St.

Mary’s University College

Business Faculty
Department of Management

An Assessment of Employee’s Motivation Practice on

Commercial Bank of Ethiopia

By
Seble Getahun

June 2010
SMUC
Addis Ababa

1
 An Assessment of Employees Motivation
Practice on Commercial Bank of Ethiopia
Particular Reference to Head Office

By
Seble Getahun

A Senior Essay Submitted to the

Department of Management

Business Faculty
St. Mary’s University College

In Partial Fulfillment of the Requirements for the

Degree of Bachelor of Arts in Management

June 2010
SMUC
Addis Ababa

2
 St. Mary’s University College

An Assessment of Employees Motivation on

Commercial Bank of Ethiopia Particular
Reference to Head office

By
Seble Getahun

Faculty of Business
Department of Marketing Management

Approved by the Committee of Examiners

Department head Signature

Advisor Signature

Internal Examiner Signature

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 ACKNOWLEDGEMENT

Thanks God!

I would like to thank my advisor Ato Zellalem Tadesse who has been
advising me in the preparation of my senior essay showed me that to the
deepest knowledge.

I would like to appreciate his patience, willingness, constructive

comments, struggle, suggestions and for sacrificing his precious time.
God blessed his knowledge is my deepest wishes.

In addition, I want to express my deepest appreciation to these for

helping my supervisor Ato Dawit Girma, Martha kebede, Bireket Kiflu for
you limitless support and to those who responded to the questionnaires
& interview at head office Staff scarifying their precious time with love.

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 Table of Contents
Page

Acknowledgement ................................................................ i
Table of Content ................................................................. ii
List of table ..........................................................................
Abbreviation .........................................................................
Chapter One

1. Introduction .............................................................................. 1

1.1. Background of the Study ................................................... 1

1.2. Statement of the Problem ................................................... 3

1.3. Research Questions ........................................................... 4

1.4. Objectives of the Study ...................................................... 4

1.4.1. General Objective ........................................................ 4

1.4.2. Specific Objectives ...................................................... 5

1.5. Significance of the Study .................................................... 5

1.6. Delimitation of the Study ................................................... 5

1.7. Research Design & Methodology ........................................ 6

1.7.1. Research Method ....................................................... 6

1.7.2. Population and Sampling Technique .......................... 6

1.7.3. Type of Data to be Collected ....................................... 6

1.7.4. Methods of Data Collection ......................................... 6

1.7.5. Data Analysis Method ................................................ 7

1.8. Organization of the Study .................................................. 7

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CHAPTER TWO
2. Literature Review
2.1. An Overview of Motivation ......................................... 8

2.2. Historical Concepts of Motivations ............................. 8

2.3. Importance of Motivation .......................................... 8

2.4. Types of Motivation .................................................... 9

2.5. Approaches to Motivation ......................................... 11

2.5.1. The Scientific Management Approach ............. 11

2.5.2. The Maslow Approach .............................. 12

2.6. Motivational Tools .................................................... 13

2.6.1. Ability, Motivation and Employee Work Behavior 13

2.7. Methods of Motivation .............................................. 14

2.8. Theory of Motivation ................................................. 15

2.8.1. Hierarchy of Needs Theory .............................. 15

2.8.2. Herzbergs Two Factors Theory ........................ 17

2.8.3. Equity Theory ................................................ 17

2.8.4. McGregor’s Theory X and Theory Y ................. 17

2.8.5. Hertzberg’s Motivation-Hygiene Theory ........... 18

2.8.6. Vroom’s Valence-Expectancy Theory .............. 19

2.9. ERG Theory ............................................................. 19
2.10. Practical Implications of Content ............................. 20

2.11. The Nature of Motivation ........................................ 21

2.12. Causes of De-motivation ........................................ 21

2.13. The Consequences of De-motivation ....................... 22

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CHAPTER THREE

Presentation, Analysis and interpretation of data ............... 23

3.1 General Characteristics of the respondents .................. 23

3.2 Analysis of the major Findings ..................................... 26

CHAPTER FOUR

Summary, Conclusions and Recommendations .................. 36

4.1 Summary Findings ...................................................... 36

4.2 Conclusions ................................................................ 37
4.3 Recommendations ....................................................... 38
Bibliography ...................................................................... 40
Appendix

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 List of Table

Page
Table 1. Gender, Age and educational background of respondents ……… 24
Table 2. Respondent’s response on Money ……………………………………. 26
Table 3. Respondent’s response on working Environment ………………… 27
Table 4. Respondent’s response on recognition ……………………… ……….28
Table 5. Respondent’s response on Educational development …………… 29
Table 6. Response regarding the organization …………………………………30
Table 7. Satisfaction of Employees by management ………………………… 32

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Abbreviations

CBE: Commercial bank of Ethiopia

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 Chapter One
Introduction

1.1. Background of the Study

Motivation is derived from Latin word Movere which means, “To move”.
Motivation deals with the ways that people behave, managers wants
workers to work efficiently and effectively, but the nature of the work
may be such that workers don’t want to do it at all (Simadies, 1989:15).

Motivation is an important function, which a manager has to perform for

getting things done from employees. As quoted in (Krishna and Aquinas,
2004:261) stated as motivation means a process of stimulating people to
action to accomplish desired goals. Basically, people are motivated by
heir own self-generated factors or what is done for them by others. In the
further case, factors such as responsibility, autonomy and authority
influence people to behave in a particular way or to move in a particular
direction. In the latter one, the execution of rewards and punishments
would motivate or demotivated employees in the organization.

As quoted in Krishana and Aguinas (2004:264) the motivational method

applied by the managers has its own effect on the workers performance.
If a manager wants to get work done by his employees, he may either
hold out a promise of a reward (positive motivation) or he may either
install fear (negative motivation). The choosing between the two methods
also brings different motivational outcomes on the employees.

The State Bank of Ethiopia was founded in 1942 G.C with twin
objectives: performing the duties of both commercial and central
banking. In 1963, the Commercial Bank of Ethiopia (CBE) was legally
established as Share Company to take over the commercial banking
activities of the State Bank of Ethiopia. In the 1974 G.C revolution, CBE
got its strength by merging with the privately owned Addis Ababa Bank.

