EFFECTS OF MOTIVATION ON EMPLOYEES’ PERFORMANCE IN BERHAN BANK WEST ADDIS DISTRICT

EFFECTS OF MOTIVATION ON EMPLOYEES’ PERFORMANCE IN BERHAN BANK WEST ADDIS DISTRICT BY Dereje Biru ADDIS ABABA, ETHIOPIA JUNE, 2024 Table of Contents LIST OF FIGURES .............................................................................................................................. vi LIST OF TABLES............................................................................................................................... vii LIST OF APPENDICES ..................................................................................................................... viii Questionnaire .............................................................................................................................. viii ACRONYMS .................................................................................................................................... ix CHAPTER ONE .................................................................................................................................. 1 INTRODUCTION ............................................................................................................................... 1 1.1. Background of the study ........................................................................................................ 1 1.2. Statement of the problem ..................................................................................................... 4 1.3. Objective of the study............................................................................................................ 5 1.3.1. General Objective ................................................................................................................. 5 1.4.2. Specific Objectives ................................................................................................................ 5 1.5. Significance of the Study ........................................................................................................ 6 1.6. Scope of the study ................................................................................................................. 6 1.7. Limitations of the study ........................................................................................................ 7 1.8. Definition of Terms ............................................................................................................... 7 1.9. Organization of the Study.................................................................................................... 8 CHAPTER TWO............................................................................................................................... 10 REVIEW OF RELATED LITERATURES ................................................................................................. 10 2.1. Review of Theoretical Literature ......................................................................................... 10 2.2. Motivation Concept ........................................................................................................... 10 2.3. Motivational Types ............................................................................................................. 10 2.3.1. Intrinsic Motivation ............................................................................................................ 10 2.3.2. Extrinsic Motivation............................................................................................................ 11 2.4. Theories of Motivation ....................................................................................................... 11 2.4.1. Theories of Content ............................................................................................................ 11 2.2.2. Theories of process ............................................................................................................. 18 2.3. Employee Performance ....................................................................................................... 19 2.3.1. The Importance of Motivation on Organizational Performance ............................................ 19 2.3.2. The Effects of Motivation on Employees’ Performance ........................................................ 20 2.3.3. Factors That Motivate Employees ....................................................................................... 22 iii 2.3.4. The relationship between employee performance and motivation....................................... 25 2.4. Review of Empirical Literature ............................................................................................ 27 2.6. Conceptual Framework ....................................................................................................... 31 2.7. The study's Hypothesis ....................................................................................................... 33 CHAPTER THREE............................................................................................................................. 34 RESARCH METHODOLOGY.............................................................................................................. 34 3.1. Research Design.................................................................................................................. 34 3.2. Research Approach ............................................................................................................. 34 3.3. Data Type and Data Source ................................................................................................. 35 3.4. Sampling and Sampling technique......................................................................................... 35 3.4.1. Target population ............................................................................................................... 35 3.4.2. Sample size ......................................................................................................................... 35 3.4.3. Sampling Technique ............................................................................................................ 36 3.5. Data Collection Instrument ................................................................................................. 37 3.5.1. Questionnaires ................................................................................................................... 37 3.5.2. Interviews .......................................................................................................................... 