THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.

The effect of motivation on employees’ performance:

In the case of Berhan bank S.C, Addis Ababa.

By
Solomon Motuma .

July, 2022
Addis Ababa, Ethiopia

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

ST. MARY’S UNIVERSITY

SCHOOL OF GRADUATE STUDIES
FACULTY OF BUSINESS
The Effect of Motivation on Employees’ Performance:
In the case of Berhan Bank
Addis Ababa

By
Solomon Motuma

A Thesis Submitted to St. Mary’s University College, School of

Graduates Studies in Partial Fulfillment of the Requirements for The
Degree of Masers of Business Administration

APPROVED BY BOARD OF EXAMINERS

________________________ __________________ _________________
Dean, Graduate Studies Signature Date
Ashenafi Hailu (Ph.D) ________________ __________________
Advisor Signature Date
_______________________ _______________ __________________
External Examiner Signature Date
_______________________ _______________ __________________
Internal Examiner Signature Date

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

DECLARATION
I, the undersigned, declare that this study entitled “the effect of motivation on employees’

performance: in the case of Berhan bank” is my original work and has not been presented

for a degree in any other university, and that all sources of material used for the study have

been duly acknowledged.

Solomon Motuma(SGS/0191/2013) ________________ ______________

Name Signature Date
St. Mary's University, Addis Ababa

May 2022
Addis Ababa, Ethiopia

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

ENDORSEMENT
This thesis has been submitted to St. Mary's University, School of Graduate Studies for
Examination with my approval as a university advisor.

Ashenafi Hailu (Ph.D) _________________

Advisor Signature
St. Mary's University, Addis Ababa Jun

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

List OF tables
Acknowledgements
List of table
List of figure
Abstract
Chapter One :
Introduction ................................................................................................................................................ 12
1.1. Background of the study ............................................................................................................ 12
1.2. Back ground of the organization................................................................................................ 14
1.3. Statement of the problem ......................................................................................................... 15
1.4. Research Questions .................................................................................................................... 16
1.5. Objective of the study ................................................................................................................ 17
1.5.1. General Objective ............................................................................................................... 17
1.5.2. Specific Objectives .............................................................................................................. 17
1.6. Significance of the Study ............................................................................................................ 17
1.7. Scope of the study ...................................................................................................................... 18
1.8. Limitation of the study ............................................................................................................... 18
1.9. Organization of the study .......................................................................................................... 18
Literature Review ....................................................................................................................................... 20
2.1. INTRODUCTION .......................................................................................................................... 20
2.2. THEORETICAL LITERATURE REVIEW .......................................................................................... 20
2.2.1. CONCEPT OF MOTIVATION................................................................................................. 20
2.2.2. TYPES OF MOTIVATION ...................................................................................................... 20
2.3. MOTIVATIONAL THEORIES .................................................................................................. 21
2.3.1. CONTENT THEORIES ...................................................................................................... 21
2.3.2. PROCESS THEORIES ............................................................................................................ 25
2.4. EMPLOYEE PERFORMANCE ........................................................................................................ 26
2.5. FACTORS AFFECTING WORKERS MOTIVATION AND PERFORMANCE .......................................... 27
2.6. RELATIONSHIP BETWEEN MOTIVATION AND EMPLOYEE PERFORMANCE .................................. 28
2.7. EMPIRICAL LITERATURE REVIEW ............................................................................................... 30
2.8. CONCEPTUAL FRAMEWORK ....................................................................................................... 32
2.9. Research Gap .............................................................................................................................. 33

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

2.10. Hypothesis of the study ......................................................................................................... 34

Research Methodology ............................................................................................................................. 35
3.1. INTRODUCTION .......................................................................................................................... 35
3.2. RESEARCH DESIGN ...................................................................................................................... 35
3.3. RESEARCH APPROACH................................................................................................................ 35
3.4. Sampling technique and Sample Size ........................................................................................ 36
3.4.1. SAMPLING TECHNIQUE ...................................................................................................... 36
3.4.2. Target population ............................................................................................................... 36
3.4.3. Sampling frame................................................................................................................... 37
3.4.4. Sample size Determination ................................................................................................ 37
3.5. DATA SOURCES ........................................................................................................................... 38
3.6. METHOD OF DATA ANALYSIS ..................................................................................................... 38
3.7. Validity and Reliability Test ....................................................................................................... 39
3.7.1. Validity ................................................................................................................................ 39
3.7.2. Pilot Test ............................................................................................................................. 40
3.7.3. Reliability Analysis.............................................................................................................. 40
3.8. Ethical Consideration ................................................................................................................. 42
Data Presentation, Analysis and Interpretation ...................................................................................... 43
4.1. INTRODUCTION .......................................................................................................................... 43
4.2. DESCRIPTION OF THE RESULTS .................................................................................................. 43
4.3. BACKGROUND INFORMATION OF RESPONDENTS .................................................................... 43
4.3.1. Sex distribution of the respondent .................................................................................... 44
4.3.2. Age of the respondent ....................................................................................................... 44
4.3.3. Education Qualification of the respondent ....................................................................... 45
4.3.4. Working Experience of the respondent ............................................................................. 45
4.5. Correlation Analysis Independent and Dependent Variables .................................................. 51
4.5.1. Regression Analysis ............................................................................................................ 54
4.5.2. Regression test ................................................................................................................... 54
4.5.3. Multicollinearity ................................................................................................................. 54
Independent Variables ........................................................................................................................ 54
4.6. Multiple Regression Analysis ..................................................................................................... 55
4.7. Hypothesis Testing and Discussion ............................................................................................... 60
4.8. Effect of motivation on Employees’ Performance .................................................................... 61

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

4.9. Chapter Summary,...................................................................................................................... 64

SUMMARY, CONCLUSIONS AND RECOMMENDATIO ................................................................................ 66
5.1. Introduction ................................................................................................................................ 66
5.2. Summary of Findings .................................................................................................................. 66
5.3. Conclusion of the Study ............................................................................................................. 68
5.4. Recommendation ....................................................................................................................... 70
5.5. Future research .......................................................................................................................... 72
6. Reference ............................................................................................................................................ 74
7. Appendix ............................................................................................................................................. 78

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

ACKNOWLEDGMENTS
The presentation and preparation of this research would have been very difficult, if not
impossible with out the aid of various people whom I am very grateful to them. Its upon their
knowledge, ideas and work devoted efforts and experience that I base my self to write this
work.

My sincere thanks to the Almighty God for guiding and enabling me to work on this research
project and gain academic insight into this topic. I am also grateful to my supervisor- Ashenafi
Hailu (Ph.D) for the support and guidance he has accorded me during the project.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

LIST OF TABLES
Table 3.1 Sample Size Determinations for Each Stratum…….......................................28
Table 3.2 Variables of the Study……………….………………………………………….31
Table 4.1 Respondents by Age, Sex, Qualification and Years Of Service.......................34
Table: 4.2 Mean And Slandered Deviation of Extrinsic and Intrinsic Factors................35
Table 4.3: Descriptive Statistics........................................................................................40
Table 4.4: Model Summary...............................................................................................52
Table 4.5: Multicollinarity.................................................................................................41
Table: 4.6: Analysis of variance (ANOVA) …………......................................................55
Table: 4.7: Regression coefficients………………….......................................................56
Table: 4.8: Respondents on effect of motivation on employment performance.............60

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

LIST OF FIGURES
Figure 2.1Maslow’s Hierarchy of Needs……………………………...........................…16
Figure 2.2 Need Theory of Motivation…........................................................................18
Figure 2.3 Reinforcement Theories…..............................................................................19
Figure 2.4 Conceptual Frame Work…………………………………................................24

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Abstract
Motivation is stated as one of the most important contributor for high performance in the Bank sector.
Motivation factors (reward, recognition, promotion, job security, training, working environment,
fringe benefit, and salary) are motivation systems to encourage employees to perform in the most
effective way. The purpose of this study was to investigate the effect of motivation on employees`
performance in Bank sector, focusing particularly at Berhan bank S.C. In the study motivation is seen
as an independent variables while employee performance as a dependent variable. For this particular
study descriptive and explanatory research design was employed and quantitative research method was
used. The purposive sampling technique was used to select the study area of the organization, while
simple random sampling technique to select sample the target respondents. A survey is conducted by
using structured close ended questionnaires which is distributed to 192 Berhan bank employees in
order to gather data relevant to the research objectives. Descriptive statistic such as percent, frequency,
mean and standard deviation and inferential statistic such as correlation, multiple regression and
ANOVA analysis statistical tools were used to examine the relationship between motivation and
employee Performance .The data collected on the questionnaire were analyzed using SPSS (version-
28).Pearson correlation coefficient analysis was carried out to test the hypotheses. Multiple regressions
analysis were performed to examine relationships between the independent and the dependent
variables and to identify the influence of the independent variable on the dependent variable. The
findings revealed that all motivational factors have a significant positive relationship with employee
performance in Berhan bank in the study setting. There was a positive correlation between all
motivational factor describe in this research and employee performance in Berhan bank In descriptive
statics frequency shown that motivation is directly proportional to employee performance. This result
clearly pre supposes that the more motivated the workforce, the higher their level of input into work
and hence increase in performance. Thus, this study recommended that Berhan bank managers can
be improving the employee performance and increasing organizational effectiveness seriously giving
attention the entire motivation factor.

Keywords: Employee, Motivation, employee performance, Employees satisfaction, Employee

Management.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Chapter One

Introduction
1.1. Background of the study
The term motivation is derived from the Latin word ‘movere’ which means to move (Baron,
Henley, McGibbon and McCarthy, 2012). Certo (2016) describes motivation as giving people
incentives that cause them to act in desired ways. Motivation has also been described as the
process of arousing and sustaining goal-directed behavior (Nelson, 2013).

It is commonly agreed that there are two types of motivation, namely extrinsic and intrinsic.
Intrinsic motivation is that behavior which an individual produces because of the pleasant
experiences associated with the behavior itself (Mosley, Pietri and Mosley Jnr, 2012). They
stem from motivation that is characteristic of the job itself. Examples are receiving positive
recognition, appreciation, a sense of achievement and meeting the challenge. According to
Beer and Walton (2014), intrinsic rewards accrue from performing the task itself, and may
include the satisfaction of accomplishment or a sense of influence. Mosley, Pietri and Mosley
Jnr. (2012) describe extrinsic motivation as the behavior performed, not for its own sake, but
for the consequences associated with it. Examples include salary, benefits and working
conditions. Extrinsic rewards come from the organization as money, perquisites or
promotions from supervisors and co- workers as recognition (Beer and Walton, 2014).
Employees are motivated by a combination of both factors at any given point in time (Riggio,
2013

Traditionally, the study of job performance has been based on two somewhat independent
assumptions: that performance can be understood in terms of the individual's ability to
perform the tasks, and that performance depends solely upon the level of motivation (Chung,
2013). Motivation is generally defined as the psychological forces that determine the direction
of a person's level of effort, as well as a person's persistence in the face of obstacles (Stanley,
2012).

Research in performance appraisal has demonstrated that performance appraisal

characteristics (such as appraisal purpose and source) can elicit positive employee reactions to

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

performance appraisal and, which in turn, can motivate employees to improve their
performance (DeNisi and Pritchard 2016). Therefore, by focusing the attention on
performance, performance appraisal goes to the heart of personnel management and sets out
different objectives which are directly responsible for the Career development of employees
and continued growth and development of the organizations (Selvarajan and Cloninger, 2016

Employee turnover is a universal problem that all organizations around the world face
(Stanley, 2012). One of the factors that contribute to high employee turnover is demotivation
(Mosley, Pietri and Mosley Jnr, 2012). There is a growing consensus among managers and
leaders about the significance of combining effective motivation incentives to encourage good
performance (Cole and Kelly, 2011). In order for organizations to meet their objectives, they
must have a workforce that is motivated and works towards achieving the said objectives
(Steers and Porter, 2011).

Theories of job performance offer that motivation is a key determinant of performance The
role of motivation in the work context has been studied to understand what causes employees
to try hard to do well, or more specifically what causes the arousal, direction, and persistence
of voluntary actions that are goal directed (Mitchell and Linden, 2012). It is therefore
imperative that managers understand what motivates employees and also how to motivate
them effectively (Deci, 2013)

There have been numerous researches done on motivation and employee performance. Many
scholars have postulated theories to try and understand what motivation is, and how it affects
individuals ( Fincham and Rhodes, 2015). One particularly significant theory was developed
by Abraham Maslow and is known as the hierarchy of needs (Riggio, 2014). At the core of
Maslow’s theory is a hierarchy of five categories. They are psychological, security, social,
esteem and self-actualization needs (Kreitner and Kinicki, 2016)

Frederick Herzberg is another renowned motivation scholar. According to his two factor
theory, dissatisfaction results from the absence of hygiene factors which include salary and
relationships with others, while satisfaction results from the presence of motivating factors
such as job opportunities and recognition (Kinicki and Kreitner, 2016).

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

On the other hand, employee performance is an evaluation of the results of a person’s

behavior. It involves determining how well or poorly a person has accomplished a task or
done a job. Motivation is only one factor among many that contributes to an employee’s job
performance. But, all thing being equal, one would expect a highly motivated employee would
deliver high-quality output or service than those poorly motivated employee. (Lussier 2005).

