HARAMAYUNIVERSITY

COLLEGE OF BUISNESS AND ECONOMICS

DEPARTMENT OF PUBLIC ADMINSTRATION AND
DEVELOPMNET MANAGEMENT
TITLE: THE IMPACT OF EMPLOYEE MOTIVATION ON JOB
PERFORMANCE (IN CASE OF COMMERCIAL BANK OF
ETHIOPIA IN FINILEBRANCH

THE SENIOR ESSAY SUBMITTED TO DEPARTEMENT OF

PUBLIADMINISTRATIONANDDEVELOPMENTMANAGEMENTII
N IN PARTIALLY FULFILMENT OF THE REQUIRIMENT OF THE
BACHELOR OF ART DEGREE IN PADM

PREPARED BY :
NAME : BOSENA MENGST ...................... ID No CBE/UR17

ADVISOR: Mr. KEMAL MUHAMED

May, 2023,

Finile, Ethiopia

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Table of Contents

CHAPTER ONE..................................................................................................................1
1. Introductions................................................................................................................1
1.1. Background of the study…......…..........................................................1
1.2. Statement of problem........................................................................................2
1.3. Research Questions...............................................................................................3
1.4. Objective of the study...........................................................................................3
1.4.1. General objective...............................................................................................3
1.4.2. Specific objective...............................................................................................3
1.5. Significance of the study..........................................................................................3
1.6. Scope of the study.....................................................................................................4
1.7. Limitation of the study..............................................................................................4
1.8. Organization of the paper.........................................................................................4
CHAPTER TWO.................................................................................................................5
2. Review of Related Literature...........................................................................................5
2.1 Motivation..............................................................................................................5
2.2 How to motivate employees..................................................................................6
2.3. Importance of motivation.....................................................................................7
2.4. Source of motivation.............................................................................................7
2.5. Theories of Motivation.........................................................................................8
2.5.1 Maslow theory....................................................................................................8
Chart 2.1 Maslow Theory Hierarchy.................................................................................10
Physiological needs.........................................................................................................2
2.5.2. Alderfers ERG theory......................................................................................11
2.5.3 Acquired-needs theory of David McClelland’s.................................................11
2.5.4. Motivation, Performance and Job satisfaction.................................................12
2.5.5. Consequence of Job dissatisfaction.................................................................12
CHAPTER 3.....................................................................................................................14
Materials and research methodology.................................................................................14
3.1 Study area................................................................................................................14
3.2 Methods of Data collection......................................................................................14
3.2.1 Technique of data collection.............................................................................14
3.2.2 Questionnaires..................................................................................................15
3.2.3 Interview...........................................................................................................15
3.3. Target population....................................................................................................15
3.4. Sample design and procedure.............................................................................15
3.5 sampling techniques.................................................................................................15
3.6. Method of data analyze and interpretation.................................................................15
3.7 Time scheudule and budget scheudule
Reference..........................................................................................................................16,

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CHAPTER ONE

1. Introductions

1.1. Background of the study

The commercial banks of play important roles in worldwide economies and their
employees are the best source of delivering good service to their customers. Excellent
services provided and offered by employees can create appositive perception and ever
Lasting image in the eyes of banks employees plays a major role in achieving high level
of satisfaction among its customers (petcharak, 2004). The financial services industry is
one of the most competitive and highly globalised sectors due largely to the extensive use
of information technology systems by firms operating in the sector. Despite the fact that
information technology has become the bedrock of all companies in the financial sector
at the global level, human capital still remains the driving force in the highly digital
financial services industry, because not all the functions performed by financial
institutions can be undertaken solely by electronic devices such as automated teller
machines (ATM), computers or other similar devices. Where even electronic devices can,
the organization still requires human’s beings to operate them. (Ombati et al.2010), stated
that services, by definition, are intangible and can be divided into high touch or high-tech
services. ‘High-touch services are mostly dependent on people in the service process
producing the service, where as high-touch services are predominantly based on the use
of automated systems, information technology and other types of physical resources. For
example, high-tech services include internet/telephone/short messaging service (SMS),
ATMs where as high-tech services consist of instruction and personnel assistance in using
the service.”
Even with the provision of these high-tech services by electronic devices, same amount
of human effort is required to service and monitor the equipment used in the process of
delivering the service. Therefore, financial institution still need to recruit and retain some
level of qualified and self motivated staff in order to be competitive in the current
globalized and turbulent financial services industry. In case of using human beings to
provide services, it is not enough to merely rely on the number of people engaged, their
qualification and experience or their ability but remunerating them appropriately is also
of paramount importance. The personnel engaged must be motivated in order to get the