10
Since then, it has been playing a significant role in the development
endeavor of the country.

The CBE, which is striving to embark into a world-class commercial

bank, is rendering state-of-the-art and reliable services to its millions of
customers both locally and abroad. The business strategies of the Bank
focus on the stakeholders it serves.

As at the end of fiscal year 2007/08, the number of branches reached

205 and stretched across the length and breadth of the country with
8,033 employees in 2007/08, which it regards as its key assets for
banking development.

The state owned CBE still dominates the market in terms of assets,
deposit, capital, and customer base and branch network despite the
growing competition from private banks over the last 15 years. This
makes it one of the most reliable and strong commercial bank, both in
the country and the region.

Its strong capital base, above 67 years of rich experience in the market
and large branch network throughout the country enabled the Bank to
accommodate large demands for banking services, both from private and
public companies and to increase its overall revenue on a sustainable
basis (Annual report 2007/08).

The gap between the willingness of the managers and what employees
dream lack coordination in the interdepartmental relationship and lack
of motivation. The existing employee motivational system is presumed to
be not effective.

To this end, the student researcher inspired to be motivated to assess

employee’s motivation on Commercial Bank of Ethiopia.

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1.2. Statement of the Problem

Motivation is a “driving force through which people strike to achieve their

goals and fulfill a need or uphold a value (Mullins, 2002:64).

Motivation is the reason for behavior. A motive is a construct

representing an unobservable inner force that stimulates and compels a
behavioral response and provides specific direction to that response. A
motive is why an individual does something (Hawkins, 2004:355).

It is obvious that human resource management play a significant role in

the organization. Human resource management is a strategic and
coherent approach to the management of an organization’s most valued
asset the people working there whom individually and collectively
contributes to the achievement of its objectives (Armstrong, 2003:3).

People who are unhappy or dissatisfied at work tend to miss work or

come late more frequently than those who are satisfied (Ahuja, 1988:90).

The preliminary observation that is conducted by the student researcher

revealed the following points:

- Too much complain on the inadequacy of motivational scheme

- Large majority of the employees are not willing to exert their

energies to the attainment of organizational goal.

- Payments are crucial issue however it is not as attractive as

compared with other private banks.

Having the issues identified above the student researcher guessed that
these various factors would have an adverse effect on the entire picture
of the organization.

To this end, having the above issues as a general theme, the student
research specifically focuses on and attempts to answer the following
research questions.

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1.3. Research Questions

- To what extent employee of CBE satisfied with the motivational

scheme of the organization?

- What are the major factors that make employee to be disappointed

with motivational practices of the organization?
- What are the main types of motivation that are used by the
organization?

1.4. Objectives of the Study

This part of the paper is devoted to general and specific objectives.

1.4.1. General Objectives

The general objective of this study is to assess employees’ motivational

practices of Commercial Bank of Ethiopia with particular reference to
Head Office.

1.4.2. Specific Objectives

In line with above mentioned general objective, the study has the
following specific objectives listed below:

- To describe to what extent the employees are satisfied with the

current motivational schemes of the organization.

- To describe factors that affects the motivational scheme of the

organization.
- To identify whether the firm has a well taught motivational scheme
or not.

1.5. Significance of the Study

The major importance of this research study is to show employees

motivational practices of CBE. The output of this study will be used to
improve the performance of the company. Furthermore, it used as a

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stepping-stone for a prospective reader who wants to conduct an in-
depth research in similar area to the title under consideration.

1.6. Delimitation of the Study

The scope of the study is limited to the head office of the commercial
bank of Ethiopia, which is located in Addis Ababa. Furthermore, the
study covers only the motivational level of professional employees
because the turnover rate of these employees is greater than that of the
non-professional employees.

The data collection is delimited to three years i.e. 1999-2001 E.C. since
the organization has been made an adjustment since 1999.

1.7. Research Design & Methodology

1.7.1. Research Method

To address the objectives and research questions descriptive research

method was used. This method enables the student researcher to
describe the problem associated with employee motivation practices of
CBE.

1.7.2. Population and Sampling Technique

In this study employees and human resource manager were considered

as the informant of the study. As the data obtained from the bank shows
that there are 400 clerical employees in the head office. To make
representative interpretation 30% of the total population was contacted.
Furthermore, to approach the informant’s of the study simple random
sampling technique was used. By assuming that this sampling technique
gives equal chance to all professional employees.

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1.7.3. Type of Data Collected

The study consumed both primary and secondary sources of data.

1.7.4. Methods of Data Collection

The data collection method includes questionnaires and interview. An In-

depth interview was conducted with human resource manager of the
organization. Questionnaire that covers open-ended and close-ended was
prepared to illicit data from workers of the company.

1.7.5. Data Analysis Method

To complete the research successfully the collected data were analyzed

by using both quantitative and qualitative data analysis technique.
Among quantitative data percentage was used.

1.8. Limitation of the Study

During conducting the research the student researcher faced shortage of
relevant materials in the area under investigation. Furthermore, some
respondents were not positive to fill and to return the questionnaire on
time.

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1.9. Organization of the Study

This research paper contains four chapters. The first chapter tries to
cover the introductory parts, statement of the problem, objectives of the
study, significance of the study, delimitation of the study, research
design and methodology, limitation of the study and organization of the
study. The second chapter deals with the review of related literature.
Moreover, the third chapter deals with the presentation, analysis and
interpretation of data. The last chapter includes summary, conclusions
and recommendations. And finally list of bibliography and appendices
were annexed.

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 Chapter Two

Literature Review

2.1. An Overview of Motivation

Motivation may be defined as those forces that cause individuals to

behave in particular way. It defines as “a process that starts with
physiological deficiency or need that activates a behavior or a drive that
is aimed at a goal or incentive. Motivation encompasses all those
pressures and influences that trigger channel, and sustain human
behaviors. Most successful managers have learnt to better understand
the concept of human motivation and are able to use that understanding
to achieve high standards of subordinate work performance (Hunt,
1992:13).

2.2. Historical Concepts of Motivation

As Pinder (1994:173) stated that, development of modern motivational

concepts has evolved from a series of interesting and helpful historical
perspectives. The early approaches to motivation were based on the idea
of hedonism – the concept that people seek comfort and pleasure and
avoid discomfort and pain. Although this philosophy explains some
human behavior, it doesn’t explain a lot of worker behavior for instance;
hedonism doesn’t explain why people work long hours to help others.