As a consequence, like any other organization one of the major factors that determine the
success of any banks is the readiness, commitment, efficiency and effectiveness of its
employees. For that matter any organization to achieve its objectives needs to have staff that
are motivated to work and committed to the organizational objectives. This study is therefore
sought to assess the effect of motivation on Berhan bank employees’ performance. It was
also focuses on both intrinsic and extrinsic motivational factors.

1.2. Back ground of the organization

Berhan Bank S.C was formed in accordance with Article 304 of the Commercial Code of
Ethiopia with the objective of operating in the banking industry. This objective has been
ensured in Article 3 of the Memorandum of Association of the Company. The Bank was
registered and licensed by the National Bank of Ethiopia on 27 June 2009 with a paid up
capital of Birr 95.7 Million divided in to shares of Birr 1,000 and an authorized capital of Birr
300 Million.

Having been registered and licensed by the National Bank of Ethiopia on 27th June, 2009,
Berhan Bank S.C started operation on October 30, 2009. opening its first branch in Addis
Ababa near Bole International Airport as ‘Berhan International Bank- Bole Branch’ .

With a branch network leapfrogging 280 as at October 26/2021, headquartered in Bole, Addis
Ababa today, we operate in virtually all regional cities of Ethiopia and in their respective
towns. The total employee is over 5,500 across the nation.

The goal to make banking stress free and efficient, we kept on investing in technology and
innovations that enable our customers to reach their goals as in saving, investment, business
or efficient transaction. In addition to serving our customers at our networked branches, we

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

offer electronic banking services such as Debit Cards allowing customers to access their
accounts at any ATM machine nationwide, introduce Mobile and Internet Banking.

Beyond local banking services, they are partnered with international money transfer
companies such as Western Union, Money Gram, Ria, Dahabshiil, Trans-Fast, Xpress Money
and World Remit.

The Bank’s capital base has also kept on showing a steady growth. At the end of June 30th
2019, its paid up capital reached Birr 2 billion. Moreover, the number of shareholders has also
significantly increased to over 14,879 making Berhan Bank among the leading private
commercial bank with such massive public base.

1.3. Statement of the problem

In a highly competitive, global environment, organizations are constantly under pressure to
retain their workforce (Deci, 2013). Highly skilled, reliable and experienced employees are a
valuable asset for any organization. It is evident that highly motivated employees are more
likely to have high productivity. However, according to Certo (2006), good performance is not
as a result of motivation only, but also includes ability i.e. skills, equipment, supplies and time.

Some organizations have been known to experience a high staff turnover despite offering
above average salaries (Aguinis, 2012). This tells us that money is not the only way to motivate
employees. Additionally, different people are motivated by different factors. It is important
for managers and supervisors to understand what motivates individual employees, and not
assume a one-size-fits-all approach (George and Jones, 2013).

An organization is only as strong as its workforce. Human resources need to be treated with
great care, since they are a special resource that needs to be given special managerial attention
and time. (Storey, 2013). Therefore, studies like this are an invaluable resource in helping
organizations identify and maximize on ways to motivate employees whilst mitigating
employee turnover and under-performance (Steers and Porter, 2011)

On my observation and interviewing the problems Berhan Bank currently faces is the lack
of motivation for its employees, which affects the bank's profitability and capacity compared

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

to other similar private banks. (based on observation time). The bank pays less attention and
as a result does not understand how motivation affects the work of its employees. Employee
dissatisfaction reduced the bank's productivity and reduced the amount of services it provided.
Human resources are one of the key organizational factors for business success. An
individual's performance generally reflects his or her knowledge, abilities, skills and
characteristics.

With that in mind, I decided to carry out research in Berhan Bank S.C, into the effect of
motivation on employee performance. It is the human resource amongst other factors of
production in the organization which really makes a distinction (Kreitner and Kinicki, 2013).
Production is cons

Many studies have been conducted on employee motivation by different researchers, like
Owusu T.(2012) conducted research on the effects of motivation on employee performance
of commercial bank in Ghana and the researcher used salary, fringe benefits, promotion, and
loans as motivational factors. Pessaran D. and Tavakoli S. (2011) conducted research on
identifying the employees’ motivation of Parsian hotels in Tehran and the study used salary,
security, working condition, status, achievement, recognition, growth and advancement, work
itself and responsibility as motivational factors.

Therefore, the purpose of the study was to investigate the effect of motivation on employee’s
performance the case of Berhan Bank S.C and also after completion of this study will improve
motivation practice in the bank sector so as to improve employees and organization.

1.4. Research Questions

In order to achieve the above objectives, this study paper will tried to answer the following
questions:-
1. What is the correct level of motivation practice in the bank?
2. To what extent does extrinsic motivation (Salary, Promotion, Job security, Fringe
benefit, working Environment) affect performance of Berhan bank employees?
3. To what extent does intrinsic motivation (reward, Recognition, training) affect the
performance of Berhan bank employees?

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

1.5. Objective of the study

1.5.1. General Objective
The main objective of the study is to investigate the effect of motivation on employees’
performance at Berhan bank in selected Addis Ababa branches.

1.5.2. Specific Objectives

 To examine the effect of reward, job security and salary on employee performance.
 To identify the influence of recognition and training on employee performance
 To examine the effect of working condition, promotion and fringe benefit on employee
performnace.
 To identify the relationship between employee motivation and employee performance.

1.6. Significance of the Study

This study will be of immense benefit to the employees of Berhan Bank , management of
Berhan Bank , students and academicians in the field of the study in that it will highlight how
the concept of motivation and job performance are valued and understood and the need for
all to pay attention to a variety of motivation issues or financial incentives for employees.

The research has exposed the researcher to the practical issues of the subject. It enabled him
to match theory and in this way that the researcher will better understand more the application
of the motivation theories managing human resources in real estate business.

Furthermore, the study will bring to light the different forms of motivation which will in-
form the design of appropriate measures aimed at bringing out the best in employees with
regard to job performance.

Again, the factors leading to high performance as well as causes of low performance will
inform management in their decision making. Administrators will be helped through this study
to be able to use motivation not just for the sake of it but to know how, when and what type
of motivation to use so as to achieve maximum performance of staff.

The findings of this study will assist in the development of effective managerial strategies and
policies that can help in improving the administration and realization of Berhan bank goals.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Also, the findings will enable the Berhan bank management in general to identify the
motivational factors and their problems and can use it in the improvement of management
concerning employee’s needs, issues of welfare and motivation of employees and enhance
their performance for a better and deliverance of good services

1.7. Scope of the study

The study was conducted in one private bank namely Berhan bank S.C. We have conducted
this research on selected branches of Berhan bank with about 500 employees. The survey be
conducted on employees of different levels and employees with different experiences. This
study will be conducted in the Addis Ababa region mainly and used a closed-ended descriptive
questionnaire for data collection from the responders. In Ethiopia, there are numerous more
similar banking sectors where such studies can easily be conducted and the result could be
used for their benefit. It would also improve employee relationships with top management.

1.8. Limitation of the study

There were some limitations encountered in the conduct of this research study. The main
limitation existed in the sample group, as it was quite small. Therefore, the diversity in the
answers could have been limited. . In addition to this:

1.9. Organization of the study

The paper is organized in to 5 chapters; the primary chapter is introduction for the study that
introduces the general study. It consists of introduction or back ground of the study, problem
statement, objectives, significance, scope and limitations of the study.

The second chapter focuses on review of literatures during which previous studies were
consulted. In this chapter general definitions and ideas, basic problems and empirical
evidences, the results of motivation on employee’s performance, the link between worker
motivation, Job Performance and theoretical and abstract framework were mentioned
thoroughly. the foremost areas and results of previous studies have additionally been
conferred.

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The third chapter focuses on analysis methodology, design, method, approach and,
emphasizes on the look of the study and also the methodologies used. during this chapter;
supply of information, data collection instrument, and sample size, sampling techniques,
methodology of information analysis and selection of study organizations square measure
mentioned.

The fourth chapter is dedicated to information presentation, analysis and interpretation

during which the collected primary information analyzed and arranged in important manner
therefore on meet the objectives of the study. The analysis is expedited by SPSS version 28.

The fifth and last chapter is bothered with outline, conclusion and proposals. Here the
findings of the study square measure summarized, conclusions clearly conferred and proposals
are provided for the findings of study

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Chapter Two
Literature Review
2.1. INTRODUCTION
This chapter served as the foundation for the development of this study. An overview
of the extensive historical research related to motivation and employee performance is
presented to examine the existing knowledge base regarding role of motivation
on employee performance. Finally the conceptual framework for this research was
shown.

2.2. THEORETICAL LITERATURE REVIEW

In this section the researcher review the basic theories of motivation and employee
performance in order to develop the overall conceptual framework of the study and
to make ease for designing the measurement of variables and then to create bases
for comparisons of the basic findings of the study with previous related studies. Thus,
the theoretical background of previous studies were reviewed and summarized from
the view point of roles of motivation on employee performance as follows:-

2.2.1. CONCEPT OF MOTIVATION

(Rajput 2011), argues that the word motivation is derived from a Latin word
"Movere" which literally means "to move". They defined motivation as "the
individual’s desire to demonstrate the behavior and reflects willingness to expend
effort". Thus, the underlying concept of motivation is some driving force within
individuals by which they attempt to achieve some goal in order to fulfill some
need or expectation.

2.2.2. TYPES OF MOTIVATION

The complex and variable nature of needs and expectations at work give rise to
the following simplistic but useful, broad two classification of motivation to work
namely:-

2.2.2.1. INTRINSIC MOTIVATION

It is defined as the doing of an activity for its inherent satisfactions rather than
for some separable consequence. When intrinsically motivated a person is moved

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

to act for the fun or challenge entailed rather than because of external prods,
pressures, or rewards. These spontaneous behaviors, although clearly bestowing
adaptive benefits on the organism, appear not to be done for any such instrumental
reason, but rather for the positive experiences associated with exercising and
extending ones capacities. (White 1959).
2.2.2.2. EXTRINSIC MOTIVATION
Extrinsic motivation comes from outside of the performer. It is related to tangible
rewards such as salary and fringe benefits, security, promotion, contract of service,
the work environment and conditions of service. Money is the most obvious
example, but coercion and threat of punishment are also common extrinsic
motivations. While competing, the crowd may cheer on the performer, which may
motivate him or her to do well. (Armstrong 2006).
Generally, regardless of whether people are intrinsically or extrinsically motivated,
they join and are motivated to work in organizations to obtain certain outcomes.
An outcome is anything a person gets from a job or organization.

2.3. MOTIVATIONAL THEORIES

2.3.1. CONTENT THEORIES
These theories attempt to explain the specific things which actually motivate the
individual at work. These theories are concerned with identifying people’s needs
and their relative strengths and the goal they pursue in order to satisfy these needs.
Also, these theories place emphasis on the nature of the needs and what motivates
individuals. Thus, the basis of these theories is the belief that the content of
motivation consists of needs. (Mullin 2005). The various postulated content
theories are:-
I. Maslow’s hierarchy of need theory
II. Clayton Alderfer’s ERG theory (Alderfer’s need modified theory)
III. Herzberg’s two-factor (motivation-hygiene) theory
IV. McClelland’s achievement motivation theory

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

I. Abraham Maslow’s Hierarchy of Need Theory

One of the most widely mentioned theories of motivation is the hierarchy of needs theory
put forth by psychologist Abraham Maslow. Maslow saw human needs in the form of a
hierarchy, ascending from the lowest to the highest, and he concluded that when one set of
needs is satisfied, this kind of need ceases to be a motivator. (Armstrong 2006). Thus, the
hierarchy of Maslow’s need theory noted as follows:-
A. Physiological Needs: These are important needs for sustaining the human life. Food,
water, warmth, shelter, sleep, medicine and education are the basic physiological needs
which fall in the primary list of need satisfaction. Maslow was of an opinion that until
these needs were satisfied to a degree to maintain life, no other motivating factors can work.
B. Security or Safety Needs: These are the physical danger and the fear of losing a job,
property, food or shelter. It also includes protection against any emotional harm. Once
physiological needs are met, one's attention turns to safety and security in order to be free from
the threat of physical and emotional harm. Such needs might be fulfilled by, living in a safe
area, medical insurance, job security and financial reserves. (Locke & Latham 2002).
C. Social Needs: Since people are social beings, they need to belong and be accepted by
others. People try to satisfy their need for affection, acceptance and friendship. Once a person
has met the lower level physiological and safety needs, higher level motivators awaken. The
first levels of higher level needs are social needs. Social needs are those related to interaction
with others and may include friendship, belonging to a group, giving and receiving love.
(Mullins 2005).
D. Esteem Needs: According to Maslow, once people satisfy the social need, they tend to
want to be held in both by themselves and by others. This kind of need produces such
satisfaction as power, prestige, status and self-confidence. It includes both internal esteem
factors like self- respect, autonomy and achievements and external esteem factors such as
status, recognition and attention. After a person feels that they "belong" to a group, the urge
to attain a degree of importance emerges.
E. Need for Self-Actualization: Maslow regards this as the highest need in his hierarchy.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

It is the drive to become what one is capable of becoming; it includes growth, achieving one’s
potential and self- fulfillment. It is to maximize one’s potential and to accomplish something.
Self-actualized people tend to have motivators such as truth, justice, wisdom and meaning.
(Mullins 2005).
Figure 1: Maslow’s Need Hierarchy

Therefore, according to Maslow’s need theory as each of these needs is substantially satisfied,
the next need becomes dominant. From the standpoint of motivation, the theory would say
that although no need is ever fully gratified, a substantially satisfied need no longer motivates.
So if you want to motivate someone, you need to understand what level of the hierarchy that
person is on and focus on satisfying those needs or needs above that level

II. Clayton Alderfer’s ERG theory (Alderfer’s Need Modified Theory)

(Alderfer 1969) has tried to rebuild the hierarchy of needs of Maslow into another model
named ERG that is, Existence – Relatedness – Growth. According to him there are 3 groups
of core needs. The existence group is concerned mainly with providing basic material
existence. The second group is the individuals need to maintain interpersonal relationship with
other members in the group. The final group is the intrinsic desire to grow and develop
personally. (Mullins 2005).