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best output from them. Many captains of industries believe that the key to improve staff
performance and productivity in any area is motivation rather than ability.(bateman and
snell1996), contend that motivation is the force that energizes, direct and sustains a
person’s effort towards the achievement of a goal. A highly motivated person will work
hard towards the achievement of organization goal, given the ability and adequate
understanding of the job. Therefore, the challenge for today’s management is to
administer motivational programmers which will encourage employees to improve their
work performance and productivity. To this end modern day managers of companies in
the financial services industries are therefore adopting various kind of motivational
packages not only to retain employees but also help them to achieve competitive
advantage in the market.

1.2. Statement of problem

Employee incentive programs go a long way towards ensuring employees feel appreciate
and worthwhile. This alone can help with employee’s motivation across the board. The
great thing about these programs is they are very individual. Incentive program increase
motivation because they are not only encouraging job performance but also show
employees the company cares
The motivational tools that management generally uses to increase employees motivation
are financial and non-financial motivation. Financial motivation include like rewards,
piece rate wages and the non-financial motivation also include promotion, status,
responsibility, making job pleasant and interesting(Bernard L .Rosembaum 1982)
Motivated employees are happy on behave of the job and strive for increasing service of
the business. They also try to develop a new mechanism of doing a job so as to improve
their service. In contrast to this, poor motivation leads to eradicate the service of the
organization by a means of unpunctual, absenteeism, Employees turnover and, early
retirement. So that there is not sufficient motivation of performance in organization. This
may be se at haramaya CBE. There for unless the assessment under take on the problem
and the correction are not take it may result above stated problem. The researcher will
intende to assess those problem which comes at the result lack of employees motivation
and to give (show) some important information about employee motivation and its
importance.

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1.3. Research Questions
1) What methods does the organization use to motivate its employees?
2) What types of impact employees’ motivation impose on service?
3) What are the problems related to motivation in the organizations?
4) What are the factors that affect most employee job performance?

1.4. Objective of the study

1.4.1. General objective

The general objective of this research is to find out the impact of employees motivation
on job performance (survey study of commercial banks in FINILEBRANCH.

1.4.2. Specific objective

 To identify what methods use in order to motivate employees of the organization.
 To identify what type of impact employees motivation impose on service.
 To identify the problem related to motivation in the organization
 To evaluate the factors that affect employees job performance

1.5. Significance of the study

The study to have the following importance:-

 The study enables the organization to know its strength and weakness and then to
follow the way to motivate and increase its service performance in easy way. The
study also provide relevant information to those on varies level of management,
employees and labor union leads to understand the importance of motivational
factors on performance of employee. Lastly, it creates awareness to minimize the
problem related to employee motivation.

1.6. Scope of the study

The scope of the study limit to The impact of employee motivation on job performance
in case of commercial ETHOPIA in Finikle branch. IN addition, the study focus on

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permanent employees because of reaching this employee is suitable. So, the scope of the
study limi t only on commercial bank of Ethiopia in FINILEBRANCH.

1.7. Limitation of the study

While conducting this study the limitation that will face undr the following.
 Limit geographical location only on Finikle branch
 Lack of up-to date literature that relate to the study.
 Shortage of time for gathering all necessary data from the organization.
 Lacks of financial resource will the major constraint.