37 3.6. Method of Data Analysis ..................................................................................................... 38 3.7. Model Specification ............................................................................................................ 39 3.8. Validity and Reliability...................................................................................................... 40 3.8.1. Validity test ........................................................................................................................ 40 3.8.2. Reliability ........................................................................................................................... 40 3.9. Ethical Considerations ........................................................................................................ 41 CHAPTER FOUR ........................................................................................................................ 42 DATA PRESENTATION, ANALYSIS AND INTERPRETATION ............................................. 42 4.1. Introduction ...................................................................................................................... 42 4.2. Demographic Background of the Respondents .................................................................. 42 4.3. Analysis of Collected Data ................................................................................................. 44 4.3.1. Recognition .................................................................................................................... 45 4.3.2. Training ......................................................................................................................... 46 4.3.3. Job Security ................................................................................................................... 47 4.3.4. Reward .......................................................................................................................... 48 4.3.5. Salary ............................................................................................................................ 50 4.3.6. Promotion ...................................................................................................................... 51 iv 4.3.7. Fringe Benefit ............................................................................................................... 52 4.3.8. Working environment.................................................................................................... 53 4.3.9. Employee Performance .................................................................................................. 55 4.4. 4.4.1. 4.5. 4.5.1. 4.6. Inferential Analysis ........................................................................................................... 56 Pearson Correlation analysis ......................................................................................... 56 Multiple regression of Independent variables on employee performance .......................... 59 Analysis of Variance (ANOVA) ..................................................................................... 61 Regression analysis ............................................................................................................ 62 4.6.1. Linearity ........................................................................................................................ 62 4.6.2. Normality of the Error Term Distribution ..................................................................... 63 4.6.3. Homoscedasticity (Equal Variance) ............................................................................... 65 4.6.4. Multicollinearity ............................................................................................................ 69 4.7. Result Discussions ............................................................................................................. 72 Table 4.18 Beta coefficient Result ................................................................................................. 75 4.8. Discussion of interview and document review results ......................................................... 75 CHAPTER FIVE.......................................................................................................................... 78 SUMMARY, CONCLUSIONS ANDRECOMMENDATIONS ..................................................... 78 5.1. Summary of Major Findings ............................................................................................. 78 5.2. Conclusions ....................................................................................................................... 79 5.3.1. Recommendations for Action ......................................................................................... 79 5.3.2. Recommendations for Further Study............................................................................. 79 REFERENCE............................................................................................................................... 81 APPENDIX .................................................................................................................................. 90 v LIST OF FIGURES Figure 2.1: Maslow’s hierarchy of needs 13 Figure 2.2: Figure 2.3: Figure 2.4: Comparing Alderfer and Maslow Motivators & Hygiene Factors Herzberg’s Hygiene Factors and Motivators Diagram 14 15 16 Figure: 2.5: How to motive According to McClelland’s Theory of Needs 17 Figure 2.6: Conceptual Framework of the study 32 Figure 4.1 Normality Test 63 Figure 4.2 Histogram residual 66 Figure 4.3 scatterplot 68 vi LIST OF TABLES Table 2.1 categories of hygiene and motivational factor 16 Table 3.1 Sample size of the Study 36 Table 3.2 Cronbach’s alpha test Reliability Statistics 41 Table 4.1 Respondents’ Demographic Characteristics 42 Table 4.2 Comparison based on the mean score of five-point Likert scale 44 Table 4.3 Descriptive Statistic for Recognition 45 Table 4.4 Descriptive Statistic for Training 47 Table 4.5 Descriptive Statistic for job security 48 Table 4.6 Descriptive Statistic for Reward 49 Table 4.7 Descriptive Statistic for Salary 50 Table 4.8 Descriptive Statistic for Promotion 51 Table 4.9 Descriptive Statistic for fringe benefits 53 Table 4:10 Descriptive Statistic for Working Environment 54 Table 4:11 Descriptive Statistic for Employee Performance 55 Table 4.12 Guideline for the Pearson Correlation Analysis 57 Table 4.13 Correlation matrixes between variables 58 Table 4. 