2.3. Importance of Motivation

According to Aswathapa (2002:314) cited that probably no concept of

HRM receives as much attention of academicians, researchers, and
practicing managers as motivation. The increased attention toward
motivation is justified by several reasons.

Motivated employees are always looking for better ways to do a job. This
statement can apply to corporate strategists, and to production workers,

17
when people actively seek new ways of doing things, they usually find
them. It is the responsibility of managers to more employees look for
better ways of doing their jobs.

A motivated employee, generally, is more quality oriented. This is true

whether we are talking about a top manger spending extra time on data
gathering and analysis for report, or a clerk taking extra care when filing
important documents. A clear understanding of the way motivation
works helps a manager make his employees quality oriented.

Highly motivated workers are more productive than apathetic workers.

Productively of workers becomes a question of the management’s ability
to motivate its employees.

In other words, for an organization to be effective, it must come to grips

with the motivational problems of stimulating both the decision to
participate and the decision to produce at work.

2.4. Types of Motivation

There are different types of motivation stated by different authors. The

following are some of the type of motivation stated by (Ramasamy,
1998:287)

1. Negative Motivation
Negative motivation is based on force of fear. If the worker fails to
complete the work, they may be threatened with demotion, dismissed,
lay-off and pay-cut etc. The negative motivation gives maximum benefits
available to the organization. Negative motivation results in disloyalty to
the group as well as to organization (Ramasamy; 1998:286).

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2. Positive Motivation
Positive motivation is based on rewards. According to flips “Positive
motivation is a process of attempting to influenced others to do four will
through the possibility of gain or reward “participation in decision
making process, pride and delegation of authority and responsibility and
some of the methods of positive motivation (Ramasamy; 1998:287).

3. Extrinsic Motivation
Motivation is available only after the completion of a job. Increases in
wages, retirement benefits rest period’s holidays, health wages, health
insurance and the like are example of extrinsic motivation
(Ramasamy, 1998:287).

4. Intrinsic Motivation
Intrinsic motivation is available at the time of performance of work.
These motivations provide a satisfaction during the performance of the
work it self. Recognition, power, delegation of authority and
responsibility, competition and participation in the decision making
process are some of the example of intrinsic motivation (Ramasamy,
1998:287).

5. Financial Motivation
Financial motivation is directly or indirectly associated with many
rewards. The most important financial motivations are wages and
salaries, bonus, profit-charity, vacation pays, fee-medical services,
retirement benefits are some of the other financial motivation
(Ramasamy, 1998:287).
6. Non-Financial Motivation

Non-financial motivation is that motivation which is not associated with

monetary rewards, praise, job rotation, delegation of authority and
responsibility, participation, recognition and power are some of the

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examples of non-financial motivation. According to Robert Dulin “non-
financial incentives are the psychic rewards or the rewards of enhanced
position that can be secured in the work organization. (Ramasamy,
1998:287)

2.5. Approaches to Motivation

Managerial attentions to the role of motivation are the most recent

phenomenon despite large scale and complex organizations has existed
for several hundred years. There are three types of managerial
approaches to motivation (Malitlan, 1995:110).

There are:

The scientific management approach.

Maslow approach.

2.5.1. The Scientific Management Approach

The scientific management approach, authored by Taylor and Kaniger,

(1997:173) the father of scientific management, holds that workers are
economically motivated to earn as much money as possible. His
approach to management included the use of incentive pay or piece rate,
so that workers could satisfy their economic need by producing more and
more products. Sometimes called the traditional approach to motivation,
scientific management calls for the manager to determine the most
effective way to perform a repetitive task, assign workers whose skills
and attributes are most applicable to the give task, and motivate
performance through a system of wage incentives.

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2.5.2. The Maslow Approach

As Ivancevich, (1993:125) stated that the Maslow theory is that peoples

are motivated by multiple needs that are arranged in hierarchy.” The
lowest level needs are the physiological needs and the highest level needs
are self actualization needs. These are discussed below:

According to Maslow, there are five general categories of needs in order of

ascendance:

1. Physiological needs are: this most basic level of Maslow’s hierarchy

includes the needs for food, water, sleep, oxygen, warmth, and
freedom from pain. If these needs are sufficiently met, a second set of
needs will emerge.

2. Safety needs are: the needs for a safe and secure environment. In the
workplace, these are the needs for job safety, job security, and fringe
benefits.

3. Social needs are: the needs represent the needs to have satisfactory
social relationships, to be accepted by one’s peers, to be part of a
group. In the organization, these needs are reflected by the need to
participate in a work group and to have positive relationships with
both coworkers and supervisors.

4. Esteem needs: deal with the desire to receive attention and

appreciation from others. In a work environment, this is the need for
status and recognition for one’s contributions to the work group and
the organization.

5. Self-actualization needs: include the needs for self-fulfillment and

competency self-respect.

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 Self
Actualization
Esteem needs
Social
Safety
Physiological

Maslow’s Hierarchy of Needs

2.6. Motivational Tools

According to Michael (1995:367) cited various tools of motivation are

generally used in the business environment. There are monetary and non
monetary motivational tools. Wages and salaries, allowance, and bonus
schemes have been used as an effective motivational tool from the time
immemorial. Various incentive schemes are also introduced for
motivating the workers. But any motivation tool may have limited effect.
Though it makes an impact in the mind, after sometimes its effect can
decline. Hence, the motivator must realize that a motivational tool is not
a once for all affairs. A proper plan for a constant motivational
programmed must, therefore in accordance with the situation from time
to time.

2.6.1. Ability, Motivation and Employee Work Behavior

According to Milkovich (2006:165) what leads one employee to perform a

job better than another? What causes some employees to come to work
reliably and regularly, while others are frequently absent? What causes
some employees to work for decades for an employer, while others leave
after a short time? Three general factors affect employee’s work
behaviors.

