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    EMPLOYEES MOTIVATION

    AND ORGANIZATIONAL

    SUCCESS

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    RESEARCH METHODS &

    TECHNIQUES

    FINAL PROJECT

    GROUP CHALLENGERS

    (BBA-4-A)

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    INTRODUCTION:

    The category of micro, small and medium-sized enterprises (SMEs) is made up ofenterprises which employ fewer than 250 persons and which have an annual turnover not

    exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million

    euro. (Extract of Article 2 of the Annex of Recommendation 2003/361/EC). Micro, small

    and medium-sized enterprises (SMEs) are the engine of the European economy. They are an

    essential source of jobs, create entrepreneurial spirit and innovation in the EU and are thus

    crucial for fostering competitiveness and employment. The new SME definition, which

    entered into force on 1 January 2005, represents a major step towards an improved business

    environment for SMEs and aims at promoting entrepreneurship, investments and growth.

    This definition has been elaborated after broad consultations with the stakeholders involved

    which proves that listening to SMEs is a key towards the successful implementation of theLisbon goals. (Gnter Verheugen, Member of the European Commission)

    Motivation is a process of an individual's experience of feeling enabled (Corsun and Enz

    1999). Motivation can be operationally defined with the help of resembling variables such as

    motives, needs, values, and replacement (Hogan and Hogan, 1990). Motivating employees

    and training them is an essential source of firms' sustainable competitive advantage.

    Employees should be motivated to believe that they have organization support; it is the

    degree to which practices and norms make employees believe that their organization valuestheir contributions and cares about their well-being (Eisenberger et al. 1986). Employees are

    extrinsically motivated if they are able to satisfy their needs indirectly, especially through

    monetary compensation. Money is a goal which provides satisfaction independent of the

    actual activity itself (Calder and Staw 1975, p. 599).4

    Motivating employees is necessary to enhance their autonomy (Kanter 1983), leadership

    skills (Burke 1986), team-building experiences (Neilsen 1986), intrinsic motivation or self

    determination (Deci 1980), internal locus of control (Rotter 1966), effectance motivation or

    competency (White 1959), sense of control (Lawler 1992), need for power (McClelland1975), and self-efficacy (Bandura 1986). Organizations can gain beneficial outcomes by

    employees' motivation and thus enhancing their self-efficacy. Self-efficacy refers to belief in

    one's own ability to perform a specific task (Bandura 1982; Gecas 1989; Schwalbe 1985).

    According to Bandura (1986), it has nothing to do with opportunities and constraints, as

    such; it concerns judgments about what one can do with the existing opportunities and

    constraints. Studies have reported motivation as a significant predictor of high performance

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    in a variety of organizational domains. (Bandura 1982, 1986). People with high levels of

    motivation consider themselves competent and able to influence their jobs and work

    environments in meaningful ways. They are more proactive than others in that they

    anticipate problems and act independently. They tend to engage actively in the creation of

    whatever is new and challenging (Spreitzer 1995). Also, they are less constrained by

    technical or rule-bound aspects of work. (Thomas and Velthouse 1990).

    Organizations can boost employees motivation by supporting them with adequate

    resources, recognizing the significance of their work, and showing interest and respect for

    their efforts (Yoon, Han, and Seo 1996). In this challenging environment, empowerment has

    been proposed as a critical intervention program to boost motivation, proactively, and

    mental/physical health (Conger and Kanungo 1988) The results have showed that both

    promotion and wages positively effects the relation with employees work motivation. A

    comparison of the relative strengths of the effects reveals that a reasonable promotion was a

    more powerful motivator than wage level and wage increase. (Yoon and Lim 1999).

    The idea of pay-for performance has been adapted by many public agencies as a new means

    of enhancing motivation and improving organizational performance in the public sector

    under the performance management and recognition system. (Brudney & Condrey, 1993).

    employees are provided with three types of opportunities: Promotion, Pay, Challenges at

    work in SMEs that also motivate the employee (Ospina, 1996). These three benefits, i.e. fast

    improvement in gaining higher positions, a high level of payment, and meeting interesting

    and challenging work, they all contribute to the improvement of workers motivation, job

    satisfaction and hence leading to organizational success. Practices of delay in promotions

    and low wage may be less beneficial to maximize employee interests; thus, they may de-

    motivate employees and reduce their commitment to the organization (Rosenbaum, 1984).