14 Model Summary 60 Table 4.15 ANOVA Analysis 61 Table 4.16 Skewness and Kurtosis 64 Table 4.17 Multi-Collinearity problem test of Tolerance and VIF and tolerance 70 Table 4.18 Beta coefficient Result 75 vii LIST OF APPENDICES Questionnaire Interview Question’s viii ACRONYMS ANOVA Analysis of variance ATM BB EP ERG Automatic Tailor Machine Berhan Bank Employee Performance Existence Relatedness Growth FB Fringe Benefits JS Job security KPIs NBE PRO RC Key Performance Indicators National Bank of Ethiopia Promotion Recognition RW Reward SL Salary SPSS Statistical package for the social sciences TR Training WE Work Environment ix Abstract One of the key factors cited as contributing to great performance in the banking industry is motivation. Reward, recognition, advancement, job security, training, working conditions, fringe benefits, and pay are examples of motivational systems that motivate staff to work as efficiently as possible. The main purpose of the study was to examine the effect of motivation on employees’ performance in Berhan Bank West Addis District. The association between employee performance and motivation practices was examined using descriptive study methodology. A mixed-research design was employed. 180 surveys in all were correctly completed and returned, and a stratified random sampling method was used. Semi-structured interviews were employed as a data collection tool, along with a structured questionnaire with a five-point Likert scale rating system. Using SPSS version 26.0, the acquired data were condensed and subjected to descriptive and inferential statistical analysis. The outcome is then discussed for a more thorough analysis of the findings after being provided as tables and figures. The study found that motivational factors significantly impact employee performance; with training, job security, fringe benefits, and working environment significantly motivate employee performance, while reward and recognition have negative effects, while salary and promotion do not. The study suggests that to improve performance, bank managers should establish clear recognition criteria, reassess compensation structures, tailor training programs, address workflow and leadership concerns, and communicate job security transparently. Salary and promotion practices should be competitive and merit-based, and a supportive working environment should be created through regular employee feedback and investment in employee support. Key words: intrinsic rewards, extrinsic rewards, employee performance x CHAPTER ONE INTRODUCTION 1.1. Background of the study The Latin word "movere," which meaning to move, is where the word "motivation" originates (Baron, Henley, McGibbon and McCarthy, 2012). According to Certo (2016), motivation is the process of providing people with incentives to make desired actions. Motivation has also been described as the process of activating and sustaining goal-directed activity (Nelson, 2013). Extrinsic and intrinsic motivations are the two categories that are widely acknowledged to exist. Intrinsic motivation is that activity which an individual produces because of the pleasurable experiences linked with the behavior itself (Mosley, Pietri and Mosley Jnr, 2012). They originate from a motivation that is inherent in the work. Examples include feeling accomplished, being appreciated, rising to the challenge, and getting favorable feedback. Beer and Walton (2014) claim that intrinsic rewards come from completing the work itself and can include a sense of influence or accomplishment. According to Mosley, Pietri, and Mosley Jr. (2012), extrinsic motivation refers to actions taken because of the results they will bring about rather than for their own purpose. Salary perks, and working conditions are a few examples. Extrinsic benefits come from the organization as money, perquisites or promotions from supervisors and co- workers as acknowledgment (Beer and Walton, 2014). At any particular time, a combination of these elements motivates employees (Riggio, 2013). The study of job performance has historically been predicated on two relatively separate premises: that an individual's performance may be defined as their capacity to complete tasks, and that an individual's motivation level is the only factor influencing performance (Chung, 2013). Psychological influences that dictate an individual's direction of effort and perseverance in the face of adversity are sometimes referred to as motivation (Stanley, 2012). Studies on performance appraisals have shown that elements of the appraisal (such as the purpose and source) can generate favorable responses from employees, which can encourage them to improve their performance (DeNisi and Pritchard 2016). Therefore, by focusing the attention on performance, performance appraisal goes to the heart of personnel management and sets out different objectives which are directly responsible for the Career development of employees and continued growth and development of the organizations (Selvarajan and 1 Cloninger, 2016). Employee turnover is a global challenge that all firms throughout the world experience (Stanley, 2012). Demonization is one of the elements that leads to a high rate of employee turnover (Mosley, Pietri, and Mosley Jr., 2012). Managers and leaders are beginning to agree more and more on the importance of combining powerful incentives with effective motivation to promote high performance (Cole and Kelly, 2011). An engaged workforce that strives to accomplish the stated goals is essential for firms to fulfill their targets (Steers and Porter, 2011). According to theories of job performance, one important factor influencing performance is motivation. The function of motivation in the work context has been examined to understand what leads employees to try hard to achieve well, or more particularly what causes the arousal, direction, and persistence of voluntary behaviors that are goal oriented (Aktar, Uddin, and Sachu, 2013). Therefore, it is crucial for managers to comprehend staff motivation and efficient methods for inspiring it (Deci, 2013). Numerous studies on employee performance and motivation have been conducted. Numerous academics have proposed hypotheses in an effort to comprehend what motivation is and how it influences people (Masydzulhak, & Anggraeni, 2016). Abraham Maslow created a particularly important theory known as the hierarchy of needs (Riggio, 2014). Maslow's thesis is based on a hierarchy of five categories. According to Kreitner and Kinicki (2016), they are psychological, security, social, esteem, and self-actualization needs. Another well-known researcher on motivation is Frederick Herzberg. His two component theory states that while contentment stems from the existence of