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

III. Frederick Herzberg’s Two- Factor (Motivation-Hygiene)

(Frederick Herzberg 1959) had also tried to modify Maslow’s Need Hierarchy theory. His
theory is also known as Two-factor theory or Hygiene theory. He stated that there are certain
satisfiers and dissatisfiers for employees at work. Intrinsic factors are related to job satisfaction,
while extrinsic factors are associated with dissatisfaction. From study he concluded that
opposite of satisfaction is not dissatisfaction. Thus, removing dissatisfying characteristics from
a job does not necessarily make the job satisfying. He states that presence of certain factors in
the organization is natural and the presence of the same does not lead to motivation. However,
their non-presence leads to de-motivation. In similar manner there are certain factors, the
absence of which causes no dissatisfaction, but their presence has motivational impact. (Cole
2003).

Figure 2: Herzberg’s Motivation-Hygiene Theory

IV. McClelland’s Theory of Needs

David McClelland in 1988 developed a theory on three types of motivating needs. These are
need for power, need for affiliation and need for achievement. Basically people for high need
for power are inclined towards influence and control. They like to be at the center and are
good orators. They are demanding in nature, forceful in manners and ambitious in life. They
can be motivated to perform if they are given key positions or power positions. (Cole 2003).

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

In the second category are the people who are social in nature. They try to affiliate themselves
with individuals and groups. They are driven by love and faith. They like to build a friendly
environment around themselves. Social recognition and affiliation with others provide them
motivation. People in the third category are driven by the challenge of success and the fear of
failure. Also, their need for achievement is moderate and they set for themselves moderately
difficult tasks. They are analytical in nature and take calculated risks. Such people are motivated
to perform when they see at least some chances of success. (Ibid 680).

2.3.2. PROCESS THEORIES

These theories are extrinsic theories and they attempt to identify the relationships among the
dynamic variables which make up motivation and the actions required to influence behavior
and action. As well, they provide a further contribution to our understanding of the complex
nature of work motivation. (Mullins 2005).

Process theory on the other hand is also known as cognitive theory because it is concerned
with people’s perceptions of their working environment, the ways in which they interpret and
understand. Thus, cognitive theory can certainly be more useful to managers than need theory
because it provides more realistic guidance on motivation techniques. (Armstrong 2006). The
process theories are:-

I. Vroom’s Valence/Expectancy theory

II. Equity theory

III. Goal theory

I. Vroom’s Valence/Expectancy Theory

Victor Vroom in 1964 proposed expectancy theory. In his theory Vroom criticized Herzberg’s
two-factor theory as being too dependent on the content and context of the work roles of
workers and offered an expectancy approach to the study of motivation. (Bloisi 2003).

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

This theory argues that the strength of a tendency to act in a specific way depends on the
strength of an expectation that the act will be followed by a given outcome; and on the
attractiveness of that outcome to the individual to make this simple. Besides, expectancy
theory says that an employee can be motivated to perform better when there is a belief that
the better performance will lead to good performance appraisal and that this shall result into
realization of personal goal in the form of some reward. (Cole 2003).

II. Equity Theory

According to the equity theory developed in by J. Stacey Adams (1965), people are motivated
by their beliefs about the reward structure as being fair or unfair, relative to the inputs. People
have a tendency to use subjective judgment to balance the outcomes and inputs in the
relationship for comparisons between different individuals. If people feel that they are not
equally rewarded they either reduce the quantity or quality of work or migrate to some other
organization. However, if people perceive that they are rewarded higher, they may be
motivated to work harder. (Reiss 2004).

III. Goal Setting Theory of Edwin Locke

It was postulated by Edwin Locke in 1979 and it states that motivation and performance are
higher when individuals set specific goals, when accepted goals are difficult, and when there is
feedback on performance. (Mullins 2005). Thus, instead of giving vague tasks to people,
specific and pronounced objectives help in achieving them faster. Also, as the clarity is high,
a goal orientation also avoids any misunderstandings in the work of the employees. The goal
setting theory states that when the goals to be achieved are set at a higher standard, then in
that case employees are motivated to perform better and put in maximum effort. Besides, it
revolves around the concept of “self-efficacy” that is individual’s belief that he or she is
capable of performing a hard task. (Ibid).

2.4. EMPLOYEE PERFORMANCE

Performance of the employee is considered as what an employee does and what he does not
do. Employee performance involves quality and quantity of output, presence at work,
accommodative and helpful nature and timeliness of output. (Yang 2008).

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

In the same way, Armstrong (2006) define employee performance as the achievement of
specific tasks measured against predetermined or identified standards of accuracy,
completeness, cost and speed. Thus, employee performance can be manifested in
improvement in production, easiness in using the new technology, highly motivated workers.

In relation to these, Herzberg (1959) says having fewer dis-satisfiers does not motivate a
worker to do a good job, but only to stay in it. Worker performance clearly depends on
their level of motivation, which stimulates them to come regularly, work diligently, be flexible
and be willing to carry out the necessary tasks. The performance and quality of organization’s
service depends on the quality and motivation of their human resources practices.

Consequently, employee performance should be carefully noted at all levels of the

organization. Since no matter an individual’s title, everyone has the opportunity to lead in
some capacity and have a positive impact on performance. Thus, understanding the value that
can be achieved through different roles is one way of providing motivation, performance and
thus leadership skills. (Llopis 2012)

2.5. FACTORS AFFECTING WORKERS MOTIVATION AND

PERFORMANCE
Motivation at work is widely believed by most writers on the subject to be a key factor for
performance of individuals and organizations and also a significance of intention to
turnover. There is a strong link between job dissatisfaction, lack of motivation and
intention to turnover. There are three factors that play key role in performance;

 The ability of staff to do their job;(the capacity or can do factors)

 The motivation of staff, to put in effort to do their job, (the ability or will to do factors).

 The organizational support or opportunity to do the job well (availability of resources).

In other words, performance depends on whether the staff perceives themselves as able to
do things, whether they are willing to do things and whether they have the means to do them.

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2.6. RELATIONSHIP BETWEEN MOTIVATION AND EMPLOYEE

PERFORMANCE
The link between motivation and employee performance seem to be an obvious one. If
individuals are highly motivated, they will perform better. In turn, better performance may
well lead to a sense of achievement and result in greater motivation. Most people have a
natural sense that motivation is linked with performance. Although some may disagree on
how much impact motivation has on performance, most would agree that high levels of
performance are difficult to achieve when little or no motivation to perform is present.
(Frederick- Recascino & Hall 2003).

Thus the relationship between motivation and performance can be a mutually reinforcing one.
This, however, begs a number of questions to do with perception, ability and stress. As well,
motivated individuals may do more work, but this will need to be carefully managed if
they are not going to spend most of their energy on aspects of work they find stimulating,
which may be of little or no benefit to the company. Motivated employees may be more
productive, provided they have the requisite skills to do the job and the perception to realize
whether they have or not. It is just as important to take steps to improve ability by means of
good selection and training as it is to pay attention to motivation. (Karan 2009).

Besides, motivating employees for better performance encompasses several critical factors:
employee engagement, organizational vision and values, management acknowledgment and
appreciation of work well done, overall authenticity of leadership, financial reward, and career
advancement among others. Employees are expected to come to the workplace with the
intrinsic motivation and desire to be successful, be value-added and contribute to the
obtainment of an employer’s vision. Conversely, it is incumbent upon the employer to provide
resources, opportunities, recognition and a cohesive work environment for employees to be
successful. (Ibid; 490)

Likewise, engagement influences motivation and it is reflected in the extent to which

employees commit, how hard they work and how long they stay. Additionally, people join
organizations for different reasons, motivated by intrinsic and extrinsic rewards. Intrinsic

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

rewards are reflected in actions believed to be important. Thus, it is the responsibility of

managers to motivate employees, with the goal for employees to contribute to the
organization. Managers can best motivate employees by offering rewards that are meaningful
to them. (Daniel & Metcalf 2005).

Furthermore, employees are often motivated differently and to develop a work environment
that promotes motivation, organizations need to know what is important to their employees
and then to emphasize these factors. Aside from monetary gain, work provides people with
fulfillment on various levels, from earning a living and “doing good work” to aspiring to a
vision and ultimately having an impact on the quality of life. Good organizations are always
trying to structure the work so as to match the nature of the work with the nature of the
employee and to make the work as interesting and enjoyable as possible. (Brian 2013). In
relation to these, (Perry 2006) did emphasize that employees who participate in their
organization’s decision-making processes and who feel that they have a voice in the company
have a higher job satisfaction.

Moreover, (Lawler 2003) emphasizes that “treating people right is fundamental to creating
organizational effectiveness and success. It is also easier said than done. This includes “a
highly complex set of actions on the part of both organizations and employees. Organizations
must develop ways to treat their employees so that they are motivated and satisfied; employees
must behave in ways to help their organizations become effective and high-performing. Thus,
his winning combination for performance requires a partnership between the organization and
the employees. Additionally, he also include that “One cannot succeed without the other. To
provide people with meaningful work and rewards, organizations need to be successful. And
to be successful, organizations need high-performing individuals. The challenge is to design
organizations that perform at high levels and treat people in ways that are rewarding and
satisfying.” To describe this mutually beneficial relationship, he uses the term virtuous spiral,
a relationship that occurs when the organization values its employees, and in return, workers
are committed to high performance. Moreover, motivation is the most important factors that
could influence organizational performance. Employee motivation should be one of the

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

policies of managers to increase effective job management amongst employees in

organizations (Shadare et al 2009). Also, a motivated employee is responsive of the definite
goals and objectives individuals must achieve, therefore individuals direct its efforts in that
direction. Thus, organizational facilities will go waste if it lacks motivated people to utilize
these facilities efficiently.

Hence, employee motivation and performance are key factors in moving a business forward.
But, owners, managers and supervisors know positive motivation leads to better performance
and higher productivity but may rely on the wrong tools that will create dissatisfaction among
employees and leads to poor performance. As well, motivation increases the willingness of the
workers to work, thus increasing effectiveness of the organization. (Ibid; 560).

2.7. EMPIRICAL LITERATURE REVIEW

Different researchers have made study concerning the effect of motivation on employee
performance and came up with some findings that helped to draw conclusion as elaborated
here under.

First researcher known as Orasa (2016) made a study on the effect of motivation factors on
employee job performance in public health care facilities at Ilemela in Mwanza region using
descriptive methodology and presented the following findings; there were low motivation
among health workers, some employee were intrinsically motivated and some were poorly
motivated using extrinsic motivators the study intended to be done will be different from the
previous as it will be conducted in different area which is in Dar es Salaam region..

Another study was conducted by Bushiri (2014) on the impact of working environment on
employee’s performance using qualitative and quantitave methodology at Institute of Finance
Management in Dar es salaam and came up with the following findings that there were positive
relationship between working environment and employee’s performance. The undertaken
study will be different from the previous study as it is going to consider various factors of
motivation instead of looking on single factor of working environment.

Third study conducted by Mbogo (2014) concentrated on impact of motivation on employee

performance in public services in Tanzania in Ilala Municipality using Statistical Package for

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Social Studies and presented that there were positive relationship between motivation and
employee performance where wage was identified as the most motivating factor. The study
intended to be done will different from this as it doesn’t explore about factors of motivation

Furthermore Mohamed (2016) conducted a study on the influence of motivation on job

performance among primary teachers in public schools in Kongwa District Council using
Statistical Package for Social Studies and drawn conclusion that there were no significant
relationship between motivation and teacher’s job performance as teachers performance is
influenced by many factors. The study to be done will be different from Mohamed’s study
basing on target population which is from Dar es Salaam Region.

Mruma (2013) conducted a study on effect of motivation factors on teacher’s performance in

Tanzania education institutions in Nyamagana District using qualitative and quantitative
methodology and found that teachers are mostly motivated by intrinsic factors. Te study to be
conducted will be different from this previously done as it is going to be conducted in Dar es
Salam at Vice President Office.

Thomas Owusu (2015) undertaken the study on effects of motivation on employee

performance specifically in Ghana commercial bank- Kumasi zone using qualitative and
quantitative to analyze data and found that there were positive relationship between
motivation and employee performance. The intended study will be different from this as it
will be conducted in different area which is Tanzania.

Albeit (2015) conducted the study on the role of motivation on employee performance at
Victoria commercial bank in Kenya using correlation and regression to analyze data and
concluded that there positive relationship between motivation and employee performance.
The planned study will be different from this as will be undertaken in Tanzania.