1.8. Organization of the paper

The study will present in five chapters. The first chapter which is the introduction
covers the background of the study, statement of problem, objectives of the study,
research questions, significance of the study as well as scope and limitation of the
study. This is follow by chapter two which review related empirical literature on
the subject matter. Among the various topics to be cover include concepts of
motivation, service in relation to job performance. Chapter three look at the
methodology of the research which comprises the research design, research
population, sample and sampling technique. It also considered the source of data
and data collection instruments, method of data collection and analysis.
Finally, chapter five deals with summary of the study, conclusions drawn from the
findings and recommendation of the study.

CHAPTER TWO

2. Review of Related Literature

The employee motivation is major impact on economic performance of the firm. The firm
use different essential resource for its economic performance. Especially human resource
is most and significant and ingredient part of resource and managers apply a variety of

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motivational scheme to give employees highly productive and always they stand for a
common good of firm. This chapter tries to present the theoretical
aspects of motivation (staff@incentivequotes.com).

2.1 Motivation
There is no standard definition of motivation but there are number of common agreement.
Motivation has to do three broads are as with respect to individuals behavior. Source
(Anderson 1989. PP63).

1) Direction what someone is trying

2) Persistence has along some one continual trying.
3) Effort how hard someone is trying
According to Bernard bereslon and Gram A. Steiner” motivation is an energized action at
channels behavior rewards the goals”.
Holophote (2005) defines motivation as a person active participation and commitment to
archive prescribed result
Reinter(1995) Buford,bedeian and Linder(1995)defined motivation as “the psychological
process that gives behavior purpose and direction predisposition to behave in purposive
manner to archive specific unmet needs, unsatisfied needs, the will to archive respective
Young (2000) suggest that motivation can be defined in a variety of ways, depending on
who you ask .Ask someone on the street; you may get a response like “its ’ what drives
us” or “its’ what makes us do the things we do.” Therefore motivation is the force within
an individual that account for the level, direction, and persistence of effort expended at
work.”
According to Antomioni (1999), “the amount of effort people are willing to put in their
work depends on the degree to which they feel their motivational needs will be satisfied.
On the other hand, individuals become de-motivated if they feel something in the
organization prevents them from attaining good outcomes.
It can be observed from the above definitions that, motivation in general, is more or less
basically concern with factors or events that moves, leads, and drives certain human
action or inaction over a given period of time given the prevailing conditions.

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Furthermore the definitions suggest that there need to be an” invisible force ” to push
people to do something in return.

2.2 How to motivate employees

The successful manager known how to motivate their employees. Even though everyone
is motivated by different needs, most people tell that two of most important issues they
look for the company are mutual respect and personal involvement. There are some ways
motivating employees are
- Be aware of moral level of your organization.
- Involve employees in decision making.
- Outline job responsibilities.
2.3 Challenges of Motivation
Motivation in practice and theory are difficult issues conducting on several disciplines. In
spite of research basic as well as applied, the subject of motivation not clearly understood
more often than not poorly practice. People in the organization come from different
places with respect to attitudes towards job peers, subordinates, organizational rules and
procedures. As a result of these mangers or organization encounter a big problem of
having different outlook and at same goals and objective achieved by integrating and
coordinating people. Source (plunkent, 1997.PP390).

2.3. Importance of motivation

Motivation is important because of its determinants factors on performance and its

intangible character. The performance of individuals is determined by
- Motivation ‘the desire to do the job
- Ability; the capability to do the job
- The work environment the goals, material and information. Motivation process
begins with needs as deficiency. Motivated employees are a tower of the company
and they will binges dramatically change in every activities of their performance

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 and they are more services to be effective manager needs to understand what
motivates employees within the context of they perform.
- Source (Bowen and Radhan kishna, 9191 W.W.W. jo.oxgn).