    A number of researchers indicated that employment practices show signs of characteristics

    of the internal labor market (Jacoby, 1985 and promotion opportunities increase the level of

    motivation among workers in the internal market (Lincoln and Kalleberg, 1990). Therefore,

    it is very clear that career advancement influences the workers behaviors and viewpoint,

    such as motivation and organizational commitment, particularly in the case where

    employment is constant. Tournament theory (Lazear and Rosen, 1981) states that when an

    organization is unable to monitor its employees in a well organized manner such that itpossesses information which is unsatisfactory, related to employees skills and abilities. If

    tournament participants recognize that esteemed positions and significant wage premiums

    are very attractive, they will have an incentive to work very hard in order to gain those

    prizes. (Velthouse 1990)

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    In the internal labor markets, employees are motivated by higher positions rather than higher

    wages to win the competition. An if the employees value higher positions then Promotion

    acts as an incentive mechanism, (Takeuchi 1995), the speed of advancement is lagged

    because slow promotion causes employees to stay in the competition of promotion for a long

    period, hence sustaining a high level of motivation. It also avoids de-motivating those who

    were dropping from the fast track. Incentives are related to promotion. (Hackman and

    Oldham 1976) theory of job characteristics suggested that the nature of the job itself is an

    important source of motivation. This theory advocated that the nature of the job, rather than

    the pay and promotion, has mechanisms to motivate employees.

    Incentives that are given along with promotions are relatively larger than wage increases.

    The competition which is observed between employees lasts all throughout their company

    career from entry to retirement. Employees work hard not only because they want higher

    wages but also because they do not want to lose to their rivals (Ishida, 1985).

    Employees can be highly motivated and contribute significantly to organizations success

    (Leavitt et al., 1995). Motivation focuses on judgments to commence the effort for reaching

    the goals, exert a definite level of effort, and continue in that effort until the goal is reached.

    In deciding what the level of effort should be, employees consider the value of the goal to be

    achieved, the probability of reaching that goal, and the attractiveness of the means to the

    goal (Farrell et al., 1994; Harrison, 1995).

    Managers are challenged to become leaders who transform the performance of the

    organization (Bass, 1990; Kouzes and Posner, 1995).

    Employees feel rewarded and productive through effective interaction with their managers,

    their work relationship is strengthened, and their allegiance to the organization is built

    (Becker, 1992). The probability of goal attainment is increased through this interaction by

    helping employees gain insight into how to reach their goals and overcoming obstacles in

    reaching them and by exchanging resources (Johnson et al., 1981). On more complex tasks,

    experiments have found that co-operation is more motivating (Johnson et al., 1981).

    Consistent with this evidence, competitive work has been found to undercut the completion

    of important organizational tasks such as implementing technology (Tjosvold, 1990). co-

    operative goals can be built when managers and employees can together develop sharedgoals, integrated roles, common tasks, and shared reward distributions (Hanlon et al., 1994).

    Then they feel that they are on the same side so that as one succeeds, others succeed; as one

    fails, others too are threatened.

    In co-operation, the manager and employee have a vested interest in each others success;

    they want each other to perform effectively because that helps them both succeed. With this

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    orientation, they discuss issues and opposing ideas fully, communicate information

    accurately, and exchange resources and assistance (Deutsch, 1973, 1980; Johnson and

    Johnson, 1989; Johnson et al., 1983) Researchers have focused on the motivation of

    individual employees (McClelland, 1987), but managers can also affect motivation by

    structuring the interdependence and interaction between themselves and their employees

    (Leavitt and Lipman-Blumen, 1995). Managers are being advised to motivate people

    through teamwork (Koch, 1995)

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    LITERATURE REVIEW:

    Human motivation and organizational success are subjects that command the interest of

    multiple disciplines.

