North South University

Term Paper
An Investigation of Motivation & Its Impact on Organizational
Effectiveness

Course: HRM-603.1
Summar-2021

Submitted to:
Dr. Kamal Uddin Ahmed
Professor, School of Business

Submitted by:
Farhana Rashed
ID: 2035196660

Submission date: 25th August, 2021

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 Letter of Transmittal

25th August, 2021

Dr. Kamal Uddin Ahmed
Professor School of Business
North South University

Subject: Submission of my term paper ‘An Investigation of Motivation & Its Impact on
Organizational Effectiveness’

Dear Sir,

With respectfully, I am presenting my term paper on the topic of ‘An Investigation of

Motivation & Its Impact on Organizational Effectiveness’. While preparing this term paper, I
have followed your proper instructions and guidelines to ensure that it are much more
informative as well as comprehensive. I am expressing my special gratitude to you or dedicating
your valuable time, support and expert guidance. I have tried my best to complete the report
appropriately as much as possible. I shall be pleased to answer any sort of query you may have
regarding this term paper. I hope with great anticipation that you would like and accept my
term paper and I eagerly look forward to your cooperation.

Sincerely yours

Farhana Rashed

ID: 2035196660

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 Acknowledgement

I am grateful to our course instructor, Dr. Kamal Uddin Ahmed, Professor, School of Business,
for allowing me to write this term paper on motivation and its impact on organizational
performance. It has been a fantastic learning experience for me. Throughout the process of
writing this term paper, I have gained in-depth information about the subject, which will
benefit me throughout my life. The COVID-19 has had an impact on our daily lives because we
have been attending classes remotely throughout the semester. As a result, I'd like to express
my heartfelt gratitude to my instructor for being exceptionally supportive throughout this time
by offering constructive criticism online to assist us in finishing our course on schedule despite
being disrupted by COVID-19. I'd also like to express my gratitude to my classmates, who have
been extremely cooperative with one another throughout the semester.

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 Abstract

This term paper is about the connection between employee work motivation and their
performance. Workplace performance it looks into common motivation theories as well as
distinct types of motivation. Methods for motivating staff The major goal is to discover how
employee incentive works, leads to improved employee performance, which has a positive
impact on corporate efficiency. Employee motivation and performance, as well as their
relationship, are clearly defined in the literature review using various motivation theories, and
have recently been explored in the findings and discussions based on the literature review.
Because primary data collection is unfeasible during the COVID-19 epidemic, the Term Paper
was created using secondary data sources.

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Table of Contents
1. Introduction .......................................................................................................................................... 6
2. Methodology & Aim of Research .......................................................................................................... 6
3. Research Methodology ......................................................................................................................... 7
4. Review of the Literature ....................................................................................................................... 7
4.1 Why the employees should be motivated .................................................................................... 7
4.2 Motivational Theories ................................................................................................................... 8
4.2.1 Abraham Maslow’s Hierarchy of needs: ...................................................................................... 8
4.2.2 ERG theory (Clayton Alderfer): .................................................................................................. 10
4.2.3 Herzberg’s two factor theory ..................................................................................................... 11
4.2.4 David McClelland’s Acquired Needs Theory .............................................................................. 12
4.3 Approaches to motivation and their impact on employee happiness and performance................. 13
5. Critical Analysis ....................................................................................................................................... 14
6. Research Findings ................................................................................................................................... 15
7. Limitation of the Research ...................................................................................................................... 16
8. Recommendations: ................................................................................................................................. 16
9. Conclusion: .............................................................................................................................................. 16
10. References ............................................................................................................................................ 17

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 1. Introduction
The organization's principal aim is to increase profit and client happiness. Employees are the
most important resource in achieving the company aim. Employees were formerly viewed as
only an input into the business's production process, but now they are not only assets, but also
the primary contributors and most influential elements in the company's success.

To increase corporate productivity, the company must encourage its personnel. They must,
however, know how to encourage others. It is the manager's responsibility to initiate the
motivation process and allow workers to contribute their thoughts on what truly drives them.
This should be done as part of a plan to achieve business goals using the company's most
valuable asset, its people.