2.4. Source of motivation

1. Positive motivation; involves proper recognition of employees effort and appreciation

of employees contribution towards organizational goals achievement. Some of these
are delegation of Authority and responsibility to subordinates participation indecision
making..
2. Negative motivation; is based up on use of force, power and treats. The fear of
punishment or unfavorable consequence affects the behavior change
3. Extrinsic motivation; is induced by external factors which are primly financial in
nature.
4. Intrinsic motivation, it stems from feeling achievement and accomplishment and is
concerned with state of self-actualization in which the satisfaction of accomplishment
something worthwhile motivates the employees. Its self-generated and independent of
financial rewards like recognition, responsibilities, esteem needs source (Chandan
1995. PP 57).

2.5. Theories of Motivation

THE CONTENT (NEED) THEORIES

Malik et al(2o11) discussed the early theories of motivation which include hierarchy
needs theory, ERG theory, hierarchy of need identifies Five levels of human need;
physiological, safety, social, self-actualizing. Low level need must be satisfied first
before the next higher level need since this will motivate employees.

2.5.1 Maslow theory

Maslow theory is a hierarchy need theory which is popular theories of motivation and it’s
based on the following facts.
 Man is not always satisfied with it on hand. He is always in need of something
which he does not have.

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  Human needs are unlimited, that is if one need is satisfied the other need will be
activate and the process continuous in definitely. Maslow needs hierarchy,
source (Daver, 1994.PP14).
Maslow categorizes the need in to the following five.
A) The physiological needs; involves a need for basic thing like food, water, shelter and
sex, when this fundamentals needs are not meet no other higher level needs will act
as motivation. On another way, once primary needs satisfied, safety or security needs
are activities.
B) Safety needs; include protection from physical harm, economic disaster and
futuristic needs in that they represent a desire to ensure ability to physical need.
C) Social need; is need for belongingness and love that comes in to play only when
physical and safety need are reasonable secured.
D) Esteem needs; include self-respect and feeling of competency and the need for
recognition and administration in the eyes of other.
E) Self-actualization; The process of making actual persons perception of his/ her real
self. Rarely attained self-actualization impulse to become when one is capable of
be comings of Achieving ones full potential in the most creative self-motivated way
source ( Resenabaum, 198hy

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 Self
Actu
aliza
tion

Esteem Needs

Social needs

Security and safety needs

Physiological needs

2.5.2. Alderfers ERG theory

The ERG need theory, developed by Clayton Alderfers is a refinement of Maslow ’s
need hierarchy, Instead of manioc’s five needs, ERG Theory condenses these five need
in to three needs.

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 1. Existence needs- these needs are roughly compatibilities to the physiological and
safety needs of Maslow’s models are satisfied primarily by material incentives.
These include the need for shelter physical and safety from threats on people’s
existence and well-being.
2. Relatedness needs- these roughly correspond to social and esteem in Maslow ’s
hierarchy. These needs are satisfied by personal relationship and social interaction
with others. It involves open communication and honest exchange of thought and
feelings with other organizational members.
3. Growth needs’. These are needs to develop and grow and reach the five potential that
person is capable of reaching. Their needs are fulfilled by strong personal
involvement in organization environment and look for new opportunities and
challenge. ERG different from Maslow’s in proposing that may be motivated by
more than one kind of needs at the time. While Maslow proposes that in the
hierarchy needs, a person will satisfy the lower level need before he moves up to the
next levels of needs and will stay at the need until it is satisfied. ERG Theory
suggests that if the person is frustrated in satisfying his needs at a given level, he
will move back to the lower level needs. (“Business management articles ”, April
10,2009,http://www.envision software.com/articles/accessed date15 august,2010).