motivating elements like career possibilities and recognition, dissatisfaction arises from the absence of hygienic aspects, which include salary and relationships with others (Kinicki and Kreitner, 2016). Shahzadi et al. (2014) claim that motivation theory and practice are challenging topics that cross multiple academic fields. According to Uzona (2013), the issue with motivation stems from the need to comprehend human nature in order to comprehend motivation. He claims that although human nature may be both extremely basic and complex, recognizing and appreciating this fact is necessary for good management and leadership in the workplace as well as effective employee motivation. Motivation theory and practice are challenging topics that cross multiple fields, according to Shahzadi et al. (2014). According to Uzona (2013), comprehending human nature is a 2 prerequisite for comprehending motivation, and it is here that motivation becomes problematic. According to him, human nature can be both extremely simple and complex, and that knowledge and comprehension of this is necessary for both efficient management and leadership as well as successful employee motivation at work. In compliance with Ethiopia's Commercial Code's Article 304, Berhan Bank S.C. was established with the intention of conducting business in the banking sector. In Article 3 of the Company's Memorandum of Association, this goal is guaranteed. The National Bank of Ethiopia registered and licensed the bank on June 27, 2009, with an authorized capital of Birr 300 million and a paid-up capital of Birr 95.7 million divided into shares of Birr 1,000. On June 27, 2009, Berhan Bank S.C. obtained a license and registration from the National Bank of Ethiopia. On October 30, 2009, the bank opened for business establishing the "Berhan International BankBole Branch" as its first location in Addis Ababa, close to Bole International Airport. With a branch network that as of October 26, 2021, leapfrogged 280, and its headquarters located in Bole, Addis Ababa, the organization employed over 5,998 people nationwide BB(2023). Currently, the Bank has 366 branches distributed across all regions and city administrations. Of these, 204 are located in outlying areas while 162 are situated in Addis Ababa city BB(2023). In order to achieve its mission of making banking easy and stress-free, the bank continued to invest in technologies and technology that help its clients save, invest, and conduct business or execute efficient transactions. Apart from catering to clients via its networked locations, the bank also provides electronic banking services including Debit Cards, which let users to access their accounts at any ATM across the country, as well as Mobile and Internet Banking (BB2023). By the end of the fiscal year, the Bank has reached a total capital of Birr 5.0 billion, marking a growth rate of 12.7 percent in comparison with the same period last year. Furthermore, the paidup capital has grown to Birr 3.4 billion, indicating a 6.1 percent increase from the previous year. In order to meet the new minimum capital requirement established by NBE before the deadline, the Bank has been selling shares to existing and new shareholders. As a result, the total number of shareholders has reached 16,781(BB2023). 3 1.2. Statement of the problem Giving your employees the proper combination of direction, resources, incentives, and resources can motivate them to strive toward your goals and be inspired to do so Luthans, and Sommers, (2005). Employees are among the most precious resources. Motivated staff members are more likely to stick around and support the expansion of your company. Maintaining a motivated workforce improves your company's health and helps you reach the group objective. Numerous studies on employee motivation have been carried out by various researchers. For example, Ogunnaike, et.al (2014) investigated the impact of motivation on employee performance at a commercial bank in Ghana, using loans, promotions, salary, and fringe benefits as motivators. Research on the motivation of Parsian hotel employees in Tehran was done in 2017 by Praveen, S. The study identified motivational variables such as salary, security, working conditions, achievement, status, acknowledgment, growth and advancement, work itself, and responsibility. As stated by Kirby, (2020), there are several reasons why people work. The majority of people labor primarily because they must make money in order to pay for food and other essentials of existence. However, some labor is unpaid and done voluntarily. Despite paying above average compensation, certain companies have a history of having a high employee turnover rate Ali,et.al (2016). This indicates that there are other ways to inspire staff members besides money. In a highly competitive, global world, firms are continuously under pressure to retain their workers (Deci, 2013). Employees with a high level of expertise, dependability, and experience are a great addition to any company. It is clear that workers with high levels of motivation are more likely to be highly productive. But according to Certo (2006), ability that is, skills, resources, equipment, and time as well as motivation have a role in effective performance. De-motivation is one of the elements that lead to a high rate of employee turnover (Mosley, Pietri, and Mosley Jr., 2012). Managers and leaders are beginning to agree more and more on the importance of combining powerful incentives with effective motivation to promote high performance (Cole and Kelly, 2011).Therefore, the management of the modern Berhan Bank faces a problem in inspiring their staff to deliver quality services, which in turn would satisfy the needs of their clientele. One of the main factors influencing an employee's performance is motivation. Mullins, 2005 A manager's ability to motivate staff members is one of their most crucial 4 responsibilities. There is proof that firms are having trouble keeping workers on board because of the competitive labor market and few possibilities for growth. It doesn't seem like things will improve in the near future. Losing employees means losing their skills, expertise, and experiences, which may have a big financial impact on businesses and affect how well their customers are served. Motivated managers improve staff retention, which benefits the company. A company is only as good as its employees. Since human resources are unique and require particular managerial attention and time, they must be handled with extreme caution. (Stanley, (2012). As a result, research like this is a priceless tool for businesses looking to increase employee motivation while reducing attrition and subpar work (Steers and Porter, 2011). Thus, the purpose of the research was to examine how motivation influences employee performance in the Berhan Bank West Addis District. Additionally, this study's completion will enhance bank sector incentive practices, hence enhancing personnel and organizational performance. Research Questions The following fundamental research questions were addressed by this study: 1) What are the specific motivational factors that influence employees in Berhan Bank, considering both intrinsic and extrinsic motivators? 