to recognize and measure their performances. Particular names and triumphs should be confered in meetings. (3) Employees must not be forced for overtime. (4)The motivation level of the employees must be monitored. (5)The coordination among the employees and management must be developed. (6) Send performance appraisal report & Performance report of the organization to every employee. Particularly, record how much revenue every branch generates on a monthly basis. As well as recognize successful performance and outstanding employees. Let workers distinguish what areas require developments and how they can assist the organization in order to achieve its goals. (7) Encourage chief executives to visit the different departments on a weekly basis to ensure that they have not forgetten their emplyees. (8) Let each employee involve in decision making and propose them with more efficient ways to get things done.