2.5.3 Acquired-needs theory of David McClelland’s

Acquired need theories is also known’ as the three need theory or learned need theory.
According to acquired need theory individual s acquires three types of needs as a result
of their life experiences. Those are need for achievement, need for affiliation and need
for power. Those reflect that managers in the bank should be recognized and not
motivated by money and as such motivated with the necessary power to carry out the
bank duty. There is the need to encourage good relationship among the staff. All
individuals possess a combination of those needs and the dominant needs are thought to
drive employee behavior. According to theory organization offers an opportunity to
satisfy of at least three needs

1) The need for achievement (n- Ach)

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 Achievement motivation is driven some people have to overcome challenges and
obstacles in the pursuit of goals. An individual with this drive wishes to develop and
grow up the ladders of success characteristics of Achievement oriented. Employees are
work harder when they perceives that they will receive personnel credit for their efforts
when there is only moderate risk of failure and when they receive specific feedback
about past performance.
2) Need for Affiliation
Affiliation motivation is a drive to relate to people on social basic. Affiliation
oriented people work better when they are complimented for their favorable attitudes
and cooperation. They receive inner satisfaction from being with friends and they
want the job freedom to develop those relation.
3) Need for Power
Power motivation is drive to influence people and change situation. Power motivated
people wish to create an impact on their organization and are willing to taking risks to
do so Once this power is obtained it may be uses either constructively or destructively.
Power motivated people make excellent managers if their drives are per instructional
power instead of personnel power. Heller,J;Goulet,L;Mohr,E;(2004).

2.5.4. Motivation, Performance and Job satisfaction

It has often been said that a happy employee is a service and happy employee must be
satisfied with his job. Job Satisfaction can be defined as the extent of positive feeling of
attitudes that individuals have towards their job feels, good about it and values his job
highest on other and serious job dissatisfaction results in stress and tension which is
usually the cause of a variety of physiological disorder (Chandra 1995. PP: 87).

2.5.5. Consequence of Job dissatisfaction

Job dissatisfaction produces low mental among workers and low mental at workers.
Some of the indicators to low morale are:- Employees unrest, the workers may not attend
to his job properly, may be involved in a day a reaming, be forgetful or just may not care.
If this unrest affect a sufficient numbers of workers, they may take a collective action
such as go slows, worker stoppage sticks and other allied group actions Absenteeism: job
satisfaction is highly related to absenteeism. Studies have found that less satisfaction

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employers are more likely to be absent from work due to “Avoidable reason ”.
Management must be concerned with excessive absenteeism for it disrupts production
and business operation and employee turnover: high turnover distributes normal
operation and continuously replacing the employee who leave is costly and both technical
and economically undesirable. Turn over may be voluntary which initiated by the
employee and may be due to Job dissatisfaction or other personal reason beyond
management control.Early retirement: These has been that employee who choose early
retirement tend to hold less positive attitudes, challenges and, work opportunities are less
likely to seek requirement than employees with lower levels jobs employee motivation
impact on organizational performance Maintaining stability Employees are a
company livelihood. How they feel about the work they are doing and the result received
from that work directly impact on organization performance and ultimately, its stability.
For instance, if an organization employees are highly motivated and protective, they will
do whatever is necessary to achieve the goals of the organization as well s keep track of
industry performance to address any potential challenges. This two-prong approach
builds an organization’s stability. An organization whose employees have low motivation
is completely vulnerable to both internal and external challenges because its employees
are not going the extra mile to maintain the organizations stability and unstable
organization under forms Reduction in service Lack of motivation equates to less work
being accomplished, service does not disappear; it is usually transferred to aspects not
related to the organizations work. Things like personal conversation, internet surfing or
taking longer lunches cost the organization time and money. Reduced service can be
detrimental to an organization performance and future success
Negative changes to reputation to repute
Low employee motivation could be due to decreased success of the organization,
negative effects from the economy or drastic hags or uncertainty within the organization.
No matter what the cause, having the reputation of having unpleasant work environment
due to low employee motivation will ultimately impact how existing and potential clients
or parents view working with an organization. A reputation can precede on organization
and indicate its future in the industry
Source: www.ehow.combuisenss

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 CHAPTER 3

Materials and research methodology

3.1 Study area

The study will conducte at eastharaghe which found at the distance of it 510km away
from Addis Ababa the capital city of Ethiopia. This study concern on the impact of
employee motivation on job performance in case of commercial bank of Ethiopia in
FlNILEBRANCH

3.2 Methods of Data collection

Both primary and secondary data will use in the study. The primary data will collecte by
self Administers questionnaires for employees and structured interview for managers and
workers. Secondary will data collecte from organizational records and source written
(document) about the organization.