Furthermore, Garderner and Lambert (1972) defined motivation as the process of directing
people toward completing tasks and attaining a goal via the use of incentives. Work motivation,
on the other hand, is a factor that alters an employee's style of working and behavior,
according to Steers and Porter (1987), and Allscheid & Cellar (1996), who claim that the only
talent necessary in the workplace is motivation. As a result, it is a skill that is necessary for
every profession or endeavor.

Furthermore, Hislop (2003) described motivation as a force that drives workers to accomplish
things as a consequence of individual needs being met so that they have the incentive to finish
and continue with the activity, and motivated employees will demonstrate their skills and
talents. As a result, without motivation, the organization will never achieve a high rate of
performance, production, or profit.

2. Methodology & Aim of Research

The primary goal of this research is to better understand the link between employee motivation
and performance. The key motivating theories and techniques that I utilized and followed are
also examined in this study. By understanding these techniques, every business can successfully
decide which sort of incentive strategy to adopt. As a result, it is necessary to attain the
following goals:

 Investigate why employees should be motivated.

 Examine the most common motivation theories and techniques.
 Investigate the impact of various motivating techniques on employee performance in a
company.

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 3. Research Methodology

As directed by my Honorable Professor, this Term Paper is literature-based. The article will be
based on secondary sources of information. Textbooks, other sorts of papers, and journals have
all been used as secondary data sources. To create a term paper Secondary data has been
extensively reviewed and debated in order to have a better knowledge of the subject and
provide appropriate comments. Finally, based on secondary data analysis, a suggestion was
made.

4. Review of the Literature

4.1 Why the employees should be motivated
Employees are the most valuable assets of any business, and managers must be able to create a
stimulating atmosphere for them. Keeping their staff happy and pleased is a difficult challenge
for managers. As a result, every manager should be aware of their employees' wants and
expectations, as well as what they are searching for.

The fundamental goal of companies is to inspire individuals who are enthusiastic about their
jobs and to motivate employees who are dissatisfied with their jobs, resulting in a win–win
scenario for both the firm and the workers. According to Urichuck (2002), motivated employees
will enhance the organization's production in order to fulfill its purpose, goals, and objectives. It
will also help to create a strong corporate culture. Motivated employees will also feel that they
have a strategic relationship with the company, and their commitments and loyalty will grow
day by day (Anne, 1994).

Deci and Ryan (1985) state, on the other hand, that a company with low motivation is fully
exposed to both internal and external problems because its personnel are not willing to go the
additional mile to ensure the organization's stability. Low performance is a result of an unstable
organization. In order to achieve productivity increases and maintain competitiveness, the
company must motivate and satisfy its employees. Mansoor (2008) believes that motivation is
partly about establishing an environment in which people would be encouraged to work hard.
As a result, businesses must encourage their staff to improve competitive advantages and
achieve the company's vision and purpose. 2007 (Philip, Yu-Fang, Liang-Chih)

Motivated employees may improve a company's financial line and turn it into a place where
employees want to participate rather than merely "Pick up a paycheque" (Nandanwar , Surnis,
Nandanwar 2010). Furthermore, a well-motivated business will almost certainly have more
motivated personnel, who will be more productive; resulting in significant cost savings
(Urichuck, 2002). Furthermore, pleased employees were more engaged with the company's

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culture, resulting in a slew of intangible but equally significant benefits (Yongsun, Barbara,
Christy, 2002).

Although some experts say that firms who spend money on motivating their employees are
wasting their money, the majority of experts think that the spent money may be repaid in a
relatively short period of time by the motivated employees (Khodov, 2003). Furthermore,
performing and experienced workers are important assets or the backbone of any organization,
and these people are the reason for the company's development and success (Meyer, Becker,
Vandenberghe, 2004). According to Jonathan, Christine, and Yvonne (2002), motivated workers
and their commitment to their companies are critical to work productivity because they will
operate efficiently and successfully. According to Michael and Crispen (2009), having motivated
employees gives the business a competitive edge, and greater employee performance helps the
firm boost productivity.

According to Jonathan, Christine, and Yvonne (2002), increased motivation leads to increased
effort and potentially creativity, this leads to increased productivity. They also said that
motivation results in a productive, high-performing individual who performs well at work, saves
time and effort, and volunteers to do more than is necessary. Employees like these are a
valuable resource to the company and a role model for others to emulate. “If people are
motivated and pleased, they will perform their very best instead of merely doing it.” Ryan and
Deci (2000).