Lastly Faraji (2013) commenced the study on the role of motivation on employee 18 work
performance in public organisation at National Development Corporation using correlation
to analyze data and found strong relationship between motivation and employee performance.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

The intended study will be different from this as it is going to be undertaken at Vice President
Office.

From empirical works reviewed many researchers have tried to show the relationship between
motivation and employees’ performance but leaving out what hinder motivation practice in
organization setting though of its importance therefore suggesting a need for further research.

2.8. CONCEPTUAL FRAMEWORK

The roles of motivation on employee performance is studied empirically; so there is the
need for a conceptual framework that pulls together the concepts of motivation and employee
performance. Thus, the conceptual framework provides a foundation for focusing on specific
variables for the study. These variables are based on the literature reviewed on motivation and
its roles on employee performance. The conceptual framework of the study is as follows:-

Figure 3. Conceptual Framework

Independent Variable Dependent Variable

Intrinsic Motivation
 Recognition
 Training
 Job Security
 Reward Employee
Performance
Extrinsic Motivation
 Salary
 Promotion
 Fringe Benefit
 Working Environment

Source: Reseracher 2022

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

From the above discussion, motivation the drive behind effort to satisfy needs can come from
within or from external force (intrinsic and extrinsic rewards) respectively. The need theorists’
focuses on the question of what arouses, sustains and regulates goal directed behavior that is
what particular things motivate people and the process theorists’ also emphasize on the
process of motivation and importance of rewards. As well, meters of performance are included
within a conceptual framework of the study.

2.9. Research Gap

Based on the literature reviewed it is revealed that no one has laid an intention to study
specifically on investigation of motivation toward job performance in Berhan Bank . For that
reason this research work is going to concentrate on motivation of employee and its impact
on job performance this will help fill the gap and get an answer on the motivation challenges
exist in Berhan Bank. Different environment brings about difference in motivation practices,
polices, guidelines existing in Brehan Bank. Many of the researchers whom I went through
their work conducted their study elsewhere in the world but my focus of the study is in Berhan
Bank.

However they did their study in the organizations which have difference cultures, altitude,
norms and habits these factors might produce different result from one organization to
another that is why I decide to conduct my study in Berhan Bank in order to find those
differences. Different time of the study done create a need to carry out another research
because none of researchers I went through their study, conducted research of this type in
current years specifically the year 2022. Also none of the study conducted research base on
branches this gives the reason and need to conduct another research for that reason my
research will pick employees from branches of Berhan Bank.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

2.10. Hypothesis of the study

H1: Reward has effect on employee performance

H2: Promotion has positive Significant Relationship with employee performance .

H3: Recognition positive Significant Relationship with employee performance

H4: Salary has positive Significant Relationship with employee performance

H5: Training has positive Significant Relationship with employee performance

H6: Job security has positive Significant Relationship with employee performance

H7: Fringe benefit has positive Significant Relationship with employee performance

H8: Working environment has positive Significant Relationship with employee performance.

From the on top of discussion, motivation the drive behind effort to satisfy wants will return
from among or from external force (intrinsic and extrinsic) severally. the requirement the
requirement on the question of what arouses, sustains and regulates goal directed behavior
that's what explicit things inspire folks and {also the} and also the also emphasize on the
method of motivation and importance of rewards. psychological feature Factors like reward,
salary, recognition, training, promotion, security, fringe profit and dealing surroundings, were
finished with a abstract framework of the study

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Chapter Three
Research Methodology
3.1. INTRODUCTION
This chapter describes the methodology that to be used for this study. The main issues
discussed here are the research approach, research design, research population, sample and
sampling technique, source of data and type, data collection procedures, ethical consideration
and method of data analysis. This study also built on quantitative analytical data and the try to
use of both primary and secondary data.

3.2. RESEARCH DESIGN

(Saunders et al. 2007), defines research design as the general plan of how the research
questions would be answered. It is the conceptual structure within which research is
conducted. It constitutes a blue print for the collection, measurement and analysis of data. A
survey was a method of collecting data in which people were asked to answer a number of
questions (usually in the form of a questionnaire). Thus, the research design to be used for this
study is descriptive survey research design to assess the effect of motivation on employee
performance. This method was chosen in order to make references to phenomena as they
exist in real life and it is relatively economical in terms of time and resources. Also, it could
enable the research to generalize the findings of a fairly large population.

3.3. RESEARCH APPROACH

A research approach is also either deductive or inductive. A deductive analysis approach,
which leads a study from a general to a selected development .It, begins with the event of a
theory or a hypothesis and later a development of a method to check it during a context to
verify or reject its claims (Creswell, 2003).

This study was conducted by using quantitative research approach that means deductive
research approach; the approach is best suited for looking at cause and effect, and testing of
theories and hypothesis (Muijs, 2010, p.9). The method uses to explain relationships or
phenomena by collecting numerical data and analyzing based on mathematical method. The
objective of the study is to investigate the causal relationship between motivation and the

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

employee performance; quantitative research approach was chosen to this study since it is an
appropriate method to create quantifiable cause and effect relationship between the variables
of the study.

A survey strategy provides a quantitative or numeric of trends, attitudes or opinions of

population by finding out a sample of population (Creswell, 2009, p.146) and it's a well-liked
and customary strategy in business and management analysis (Saunders et al., 2009, p.175) so,
deductive analysis approach was utilized within the gift study. because the study had relative
objectives involving associate degree variable quantity with aspects, namely, reward,
promotion, recognition, perquisite, Training, job security, operating atmosphere, and variable,
this can be worker performance.

3.4. Sampling technique and Sample Size

3.4.1. SAMPLING TECHNIQUE
Sampling technique is a method of selecting sample to be included in the study. To select
representative sectors for the study based on their number of customers and their contribution
to economic development. Purposive sampling method was used .This sampling method
minimizes biases and gives equal chance to be selected to promote representativeness. The
researcher chose Sixty branch from total of 40 Branches .The individuals of the sample
were selected by using Simple random sampling method. This sampling method minimizes
biases and gives equal chance to be selected to promote representativeness.

3.4.2. Target population

According to Bell and Waters (2014), the term population is defined as a total group of
individuals or units that are of interest to the researcher and individuals at whom the outcomes
of the study can be generalized. Eleven branches were the target population of the study. To
drive the sample, Sixty branchs were chosen by lottery method. They are Saris , kality , 6 kilo.
5 kilo, Art kilo, Kebena, Afebco Bere, Chilote , Semen Hotel, Arada, Abo. Kazanchis , Imperial
, Gerji Merbrat , Ayat Branches . So, this number constitutes the target population of the study.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

3.4.3. Sampling frame

It is the list of all possible units of the population that the sample can be drawn from it. The
sampling frame of this study is the list of 30 Saris branch office , 40 kality branch office , 28
6 kilo branch office , 24 5 kilo branch office , 29 Art kilo branch office , 30 Kebena Branch
office , 30 Afebco Bere branch , 25 Chilote branch office , 27 Semen Hotel branch office ,
45 Arada branch office , 26 Abo branch office , 42 Kazanchis branch , 26 Imperial branch
office , 26 Gerji Merbrat branch office , 32 Ayat branch office . The sample frame of 500
employees are grouped in to eight list of categories based on their respective sectors offices to
make easier for the selection of the required sample and distribute the selected sample
proportionally to the sectors.

3.4.4. Sample size Determination

According to Kothari, 2008 selection of sample size depend on nature of the study, budget
and time constraints. For the purpose of this study 223 respondents will be used in data
collection out of 500 employees which found at Berhan bank Addis Ababa branches. The
sample will identifying based on using of Sloven formula methods.

Sloven formula going to be used in this study to determine the sample size. Slovene’s formula
helps us to obtain the sample size. Denoting by n the sample size, the Slovene formula is given
by n=N/ (1+ (N*e^2)).

Where

n= sample size

N= target population

e= level of significance /marginal error 5%

N 500
𝑛 n = 𝑛 𝑛
1+N(e)2 1+500(0.025)2

500 500
`𝑛 𝑛 𝑛 N= 223 Participant
1+1.25 2.25

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Table3. 1 Sample size distribution would be selected from branch offices

S/ Branch Office Target Percentage Sample Size
N name population
1 Art Kilo 29 44.5% 12
2 6 kilo 28 44.5% 13
3 Menlik 40 44.5% 17
4 Kebena 30 44.5% 13
5 Afenco Bere 30 44.5% 12
6 Chilote 25 44.5% 11
7 Semen Hotel 27 44.5% 12
8 Arada 45 44.5% 19
9 Kasanches 42 44.5% 18
10 Imperial 26 44.5% 12
11 Gerji Meberat 26 44.5% 12
12 Ayat 32 44.5% 14
13 Abo 26 44.5% 11
14 Kality 40 44.5% 17
15 Saris 30 44.5% 13
16 Stadium 40 44.5% 17
500 223
Source: (Own, 2022)

3.5. DATA SOURCES

For this study try to use both primary and secondary data. The data would be gathered from
Addis Ababa branches of Berhan Bank with the most possible recent and current situations.

 Primary data: some selected branch that is found around Addis Ababa, the
questionnaire will be distributed to employees, interview to help us to gather data as
primary sources.
 Secondary data: The annual report of Berhane bank of 2019/20 would be used as a
secondary data source for the assessment conducted in addition to literature reviews
found in books and the internet also included.

3.6. METHOD OF DATA ANALYSIS

At the end of the entire data collection process reasonable checks were conducted and
inconsistent data where cleared appropriately. Quantitative methods were employed in the
analysis of the data. Accordingly, the collected data was processed using the Statistical Package

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

for Social Science. Data for the various research questions were analyzed using frequency,
mean, standard deviation and percentages obtained to show the distribution of opinions and
perceptions of respondents. As well, the results of the study were shown in tables.
Furthermore, data for the various research questions were analyzed using descriptive statistics,
correlation and regression to show relation of variables and perceptions of respondents.

3.7. Validity and Reliability Test

3.7.1. Validity
Validity defined as the extent to which data collection method or methods accurately measure
what they intended to measure. To ensure the validity of the study, data has been collected
from the reliable sources, i.e. respondents who have experiences in Berhan Bank. According
to Mugenda and Mugenda (2013), the term validity refers to the accuracy or truthfulness of
the measurement items. Before collecting data, conducting pilot study helps for testing the
questionnaire, which reveals the weaknesses, if any, of the questionnaire and it may prove to
be effective in collecting the relevant information (Kothari, 2004).. The first draft would be
given to the advisors for scrutiny, suggestions, and necessary amendment would be made
under supervision of advisor. The researcher would check the validity of items and make the
necessary amendments based on the feedback obtained. And also in order to ensure the
validity of the research instrument, the researcher gave the draft questionnaire to the research
advisor. Moreover, the feedback obtained through the pilot test used to check the
appropriateness of the questions included in the questionnaire. In doing so, the validity of the
questionnaire was established using both face and content validity Face validity refers to
probability that a question is misinterpreted or misunderstood. On the other hand, content
validity also refers to logical validity and the degree to which a measure depicts all face of a
given social construct. In this study, the content validity was improved by using the opinions
of the research supervisor, senior students and senior lecturer of Department of Management.
The face validity of the research instrument was also improved via a pilot test, and thereby
revising unclear and ambiguous questions. As a result, the items were properly designed to
measure the respective variable and its underlying constructs.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

3.7.2. Pilot Test

Pilot-testing was carried out before administering the questionnaires to the respondents. Pilot
testing aims at determining the reliability and validity of the research tools including the
sequence, wording and structure of the questions. This pilot study on the data gathering
instrument was carried out by administering the sample questionnaire to those who did not
participate in the study. Therefore, the pilot-test was conducted on 10 employees’ Berhan bank
kality Branch. These respondents were chosen using simple random sampling method. After
collecting data from these respondents, necessary revisions were made on certain questions
included in the questionnaire based on the respondents’ feedback given in order to ensure the
validity and reliability of the questionnaire.

3.7.3. Reliability Analysis

According to Bougie and Sekaran (2010), an instrument needs to be consistent when it
measures. This consistency can be measured by using a reliability test. In short, this test is
described as a test of worth or value of the survey data. Internal consistency reliability was
verified using Cronbach’s Coefficient Alpha. Accordingly, the respondents involved in the
pilot test were asked to comment on the questionnaire. Most respondents gave feedback
directed to the comprehensibility of items; therefore, researcher modified some of the items
to improve their clarity. The researcher also ensured the reliability of the questionnaire to
determine its consistency in testing what it was intended to measure. The reliability of the
questionnaire was tested with the help of Statistical Package for Social Science (SPSS) version
28 to confirm that the Cronbach’s Alpha coefficient values above 0.7 are generally accepted.
Reliability analysis is very important in research and is widely used to measure the accuracy of
the study. So, reliability was conducted via pre-testing the questionnaire by simple random
sampling selected 10 employees working in Kality branch . To measure the internal
consistencies and stability of the constructs namely, reward, promotion, recognition, job
security, training, working environment, fringe benefit, salary and employee performance,
Cronbach’s Alpha coefficient was applied. It indicates an average correlation among the items
that have developed the scale. Such a value ranges from 0 to 1 with 1 indicating greater
reliability. A coefficient of reliability range of between 0.30 and 0.80 is acceptable (Pallant,

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

2007).Reliability test in this study found that all item is reliable by Cronbach’s Alpha > 0.7
(Bhuwono and Agung, 2005).