3.2.1 Technique of data collection

The instrument employe to gather primary data source is questioners and interview

3.2.2 Questionnaires
The questioners that will use to gather data are8in number and from those 5 were closed
ended and 4 opened. The closed ended questionnaires are use the seek factual information
and open ended questionnaires will use to enable respondents to express their opinion
about the problem close ended questionnaires include yes\no and agree disagree
questions.

3.2.3 Interview

Structure interviews will use for collecting data from managers of bank and employments
of the bank is structure. The study will conduct using structure interviews in order to ask

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respondents. The interviews will conducte with employees and managers that are face to
face communication. From the total of 8 interviews 6 is conducte to the managers and 2
were workers.

3.3. Target population

Target population will use to collecte data from the whole employees. The rationale to
use the target population is that the numbers of employees in the organization is medium.
The total employees are31.so the study conducte on them.

3.4. Sample design and procedure

From the total population take 11(36%)employees as sample size. These
participants will be selecte using Yamane taro (1967) formula. It determine as
follow.
n=N÷(1+N)e^2
31÷(1+31)0 .1^2
n=11
Where:
n=sample size
N=total population
e= error

3.5 sampling techniques

The sampling techniques that will use in this study are simple random sampling method
because this method is based on the concepts of random selection. In this types of
sampling all members of population have equal chance of being include in the sample
and to gather information from the respondent and the information collect from the
respondent will real and free from bias.
3.6. Method of data analyze and interpretation.
In this study different types of raw data will collect, Analyze and interprete. The intended
outcome are obtained, the collect data will edit, classify and errors areomitte. By using
descriptive analysis data further processe and analyze.

Finally the data will effectively process, analyze and interpret by using percentage, and
tabulating. Finally the process, Analyze and interprete data will leads to conclusion and
recommendation of the study.

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3.7 Time schedule and Budget schedule

Tim schedule

No Listofactivities Timefram2015 Apr May June

1. Studyareaselection ✓

2 Titleselection ✓

3 Literaturereviw ✓

4 Proposalpreparation ✓

5 Proposalsubmission ✓

6 Proposaldefence ✓

Budget schedule

Descriptionofitems UintMeasurment Quantity Uintcost(Birt) TotalBuget

1.paper Number 110 2 220

2.flash Number 1 350 100

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3.pen Number 13 25 75

Miscellaneousexpense 300

Print Number 110 3 330

Total 1025

Reference
 Davis and new arom (1989) Human behavior at work.
 Dessler (1998). Human resource management, 9th edition.
 Davis, (1994), “personnel management and industrial relationship, 10th edition
PP.164ss
 Bowen and Radhan Kishha, 1991, WWW.Jo.xgn.Stephen p. Robbins,
(1943),Organizational Behavior,second Canadian edition.pp(138)
 Bernard L.Rosembaum, 1982.How to motivate today’s workers.USA, MCG raw
Hill Book co.
 Fred L uthans.1995.Organizational behavior 4th edition USA, Mc raw will Book.
 Ivan Cenvich and Matheson, 1990.Organizational behavior, USA, Richard
D.Irwisn Inc.
 Ricky W.Griffin, 2000, management 4th edition.USA HoughtonMiffilin
 Stephen P. Robbins, 2001, Organizational behavior San Diego state university
 Alderfers (“Business management articles”, April 10,2009, http//www.evision
soft ware.com/articles/accessed date 15 august,2010).
 Petcharak,(2004).Work and motivation ,3rded.Ombati et al (2010),Fundation of
personnel/HRM,4th edition.

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