    Motivation is one of the focal research interests to many public administration scholars

    (Crewson, 1997). Responding to the concerns about the decline of morale and motivation of

    public employees, many scholars began to pay close attention to motivational issues, job

    satisfaction, and organizational success in different organizations. (Volcker Commission,

    1989).

    Motivated employees are needed in our rapidly changing workplaces. Motivated employees

    help organizations survive. Motivated employees are more productive.The significance ofemployee motivation, influencing the behaviors of their employees to behave in certain

    ways, can ultimately decide the success or failure of an organization (Crewson, 1997).

    Kovach (1987) suggests that if a company knows why its employees come to work on time,

    stay with the company for their full working lives, and are productive, then the company

    may be able to ensure that all of their employees behave in that way. Such a company would

    have a decided marketplace advantage over competitors suffering from absenteeism, costly

    re-training programs, and production slowdowns.

    Moreover, Wiley (1997) also suggests ensuring the success of a company,employersmust

    understand what motivates their employees, and such understanding is essential to

    improving productivity.

    Despite the multiplicity of meanings and apparent ambiguity of the concept of employee

    motivation, it has been argued that employee motivation is a better measurement of human

    behavior in organizations than some other related measures including job satisfaction and

    job involvement (Steers & Porter, 1983). Crewson also summarized that motivation has

    been operationalized as a combination of three distinct factors: a strong belief and

    acceptance of the organization's goals and values, eagerness to work hard for theorganization, and a desire to remain a member of the organization" (1997).

    Classical motivation theories generally suggest that there are two qualitatively different

    motivation dimensions-extrinsic factors and intrinsic factors. The two factors jointly affect

    human behaviors (i.e., organizational commitment or job satisfaction) in work organizations,

    but these researchers differ on how motivation factors actually contribute to organizational

    success (Herzberg, Mausner, & Snyderman, 1959).

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    Some studies even explore the relationship between organizational success and employee

    motivation. Angle and Perry studied organizational success as an independent variable to

    explain multiple dimensions of employee motivation (1981).

    Balfour and Wechsler's (1991) study provided an interesting observation: that organizational

    success tends to have a positive association with motivation of employees and their desire

    to stay at a job but not necessarily with their willingness to put forth extra effort for the

    organization. They attempted to verify a theoretical construct and measures of

    organizational success by developing a causal model of employee motivation in

    organizations. This model posits the causal relationships among motivation antecedents,

    organizational out-comes (turnover) and organizational success. Balfour and Wechsler's

    (1996) study found that individual and organizational characteristics (working experiences,

    organizational arrangement, and job nature) jointly affect the degree of organizational

    success. One of their most insightful findings is that the willingness to do extra work for theorganization is closely associated with internal motivation factors.

    Motivation refers to the forces either within or external to a person that arouse enthusiasm

    and persistence to pursue a certain course of action. These concepts of motivation suggest

    that motivation has something to do with a persons behavior, a cause of behavior, or the

    reasons of individual behavior, and the causes of individual behaviors may differ because of

    different individual needs. The intuition of these concepts to managers is that they must first

    understand and discover these individual differences and their needs, and develop proper

    models to motivate employees by fulfilling these different needs toward common

    organizational objectives ( Daft and Marcic,2004 ).

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    PROBLEM STATEMENT

    With every job there is one common problem that people face, which is getting stuck in themachine of time and routine. This leads to, and is known to be a de-motivator by the experts.

    It is for this reason that human resource managers are asked to ensure that there are activities

    and varied ways and means to keep employees well motivated from time to time. Theimportance of motivation multiplies at the workplace. This is because an adult spends most

    of his or her hours in the office. Targets and goals have to be met. As long as employees are

    motivated, it would benefit the organization in a number of ways, for instance increase in

    productivity, improved performance, etc., which would further lead to organizational

    success.