The reliability of the questionnaires is tested by Cronbach's Alpha measurement in SPSS.

Table3.2. Item reliability Test using Cronbach’s Alpha

Variables Sign Alpha Internal Consistency

Reward + 0.8011 Very Good
Promotion + 0.8142 Very Good
Recognition + 0.7315 Acceptable
Salary + 0.8453 Very Good
Training + 0.7331 Acceptable
Job Security + 0.7792 Acceptable
Working Environment + 0.7560 Acceptable
Employee performance + 0.7731 Acceptable
Test Scale 0.8011
Source: (Researcher’s own survey, 2022)

As indicated in above table for this study, the researcher developed a total of 9 constructs with
31 items. These 31 items of 9 constructs were measured by reliability test the reliability of
reward related questionnaires on employee performance is 0.8011 promotion related
questionnaires on employee performance is 0.8142, recognition related questionnaires on
employee performance i s 0.7315, Salary related questionnaires on employee performance is
0.8453,Training related questionnaires on employee performance is 0.7331, Job Security
related questionnaires on employee performance is 0.7792, Fringe benefit related
questionnaires on employee performance is 0.7657, Working environment related
questionnaires on employee performance is 0.7560 and employee performance is 0.7731. Since
a rule of thumb suggested that the Cranach’s alpha value exceeds 0.70 the items shows good
reliability and considered acceptable and As shown in the table the overall Cronbach’s Alpha
for 9 items was 0.8011 which is very good and highly acceptable because the closer the
reliability coefficient gets to 1 the better.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

3.8. Ethical Consideration

In order to ensure ethical issues, first the researcher got full permission from the establishment
and participant under the study. The researcher provided information concerning the topic,
purpose, and overall benefit of the study to the participants. The researcher also made sure
that participation in the study was voluntary and harmless.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Chapter Four

Data Presentation, Analysis and Interpretation

4.1. INTRODUCTION
This chapter presents information on primary data collected from respondents on roles of
motivation on employee performance in Berhan bank S.C. The analysis involves the use of a
variety of statistical procedures including basic descriptive statistics (e.g. tables and graphs)
and in order to substantiate the relationship between the independent and the dependent
variables, correlation and multiple regression analysis were conducted by using SPSS 28

4.2. DESCRIPTION OF THE RESULTS

Based on the census conducted 223 questionnaires were distributed and 198 questionnaires
were collected and due to the incompleteness of data 6 questionnaires had to be discarded.
Finally, 192 questionnaires were considered for the data analysis.

4.3. BACKGROUND INFORMATION OF RESPONDENTS

This section shows the gender of the respondents, age bracket, highest professional
qualification attained and the duration spent in Berhan Bank S.C.

TTable 1able 4.3. Background of the respondent

Bio Data Frequency Percentage
Male 141 73.4%
Sex Female 51 26.6%
18 -30 years 101 52.6%
Age Range 31 – 40 Years 52 27.1%
41 – 50 years 39 20.3%
Certificate 11 5.7%
Education Diploma 23 12%
Qualification 1st Degree 108 56.3%
Maser Degree 50 26%

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

6 months -1 years 13 6.8%

1 – 2 years 121 63%
Years of Working 3 – 5 years 55 28.6%
Above 5 years 3 1.6%
Current Position Bank Teller 125 59.9%
Business Banking 38 19.8%
Officer
Credit Officer 11 5.7%
Accountant 16 8.3%
Data Processing 8 4.2%
Officer
Auditor 4 2.1%

4.3.1. Sex distribution of the respondent

It was revealed that 141(73.4%) of the respondents are male the rest 51(26.6%) of the
respondents are female. Thus majority of the respondents are male. This realizes that it is
unequal opportunity in job employment, so due to that, women should look employment
opportunities in Berhan Bank.

4.3.2. Age of the respondent

According to Table 4.2, findings of age distribution in this organizations Shows those
101(52.6%) employees aged between 18 to 30 years. And 52(527.1%) employees aged between
31 to 40 years. And 39(20.3%) employees aged 40 -50 years This result show that about
101(52.6%) employees out of 192 respondents are young and adult employees aged between
18 to 40 years. This indicates that the Berhan Bank has several young and adult workers than
older workers. meaning the info indicated the employees area unit productive and may
contribute for the accomplishment of sector, therefore young, powerful and energetic
individuals within the service and area unit able to serve for very long time offer they area unit
intended enough to remain. Wants the requirements the wants of individuals during this
cohort area unit to satisfy the lowerlevel needs (psychological, safety and social) initial

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

predominant before the higher-level wants as projected within the Maslow‟s (1946) hierarchy
of wants.

On the opposite hand older staff have Workplace experience that comes from years of
expertise in a very operating setting, Have higher attending records, Have higher client service,
and square measure loyal, reliable, and dependable.

4.3.3. Education Qualification of the respondent

According to the Table 4.3 below, the study involved different respondents with different
level of education as follows, Certificate level, 11 (5.7%) , Diploma level 23 (12%) of the
respondents, those who were having Degree level of education were 108(56.3 %) respondents
and the remaining respondents were having master degree and above level were 50 (26%)
respectively, in accordance with the revealed data it showed that majority of respondents
working at Berhan Bank are having degree level followed by Master level. However, those
with certificate and diploma levels of education are few. Mostly individuals that getting higher
education they are not satisfied their jobs and their turnover is more than so that organizations
are overcome to that problem design the compensation plan to retain the employees as well
plays more to attract, retain and motivate to give man power.

4.3.4. Working Experience of the respondent

From the respondents, only 13 (6.8 %) of them have worked six months up to one year. The
majority of the respondents have served the sector between 1 and 2 years which consists
121(63 %) of the study group. The other 55 (28.6%) respondents worked between 3-5 years
and 3 (1.6%) respondents have served the sector above 5 years .According to this table 4.4,
employees’ of the sector are largely dominated by workers who have been working in the
office for less than 2 years.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

4.4. RESULTS OF DESCRIPTIVE STATISTICS

Table 4.2. Employe perciption on Job security

Job Security Frequency Percentage

I feel safe because of
the comfort I am Agree 192 100%
provided at work
I feel safe with the Disagree 96 50%
workflow created by my Agree 96 50%
recent leader
Because I have job Disagree 100 52.1%
security, I feel proud my Neutral 21 10.9%
work Agree 71 37%

As per the above table respondent confirm that 192 (100%) respondent agree with the confirm
they provide on the work, and equal repsondat 96(50%) agree and 96% disagree with they
feel safe with the workflow created by the recent leader. In the other hand 100(52.1%)
responded disagree with the job security that they have and 71(37%)agree with that.

Table 4.2. Employe perciption on working Environment

Working Environment Frequency Percentage

I am satisfied with the Disagree 129 67.2%
working environment Neutral 27 14.1%
Agree 36 18.8%
Most employees in Disagree 141 73.4%
my organization enjoy Neutral 30 15.6%
their work Agree 21 10.9%
My office allow me to Disagree 50 50%
work freely Agree 50 50%
My superior provides Disagree 106 55.5%
an environment in Neutral 40 20.8%
which I Agree 46 24%
feel safe and secure

Most of the respondent are disagree with satisfied in the working environment and most of
the respondent 141 (74.3%) also disagree with enjoying in their work . regarding for alloment

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

of working freely 50 (50%) of the respondent disagree and 50(50%)agree with it. On the
other hand in providing environment safe secure by their superior 106(55.5%) disagree and
46(24% )agree.

Table 4.3. Employe perciption on Salary

Salary Frequency Percentage

I am satisfied with my salary Disagree 192 100%
The salary, I receive is Disagree 192 100%
appropriate for the work I do
I am happy with the salary Disagree 192 100%
increase in my institution
My salary is high in comparison Disagree 192 100%
to my colleagues pay for doing a
similar job.

As we can see above table all of the respondent disagree 192(100%) regarding for satisfied
with salary, the salary received appropriate for the work they do, salary increment.

Table 4.4 Employe perciption on Fringe Benefits

Fringe Benefits Frequency Percentage

I am satisfied with my total Disagree 145 75.6%
benefits package. Neutral 47 24.4%
My fringe benefits are paid Disagree 147 76.56%
timely Neutral 45 23.4%
It is only when I achieve my Disagree 82 42.7%
work goal that my employer Neutral 110 57.3%
offers me benefits.

On the above table 145(75.6%) of the respondent disagree with the total benefit package
does the company offered. 147 (76.5%) responds also disagree with the timely paid of
fringe benefits that the company offered and also 82 (42.7%) responded on the offer that
employee offer when archive of work goal

Table 4.5. Employe perciption on Training

Training Frequency Percentage

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

It is possible to achieve Disagree 192 100%

performance simply because of
training

I am satisfied with the training Disagree 100 52.1%

opportunities for my Agree 70 36.5%
organization
My organization give training Disagree 50 50%
based employee skill gab Neutral 50 50%

The above table is for regarding training and 192 (100%) agree with training is the key for
success and 100 (52.1%) disagree with the training that the bank offered and 70
(36.5%)agree with it. 50 (50%) disagree with the question that the organization give training
based employee skill gap

Table 4.6. Employe perciption on Recognition

Recognition Frequency Percentage

I feel appreciated when I achieve Disagree 192 100%
or complete a task
I receive adequate recognition Disagree 192 100%
for doing my job well
My manager always thanks me Disagree 192 100%
for a job well done

As per Table 4.6 all the respondent 100 (100%) disagree with recognition offered with the
bank. i.e. appreciate when employee achieve or complete task, received of adequate
recognition for doing the job well, manger always thank them for a job well done.

Table 4.7. Employe perciption on Promotion

Promotion Frequency Percentage

I am satisfied with the carrier Disagree 192 100%
advancement opportunities in
my organization
Promotions in the organization Disagree 192 100%
are based upon qualification but
not performance
In my organization it provides Disagree 159 82.81%
fair promotions opportunities Neutral 33 17.8%

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

My job allows me to learn new Disagree 192 100%

skills for career promotion
As per table 4.1 regarding of promotion offered by the bank it is clear that 192 (100%) of
the respondent disagree with ,the carrier advancement opportunities in my organization,
Promotions in the organization are based upon qualification but not performance,
organization it provides fair promotions opportunities and job allows me to learn new skills
for career promotion.

Table 4.8. Employe perciption on Reward

Reward Frequency Percentage

I am proud to be working at this Disagree 19 9.9%
company because I have been Neutral 173 90.1%
rewarded for being achievement.
I am pleased with the fair award Disagree 152 79.2%
given by my organization Neutral 40 20.8
In addition to monthly salary I Disagree 192 100%
have received reward during
achieving organizational goal
My department is rewarded with Agree 144 75%
the best performing staff Neutral 48 25%

In above table 173 (90.1%) neutral to answer the question related to proud to work on the
company because I have been rewarded for being achievement and 152 (79.2%) disagree with
fair award given by my organization , 192 (100%) disagree with addition to monthly salary I
have received reward during achieving organizational goal and last 144 (75%) agree with
department is rewarded with the best performing staff

4.1.1. RESULTS OF DESCRIPTIVE STATISTICS

In this section various statistical data analysis tools such as mean, standard deviation,
frequency and percentile are used to analyze the collected data. The summary of descriptive
statistics of all variables that are evaluated based on a 5-point Likert scale (“1” being “strongly
disagreed” to “5” being “strongly agreed”).According to Zaidaton and Bagheri (2009) the
mean score below 3.39 was considered as low, the mean score from 3.40 upto 3.79 was
considered as moderate and mean score above 3.8 was considers as high as illustrated by

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Comparison bases of mean of score of five point Likert scale instrument. Thus, detail of the
analysis is as follows.

Table 4.5.Summary Statistics on Continuous Variable

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Job Security 192 3 4 3.09 .470
Working Environment 192 2 4 2.42 .491
Fringe Benefit 192 1.7 2.7 2.311 .2751
Reward 192 2 3 2.65 .243
Training 192 3 4 3.11 .467
Salary 192 1 2 1.65 .239
Promotion 192 1 2 1.73 .312
Recognition 192 1 2 1.11 .181
Employment Performance 192 3 3 2.85 .317
Valid N (listwise) 192

Where, Std.Dev.= Standard Deviation Min. = Minimum, Max.= Maximum

Source: (SPSS output from questionaries’ )
According to the arithmetic mean of descriptive statistics, the average mean of the job security
components was 3.09, which was considered a low mean. From these responses, we can conclude that
employees are dissatisfied with their reward motivational factors. For the work environment in this
data, the average is 2.42. They are uncomfortable with the physical environment due to lack of proper
facilities and resources to do their jobs; they are generally dissatisfied with the existing office design,
furniture and office layout as compare to other bank sector.
Promotions (mean = 1.73) are low and employees are dissatisfied with promotion practices
,recognition (mean = 1.11), indicating that employees are not satisfied with their recognition. Training
(mean = 3.11) is low and employees are dissatisfied with the training Berhan bank practice, Fringe
benefits (mean = 2.31) low, employees Dissatisfied with their comapny fringe benefits, low Reward
(mean = 2.65), employees dissatisfied with the bank reward , Salary (mean = 1.65), employees

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

dissatisfied with pay practices of the bank. In the above table 4.4, it is shown that the average mean
score of Berhan Bank employee performance is 2.55, which can be considered as low mean score.
Because the mean value is low, it indicates that employees are not performing well at work. As a result,
we may conclude that Berhan Bank employees perform poorly because they are dissatisfied with the
bank's eight motivating factors (reward, recognition, promotion, job security, training, working
environment, fringe perk, and salary).