4.2 Motivational Theories

Many motivation theories have been established by psychologists and behavioral scientists, and
those ideas have been developed by researchers. Motivational theories are seen from a variety
of perspectives. But, most significantly, I shall cover Abraham Maslow's Theory, ERG Theory,
Fredrick Herzberg's Two-Factor Theory, and David McClelland's Acquired-Needs Theory.

4.2.1 Abraham Maslow’s Hierarchy of needs:

Maslow is regarded as one of the most influential psychologists of the twentieth century. Most
business students and managers are aware with his hierarchy of demands. The idea is founded
on a basic premise: humans have demands that are prioritized in order of importance. A. H.
Maslow, A. H. Maslow, A. H. Maslow (1943). Human motivation is the subject of this theory. A.
H. Maslow, A. H. Maslow, A. H. Maslow, A. H. Maslow, A. H. Maslow, A. H. Maslow, A. H (1954).
Motivation and personality, New York: Harper. There are some basic requirements that all
humans have, and without them, nothing else matters. As we meet these fundamental needs,
we move on to higher-order requirements. To put it another way, once a lower-level need is
met, it ceases to be a motivation.

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 Self
Actualization

Esteem

Social

Safety

Physchological

Physiological needs are the most fundamental of Maslow's requirements. Food, water, and
other biological demands are referred to as physiological needs. These are basic wants because
if they aren't met, the desire to fulfill them may outweigh all other desires. Consider how
hungry you are. At that moment, your whole activity may be focused on locating food.
However, after you've eaten, you'll no longer be on the lookout for food, and the promise of
food will no longer be a motivation. People tend to become worried about safety requirements
once their physiological demands have been met. Are they safe from danger, pain, or the
prospect of an uncertain future? On a higher level, social wants refer to the need to bond with
other people, to be liked, and to create long-term relationships with them.

In reality, attachments, or a lack thereof, are linked to our health and happiness. R. F.
Baumeister and M. R. Leary (1995). The desire to fit in: A fundamental human drive is the need
for interpersonal relationships. 497–529. Psychological Bulletin, vol. 117, no. The fulfillment of
social needs raises the importance of esteem needs. The need to be respected by one's peers,
to feel significant, and to be acknowledged is known as the Esteem Need. Finally, the urge for
self-actualization refers to “becoming everything you are capable of becoming” at the top of
the hierarchy. This drive expresses itself in the desire to learn new abilities, take on new
challenges, and act in a way that leads to the achievement of one's life objectives.

Maslow was a clinical psychologist, and his theory was not intended for use in the workplace. In
truth, his theory was founded on his observations of people in clinical settings; nevertheless,

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several of the theory's individual components lacked empirical evidence. One point of
contention is the sequence in which the needs are prioritized. It's possible that people who are
hungry and afraid for their life maintain close relationships with others, implying a distinct
hierarchy of needs. Furthermore, researchers found no evidence to support the claims that
once a need is met, it ceases to be a motivator and that only one need is dominant at any one
moment.

Link to needs:

Despite the absence of substantial academic backing, Maslow's hypothesis has clear business
implications. Understanding what individuals require provides us with insights as to how to
better comprehend them. The hierarchy is a method of thinking about the many requirements
that workers may have at any given time, as well as the various reactions that they may have to
comparable treatment.

When a supervisor compliments an accomplishment, an employee who is seeking to meet

esteem requirements may feel pleased. Another employee, on the other hand, who is
attempting to meet social needs, may dislike being commended by top management in front of
peers if the praise separates them from the rest of the group. Offering significant benefits like
as health insurance and company-sponsored retirement plans, as well as a sense of work
security, will assist to meet safety requirements. Social requirements may be met by creating a
welcoming environment and providing a workplace that encourages cooperation and
communication.

Providing advancement chances at work, acknowledging a person's successes orally or through

more formal incentive systems, and bestowing job titles that indicate to the employee that he
or she has earned high status within the business are all ways to meet esteem requirements.
Finally, self-actualization requirements can be met through on-the-job or off-the-job
development and growth opportunities, as well as exciting and demanding employment.
Organizations may assure a highly engaged workforce by making an effort to meet the various
requirements of each employee.