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First is individual ability. Everyone has heard stories of the super sales
person or super engineer who when promoted to management, turned
out to be mediocre or worse. Skills aptitudes and knowledge that are well
suited to one job may be useless in another. Second is the complex
dimension of motivation, resulting from the match between the
individual is needs/value and job outcomes as well as the perceived link
between engaging in work behaviors and obtaining the desired,
outcomes. By sales commissions, while others fails to work hand for
such rewards? Unlike ability, motivation can not be measured, only
inferred by observing behavior: it can fluctuate among individuals and
overtime in the same individual. The third factor effecting employee work
behaviors is conditions beyond the individual’s control.

2.7. Methods of Motivation

There are two methods of motivation

i. Financial motivators (incentives)

ii. Non-financial incentives

i. Financial Motivators

Money is basic motivator for all employees as the primary needs are to be
meeting only with money. However, money is not an end; it only serves
as a means for achieving the minimum of living. Financial incentives are
of two types:

A. Individual financial incentives.

B. Collective financial incentives.

All financial incentives which induce on individual to produce more

individual financial incentives where as collective incentives are given to
a group e.g. bonus, profit sharing etc.

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ii. Non – Financial Incentives

These method of motivation include the following participation –

subordinate staff should be associated with the decision making process.
Employees should be encouraged to participate in the decision making
process.
• Job enrichment – workers should have a hand in setting their
goals so that they have a feeling of personal responsibility for their
task.

Their goals so that they have a feeling of personal responsibility for their
task. They should be given more latitude in deciding about certain
routine things. An effort should be to create price in the job among staff
members. All this results in job enrichment.

- Integrating the communication flow – if there is approver

communication among the employees of between the management
and employees, it acts as a motivator. Let all employees be given
adequate information to solve their problems. It is very essential
that employees should know as to what is going on in the
enterprise. Upward communication is very essential as it reflects
response to various policies and program.

- Positive reinforcement – the performance of workers increases

manifold when there is a positive reinforcement among the workers
by the management. Such guidance from time to time enhances
vitality and efficiency of workers, sometimes, praise of work is a
great motivator for an employee.

2.8. Theory of Motivation

2.8.1. Hierarchy of Needs Theory

Abraham Maslow a psychologist has developed a widely accepted model

of motivation in which he claims that human needs may be put into five

24
categories ranked according to priority that is certain higher needs are
activated as lower needs are satisfied or mostly satisfied.

The two central ideas of Maslow’s hierarchy of needs theory are hierarchy
needs exists, and that lower level needs, such as physiological needs,
must be satisfied before higher level needs. Such as physiological needs
must be satisfied before higher level needs, such as self-esteem or self
actualization, will assume importance for an individual and once a need
is satisfied it becomes less important as a motivator.

As the needs for safety and security are met, and physiological needs
remain satisfied may need for belonging acceptance and association
become the primary sources of motivation. Then, the third order of
Maslow’s hierarchy of needs is human being’s social needs. Man is
gregarious animal and needs social outlets. Neglecting these needs will
probably result in employee’s unrest and decreased morale.

The next level of need theory according to Maslow is ego or esteem need,
which is classified into two groups: those related to self esteem and those
related to reputation. The self-esteem group of ego needs include, among
other, the need for self-confidence, independence and job knowledge.
Desire for status, recognition and respect fall in the category of ego
needs.

For an employee in the lower level of an organization, who may be

involved with the routine work of mass production, opportunities for
satisfaction of the ego or esteem needs on the job are limited. Thus, the
ego need for most employees in a typical organization is rarely satisfied.
The first three needs, the physiological, safety and social needs are the
predominant motivating forces. The fourth and fifth needs the ego and
self actualization of fulfillment needs become very strong motivators.

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2.8.2. Herzbergs Two Factors Theory

A departure from the idea of hierarchically ordered needs is given in the

theory of Frederick Herztberg and his co-workers. Herzberg avoids using
the work “need” and instead, divides the word environment in to two
major groups: hygiene factors and motivators. His theory hinges on the
idea that people are motivated by things that make them feel good about
work, but have a version to things that makes them feel bad. In this
theory, motivators are factors that produce good feeling about work,
while hygiene factors if not present, can result in feeling that the work
situation is unsatisfactory. However, it is important to note that the two
sets of factors are not opposites. They have different rules and in
Herzberg’s views and they are equally important.

2.8.3. Equity Theory

As Mcshane observed that equity theory is a process motivation theory

that explains how people develop perceptions of fairness in the
distribution and exchange of resources. As a process theory of motivation
it explains what employees one motivated to do when they feel
inequitably treated. In this incident, perceived inequalities motivated
several employees to complain to the telecommunications manager and
try to change the source of perceived in equity. Though the basis of their
equity comparison is one’s perception, the fact remains that
organizations must attempt to bring about equity to avoid the feeling of
dissatisfaction (Mcshane, 1998:79).

2.8.4. McGregor’s Theory X and Theory Y

Douglas McGregor is proposing that two sets of assumptions about

human nature: Theory X and Theory Y. Very simply, Theory X presents
an essentially negative view of people. It assumes that workers have little
ambition, dislike work, want to avoid responsibility, and need to be

26
closely controlled to work effectively. Theory Y offers a positive view. It
assumes that workers can exercise self-direction, accept and actually
seek out responsibility, and consider work to be natural activity.
McGregor believed that Theory Y assumptions best captured the true
nature of workers and should guide management practice.

Theory X assumed that lower-order needs dominated individuals, and

theory Y assumed that higher-order needs dominated. McGregor himself
held to the belief that the assumptions of Theory Y were more valid than
those of Theory X. Therefore, he proposed that participation in decision
making, responsible and challenging jobs, and good group relations
would maximize employee motivation.

2.8.5. Hertzberg’s Motivation-Hygiene Theory

According to Frederick Herzberg’s theory say that motivation-hygiene

theory proposes that intrinsic factors are related to job satisfaction and
motivation, whereas extrinsic factors are associated with job
dissatisfaction. Believing that individuals’ attitudes toward work
determined success or failure, Herzberg investigated the question, “what
do people want from their jobs?” He asked people for detailed
descriptions of situations in which they felt exceptionally good or bad
about their jobs.

Herzberg concluded from his analysis that the replies people gave when
they felt good about their jobs were significantly different from the replies
they gave when they felt bad. Certain characteristics were consistently
related to job satisfaction and others to job dissatisfaction. Those factors
associated with job satisfaction were intrinsic and included things such
as achievement, recognition, and responsibility. When people felt good
about their work, they tended to attribute these characteristics to
themselves. On the other hand, when they were dissatisfied, they tended
to cite extrinsic factors such as company policy and administration,

27
supervision, interpersonal relationships, and working conditions (Jane
Weightman, 1999:395).