2) What are the level of job satisfaction among employees at Berhan Bank to understand its correlation with motivation and performance? 3) Which key performance indicators (KPIs) such as productivity, job efficiency, and task completion rates among employees in Berhan Bank? 4) What are the effectiveness of existing recognition programs within Berhan Bank and their impact on employees' motivation and subsequent performance? 5) How the role of financial incentives in motivating employees and evaluate how various compensation structures influence their performance? 1.3. Objective of the study 1.3.1.General Objective The general objective of the study was to examine the effect of motivation on employees’ performance in Berhan Bank West Addis District. 1.4.2. Specific Objectives 5 1. To identify the specific motivational factors that influence employees in Berhan Bank, considering both intrinsic and extrinsic motivators. 2. To assess the level of job satisfaction among employees at Berhan Bank to understand its correlation with motivation and performance. 3. To analyze key performance indicators (KPIs) such as productivity, job efficiency, and task completion rates among employees in Berhan Bank. 4. To evaluate the effectiveness of existing recognition programs within Berhan Bank and their impact on employees' motivation and subsequent performance. 5. To Examine the role of financial incentives in motivating employees and evaluate how various compensation structures influence their performance. 1.5. Significance of the Study The study is important since it raises employee motivational attitude, which benefits all employees. Additionally, the study can contribute to a better understanding of how motivation affects worker performance today. The study is anticipated to assist the organization in identifying its areas of weakness and in creating and implementing plans that highlight the Bank's strengths. Once more, management will make decisions based on both the causes of poor performance and the characteristics that contribute to excellent performance Through this study, administrators will gain insight into how, when, and what kind of motivation to apply in order to maximize staff performance rather than just using it for its own sake. The results of this study will help the company assess how well it has performed in the past and how well it has motivated its workforce in an equitable and fair manner. It is anticipated that the results will also assist the Bank's management in planning and decisionmaking by revealing the true impact of staff motivation on performance. On the one hand, the study could serve as a springboard for more in-depth research in the field from other motivated researchers, and on the other, it could be a valuable resource for scholars and professionals alike. The results of this study will aid in the creation of managerial strategies and policies that are effective in enhancing the management and achievement of the objectives of Berhan Bank. 1.6. Scope of the study The main objective of this study was to identify the factors that influence motivation and how those factors affect worker performance. In particularly, the geographical boundaries of the research were to examines effects of motivation on employee’s performance in Berhan Bank 6 case under west Addis district in Ethiopia (Jemo 2, 18 Mazoria, Bethel, Ayer Tena Adebabay, Sebategna, Merkato Shera tera, T/Haimanot, Gojam Berenda, Geja Sefer, Mesalmya and Addisu Gebeya Branches). Conceptually, factors that were investigated to see if they have an impact on workers' performance include intrinsic motivation (recognition, training, job security, and reward) and extrinsic motivation (pay, promotion, fringe benefits, and working environment). This study's focus was solely on the professional staff member of the Berhan Bank case in Ethiopia's west Addis district. This is because it is challenging to cover every bank branch across the nation with scarce resources and little time. Alongside intrinsic and extrinsic motivation as independent factors, the researcher also employs employee performance as a dependent variable. 1.7. Limitations of the study The research focus on the effect of motivation on employee performance within the Berhan Bank case in Ethiopia’s west Addis district is commendable. However, it’s essential to consider potential limitations to ensure the study’s validity and generalizability. Here are some limitations that might want to address: Sampling Bias: The researcher focusing only on professional staff members in specific branches, there’s a risk of sampling bias. The results may not represent the entire bank’s workforce or other branches. Discussing the characteristics of the selected branches and how they might differ from other branches. Geographical Limitations: While focusing on specific branches is practical, it limits the study’s external validity. The findings may not apply to other regions or banks. Acknowledge this limitation and discuss its implications for generalizing the results. Single-Case Study: the study focuses on a single bank case. While this provides rich insights, it lacks comparative data. Discussing the benefits and drawbacks of a single-case design and how it affects the study’s robustness. Causality vs. Correlation: Establishing causality between motivation and performance can be challenging. Consider discussing the limitations of cross-sectional data and explore longitudinal or experimental designs. External Factors: Employee performance can be influenced by external factors (e.g., economic conditions, industry trends). Acknowledge these external influences and their potential impact 1.8. Definition of Terms Rewards: - According to Vroom (1964) - employees’ effort is increased when rewards are 7 offered. In a reward program, a large amount of money is spent. The reason behind these, hopefully it will increase employees’ motivation. In the words of Cameron and Pierce (2006), an effective reward system requires an experimental attitude; continual