4.2.2 ERG theory (Clayton Alderfer):

Clayton Alderfer developed a needs theory of motivation called ERG theory based on Maslow's
prior work. Maslow's hierarchy of requirements was amended by Clayton Alderfer into three
categories: existence, relatedness, and growth (ERG). The chart below shows how Maslow's five
stages connect to the ERG requirements. Relationships correlate to social and self-esteem
requirements, whereas existence corresponds to psychological and safety needs.

Growth refers to the urge for self-actualization. The ERG theory does not dictate the sequence
in which requirements are met, and it encourages the pursuit of many levels at the same time.

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As a manager, you may see certain employees regressing, which manifests itself when they
continue to prioritize lower-level demands above higher-level ones. According to the idea,
managers will need to assist regressing employees in understanding the necessity of pursuing
greater demands for personal improvement. The frustration-regression principle is what it's
called. Someone who is dissatisfied with his job's growth possibilities and progress toward
career objectives, for example, may regress to relatedness need and spend more time
socializing with coworkers. The consequence of this idea is that in order to comprehend and
appropriately motivate people, we must acknowledge the various demands that may be
motivating them at any particular time.

Existance

ERG
Theory

Relatedness Growth

Existence Needs: Desires for physiological and material well-being are known as existence
needs. (Physiological and safety requirements are included in Maslow's concept of existence
needs.)

Relatedness needs: Desires for fulfilling interpersonal connections are known as relatedness
needs. (Relatedness corresponds to social needs according to Maslow's model.)

Growth Needs: Growth needs are the urges to continue to grow and develop psychologically.
(Growth needs include esteem and self-realization, according to Maslow's paradigm.)

4.2.3 Herzberg’s two factor theory

There are two types of motivating elements, according to Herzberg: hygienic factors and
motivators. Fredrick Herzberg proposed a two-factor motivation hypothesis. Hygiene
considerations and motivators are the two variables. The approach is based on determining the
requirements and wants of each individual. The component that causes discontent is "hygiene,"
whereas the factor that causes satisfaction is "motivators" (Bradley, 2003).

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 1. Hygiene Factor
Organizational rules and procedures, pay, and job stability are all factors that affect
hygiene. If certain characteristics do not present at work, the word discontent is used.
This component defines the physiological requirements for which workers are required
to meet. Bradley (2003; Bradley, 2003; Bradley, 2003; Bradley, 2003; Bradley, 2003;
Bradley
2. Motivator Factors
The satisfaction level is determined by these elements. Achievement, recognition,
responsibility, and personal improvement are examples of intrinsic incentives that
encourage employees to perform better (Bradley, 2003).

4.2.4 David McClelland’s Acquired Needs Theory

1961 Employees will be pleased and motivated in the job if they have three needs,
according to David McClelland (Ryan &Deci, 2000).

1. Need for Achievement:

Employees in the workplace strive to achieve hard goals and objectives with a strong
desire to succeed. Taking up duties is a role played by those who have a strong desire to
succeed.
2. Need for Affiliation:
A person with a high desire for connection is more concerned with people than with
tasks. There is the necessary desire to form positive interpersonal interactions.
3. Need for Power

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 The individual who is primarily concerned with power and wishes to direct and issue
instructions to employees.

4.3 Approaches to motivation and their impact on employee happiness

and performance
Researchers have looked at a lot of ideas, and they have stressed the relevance of diverse
incentive techniques in terms of employee performance. Different methods and strategies that
may be utilized to encourage employees have been characterized as motivation approaches.
The following are some of the approaches

Salary/wages/increments:

These are the most successful methods for motivating employees since most studies have
found that money and payments are more essential to employees than other motivators such
as making a lot of money, and that this item would push them to perform the job or encourage
them. It is a well-known fact that when employees are financially pleased, they will be more
motivated at work and work more. As a consequence, the organization's production will
increase. Some financial components of employee motivation, including as payments,
allowances, salaries, and bounces, rise, and this has a beneficial impact on employee
productivity in the business.