4.5. Correlation Analysis Independent and Dependent Variables

A correlation analysis is used to determine the direction and relationship between variables,
according to Saunders et al. (2009, p.490). To infer and comprehend the nature of the link
between the variables, a correlation analysis was performed between the independent and
dependent variables of the study. The correlation analysis was used to figure out the
relationship between the independent factors (reward, recognition, promotion, job security,
training, working environment, fringe benefit, and salary) and the dependent variable
(employee performance). To show the direction, intensity, and significance of the link between
independent and dependent variables, the Pearson Correlation Coefficient was used. The
researcher also used version 28 of the Statistical Package for Social Sciences (SPSS) software
to completely examine the data, which included coding the items and entering them into SPSS
for analysis. The rule of thumb for correlation coefficient between variables is shown in Table
4.5

Table 4.6 The Rule of Thumb for Correlation Coefficient

S/N Coefficient Range Strength of Association
1 ±0.91 - ± 1.00 Very strong
2 ± 0.71 - ± 0.90 High
3 ± 0.41 - ± 0.70 Moderate
4 ± 0.21 - ± 0.40 Small but definite relationship
5 ± 0.01 - ± 0.20 Slight, most negligible

Source: Weiliang et al. (2011)

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Therefore, using the Table 4.6 and the SPSS output of the questionnaire, the following results
of the independent variables motivational factors (i.e., reward, recognition, promotion, Job
security, training, working environment, fringe benefit, and salary) and the dependent variable
(employee performance) is going to be discussed in detail basis. The following table presents
the correlation between the independent and dependent variables

Table 4.7. Pearson Correlation Coefficient

Variable Frequency Employees Performance

Pearson Correlation P-value
Coefficient
Job Security 192 0.691 0.001*
Working Environment 192 0.696 0.001*
Salary 192 0.387 0.001*
Fringe Benefit 192 0.318 0.001*
Training 192 0.694 0.001*
Reward 192 0.295 0.001*
Promotion 192 0.253 0.001*
Recognition 192 0.488 0.001*
Note: * indicate the correlation is significant at 0.01% level of significate

Source: (SPSS output of the questionnaire survey, 2022)

The results in table 4.7 shows the Pearson correlation coefficient was used to measure the
relationship between independent variable motivational factors(i.e. reward, recognition,
promotion, Job security, training, working environment, fringe benefit, and salary) and
Employee Performance in Berhan Bank table-4.7presents the correlation between motivation
and employee performance. The R-value shows the direction, the strength and the significance
of the correlation. The bigger the r value the more significant it is. The sign (*) indicates that
there is a correlation between the variables. As output of the model as shown in the table-4.7

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

there is a significant small but definite relationship positive relationship between the two
variables; reward and employee performance [r= 0.295, n = 192, p = 0.001]. a p-value of 0.001
which is less than 0.01 level of significance ,this small but definite value indicates that an
increase in reward will result in a positively change in employee performance, salary and
employee performance [r= 0.387, n = 192, p = 0.001]. a -P-value is less than 0.01 level of
significance ,this small but definite value indicates that an increase in salary will result in a
positively change in employee performance.

Promotion and employee performance [r= 0.253, n = 192, p = 0.001].p-value is less than 0.01
level of significance, there is a significant moderate positive relationship between the two
variables this moderate value indicates that an increase in promotion will result in a positively
change in employee performance, recognition and employee performance [r= 0.488, n = 192,
p = 0.001].p-value is less than 0.01 level of significance, there is a significant moderate positive
relationship between the two variables this moderate value indicates that an increase in
recognition will result in a positively change in employee performance, fringe benefit and
employee performance [r= 0.318, n = 192, p = 0.001].p-value is less than 0.01 level of
significance, there is a significant moderate positive relationship between the two variables this
moderate value indicates that an increase in fringe benefit will result in a positively change in
employee performance.

Working environment and employee performance [r= 0.691, n = 192, p = 0.001]. a p-value is
less than 0.01 level of significance, this small but definite value indicates that an increase in
salary will result in highly a positively change in employee performance

Job security and employee performance [r= 0.691, n = 192, p = 0.001].p-value is less than
0.01 level of significance ,this small but definite value indicates that an increase in job security
will result in highly a positively change in employee performance

Training and employee performance [r= 0.7355, n = 192, p = 0.000].p-value is less than 0.01
level of significance, there is a significant high positive relationship between the two variables
this high value indicates that an increase in training will result in highly a positively change in
employee performance

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

4.5.1. Regression Analysis

Regression analysis is a method of predicting an outcome variable from one (simple
regression) or several (multiple regressions) predictor variables (Andy field, 2009). The
regression model showed how much of the variation in employee performance is explained
by motivation factors.

4.5.2. Regression test

Before executing regression analysis with certainty, a number of assumptions must be met.
The following key assumptions will be checked in this section: independent variables should
not be too strongly associated to one another (Multicollinearity), residual values should be
independent of one another, and residuals should be normally distributed. The following tests
were run to see if the data matched the linear regression assumptions, allowing us to conclude
that the analysis results were valid and reliable.

4.5.3. Multicollinearity
The coefficients table can also be used to test the multicollinearity assumption. Tolerance and
Volatility Inflation Factors (VIF) are the same thing, according to Muijs (2010, p.181).
Tolerance is the amount of variance in an individual variable that is not explained by the other
predictor variables. It ranges from 0 to 1, with a value near to 1 indicating that the other
predictors don't account for the variance in that variable. A value close to 0 indicates that the
other factors account for almost all of the variance in the variable. This allows us to confirm
that our independent variables are not overly connected in a more formal way. We require a
tolerance score of more than 0.2 and a VIF score of less than 10 to meet multiple regression
assumptions.

Table 4.9 Multi collinearity Test Using Variance Inflation Factor (VIF) and Tolerance (ToL)

Independent Variables VIF ToL (1/VIF)

Reward 2.19 0.45
Promotion 4.46 0.46
Recognition 2.03 0.49
Training 33.21 0.03

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Fringe Benefit 1.83 0.54

Job Security 33.81 0.02
Salary 3.50 0.28
Working Environment 6.04 0.16
Mean VIF
Source: (SPSS output of the questionnaire survey, 2022)

As indicated in the above tables 4.9 analysis of collinearity statistics show this assumption has
been met, as VIF scores shown below 10, and tolerance scores above 0.2. Multi-collinearity is
not the problem of this model, so that as a rule of thumb, the result showed that there is no
multi collinearity problem among predictor variables except for training and job security.

4.6. Multiple Regression Analysis

A statistical approach called multiple regression analysis can be used to investigate and measure
a relationship between two or more variables (Saunders et al., 2009, p.461). This technique is
used to investigate the most complex interrelationships between variables, such as determining
which independent variables (reward, recognition, promotion, job stability, training, working
environment, fringe perk, and income) are the best predictors of the dependent variable
(employee performance). and the percentage of variance in employee performance that is
explained by all motivational variables. In general, this strategy allows the researcher to draw
stronger causal inferences from observed interrelationships between variables and to predict
a dependent variable based on the values of several independent variables. The Adjusted R
squared is coefficient of determination which tells us the variation in the dependent variable
due to changes in the independent variable.

The researchers hypothesized that motivation had a favorable and significant impact on
employee performance. Motivational elements have a tiny but clear value, a moderate and high
correlation coefficient with various aspects of employee performance, according to correlation
study (table 4:9). Correlation analysis alone does not provide sufficient information about the
interrelationships between the variables and does not imply a cause-and-effect relationship.
Multiple regression analysis is a bivariate regression extension that allows you to look at the

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

effect of two or more independent variables on a single dependent variable at the same time.
It allowed researcher to examine which independent variables have the most significant
influence on the dependent variable. Thus, to understand the relationship between multiple
independent variables and the single dependent variable the study used the regression model
summary and the researcher examined the regression coefficients for each independent
variable. Therefore, multiple regression analysis was used to investigate the effect of
motivation towards employee performance.

Table 4.10 Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 0.822 0.675 0.665 0.263
Predictors: (Constant), Reward, Promotion, Recognition, Training, Fringe Benefit, Job
Security, Salary, Working Environment
Source: (SPSS output of the questionnaire survey, 2022).

Table 4.11Analysis of Variance (ANOVA) of the Regression Result

Model Sum of Degrees of Mean F(8, 159) P-value

Squares Freedom Square
Regression 26.598 6 4.433 64.071 0.001
Residual 12.800 185 0.069
Total 39.398 191
Dependent Variable: Employees Performance
Predictors: (Constant), Reward, Promotion, Recognition, Training, Fringe Benefit, Job
Security, Salary, Working Environment
Note: * indicates the regression model is significant at 1% level of significance.

Source: (SPSS output of the questionnaire survey, 2022).

R Represent the relationship between dependent and all the independent variables.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

R2 Represent how much of the dependent variable can be explained by the independent
Variable

B Represent co-efficient of the independent variable

Sig. Represent the statistical significant level of the model

The correlation coefficient between the dependent variable and the independent variables is
represented by the R-value. R =0.822 in table-4.10 implies that the dependent variable
(employee performance) and the collection of eight independent variables have a very strong
positive association (motivational factors). The (RSquare) value in the model summary aids in
explaining variance in the dependent variable (employee performance). The (R-Square) value
is 0.794 based on the values in Table-4.10. This suggests that the dependent variable
(employee) is predicted by the independent factors (reward, promotion, recognition, training,
fringe benefit, job security, salary, and working environment). predict the dependent variable
(employee performance) by 67.5%, leaving 32.5% of the factors in this study unexplained.
This implies that there are more independent variables that were not considered in this study
but are important in explaining employee performance variation.

ANOVA (F-test) was used to determine the model's significance. The ANOVA table shows
that the model as a whole is significant (F (8, 159) = 64.071, P=.001), as indicated in the
multiple regression analysis (table 4.14). The F test is a statistical test that determines if the
independent variables have a significant effect on the dependent variable when considered
together. If the F statistic's significance value is minimal, that is, less than the error margin of
0.05, then the independent factors significantly explain the variation in the dependent variable.

It can be observed in table 4.10 above, there is a significant relationship between motivational
factors (Reward, Promotion, Recognition, Training, Fringe Benefit, Job Security, Salary,
Working Environment) and employee performance (P1) which indicates that the proposed
hypothesis which states that there is positive and significant relationship between motivation
and employee performance is accepted.

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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

Table 4.12 Regression Coefficients

Model Unstandardized Tcal P-value Standard

Beta Coef. Beta Coef.
Coef. Std. Err.
Reward 0.127 0.134 2.593 0.261 0.068
Promotion 0.928 0.126 7.357 0.001 0.639
Recognition 0.512 0.131 3.891 0.001 0.204

Training
Fringe Benefit 0.178 0.082 2.167 0.032 0.108
Job Security
Salary 0.349 0.134 2.593 0.010 0.183
Working Environment 0.904 0.664 14.101 0.001 0.997
Constant 2.339 0.264
Note: * indicates the regression coefficient significant at 1% level of significance
Source: (SPSS output of the questionnaire survey, 2022)
The model for the relationship between Reward, Promotion, Recognition, Training, Fringe
Benefit, Job Security, Salary, Working Environment and Employee Performance can be seen
as:
Yi = α +β1x1 + β2X2 + β3x3+ β4X4 β5x5 + β6X6 + β7x7 + β8X2 +εi Y=2.339+ 0.127x1
+ 0.828X2 + 0.512X3 + 0.178X4 + 0.1349X5 +0.904X6
Therefore, Employee Performance (Y) in PS in Berhan would be:
Y=2.344+( 0.127RD)+( 0.928PN)+ (0.512RN) + ( 0.178FB) + (0.349S )+ (0.904WE)
Using the beta value under the unstandardized coefficients in table 4.12, we can simply
compare the relative contributions of each of the distinct variables. The greater the beta value,
the greater the contribution.

The most influential factor that significantly affects employee performance, as shown in table
4.12, is Promotion , with a beta value (beta = 0.928), at a 95% confidence level (p 0.001). The
Beta-value of 0.928 indicates that one unit increase or positive change in "Promotion " would
result in a 0.928 unit increase in employees' job performance. As a result, the fourth hypothesis,

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"Promotion has a favorable and significant effect on employee performance," is accepted and
agrees with Zerihun's earlier research (2013).

The results of regression, as presented in table 4.12 above, shows that fringe benefit has a
positive and significant effect on employee performance with a beta value (beta = 0.178), at
95% confidence level (p < 0.010), The Beta-value of 0.178 indicates that one unit increase or
positive change in" fringe benefit" would lead to a 0.178 unit increase the level of employees’
job performance. As a result the second hypothesis which states “Fringe benefit has a positive
and significant effect on employee performance.” is accepted. And it is similar with previous
study Helen N.Kamau (2011),

The findings of regression, as presented in table 4:12 above, reveals that reward has a positive
and significant effect on employee performance with a beta value (beta = 0.127), at 95%
confidence level (p < 0.01), The Beta-value of 0.127 indicates that one unit increase or positive
change in "reward" would lead to a 0.127 unit increase the level of employees’ job
performance. Therefore, the eighth hypothesis which state “Reward has a positive and
significant effect on employee performance.” it is accepted. It is similar with previous study
(Bowen, Bob Nelson as cited by Giancola (2011) and Mahazril et al. (2012).