fine-tuning of the system; input from people within the system and ongoing evaluation of the effectiveness of the system. Intrinsic rewards, which reward that, are internal to workers and which they give themselves. Intrinsic rewards include self-esteem, a sense of accomplishment, and a feeling of growth or development of special skills and talents. Intrinsic rewards relate to the worker’s perception of the job and, hence, are affected by job design; intrinsic rewards may be called as nonfinancial/non-monetary rewards Kaswan. (2017). Extrinsic rewards, which are external to workers and are given by the organization or someone else. Extrinsic rewards include direct and indirect compensation. Direct incentives are those rewards that are directly involved with the money as wages and salaries, bonus, commission, individual and group incentives, profit sharing and stock options. Indirect incentives are those rewards that are related to employees’ benefits or perquisites. It consists of protection programs, paid time off, health insurance plans, child care benefits and employee discounts Kaswan. (2017). Indirect rewards: - can be addressed to the current employees of the company, and also to the ex-employees (www. rubinian.com). The indirect current rewards are: payment for time not worked (paid for periods like: public holidays, annual holiday, the unpaid days off, pay for other marriage days, funerals, etc.); health insurances (paid sick time off, subscriptions granted to private clinics, public health services provided free or with a discount, and so on); protection of employees for injuries or illnesses; special privileges employees (products and services obtained to preferential price from the company, deducting transport costs in whole or in part, providing free meals at work, special places for recreation, equipment, food or protection of employees that work in harmful conditions, etc.). The rewards for the ex-employees are indirectly related to: providing income to pensioners; protection of the unemployed people (the unemployment wage, health insurance, social assistance, rehiring with priority former employees, and others, etc.) (Raza, et.al. 2015). 1.9. Organization of the Study This research paper is consisting five chapters. The first chapter deals with background of the study, statements of the problem, objective of the study, research question, scope, significant of 8 study the research. The second chapter presents previous related on review and summarize conceptualize and theoretical literature, empirical literature review of effect of recognition on employees’ performance, conceptual framework and Hypothesis of the study. The third chapter explains types and source of data that would be used for the study, research approach, research design, collection procedures, sampling techniques used to determine the sample size, method of statistical data analysis tools and collection. The fourth chapter presents the analysis and result of the study that has been arrived using descriptive and inferential statistical tools. The last chapter had present summary, conclusion, and recommendation of the study 9 CHAPTER TWO REVIEW OF RELATED LITERATURES This study is based on the contents of this chapter. To assess the current body of information addressing the effect of motivation on employee performance, a summary of the substantial historical research on the subject is provided. The conceptual foundation for this study is finally displayed. 2.1. Review of Theoretical Literature In order to build the study's overall conceptual framework, facilitate the design of the variable measurement, and lay the groundwork for comparing the study's core findings with those of earlier, related studies, the researcher reviews the fundamental theories of employee performance and motivation in this section. As a result, the theoretical underpinnings of earlier research were examined and distilled into the following summary, which focuses on the roles that motivation plays in employee performance. 2.2. Motivation Concept (Rajput 2011) contends that the Latin word "Movere," which meaning "to move," is the source of the English word motivation. "The individual’s desire to demonstrate the behavior and reflects willingness to expend effort" is how they described motivation. Therefore, the fundamental idea of motivation is that people are motivated to try to accomplish a goal in order to satisfy a need or anticipation. 2.3. Motivational Types The complicated and changing nature of demands and expectations at work leads to the following two broad categories of motivation to work, which are straightforward but helpful: 2.3.1.Intrinsic Motivation It is described as engaging in an activity for the sake of its intrinsic pleasures rather than for some separate benefit. When a person is intrinsically motivated, he or she is moved to perform for the sake of fun or challenge rather than because of external prods, pressures, or rewards. Although these spontaneous activities definitely provide adaptive benefits to the organism, they appear to be performed for the good experiences associated with exercising and developing one's capacities rather than for any such objective cause (White 1959). 10 2.3.2. Extrinsic Motivation Extrinsic motivation arises from sources other than the performer. It is related to tangible rewards such as compensation and fringe benefits, security, advancement, service contract, work environment, and working circumstances. Money is the most obvious example, but fear of punishment and coercion are other prominent extrinsic motives. While competing, the audience may cheer on the performer, which may inspire him or her to do well Armstrong (2007). People join and are motivated to work in organizations to achieve certain results, whether they are internally or extrinsically motivated. Anything a person obtains from a work or organization is an outcome. 