Employee Recognition:

It is a really important tool when employees are acknowledged for their labor and the work
they have completed, and they are rewarded for it. Employees strive to perform their best
when their efforts are recognized and appreciated, according to Pinar (2011). When employees

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are acknowledged and appreciated, they go out of their way to demonstrate their knowledge,
expertise, and skills. As a result, acknowledgment is a very basic, straightforward, and effective
method of motivating staff.

Praising:

Individual motivation is most effectively achieved through praise. The most common technique
of encouraging employees is to give positive feedback by thanking and admiring them. Because
it is generally stated from the heart and spontaneously, this approach is quite simple to apply.
From the employee's standpoint, being able to appreciate others in front of others matters a lot
(Salasiah, Zainab, Rosmawati, Ermy, 2010). If companies recognize that their employees are
performing an excellent job, they will feel appreciated as individuals. Praise has a deeper
significance for motivating employees and is the most successful method of motivating folks. As
a result, when employees feel appreciated by their supervisors, they tend to perform better,
which leads to increased productivity in the workplace. As a result, the more companies
compliment their staff, the simpler the task will be and the more productive they will be.

Assigning new job roles:

Employees will be more happy and driven if their employers assign them increased positions
and responsibilities. Employees should be given precise guidance and expectations as they
begin their new jobs and responsibilities. Employees who are given additional roles and duties
will be more encouraged to work harder because they will realize that their efforts will yield
positive outcomes, and they will be recognized as a consequence (David, Louis, Micheal, 2004).

Organization Management Style:

The majority of studies believe that we need leaders, not managers, to encourage people and
obtain the desired results from them. So, rather than a manager, a leader is more crucial for
motivation since a great leader is concerned with helping employees become more successful
in their careers and being acknowledged and appreciated (Holly, Buttner and Dorothy, 1997)

5. Critical Analysis
According to Abraham Maslow, there are five degrees of need that must be met in order to
motivate employees. Money is the primary motivator that may meet both the physiological and
the safety needs of employees. Social needs can be met at work, such as communicating and
collaborating with coworkers, as well as satisfying feelings of love and belonging in order to
foster positive connections among employees at all levels. Bradley (Bradley, 2003). The
employee's self-esteem will be boosted by achieving social standing, recognition, and awards.
Finally, offering a hard work with some intriguing features will satisfy the employee's drive for
self-actualization.

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There are two types of motivating elements, according to Herzburg: hygienic factors and
motivators. Organizational rules and procedures, pay, and job stability are all factors that affect
hygiene. If such factors are absent from the workplace, discontent may result. Achievement,
recognition, responsibility, and personal improvement are all motivator elements that drive
employees to attain higher levels of performance. Employees will be pleased and motivated in
the job if they have three needs, according to David McClelland. Employees at work strive for
high levels of success and accept full responsibility for any accomplishment. Some people are
focused on power and want to lead and issue instructions to employees in order to have
excellent connections with their surroundings.
Money can inspire people, which is why it is the most important component in motivating
employees. However, some individuals are dissatisfied with it. They seek good feedback on the
work, social recognition, gratitude, and other sorts of benefits such as housing, leave, and so
forth. When employees are acknowledged and appreciated, they go above and beyond to
demonstrate their knowledge, ability, and skills.

6. Research Findings
We've discovered that management's support and contact with employees has a significant
influence on their performance and inspires them to achieve their full potential. By maintaining
excellent contact with individuals and providing positive feedback to employees, employees will
become more motivated, their performance will improve, and eventually, productivity will rise.
According to the findings, praise and appreciation are significant motivating techniques that
have an influence on employees' excellent performance since appreciation is the component
that motivates people at work. Because a leader's key qualities are appreciation,
acknowledgment, and support, leaders are more suited to motivating their people than
managers because leaders are more aware of their wants and expectations. As a result, rather
than a manager, leaders may better encourage employees.
Employee motivation and performance have a favorable link, according to the research study.
That is to say, if employees are motivated, their productivity will increase, which will have an
impact on the company's productivity. Another kind of incentive is to utilize money, as money
and pay are the primary motivators for employees. However, most employees are pleased with
perks like as housing and leave rights, so money is not the sole way to encourage them.
Employee motivation is also influenced by management communication style and praise.