The findings of regression, as presented in table 4:12 above, reveals that promotion has a
positive and significant effect on employee performance with a beta value (beta = 0.928), at
95% confidence level (p < 0.001), The Beta-value of 0.928 indicates that one unit increase or
positive change in "promotion" would lead to a 0.928 unit increase the level of employees’ job
performance. Therefore, the fourth hypothesis which state “Promotion has a positive and
significant effect on employee performance.” it is accepted. It is similar with previous study
Owusu T. (2012).

The regression results, as shown in table 4:12, show that salary has a positive and significant
effect on employee performance, with a beta value of 0.349 at the 95 percent confidence level
(p 0.01).) , The Beta-value of 0.010 denotes that a one-unit rise or positive change in "salary"
would result in a 0.349-unit increase in employee job performance. As a result, the six

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hypotheses are accepted, which declare that "Salary has a positive and significant effect on
employee performance." It is comparable to a prior study by Zerihun (2013).

Lastly, table 4:12 reveals that, working environment has a positive and significant effect on
employee performance with a beta value (beta = 0.909), at 95% confidence level (p < 0.01),
The Beta-value of 0.001 indicates that one unit increase or positive change in "working
environment" would lead to a 0.909 unit increase the level of employees’ job performance. As
a result, the fifth hypothesis that is “working environment has a positive and significant effect
on employee performance” is accepted and it is similar with previous study Helen N.Kamau
(2011).

4.7. Hypothesis Testing and Discussion

The Pearson correlation coefficient was used to test the hypotheses. The reason for this is that
the Pearson coefficient was developed to examine the link between variables, as well as to
demonstrate the strength, direction, and significance of the correlation between the variables.
The Pearson correlation coefficient was used to determine the relationship between the
independent variables (reward, recognition, promotion, job security, training, working
environment, fringe benefit, and salary) and the dependent variable (reward, recognition,
promotion, job security, training, working environment, fringe benefit, and salary) (employee
performance).

t-statistics for each coefficient, it is now time to make a decision about whether to accept or
reject the null hypothesis. In order for this decision to be made, one needs to set a significance
level, which is also known as the alpha level. The significance level of 0.05 is usually set for
rejecting the null hypothesis or otherwise. If the value of t-statistics fall in the critical region,
the null hypothesis is rejected. Or, if the p-value comes out to be less than 0.05, the null
hypothesis is rejected.

The decision criteria either to reject or accept the hypothesis is depend up on the value of p,
meaning that if p ≤ 0.05 reject the null hypothesis, but accepting the alternative hypothesis
and if p ≥ 0.05 reject the alternative hypothesis, but accepting the null hypothesis

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Table 4.8 Summary of Hypothesis

Hypotheses Decision
H1: Reward has positive significant influence on employees’ performance Not Rejected

H2: Promotion has positive significant influence on employees’ performance. Not Rejected
H3: Recognition has positive significant influence on employees’ performance. Not Rejected
H4: Training has positive significant influence on employees’ performance. Not Rejected
H5: Fringe benefit has positive significant influence on employees’ performance. Not Rejected
H6: Job security has positive significant influence on employees’ performance Not Rejected
H7: Salary has positive significant influence on employees’ performance. Not Rejected
H8: Working environment has positive significant influence on employees’ Not Rejected
performance.
Source: (SPSS output of the questionnaire survey, 2022)

4.8. Effect of motivation on Employees’ Performance

The subsequent section presents the effect of independent variables (i.e., reward, promotion,
recognition, training, fringe Benefit, job Security, salary, and working Environment) on
dependent variable (i.e., employee performance) in Berhan Bank.

In general, table 4:11 indicates that all independent variables accounted for 82.2% of the
variance in employee performance R =82.2% indicates that there is a very strong positive
correlation between the dependent variable (employee performance) and the set of eight
independent variables (motivational factors).The model summary indicates the (R-Square)
value which helps in explaining variance in the dependent variable (employee performance).
Based on the results in Table-4.12, the (R-Square) value is 0.675.

This means that the independent variables (Reward, Promotion, Recognition, Training, Fringe
Benefit, Job Security, Salary, Working Environment) predict the dependent variable (employee
performance) by 67.5%, thus, leaving out 32.5% unexplained variables in this research. This
means that there are other extra independent variables that were not put into consideration in
this study that is significant in explaining variation in employee performance.

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According to the foregoing explanation, employee motivation has an impact on their

performance in the Berhan Bank Also, according to Maslow (1946), promoting a healthy
workforce, offering financial security, providing opportunity to interact, and acknowledging
employees' accomplishments serve to meet employees' physiological requirements, which in
turn increases their performance. Employees are social beings with needs, and they will always
want to be met, and only motivation will drive them to reach that goal despite challenges.

From the discussion of the quantitative analysis above, it can be concluded that, factors such
as reward, promotion, recognition, training, Fringe Benefit, job security, salary, working
Environment) do influence employees‟ performance. Therefore, there is relationship between
motivation and performance and motivation does have effect on employees‟ performance.

Table 4.13 Employees’ response on effect of motivation on employee performance

Motivation has a strong effect on employee performance.

Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly disagree 4 2.1 2.1 2.1
Disagree 14 7.3 7.3 9.4
Agree 115 59.9 59.9 69.3
Strongly Agree 59 30.7 30.7 100.0
Total 192 100.0 100.0
Source: (SPSS output of the questionnaire survey, 2022)

Berhan bank staff has been sought as to whether motivation has an effect on their level of
performance. Out of the total employees respondents, 115 representing 59.9% agree ,59
representing 30.7% strongly agree that motivation has an effect on their performance while
only 14 (7.3%) responded in the negative.

From the above result only 14 (7.3%) respondents have not agreed that motivation has no
effect on their performance where as 59.9% and 30.7% of employees agree or strongly agree
(the sum of agree and strongly agree (90.6%) indicates that motivation has a valuable effect on

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their performance. From the majority of the respondents we can conclude that, motivation is
directly proportional to performance.

This result implies that the more motivated a workforce is, the higher their level of input into
work and, as a result, the higher their level of performance. Furthermore, the personnel may
perform far better than they do now. The majority of the respondents agreed that being
inspired by the organization leads to greater performance; similarly, (as Appiah Daniel, 2011)
highlighted the work of Karan, 2009, the relationship between motivation and performance
appears to be an evident one. If a person is exceptionally talented, motivated, they will perform
better. In turn, better performance may well lead to a sense of achievement and result in greater
motivation. Most people have an intuitive sense that motivation is linked with performance

Skinner (1953) continues to urge that in order to understand motivation, there lays great need
in understanding human beings. In this regard, human behavior has been strongly correlated
with the level of human motivation; meaning the higher the level of motivation, the better the
behavior. With this in mind, it has been made clear that, proper Employee motivation leads
to good organizational behavior, increased employee efficiency and output. Henceforth,
employee performances have directly impact on organizational productivity and success.
Therefore, it can be said that motivation and employee performance are positively correlated.
And, it has to be noted that both intrinsic and extrinsic motivational factors lead to employee
motivation and thereby improving their performance level.

The relationship between employee motivation and job performance has been studied for a
long period. However, earlier research could not succeed in establishing a direct relationship
between the two Vroom (1964). Yet it seems that the factors do influence each other. Petty et
al. (1984) reviewed the 15 studies Vroom (1964) used in his research and added another 20
more recent studies; they concluded that employee motivation and performance are indeed
related. The results of their research indicate that the relationship between individual, overall
job satisfaction and individual job performance is more consistent than reported in previous
researches (e.g. Vroom, 1964). And Hackman and Oldham (1976) argue that when employee
satisfaction is added, a circular relationship is formed with performance, satisfaction and

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motivation. The term satisfaction is also used by Herzberg (1959); he argues that when intrinsic
factors (motivators) are present at the job, satisfaction is likely to occur as well as an increase
in employee motivation. Amiable (1993) states that work performances are dependent upon
the individual’ s level of motivation; the individual’s level of motivation can be intrinsically
and/or extrinsically based. It is also argued that certain job characteristics arenecessary in
establishing the relationship between employee motivation and performance (e.g. Brass,
1981;Hackman & Oldham, 1976; etc.).

In order to make optimum utilization of human resources the Berhank Bank management
needs to identify the required motivational variables and make improvement in its
motivational system by integrating motivational strategy with human resource strategy so as
to develop unique motivational strategy and integrated with performance appraisal system that
will help to improve employees’ performance as well as achieving organization goals.

It was also found that training was considered as the main motivational factor that influence
employees’ to work hard and better, which imply that low rate of skill gap training reduce
morale for high employees’ performance. Therefore, Berhan bank management should check
its training system to reflect employees’ education level, skill, knowledge, ability and
employees’ responsibility as well as considering work experience so as to encourage better
performance for its employees.

4.9. Chapter Summary,

This chapter covers data presentation and analysis of the study. From the data collected, this
chapter performed the descriptive analysis in order to determine the response rate and data
presentation. From the descriptive analysis in chapter four, it was observed that majority of
the respondents are male and majorly between the age category of 18-30 and 31-40 years.
Furthermore, correlation analysis was employed to identify what the relationship between
independent variables (reward, promotion, recognition, training, Fringe Benefit, job security,
salary, working Environment) and the dependent variable (employee performance). . The
correlation analysis was also adopted to test the hypotheses of the study and regression analysis
for identifying in what extent the independent variables predicts the dependent variable. In

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this case, Statistical Package for Social Science Vesion-28 was employed for the correlation
and regression analysisThe correlation result shows that there was a positive and significant
relationship between motivational factor (reward, promotion, recognition, training, Fringe
Benefit, job security, salary, working Environment) and employee performance. The
regression results shows, among the eight independent variables which variable is more predict
the dependent variable employee performance. Hence, from the results, training, ,was highly
predictive the employee performance followed by fringe benefits recognition, promotion,
working Environment, salary, job security and reward can predict the employee performance.

According to frequency and percentage table 4.13, 59.9 percent and 30.7 percent of employees
agree or strongly agree that motivation has a significant impact on their performance. We may
conclude from the majority of replies that motivation is directly linked to performance. This
result implies that the more motivated a workforce is, the higher their level of input into work
and, as a result, the higher their level of performance. Furthermore, the personnel may perform
far better than they do now. The majority of respondents believed that there is a direct link
between their higher performance and their motivation by the organization.

Table 4.7 shows that employees have a poor degree of job performance since the mean value
is considered low, based on the arithmetic mean values given by descriptive statistics. As a
result, we can conclude that Berhan bank personnel perform poorly because they are
dissatisfied with the sector's eight motivating factors (reward, recognition, promotion, job
security, training, working environment, fringe benefit, and salary).

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CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIO

5.1. Introduction
The goal of this study was to see how the independent variables motivation (reward,
promotion, recognition, training, fringe benefits, job security, salary, and working
environment) interacted with the dependent variable (employee performance) in Berhan bank.
A overall objective, specific objectives, and study questions were developed to attain this goal.
In addition, eight hypotheses with a mix of null and alternative hypotheses were developed in
response to the research objectives.

For data analysis, descriptive statistics and inferential statistics were used. In this section the
main findings of the research is summarized and conclusions on major findings are presented.
Recommendations are given based on the research findings and the limitation of the study is
mentioned. Finally, the study forwarded some suggestions for further investigations.

5.2. Summary of Findings

To test the hypothesis, a multiple regression analysis was conducted on the dependent variable
employee performance. The overall model statistics box revealed a R value of R =0.822,
indicating a good connection between employee performance and the set of eight independent
variables (motivational factors). The R square score of 0.675 indicates that the model's
independent variables explained 67.5% of the variance in the dependent variable (employee
performance). As a result, the total multiple regression statistic for Employee performance
(R2 = 0.675) supports the hypothesis that motivating factors have a favorable impact on
employee performance. This means that the independent variables (reward, promotion,
recognition, training, fringe benefits, job security, salary, and working environment) predict
the dependent variable (employee performance) by 67.5%, leaving 32.5% of the variables
unexplained in this study.

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Positive and significant relationships between eight independent variables were found in the
Pearson correlation coefficient table 4.9 of the dependent variable (employee performance):
Reward ( = 0.127, p=.0.261), Promotion ( =0.928, p=.001), Recognition ( = 0.512, p=.001),
Fringe benefit ( = 0.178, p=.032), , followed by Fringe Benefit, and Recognition, contribute
the most to explaining the dependent variable employee performance among these
independent factors. As a result, a change in the above-mentioned variables will result in a
change in the above-mentioned variables substantial change on the dependent variable
employee performance.

ANOVA (F-test) was used to determine the model's significance. The model as a whole is
significant (F (8, 159) = 64.071, P=.001), as shown above in ANOVA table 4.11. As a result,
the presented hypothesis (P0.01, F>1) stating that there is a positive and substantial
association between motivational factors and employee performance is accepted.