    A growing demotivated work-force marks a pervasive problem for organizations today and

    could determine the context of the future economies. Demotivated employees do not identify

    with their jobs but often see themselves as having to do what they are told and feel that there

    is little point in doing more than the minimum to get by. If employees are not motivated or if

    the top-level management fails to do so the organization would face downfall. Hence

    employee motivation is essential for the organization to do its best.

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    RATIONALE OF THE STUDY

    Many times businesses and organizations have policies that negatively affect the

    performance of their customers as well as their employees. These policies or even lack of

    policies and subsequent enforcement do as much if not more damage to the organization's

    overall work productivity than anything else. If an organization truly wants to mastersuccess by increasing work productivity, before attempting to motivate its employees, all

    demotivating obstacles must be identified and removed. Most people want to do a good job.

    However when there is no course (strategic plan), no identification of acceptable behaviors

    (values statement) and no consistently communicated goals (mission statement), the crew

    begins the trip already behind. And this demotivation is supported by business productivity

    research.

    Many people do not actually realize this, but the fact is that most human beings spend a

    maximum number of waking hours at the workplace. This is one place that gives the means

    for survival in the form of monetary returns. And in spite of this, there are various situations

    and circumstances that occur at the workplace that lead one downhill - down the path of de-

    motivation; which could prove harmful for the organization. Motivation has a strong

    relationship with organizations success and it is necessary to maintain this relationship and

    help grow it stronger with every day. And it is through the organizations employees it could

    be achieved. Top-level management plays the vital role in motivating the employees anddriving organization towards success.

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    OBJECTIVES OF THE STUDY

    The main purpose of this study is to examine the relevance of employee motivation toorganizational success. The objectives of this study would be:

    To identify all the possible key factors influencing an employee to work as a

    diversified force towards organizational success.

    To improve employee performance for better productivity levels.

    To make the employees work as a team for the betterment of the organization.

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    RESEARCH DESIGN

    A survey based primary data will be used to examine relationship between employess

    motivation and organization success. It will also examine the moderating impact of

    motivation towards women participation in SMEs.

    There are two kinds of variables used in this study:

    Independent variables:

    Performance

    Productivity

    Turnover

    Organization commitment

    Job satisfaction

    Employee motivation

    Dependent variables:

    Organization success

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    Organization

    success

    Employee

    motivation

    PRODUCTIVIT

    Y

    PERFORMANC

    E

    JOB SATISFACTION ORGANIZATIONAL COMMITMENT

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    HYPOTHESIS

    In the present study the set of following hypotheses have been developed:

    H1: Organizational success tends to have a positive association with motivation of

    employees and their desire to stay at a job.

    H2: If employees are not motivated or if the top-level management fails to do so the

    organization would face downfall.

    METHODOLOGY

    The study basically aimed to investigate the affect of employees motivation on organization

    success. A survey will be conducted through different interviews and questionnaire will be

    used and administered to the respondents directly. The available instruments concerning

    related variables will be explored for reliability and validity, this survey will be conducted in

    the geographical areas that is in islamabad and rawalpindi in private sector organizations.

    DATA ANALYSIS

    After data collection and coding, the appropriate data analytic techniques including

    descriptive analysis will be carried out keeping in view the objective of the study by using

    latest version of SPSS.

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    CONCLUSION

    Hence this study shows that motivaton of employees is very crucial for a companys

    success. Employee motivation is an intricate and sophisticated subject; however,

    contemporary managers must face and deal with this topic to obtain organizational success.

    To enhance understanding of employee motivation, mangers must recognize the

    imperativeness of employee motivation, its concepts, and differences in individual needs.

    Subsequently, managers need to be aware of a variety of employee motivational factors and

    the changes in priorities of these factors over time. Moreover, managers have to learn

    previous or current motivational programs, examples, and theories behind them because

    understanding of these fundamentals can enhance their ability to identify rewards systemsthat can be matched with employee needs.

    Managers must understand the significance of employee motivation before proceeding

    further because managers as employees should have reasons to prompt their actions.

    Increasing production and decreasing employee absenteeism or employee turnover are some

    of the reasons that motivate mangers to proceed to next step.

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