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7. Limitation of the Research
 Due to the COVID epidemic, I was unable to gather primary data. I had no choice except
to rely entirely on secondary data. That report would be more relevant if I could obtain
the primary data.
 I experienced several issues with the paper's development. At the same time, I had to
learn and write.
 I had other classes and assignments due the same week, so I needed to set out time for
them.

8. Recommendations:
 According to the literature study, if employees are not motivated, their performance
would suffer, hurting corporate performance and productivity. Management in the firm
should be aware that money and other financial allowances and features will drive
personnel to some level in order to enhance business productivity.
 Other incentive techniques and elements, such as appreciation, acknowledgment, and
management support, should be considered by the management.
 Furthermore, in the outset, managers should select the most appropriate motivation
theory for the firm, one that will most effectively encourage people, and then proceed
to the methods stage.
 The organization should follow Maslow's Hierarchy of Requirements, which will be
beneficial because each employee has distinct needs. As a result, individuals will
respond to each demand in turn. People will be able to fulfill both financial and non-
financial demands in this manner.
 Management should employ effective management techniques. As a consequence, both
the company and its employees will gain.
Furthermore, implementing that advice in the firm will undoubtedly result in highly
motivated individuals and employees who perform well, therefore improving corporate
performance and productivity.

9. Conclusion:
As a conclusion, we may infer that motivated workers have an impact on not only their own job
performance, but also the performance of the entire company and corporate productivity.
Every employee in the company has certain expectations and criteria, which they expect the
management to meet. Employees may not understand how to accomplish organizational goals
and objectives at first, and it is up to the employer to figure out what truly motivates them. It is
also essential to figure out what their basic requirements are.

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10. References
1. Alexander, P., Ryan, R., &Deci, E., (2000). “Intrinsic and Extrinsic Motivations: Classic
Definitions and New Directions”, Contemporary Educational Psychology, 25(1).
2. Bradley, E. W., (2003). “Toward Understanding Task, Mission and Public Service
Motivation: A Conceptual and Empirical Synthesis of Goal Theory and Public Service
Motivation”, Public Management Research Conference, Georgetown Public Policy
Institute, pp. 9-11
3. Hislop, D., (2003). “Linking human resource management and knowledge management
via commitment: A review and research agenda”, Employee Relations, 25(2), pp. 182-
202.
4. Hsiu-Fen, L., (2007). “Effects of Extrinsic and intrinsic motivation on employee
knowledge sharing intentions”, Journal of Information Science, 33(2), pp. 135-149
5. Vallerand, R. J., (1993). “The Academic Motivation Scale: A Measure of Intrinsic,
Extrinsic, and Amotivation in Education”, Educational and Psychological Measurement,
52(4), pp. 1003-17.
6. Vance F. M., &Pravin, M., (1976). “Measurement of Maslow's Need Hierarchy. Journal of
organizational behaviour, 16, pp. 334-349
7. Victoria, D., (2000). “Will Employee Motivation Impact Organization & Performance”
8. Wigfield, A., Guthrie, J. T., Tonks, S., &Perencevich, K. C., (2004). “Children's motivation
for reading: Domain specificity and instructional influences”, The Journal of Educational
Research, 97, pp. 299-309
9. Yongsun, P., Barbara, S. and Christy, M., (2002). “How to improve repatriation
management: are motivations and expectations congruent between the company and
expatriates”, International Journal of Manpower, 23 (7), pp. 635-675.
10. Allscheid, S. P., and Cellar, D. F., (1996). “An Interactive Approach to Work Motivation:
The Effects of Competition, Rewards, and Goal Difficulty on Task Performance”, Journal
of Business and Psychology, 11( 2).
11. Christos, K., Lois, L., (2004). “Rural Entrepreneurs in Russia and the Ukraine: Origins,
Motivations, and Institutional Change”, JOURNAL OF ECONOMIC ISSUES, 5, pp.
12. Darya, M. (2007). “Backpackers motivations the role of culture and nationality”, Annals
of Tourism Research, 34(1), pp. 122-140
13. David, S., Louis, A. M., Micheal, I. M., (2004). “Why your employees are losing
motivation”, Working Knowledge for business leaders, 4(10), pp. 1-4

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