Impact of Employee Motivation on Organizational Performance

Abstract

Employee motivation is considered to be one of the most crucial internal factors of the success of an organization. The more motivated the employee is, the more he/she will work, the more likely he/she will persist in the face of obstacles and the more likely he/she will be to act in a way that will lead to achievement of the goals of the organization, which will affect productivity, quality, innovation, and financial outcomes. The present paper is based on secondary data gathered from classical theories, peer-reviewed journal publications, meta-analytic reviews and standard textbooks in management and organizational behaviour on the effect of employee motivation on organizational performance. The concepts of motivation and organizational performance are explained and then major content, process and self-determination perspectives summarized and discussed, and then empirical evidence on the motivation–performance relationship is synthesized. The review suggests that motivation has an impact on performance via effort, job satisfaction, engagement, commitment and discretionary behaviour and that this impact is greater when there is a balance between intrinsic and extrinsic motivation, and when jobs are well designed and goals are clear and rewards are perceived as fair. The paper ends up recommending that organizations view motivation as a strategic resource and also consider it when designing jobs, establishing goals, designing rewards, and implementing leadership practice.