2.4. Theories of Motivation 2.4.1.Theories of Content These ideas seek to explain the unique factors that motivate individuals at work. These theories are focused with recognizing people's needs, relative strengths, and the aim they seek to meet these requirements. Furthermore, these ideas emphasize the nature of needs and what motivates humans. Thus, the assumption that the content of motivation consists of requirements serves as the foundation of these theories Mullin (2005). The following content theories have been proposed: I. Maslow's hierarchy of needs theory II. Clayton Alderfer's ERG theory (also known as Alderfer's need modified theory) III. Herzberg's two-factor theory (motivation-hygiene). IV. McClelland's theory of achievement motivation I. Abraham Maslow’s Hierarchy of Need Theory The hierarchy of needs hypothesis proposed by psychologist Abraham Maslow is one of the most commonly discussed theories of motivation. Maslow considered human wants as a hierarchy, ascending from the lowest to the highest, and he reasoned that once one set of requirements is met, this type of need no longer serves as a motivator Armstrong (2007). As a result, the Maslow's hierarchy of needs is as follows: a) Physiological Needs: These are critical requirements for human survival. Food, water, warmth, shelter, sleep, medicine, and education are the basic physiological demands that must be met first. Maslow believed that until these requirements were met to a sufficient degree to sustain life, no other driving forces could work. 11 b) Security or Safety Needs: These are physical threats as well as the fear of losing a job, property, food, or shelter. It also offers safeguards against emotional injury. Once one's physiological demands are addressed, one's focus shifts to safety and security in order to avoid bodily and emotional injury. Such needs may be met by living in a safe region, having medical insurance, having work security, and having financial reserves (Locke & Latham 2002). c) Social Needs: People need to belong and be accepted by others since they are social beings. People strive to meet their needs for affection, acceptance, and friendship. When a person's lower level physiological and safety demands are addressed, higher level motivators emerge. Social requirements are the first rung of higher level wants. Social needs are those relating to interaction with others and may include friendship, group membership, and giving and receiving affection (Mullins, 2005). d) Esteem Needs: According to Maslow, once a social need is met, people want to be held in both by themselves and by others. Power, prestige, position, and self-confidence are all satisfied by this type of demand. Internal esteem elements such as self-esteem, autonomy, and successes are included, as are external esteem components such as status, recognition, and attention. When a person feels like they "belong" to a group, the desire to achieve a certain level of importance emerges. e) Need for Self-Actualization: Maslow considers this to be the most important need in his hierarchy. It is the desire to become what one is capable of becoming; it encompasses personal development, reaching one's full potential, and self-fulfillment. It is to achieve something and maximize one's potential. Truth, fairness, wisdom, and meaning are common motivators for selfactualized persons (Mullins, 2005). 12 Figure 2.1: Maslow’s hierarchy of needs Source: https://www.indeed.com/career-advice/career-development/herzberg-theory Once a result, according to Maslow's hierarchy of needs, once each of these wants is substantially met, the following need takes precedence. According to motivation theory, while no need is ever completely satisfied, a significantly met need no longer motivates. So, if you want to encourage someone, you must first identify where they are in the hierarchy and then focus on addressing those demands or wants above that level (www.aafp.org). II. Clayton Alderfer’s ERG theory (Alderfer’s Need Modified Theory) Alderfer's ERG theory of motivation, which is based on Maslow's Hierarchy of Needs, asserts that humans have three basic sorts of needs: existence, relatedness, and growth. These requirements may be of varying priority for various people, and their relative importance to an individual may change over time. (Alderfer 1969) attempted to rebuild Maslow's hierarchy of needs into another paradigm called ERG, which stands for Existence - Relatedness - Growth. There are three types of core 13 requirements, according to him. The existence group is primarily concerned with ensuring fundamental material existence. Individuals in the second group must maintain interpersonal relationships with other members of the group. The intrinsic drive to grow and develop individually is the fourth group (Mullins, 2005). Figure 2.2 Comparing Alderfer and Maslow Source: Herzberg’s Motivational-Hygiene Theory: Education Library Individuals must satisfy one level of requirements before moving on to the next in Maslow's Hierarchy of requirements. They must, for example, have addressed their safety demands before being driven by social affiliation. Alderfer was not convinced. Individuals do not need to have satisfied their existence needs before being driven by their relatedness need, according to his approach Candi et al. (2013). In fact, Alderfer went on to say that different people may prioritize their requirements in different orders based on their life perspectives. A common example of this is the starving actor who is motivated by growth through their art, even if it means sacrificing their existence (i.e. they can't pay their rent but are pursuing their passion) Mahazril et al. (2012). Alderfer also mentioned how individuals see their advancement in connection to each level of need. If a person believes they are making significant progress in relatedness, they may become increasingly motivated by growth even if their relatedness demand has not been entirely met. Similarly, if a person is dissatisfied with their progress in relation to growth, they may leave it 14 and redouble their motivation in reference to relatedness Mahazril et al. (2012). III. Frederick Herzberg’s Two- Factor (Motivation-Hygiene) (Frederick Herzberg 1959) attempted to revise Maslow's Need Hierarchy theory as well. His theory is sometimes referred to as the Two-factor theory or the Hygiene theory. He stated that there are some workplace satisfiers and dis-satisfiers. Job satisfaction is tied to intrinsic elements, and unhappiness is related to extrinsic factors. According to his research, the inverse of satisfaction is not unhappiness. As a result, removing unsatisfying traits from a work does not always result in a more satisfying job. He claims that the presence of some factors in an organization is natural, but that their presence does not contribute to motivation. Their absence, on the other hand, de-motivates. Similarly, there are certain factors whose absence creates little unhappiness but whose presence has a motivating effect. (Cole 2003).Figure 2.3: Herzberg’s Motivation-Hygiene Theory Figure 2.3: Motivators & Hygiene Factors Source : https://en.wikipedia.org/wiki/ Motivational elements are those that are related to job satisfaction. They address intrinsic demands such as achievement, acknowledgment, and progression. Employees are more satisfied with