2.8.6. Vroom’s Valence-Expectancy Theory

Vroom’s theory in certain essential aspects is more complicated than

Maslow’s Hierarchy of need theory or Herzberg’s motivation Hygiene
theory. Valence is strength of an individual’s preference for a particular
outcome. Outcomes are the things that result from behavior and can be
expressed at two levels. These are first level outcome and second level
outcome. First level outcomes are the immediate results of behavior.
Second, level outcomes are those that flow in the longer term form first-
level outcomes. Expectancy is the person’s perception that his or her
behavior will result in the first-level outcome in this instance, whether he
or she will be able to perform the new task successfully.

Instrumentally consists of the perceived strength of the connection

between first level and second level outcomes. So expectancy is the
degree of confidence a person has in his or her ability to perform a task
successfully (Singh, 2003:108).

2.9. ERG Theory

According to Saiyadain argues that there are basically three groups of

needs, generally arranged in a hierarchy. These are:

1. Existence: Concerned with providing material necessary for

survival.

2. Relatedness: The desire to establish and maintain social

relation.

3. Growth: An intrinsic desire for personal growth and

development. (Saiyandain, 2003:49).

28
The theory propounds that:

(a) By and large, lower-order needs must be satisfied to move on to

higher-order needs (what is called satisfaction-progression in
process).

(b) In case of the frustration of higher-order needs the person can go

back to lower-order needs (what has been called frustration-
regression process).

(c) The greater the satisfaction of higher-order needs the more

satisfying they become.

(d) All three needs can operate simultaneously.

(e) All these needs can be influenced by educational, social, and

cultural determinants.

2.10. Practical Implications of Content

Content theories of motivation suggest that different people have

different needs at different times. Some employees are ready to fulfill
growth needs, whereas others are still struggling to satisfy their
minimum existence needs. Needs change as people enter new stage of
their life.

Most organizations distribute the same reward, such as a salary increase

or paid time off, to all employees with good performance. But rewards
that motivate some people have less effect on those with different needs.
Thus, content motivation theories advise organizations to offer employees
their choice of rewards. Those who perform well might trade part of the
bonus for extra time off. The result of a flexible reward system is that
employees can create a reward package with the greatest value to them.
This principle is also found in flexible benefits systems, in which
employees alter their pensions, vacation time, and other benefits to
match their particular needs.

29
2.11. The Nature of Motivation

1. Motivation is an internal feeling motivation points to energetic

forces with in individuals that drive them to behave in certain
ways and to environmental forces that trigger these drives. (A.
Sudan Naveen Kumar, 2004: 284-285)

2. Motivation produces goal – directed behavior- motivation has got a

profound influence on human behavior, in harnesses human
energy to organizational requirements. There is the motion of goal
orientation on the part of individuals; their behavior is directed
towards something. (A. Sudan Naveen Kumar, 2004: 285)

3. Motivation is psychological concept motivation deals with the

psychology of workers. An efficient worker will not perform the
work desirable well unless he is properly motivated. So, effective
performance requires proper motivation. Proper motivation is
possibly only the through proper analysis of the psychology of
workers. (T. Rasamy, 998:283)

2.12. Causes of De-motivation

According to Herzberg’s two factors theory (1959:134), distinguished

between two broad categories of factors that affect people working on
their job. The first category: hygiene is characteristics of the work place
company policies, working conditions, pay, workers relations and so
forth. These factors can make people unhappy if they are poorly
managed. If they are well managed and viewed as positive by employees,
the employees, the employees will no longer be dissatisfied. However, no
matter how good these factors are, they will not make people truly
satisfied or motivated to do a good job.

According to Hertzberg, the key to true job satisfaction and motivation to

perform lies in the second category: the motivator. The motivators design

30
the job itself, that is, what people do at work. Motivators are the nature
the work it self, the actual job responsibilities, opportunity for personal
growth and recognition and feelings of achievement, the job provides.
When these factors are present, jobs are presumed to be both satisfying
and motivating for most people.

2.13. The Consequences of De-motivation

Absenteeism – people who are unhappy or dissatisfied at work tend to

mis-work or come late more frequently than those who are satisfied
absenteeism are times considers withdrawal or avoidance behaviors and
they are consistently through only moderately, related to job satisfaction.
Ahuja (1988:90) said that absenteeism refers to worker absent from his
regular task no matter what the cause. The reasons for absenteeism are
many and individual workers may absent themselves for different
reasons. The various causes of absenteeism the reasons are accountable
for absenteeism of work. Sickness, industrial accidents and occupational
disease, poor production and material control lack of interest or a feeling
of responsibility working condition, etc.

Labor Turnover - is an important factor of certain undesirable condition

and attitudes on the part of the participants in industry. Employees
turnover is a symptom of inefficient hiring methods service and
disagreeable work, bad working condition, in adequate methods and
systems, poor planning, poor coordinating and co-operation between
different functions and units of the company (Ahuja 1988:96).

31
 Chapter Three

Data Presentation, Analysis and Interpretation

This chapter presents analysis and interpretation of the data collected

through questionnaire and interview. The information obtained from the
sample respondents was considered as a basis for the analysis of an
assessment of employee’s motivation practices. The following
presentation and analysis is based on responses obtained through
questionnaires filled by the employees and interview conducted with
corporate HR manager.

From the 120 questionnaires distributed 110(92%) were filled and

returned satisfactorily, 10(8%) were not filled properly. As a result, this
presentation and analysis is carried out by taking in to account the 110
respondents.

3.1 General Characteristics of the Respondents

The table below shows the general characteristics of the sample

respondents that include gender, age, educational qualification, and
experience in the organization.

