The objective of the thesis was to find out the impact of employee motivation on organizational effectiveness. The study focused on (1) defining the motivation concepts and methods, (2) identifying the most motivating factors, and the linkage of employee motivation with an organization’s productivity and effectiveness. In addition, suggestions to increase employee’ level of motivation and direction for further study were also discussed.

To gain deeper understanding of the research topic, different motivation theory models were reviewed. However, the attention was on analyzing the three motiva- tion theories of Maslow’s Hierarchy of Needs, Herzberg’s Two-Factor theory, and Vroom’s Expectancy theory. In addition, quantitative method was used in order to acquire data. First, a questionnaire based on chosen theoretical framework was created. Later it was sent to all the students at Vaasa University of Applied Sci- ences, but with the target on currently working students.

In conclusion, the thesis pinpointed money, personal growth, and work-life bal- ance as the three most influential motivation factors for employees. Nonetheless, the research also revealed the factors that motivate employees were not the same as the factors that retain employees at work. While there might still other ways to increase employee’ level of motivation, the practice of combining both physical incentives and spiritual stimulation was proved to be the most effective.


Content                                            Page

Title page    -    -    -    -    -    -    -    -    -    -    i

Approval    -    -    -    -    -    -    -    -    -    -    ii

Dedication    -    -    -    -    -    -    -    -    -    -    iii

Acknowledgement    -    -    -    -    -    -    -    -    -    iv

Abstract    -    -    -    -    -    -    -    -    -    -    v


    Background of the study    7

    Objectives of the study and research questions    7

    Methodology    8

    Structure of the study    8


    The definition of motivation    10

    The concept of motivation    11

    Motivation methods    13

    The importance of motivation on organizational effectiveness    16

    Maslow Hierarchy of Needs    18

    Herzberg’s two-factor theory    22

    Vroom’s Expectancy theory    24

    Summary of theories    26


    Research methods    28

    Data collection    29

    Data analysis process    31

    Validity and reliability    31

    Limitations    32


    The background questions    33

    Motivation levels    34

    Motivation factors    37

    Job retention and recommendation    40

    Summary on research’s findings    41


    Conclusions    43

    Recommendations    43

    Direction for further study    44




Figure 1. Structure of the study

Figure 2. Intrinsic and Extrinsic Motivation (Ryan & Deci 2000)

Figure 3. Motivation factors (TINYpulse Employment Engagement Organizational Culture Report 2014)

Figure 4. Maslow’s Hierarchy of Needs (Finkelstein 2006)

Figure 5. The two-factor theory of motivation (Weiner 2012)

Figure 6. Vroom’s expectancy theory (Scholl 2002)

Figure 7. Summary of theories

Figure 8. Respondents’ age group

Figure 9. Respondents’ years of working

Figure 10. Respondents’ motivation level

Figure 11. Motivation and work performance linkage

Figure 12. Maslow’s and Herzberg’s Ideas compared

Figure 13. Theories supporting evidence

Figure 14. Motivation factors

Figure 15. Reasons for job retention

Figure 16. Respondents’ feeling about work

Figure 17. Job retention

Figure 18. Job recommendation



This chapter aims at drawing a brief outline and explain the objectives of this study through three separate sections: (1) background of the study, (2) purposes and objectives of the study, and (3) structure of the study. The first section sup- ports general understanding of the topic. The second one clarifies the purposes and objectives of the study followed by the third section which includes a short description of the framework of the study.

    Background of the study

Today in a world of competitive corporate environment, every company – regard- less of scales and markets is striving to gain competitive advantage(s), to perform better and to achieve productivity and effectiveness. In order to do that, it is im- portant for an organization to clearly define its objectives, and to know how to do it well with the use of available resources. However, mentioning an organization’s resources, it is the human resources that fill all the gaps between each step to suc- cess. Personnel are the one who use their competencies and knowledge to provide support to the company as the way of achieving goals. Organizations across the globe that consider their human resources as a central core of the business and continuously increase the level of their employees’ motivation and performance tend to be more effective (Adi, 2000, Anka, 1988, Rothberg 2005).

    Objectives of the study and research questions

An effective organization is defined as the competency of a company to achieve its intended objectives (Etzioni 1964). According to Waterman and Peters (1982), there are elements in an organization that needs to be coordinated and supported in order to achieve the organization’s productivity and effectiveness. They are classified as hard elements (strategy, structure, and systems) and soft elements (share values, skills, style, and staff). This study, however, will concentrate only on the staff element and with the focus on employee motivation, since it is notable that there exists a strong relationship between employees’ motivation and organi- zational effectiveness. Employees with high motivation are thought to have better

work performance, and overall resulting in a better, more productive and effective company performance (Abbah 2014).

Acknowledging the importance of employees’ motivation in everyday work, the research is carried out with the aims to:

·    Study the definition of employee motivation, its concepts and methods, and the link of it to organizational effectiveness

·    Find out what factors motivating employees the most

·    Provide suggestions for companies and managers in order to increase employees’ motivation.


Both primary and secondary data collection methods will be used in order to ac- quire data for this research. First, secondary data will be gathered through such sources as books, articles, and from online platforms to get a thorough under- standing about the research. Theoretical framework of this study is built based on the knowledge gaining from this step. Furthermore, primary data will be obtained through a tailored-made survey which will be implemented by sending it to stu- dents studying at Vaasa University of Applied Sciences.

    Structure of the study

The study comprises five sections. The first section introduces general infor- mation, including the background, purpose and objectives, and structure of the study. The study’s theoretical framework is presented in the second section. All the theories related to employee motivation are outlined and explained. The fol- lowing chapter describes the research methodology chosen in this study. Also, the limitations, as well as validity and reliability are also explained in this section.

Figure 1: Structure of the study

The fourth section focuses on the empirical study. Research’s data and results are analyzed and discussed with illustration of figures, tables, and charts. The study closes with conclusion and recommendations for further study.




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