This study used correlation analysis methods to test eight hypotheses and determine the
relationship between variables. So far, the study's findings, as well as the hypothesis decision,
are listed below. Based on the objectives, the study's findings were summarized in this example
as follows:

Objective-1: To examine the effect of reward, and salary on employee performance

The findings on the relationship between reward, salary, and employee performance indicate
the presence of a coefficient greater than 0.2 (r>0.2) as the Rule of thumb for Correlation
Coefficient, Source: Weiliang et al. (2011) at p 0.05 rejecting the null hypothesis (Ho) but
accepting the alternative hypothesis (Ho) (Ha). This demonstrates that compensation, job
security, and salary have a favorable impact on employee performance. This positive link
demonstrates that as reward, and salary all rise, employee performance rises as well.

Objective-2: To identify the influence of recognition on employee performance

The findings on the relationship between recognition and employee performance indicate the
presence of a coefficient greater than 0.2 (r>0.2) as the Rule of thumb for Correlation
Coefficient, Source: Weiliang et al. (2011) at p 0.05 rejecting the null hypothesis (Ho) but

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accepting the alternative hypothesis (Ho) (Ha). This demonstrates that employee performance
is affected by recognition and training, and the two are linked in a favorable way. This positive
link demonstrates that while recognition improve employee performance as well.

Objective-3: To examine the effect of working condition, promotion and fringe benefit
on employee performance

The finding obtained on the relationship between working condition, promotion and fringe
benefit and employees’ performance indicate the presence range of coefficient greater than 0.2
(r>0.2) as the Rule of thumb for Correlation Coefficient, Source: Weiliang et al. (2011) at p <
0.05 rejecting the null hypothesis (Ho), but accepting the alternative hypothesis (Ha). This
show working condition, promotion and fringe benefit has an effect on employee performance
and they are positively linked. This positive relationship show that if working condition,
promotion and fringe benefit separately and respectively increases, employee performance also
increases

Objective-4: To identify the relationship between employee motivation and employee

performance.

In general, table 4:12 indicates that all independent variables accounted for 82.2.% of the
variance in employee performance R =82.2% indicates that there is a very strong positive
correlation between the dependent variable (employee performance) and the set of eight
independent variables (motivational factors) The above explanation indicates motivation have
effects on their employee performance among employees in the Berhan bank. And also well
motivation package have high effects on their performance which also agrees with Maslow
(1946). From the table 4:13 result only 14 (7.3%) respondents have not agreed that motivation
has no effect on their performance where as 59.9% and 30.7% of employees agree or strongly
agree motivation has a valuable effect on their performance. From the majority of the
respondents we can conclude that, motivation is directly proportional to performance.

5.3. Conclusion of the Study

The following conclusions are drawn based on the major findings. Reward, Promotion,
Recognition, Fringe Benefit, Salary, and Working Environment motivational aspects

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implemented in Berhan bank are not satisfied employees of the firm, according to this study.
There's also a difficulty with implementation and design. As a result, employee work
performance is poor, and businesses fail to meet their objectives.

Employees are most motivated by training motivating factors, according to the study's
findings. Employees, on the other hand, are less motivated by elements such as pay, job
security, and remuneration, as well as the working environment. A positive and significant
relationship exists between reward and employee performance, recognition and employee
performance, promotion and employee performance, salary and employee performance, and
working environment and employee performance, according to the correlation results. Also,
employee performance and fringe benefits.

The investigation yielded the following specific empirical findings in relation to the given
research hypotheses. Employee performance is positively influenced by all six motivating
elements, including reward, promotion, recognition, fringe benefits,, compensation, and
working environment.

The findings of this study also demonstrated that promotion is the most essential component
in influencing employee performance in a good and meaningful way.

Because the mean value is considered low, the findings of this study imply that employees do
not have a high level of job performance. As a result, we may conclude that Berhan bank
employees have poor job performance due to their dissatisfaction with the sector's eight
motivating factors (reward, recognition, promotion, working environment, fringe benefit, and
salary).

Motivation is vital to a company because it improves employee performance, reduces

employee turnover and absenteeism, and aids in the acceptance of organizational changes.
Furthermore, the aforementioned motivational elements account for a considerable portion
of the diversity in employee performance.

Employee motivation is directly linked to employee performance, according to the findings of

this study. The result implies that the more motivated a workforce is, the higher their level of

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input into work and, as a result, the higher their level of performance. Furthermore, the
personnel may be performing a lot better than they are. As a result, motivation is a toolkit for
activating and arousing workers' performance in a certain organization, as well as an
organization's overall productivity.

The study's overall goal was to look into the effect of motivation on employee performance.
As a result, according to the study's findings, motivation to improve job performance also
rises. To analyze the employee's motivation for job performance, the study used descriptive
methodologies. Aside from that, the findings of the study show that there is a link between
employee motivation and performance, with higher motivation resulting in higher
performance. The data show that the majority of employees cite a variety of motivators,
including reward, promotion, recognition, fringe benefits, job security, salary, and the working
environment of high-performing employees.

5.4. Recommendation
The study found that the Berhan bank has issues with correctly developing or implementing
the motivational variables studied in this study, which include reward, promotion, recognition,
fringe benefits, salary, and working environment. As a result, public sector leaders and human
resource managers must pay close attention to the design and implementation of those
motivational aspects. Employees were unsatisfied with the public sector's motivational
practices, according to this study, and this resulted in poor employee performance. As
employee performance deteriorates, the public is unable to receive adequate and satisfying
service from the sectors.

Based on the findings and conclusions of the study, the researcher forwards the following
recommendations.

 The next step is to locate a fringe benefit. It is the most important motivating factor in
the public sector that has a beneficial impact on employee performance. As a result, it
is preferable if Berhan bank leaders practice thus, improving fringe benefit, which is an
indirect compensation given to an employee, and focusing on maintaining the quality
of life for employees as well as providing a level of protection and financial security for

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workers and their families. Here are a few examples: Medical insurance, education
reimbursement, and time off are all examples of retirement or pension programs. This
fringe benefit package, like base pay plans, will serve to recruit, retain, and encourage
qualified, competent employees. This mechanism will allow the public sector to
maximize the potential of their human resources and easily meet their goals.
 According to the findings of this study, the working environment motivating factor is
one of the most important elements that influence Berhan bank workers' performance,
yet employees are less motivated by this component. As a result, managers should
create a favorable working environment by providing adequate facilities and equipment
(computers, printers, machines, tables, chairs, and a clean office), avoiding excessive
workload, and encouraging social interaction programs in order to improve employee
relations and achieve the organization's goals.
 According to the findings of this study, motivation is one of the most important aspects
impacting employee performance; therefore, employees are unlikely to be motivated
solely by monetary incentives all of the time. In reality, non-monetary incentives such
as paid vacations, time off from work, and gift vouchers can be very helpful in
motivating employees to use tactics that help them perform better. As a result, the
leader and group leaders should create this type of motivating package in order to bring
job satisfaction to employees and encourage them to perform at their best.
 Promotion is one of the motivating elements influencing employee performance,
according to the findings, an increase in promotion leads to a beneficial change in their
performance. Incentives, rewards, and promotions, for example, are critical for
motivating employees to improve their performance and foster healthy competition
among team members. Therefore organization leader should build appropriate systems
for recognize and granting advancement those who have performed their activities in
a better way in transparent manners.
 One of the motivational variables impacting employee performance comes from
discovering a reward. According to the findings, an increase in compensation will result
in a beneficial change in employee performance. Berhan bank staff, on the other hand,

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were less motivated by this element. When rewards are offered to employees who do
well, they can be an effective tool for encouraging the desired behavior to continue.
External rewards in the workplace include incentives, benefits, and other forms of
compensation. Rewards that are monetary in nature. Managers frequently employ
external prizes as motivators. As a result, the managers of Berhan Bank should devise
a suitable compensation plan and program depending on the success of their staff.
 Salary is one of the motivating variables impacting employee performance, according
to the findings. According to the findings, a rise in income leads to a beneficial impact
in employee performance. Though Berhan bank employees were less motivated by this
element, it was also discovered that income was the most important factor influencing
employees' willingness to work hard and better, implying that low monthly pay reduces
morale for excellent employee performance. As a result, Berhan Bank's human resource
department should reassess its wage system to reflect employees' education, economic
standing, and responsibility, as well as market wages, in order to motivate staff to
perform better.
 Finally, in Berhan Bank, motivation is a vital aspect of managing a team of highly
qualified and motivated people in order to achieve the organization's goals. As a result,
every concerned entity should make sound employee incentive schemes a top priority
in order to achieve optimum efficiency in achieving its objectives. Aside from that, the
researcher would like to recommend that any concerned and interested party perform
study in order to provide any relevant comments to the topic.

5.5. Future research

 The researcher was limited to eight motivational factors which effect motivation
employees ’job performance but the future researchers may focus on different
variables(extrinsic and intrinsic) or combination of those variables included in the
future researches.
 The study was conducted in the bank sectors limiting its scope. The future
researches may examine the determinant factors on employees’ job performance
on other sectors.

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 The current study focused only on the quantitative measure, so future approach
should also include a qualitative inquiry for a better understanding of the issue
under study

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 Greenberg J&Baron A.R (2003) “Behaviors in organizations”, USA, Prentice Hall, Vol.
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 THE EFFECT OF MOTIVATION ON EMPLOYEE PERFORMANCE: IN THE CASE OF BERHAN BANK S.C

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 Mnaku, M. (2011), Tanzania Postal Bank Plans for major re- Organization, Improve
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 Berhan Bank S.C

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7. Appendix

ST. MARY’S UNIVERSITY

SCHOOL OF GRADUATE STUDIES
MBA PROGRAM
Questionnaire

Dear respondent,

I am final year postgraduate student pursuing a master’s in general MBA from St. Mary’s
University. The purpose of this questionnaire is to find out about your perception on the
effect of motivation on employees performance. The information that you offer me with
this questionnaire will be used as a primary data in my case research.
Thank you for your participation.

Instructions:
1) Completion of this questionnaire will take you approximately 5 to 10 minutes.
2) The contents of this questionnaire will be kept confidential.
3) Please simply make tick mark (√) on the appropriate choices
4) No need to wrote your name
Section A
Back Ground Information
1. Gender
Male Female

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2. Age
18 – 30years 31-40 years
41 – 50years 51 – 60 Years

3. Educational Qualification
Certificate Diploma
1st Degree Masters’ Degree

4. Your Current Position

Bank teller Business Banking Officer
Loan Officer Credit officer
Accountant Data Processing Officer
Auditor Any_______________________
5. Since how many years you have been working in this organization?

6 months - 1 Years 2-3 Years

3-5 Years More than 5 Years

SECTION B
Do you think that the under listed factors motivates you to perform better in your job.
Please rate your responses (on a scale of 1 to 5).

NO Effects Strongly Agree Neutra Disagree Strongly

Agree l disagree
Job security

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Q6 I feel safe because of the comfort I am provided

at work
Q7 Because I have job security, I feel proud my work

Q8 I feel safe with the workflow created by my recent

leader
Working Environment
Q9 I am satisfied with the working environment
Q10 Most employees in my organization enjoy their
work
Q11 My office allow me to work freely
Q12 My superior provides an environment in which I
feel safe and secure
Salary
Q13 I am satisfied with my salary
Q14 The salary, I receive is appropriate for the work I
do
Q15 I am happy with the salary increase in my
institution
Q16 My salary is high in comparison to my colleagues
pay for doing a similar job.
Fringe Benefit
Q17 I am satisfied with my total benefits package.
Q18 My fringe benefits are paid timely
Q19 It is only when I achieve my work goal that my
employer offers me benefits.
Training
Q20 It is possible to achieve performance simply
because of training

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Q21 I am satisfied with the training opportunities for

my organization
Q22 My organization give training based employee skill
gab
Recognition

Q23 It is possible to achieve performance simply

because of training
Q24 I am satisfied with the training opportunities for
my organization
Q25 My organization gives training based on employee
skill gap
Promotion

Q26 I am satisfied with the carrier advancement

opportunities in my organization
Q27 Promotions in the organization are based upon
qualification but not performance.
Q28 In my organization it provides fair promotions
opportunities
Q29 My job allows me to learn new skills for career
promotion
Reward

Q30 I am proud to be working at this company

because I have been rewarded for being
achievement.
Q31 I am pleased with the fair award given by my
organization
Q32 In addition to monthly salary I have received
reward during achieving organizational goal
Q33 My department is rewarded with the best
performing staff

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Employment Performance
Q34 My performance is better than that of my
colleagues with similar qualifications.
Q35 I am satisfied with my performance because it’s
mostly good
Q36 My performance is better than that of the officer
with similar qualification in other office.
Q37 Motivation has a strong effect on employee
performance.

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Interview Question’s for Top Management

1. Does Berhane bank have employee motivational programs?
2. What type of motivational systems (financial or non-financial motivational system)
your organizations mostly provide for employees?
3. What is do you think is the role of motivating employees?
4. Does the current motivational system satisfy the employees of the organization? Yes
or No?
5. Which motivational processes of Berhan bank have strong effect on employee
performance?
6. What are the challenges or hindering factors affecting the motivational system in your
organization?
7. What is your opinion on the comparison between -financial motivational factors and
employee performance?
8. What is your opinion on the comparison between non-financial motivational factors
and employee performance?
9. How do you think the current motivational system at Berhan bank can be improved?

Thank you very much!!

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