32
Table 1 General Characteristics of the Respondents
Respondents
Items
No Number Percentage
Gender
1 A. Male 68 61.82
B. Female 42 38.18
Total 110 100
Age
18-27 years 15 13.63
2 28-37 years 55 50
38-47 years 30 27.27
48-57 years 10 9.10
58 years and above - -
Total 110 100
Educational Background
Certificate - -
3 Diploma 50 45.45
First Degree 40 36.36
2nd degree and above 20 18.18
Total 110 100
Experience with CBE?
Below 5 years 5 4.55
33 30
6-10 Years
45 40.91
11-15 Years 18 16.36
4 9 8.18
16-20 Years
- -
Above 20 years
Total 110 100

33
With regards to gender distribution 68 (61.81%) of the respondents were
male, while the remaining 42 (38.18%) of the respondents were female.
These percentages indicate dominance of male.

Concerning the distribution of the responds 100 (90.91%) of the

respondents were less than 47 years old. This age group can be
considered the most productive, energetic and highly ready for change. If
they are being treated highly, they may increase organizational
performance.

Concerning with educational background of the respondents, 50

(45.45%) were diploma holders where as the rest 40 (36.36%) and 20
(18.18%) were second degree and above respectively. This implies that in
the organization majority of the employees were well educated and
qualified.

As shown in item 4 of table 1, from the total of respondents 5(4.55%) had

below five years experience, 33(30%) of the respondents had 6-10 years
of experience in the organization 45(40.91%), 18(16.36%) and 9(8.18%)
of them had experience of 11-15 years, 16-20 years and above 20 years
respectively. This implies that their knowledge about CBE would greatly
depend on experience and stay long in the organization and the
respondents were capable enough to give information.

34
3.2. Analysis of the Findings of the Study

Table 2. Responses Regarding Money

No Items Number Percentage

1 Money is the means or factors to
initiate employees to fulfill the
organizational goal?
Strongly agree 100 90.91
Agree - -
Neutral - -
Disagree 10 9.09
Strongly disagree - -
Total 110 100

From the total 110(100%) respondents 100(90.91%) strongly agreed as

payment is the main motivational tool for employees, where as 10(9.09%)
of the respondents rated as money is not a decisive tool to assure
organizational goals. The result obtained favors the viewer of different
writers they had on money, hence, payment (money) contribute
significantly to job satisfaction to fulfill organizational goal. Therefore,
employees can highly motivate when the return is comparable with other
organization.

35
Table 3. Respondent’s response on working environment

No Items Number Percentage

The working environments of an
organization encourage you for higher
performance?

Strongly agree - -
1 Agree 32 29.10

Neutral 8 7.27

Disagree 50 45.45

Strongly disagree 20 18.18

Total 110 100

Lack of good working environment
contributed being absent from work?
Strongly agree 25 22.72
2 Agree 50 45.45
Neutral 10 9.10
Disagree 25 22.73
Strongly disagree - -
Total 110 100

As it is attested in item 1 of table 32 (29.10%) of the respondents agreed

that the work environment is encouraging for higher performance,
78(63.63%) of the respondents rated that the working environment used
to measure their performance do not encourage on the most important
aspect of their job. This information tells that most professional
employees agreed that the work environment do not encourage for higher
performance, i.e. company policy and administration, status,
interpersonal relation with supervisors.

36
Concerning Item II of table 3, 75(68.17%) of the respondents agreed that
lack of good working environment is one of the major variable for
absenteeism. Hence, majority of the respondents agreed that good
working conditions lead to employees satisfied with work and decreases
absenteeism. In favor of this Jane Wightman (1999:170) understands
that motivation of people at work means admitting that different things
will have different values to different people. We will different in our
interests, attitudes and needs and that will affect how we react to
different aspects of the job. We react differently to the work environment
of peers and supervision and the organization climate. Motivation at
work remains an important part of analyzing the behavior of people at
work. So, the finding obtained is far from the theoretical perspective.

Table 4. Respondents Response on Recognition

Item Number Percentage

Recognition is one of the
psychological satisfactions for
employees?
Strongly agree 90 81.82
Agree 20 18.18
Neutral - -
Disagree - -
Strongly disagree - -
Total 110 100

The findings shows that 90(81.82%) of the respondents rated strongly

agreed, where as the remaining 20(18.18%) rated agree. This indicates
that most of the employees recognized by work leaders to put their best
effort to their organization.

37
Table 5. Respondents Response on Educational Development

Item Number Percentage

Your organization encourage employee to
learning and hence you to upgrade you in
education? - -
Strongly agree 10 9.09
Agree - -
Neutral 80 72.73
Disagree 20 18.18
Strongly disagree
Total 110 100

From the above table 10 (9.09%) of the respondents rated agree and
10(18.18%) of them rated strongly disagree, and the rest 80 (72.73%)
rated neutral the effort of the organization towards motivating employees’
in education. From the finding it is possible to conclude that the
organization does not give great attention to improve the educational
level of the employees and this may lead to dissatisfaction of employees.

38
Table 6. Response regarding the organization to accept complain,
suggestion and others issue

No Items Number Percentage

How do you rate the organization in
providing any methods or tools
available to accept complain, suggestion
and opinions of its employees?

Very high -
1 -
High 18.18
20
Medium -
-
Low 72.72
80
Very low 9.10
10
Total 110 100
What is the extent of the organization
in answering questions raised by its
employees?
Very high - -
2 High 30 27.27
Medium - -
Low 75 68.18
Very low 5 4.55
Total 110 100
What is the extent of the organization in
taking information from employees on
input to make corrective action?
Very high - -
High 25 22.73
3 Medium - -
Low 55 50
Very low 30 27.27
Total 110 100

39
As it is indicated in item 1 of table 6, 90(81.82%) rated low and very low
where as, 20(18.18%) of the employees’ have accepted any complain
suggestion and opinion of its employees.

In Item 2, 80(72.73%) of the respondents rated low and very low where as
30 (27.27%) of the respondent have accepted answers among the
questions raised by employee. So, majority of the employees are not get
proper answer that is raised by them. This shows that they are
dissatisfied with the answering the question and may not provide what
they are expected from them.

Item 3, 85(77.27%) of the respondents rated low and very low to accept
taking information as input to make corrective action where as
25(22.73%) of the respondents indicated medium to accept taking
information as input to make corrective action.

Based on the above table suggest that employees do not have close
relation with management, this show that the professional employee
decreasing in making to give innovative ideas or input to organizational
effectiveness.

40
Table 7. Satisfaction of Employees by Management

Item Number Percentage

Are you satisfied and motivated by
management of the organization?
Yes 35 31.82
No 70 63.64
Neutral 5 4.54
Total 110 100

From the above table 35(31.82%) of the respondents are satisfied by

management of the organization, 70(63.64%) of the respondents are not
satisfied by management of the organization where as 5% of the
respondent responded neutral. This implies that majority of the
respondents have not satisfied by management of the organization.

Generally, the data obtained reveled that the majority of the employees
are not motivated and satisfied with the management of the organization.
This is mainly because demotivated workers are less initiative to work
than motivated workers.

Summary on responses obtained through open-ended

questions:

1. How do you compare your salary with employees of other

organization with similar educational qualification?

Majority of the employees agreed that the salary which they are paid is
not balanced it is low with what they are giving in other similar
organization.

41
2. Do you think the management treats the employees equally and
fairly?
Most employees reply that the management has not happy to treat
equally all employees as viewed as positively and fairly. However, no
matter how good these factors are, they will not make people truly
satisfied or motivated to do a good job.

3. What motivation tools does the organization use?

Majority of the employees replied that bonus, promotion, training,
emergency staff loan, insurance, medial coverage is a good. Majority
respondents indicated that the bonus is not sufficient to that of the
organization always achieve profit.
4. What is your satisfaction level on the bonus that the organization
provides?
Majority of the respondents replied that we have taken some parts of the
organization success in relation to the profitability of the organization. If
the employee exceeds the standards of the organization, the respondents
said that the provision of bonus to professional employees is low.
The student researcher revealed that would bonuses can also paid as a
group of individual. This might be done when it is difficult to measure
individual output/result according to their performance.

5. In your opinion what motivational tools does the organization

use?
Majority of the respondents’ bonus, salary increment, medical coverage,
insurance, emergency staff loan, mortgage loan to purchase vehicles and
build house etc. Majority of the respondent highlighted that medical
coverage and insurance coverage with reasonable repayment approach is
good. Regarding training and development that the organization provides
different kinds of training as the condition they applied.

42
6. Do you think the management treats the employees equally and
fairly?
Majority of the respondents replied as they are not equally treating all
employees.

This shows that the management of the organization must try hard in
treating all professional employees equally and fairly in order to avoid
dissatisfaction and create peaceful working environment.

Summary of Response to Structured Interview

Questions

About 5 questions are forwarded to corporate human resource manager

are presented and analyzed below.

• Does the organization motivate and satisfy their employees?

The administrative officials replied that the organization is doing its best
effort to fulfill the need of the employees.

But this response of the administrative officials are in contradicting with

that of the employee’s respondents.

• What are the motivated schemes of the organization?

- Bonus
- Allowance
- Life insurance
- Medical coverage
From the information we observed that the organization uses some
motivational schemes. But they are also denied of other benefits as
regard to educational support, the organization does not provide any
support to help its employees to improve their educational level.

43
 • Is the working environment is conducive?
The administrative body replied that the working environment is
conducive to employees.

From the respondent response the major problem towards the working
environment those are company policies, to job security, interpersonal
relations and routine working condition.
• How looks like the relationship between managers and employees?

The administrative body replied that the relationship between the

management and employees can be rated as good.

According to the respondents, the employees do not have close relation

with management this shows that discourage to give innovative ideas or
in put to the organization.

• What to be done to improve rating actual performance of

employees?
The officials replied that the nature of rating actual performance
traditionally focused on more-group-focused. In coming new years the
current problem will have to change to computerized system of rating the
performance of employees.

From the observation individual differences can easily manage and

computerized system increases the quality of rating actual performances
and increasing the job satisfaction of employees.

44
 Chapter Four

The Summary, Conclusions and Recommendations

This chapter presents the summary, conclusions and recommendations

of the study.

4.1. Summary of the Major Findings

- Majority of the employees in CBE are young and most of them were
diploma and degree holders.
- In the organization the study shows that majority of the employees
are qualified and experienced.
- Concerning the pay, most of the employees are unsatisfied which
leads de-motivated with what they get.
- The overall mechanism of motivation that the organization uses is
not sufficient enough to motivate the employees.
- Although, promotion is one of the motivating factors, it was found
out in the study that majority of the sample respondents in the
organization asserted as they were not satisfied that much by what
they have got in the form of promotion.
- With regard to education support, the organization does not
provide any support to help majority employees to improve their
educational level.
- According to the general views of the respondents the level of
recognition provided by work is low.
- Tendency of responding timely questions raised by its employees is
low.
- Most of the respondents reveal that money has an impact on
employees’ performance.

45
 4.2. Conclusions
The student researcher has drawn the following conclusions on the basis
of the findings obtained:
- Employees believe that the financial benefits provided by the
company increase productivity. However, the organization provides
them with financial benefits such as salary, loan bonus, medical
coverage, Insurance etc… however; they are not satisfied by this
provision. Employees also believed that their salary is much less
than from those employees who worked in the other similar
organizations with the some level of educational qualification. This
implies that low motivational can have its own impact on job
performance.

- The other important area that attracts the attention of the

employees next to salary in the company is employees’ treatment
and promotion system. The majority of respondents believe that
the organization system of employee treatment and promotion
system is not equitable and fair. It is generally argued that such
practice could potentially discourage the employees’ motivation
and have adverse effect on the overall productivity of the
organization.

- According to the sample information most employees of the

organization have low acceptance to provide complain suggestions
and opinions and also to participate in strategic formulation of the
organization. So, this might also allow employees’ not to show
sense of belongness.

46
 - In the areas of recognition and training opportunities, most
employees fell that they are not provided these opportunities
equitable and fairly. This may also affect competitive performance
of employees’ and other qualified employees.
- Majority of the employees believed that usually the reward system
is not tied up with their job performance; even most of the
employees are not satisfied with the effectiveness of the system of
performance appraisal of the company. So, this might have its own
implication towards employees’ performance in particular and
organization performance in general.

4.3. Recommendations

Based on the factors that have been gathered from sample information of
the organization employees the following are recommended.
• To attain well motivated and hard working employees, the
organization should adjust the salary of the employees so that they
can have a belongingness feeling to the organization.
• The organization should support its employees to improve their
educational level using different techniques such as providing
financial and material support so that they can be asset to the
organization.
• The organization should improve providing a conducive working
environment so that the employees are motivated and put their
best effort to the organization.
• The management of the organization must try hard in treating all
employees equally and fairly in order to avoid discrimination and
create peaceful working environment.
• The organization should provide training and development to the
workers who need it so that they can obtain the necessary skills
and knowledge that would help the organization to develop in the
long run.

47
• Employees should involved in decision making process. The
manager should change their leadership style of its employees.
• The organization should improve the rewarding system based on
their qualification, experience and performance of the employees.
• Generally motivation play vital role in the success of any
organization. Using the right motivational approaches at the right
time is critical for managers who want their subordinate to
increase the profitability of the organization.

48
 Bibliography
Ahuja K.K (1998). Personnel Management. New Delhi: Kalyani
Publisher.
Amrik Singh Sudan and Navelin Kumar (2003). Management Process
and Organization Behavior. New Delhi: Anmol Publications.

Boundreau, Milkovich (2006). Personnel Human Resource

Management. New Delhi: Mac Graew-Hill publishing

Gupta B.D. Sharma, N.S. Bhalla. 1st ed. (1988). Principle and Practice
of Management. New Delhi: Kalyain Publisher.

Hertzberg; F Mausner, B, and Snyde man, B.B (1959). The Motivation

to Work. New York: Wiley.

Jane Weightman (1999). Managing People Jane

Lushans. F, (2003). Organization Behavior. 8th edition. New York:

Erwin- Mc Graw Hill.

Mcshane Von Gllnaw, (2002). Organization Behavior. 1st Edition,

New Delhi: Tata Mc Graw-hill higher education.

Mirza S. Saiyadain (2003). Organizational Behavior. Tata McGraw-Hill

Publishing Company Limited.

Ramosamy (1998). Principle of Management 1st ed. Mumbai: Himalaya

Publisher.

49
50
 Appendix 1

St. Mary’s University College

Faculty of Business
Department of Management
Questionnaire to be filled by Professional Employees’
This questionnaire is prepared by St. Mary’s University College
undergraduate degree student in order to assess Employees’ motivation
practices on Commercial Bank of Ethiopia especially at Head office. Your
answer is concrete base for this student research paper, please; fill all
answer dedicatedly and honestly. All information you provide to this
study will kept strictly confidential. Thank you in advance for your
cooperation to fill this questionnaire.

General Information
You are not required to write your name

” in the box of choice given below:
Put “x” or “

Section 1:- General Characteristics of the Respondents:-

1. Gender:- A. Male B. Female

2. Age: A. 18-27 yrs B. 28-37 yrs
C. 38-47 yrs D. 48-57 yrs
E. 58 yrs and above
3. Educational Background
A. Certificate B. Diploma
C. First Degree D. 2nd degree and above
4. Experience with CBE?
A. Below 5 yrs B. 6-10 yrs
C. 11-15 yrs D. 16-20 yrs E. above 20 yrs

51
 1. Questions Directly Related to the Study
A. The Organization Effort in Using of Feedback as input
from its employees
1. How do you rate the organization in providing any methods or tools
available to accept (complain suggestions and opinions) of its
employees?
A. Very high C. Medium E. Very low
B. High D. Low
2. What is the extent of the organization in answering questions raised
by its employees?
A. Very high C. Medium E. Very low
B. High D. Low
3 What is the extent of the organization in taking information from
employees as an input to make corrective actions?
A. Very high C. Medium E. Very low
B. High D. Low
4. What is the extent of the organization in participating employees in
strategy formulation?
A. Very high C. Medium E. Very low
B. High D. Low
B. Employees Perspectives in Different Issues

5. Money is the means or factor to initiate employees to fulfill the

organizational goal
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly disagree
6. The work environment of an organization encourages you for higher
Performance?
A. Strongly agree B. Agree C. Neutral

D. Disagree E. Strongly disagree

52
7. Yearly bonuses initiate employees for improved job
accomplishments?
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly disagree
8. Your effort on your performance provides an opportunity to get a
salary increment?
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly disagree
9. Why only monetary incentives may not encourages you to perform
differently?

10. Acting allowance payment initiates you to work differently?

A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly disagree
11. Lack of good working environment contributed being absent from
work?
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly disagree
12. On job training provides you comfortable working conditions?
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly disagree
13. You are willing to handle additional responsibility without any
reward?
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly Disagree
14. Your organization encourage employee to learn and develop in
education?
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly Disagree

53
 15. Recognition is one of the psychological satisfactions for employees?
A. Strongly agree B. Agree C. Neutral
D. Disagree E. Strongly disagree
16. Are you satisfied by management of the organization?
. A. Yes B. No C. Neutral
17. How do you compare your salary with employees of other
organization with similar educational qualification?
________________________________________________________ _____ _____
_________________________________________________________ ___ _ _____
18. Do you think the management treats the employees equally and
fairly?
________________________________________________________________________
________________________________________________________________ __
19. What is your satisfaction level on the bonus that the organization
provides?
________________________________________________________________________
_______________________________________________________________
20. In your opinion what motivational tools does the organization use?
________________________________________________________________________
________________________________________________________________________

54
 Appendix 2

St. Mary’s University College

Faculty of Business
Department of Management
Interview Check List
This interview prepared to ask Director Corporate human Resource
manager in order to get input for the student researcher paper that
aimed at to assessment of employee’s motivation practices on
Commercial Bank of Ethiopia especially at Head office.

1. Does the organization motivate and satisfy its employees?

2. What to be done to encourage your employees for effective
performances?
3. What are the motivational schemes of the organization?
4. Is there a clear human resource policy in the organization?
5. How looks like the relationship between managers and employees?
6. Is the working environment conducive?
7. What are the major problems towards employee’s turnover?
8. What to be done to improve rating actual performance of
employees?
9. How often did take human resource technical development training
to employees?

55
 Declaration

I, the undersigned, declare that this senior essay is my original work,

prepared under the guidance of Ato Zellalem Tadesse. All sources of
materials used for the manuscript have been duly acknowledged.

Name:
Signature:
Place of Submission:
Date of Submission:

This senior essay has been submitted for examination with my approval
as a University College advisor.

Name: ______
Signature: _______
Date: ________________ ___

56