their jobs when they are motivated. The six motivators that fulfill employee intrinsic needs: achievement, recognition, growth, advancement, responsibility, and the work itself In (2013). Hygiene considerations: These are factors that are unrelated to workplace satisfaction yet must 15 be present in order to prevent unhappiness. Extrinsic needs such as pay grade, workplace rules, and interactions with peers are covered by hygiene elements. Hygiene factors consists of a set of 10 factors: company policies and administration, quality of technical supervision, quality of interpersonal relations among peers, subordinates, and superiors, salary, job security, personal life, working conditions, and status Kingira and Mescib (2010). Table 2.1: categories of hygiene and motivational factor Categories Root cause Connectors Byproducts Hygiene Factors extrinsic needs job context dissatisfies Motivators intrinsic needs job content satisfiers Sourece: Kingira and Mescib (2010) In order to apply Herzberg’s theory in the workplace, one must examine the hygiene factors. As stated above, hygiene factors do not contribute to workplace satisfaction but must be present in order to prevent workplace dissatisfaction. Hygiene factors are closely related to extrinsic needs: Figure 2.4: Herzberg’s Hygiene Factors and Motivators Diagram Source: https://www.aafp.org/pubs/fpm/issues/1999/1000/p26.html IV. McClelland’s Theory of Needs David McClelland established a theory on three sorts of motivational requirements in 1988. 16 These are the needs for power, affiliation, and achievement. People with a strong desire for power are naturally drawn to positions of influence and control. They enjoy being in the spotlight and are excellent orators. They are demanding by nature, powerful in their demeanor, and ambitious in their pursuits. If they are given key or authority roles, they can be driven to perform (Cole 2003). People that are naturally social fall into the second type. They make an effort to connect with individuals and groups. They are motivated by religion and love. They enjoy creating a welcoming environment around themselves. They are motivated by social recognition and identification with others. The third category is motivated by the challenge of success and the dread of failure. Furthermore, their need for achievement is moderate, and they establish somewhat difficult goals for themselves. They have an analytical mindset and take cautious risks. Such individuals are motivated to perform when they believe they have a chance of success (Ibid 680). Figure: 2.5: How to motive According to McClelland’s Theory of Needs Source: Norlyon Opinaldo (2022) Individuals' work is best suited to them, so there is little justification for poor performance or a lack of drive to accomplish a task. Using this approach, individuals can persuade team leaders to offer them work that they are more interested in. Employees are more accountable for their work as a result, and they are less prone to make excuses for providing poor quality work. This also means that the bar for delivering high-quality work has been raised Shahzadi, et al. (2014). This is 17 because the extra time spent accurately allocating work implies that a greater standard of excellence is normally expected (Vrancic, 2015). 2.2.2. Theories of process A process theory is a collection of ideas that describes how a thing changes and evolves. Process theories are sometimes contrasted with variance theories, which are conceptual systems that explain the variation in a dependent variable using one or more independent factors (Singh, et. al. 2012). These are extrinsic theories that aim to discover the relationships between the dynamic variables that comprise motivation and the activities necessary to impact behavior and action. They also contribute to our knowledge of the complicated nature of work motivation. Mullins (Mullins, 2005). Process theory, on the other hand, is also referred to as cognitive theory since it is concerned with people's perceptions of their working environment, as well as the methods in which they interpret and comprehend. As a result, cognitive theory is more valuable to managers than need theory since it provides more practical advice on motivation tactics (Armstrong 2006). The following are the process theories: A) Vroom’s Valence/Expectancy Theory In 1964, Victor Vroom proposed expectation theory. Vroom's theory critiqued Herzberg's twofactor theory as being overly dependent on the content and environment of workers' work duties, and he proposed an expectation approach to the study of motivation (Bloisi.2003). To put it simply, this theory contends that the strength of a tendency to act in a certain way is determined by the strength of anticipation that the act would be followed by a given consequence, as well as the attractiveness of that outcome to the individual. Furthermore, expectation theory states that an employee can be driven to perform better when there is a belief that better performance will result in a positive performance appraisal and that this will result in the achievement of a personal objective in the form of a reward (Cole 2003). B) Equity Theory People are motivated by their opinions about the reward structure being fair or unjust in relation to the inputs, according to the equity theory articulated by J. Stacey Adams (1965). For comparisons between various individuals, people have a tendency to utilize subjective judgment to balance the outputs and inputs in the connection. If employees believe they are not being fairly compensated, 18 they will either cut the quantity or quality of their job or leave for another business. People may be inspired to work harder if they believe they are being rewarded more generously (Reiss 2004). C) Goal Setting Theory of Edwin Locke It was proposed by Edwin Locke in 1979 and claims that individuals are more motivated and performs better when they create explicit objectives, accept demanding targets, and receive performance feedback. Mullins (Mullins, 2005). Rather to assigning workers broad tasks, specific and pronounced objectives help they complete them more quickly. A goal orientation also minimizes any misconceptions in the employees' job because the clarity is strong. According to goal setting theory, when the goals to be reached are established at a higher standard, employees are driven to perform better and put forth maximum effort. Furthermore, it is based on the concept of "self-efficacy," which is an individual's perception that he or she is capable of completing a difficult activity (Ibid). 2.3. Employee Performance Employee performance is a gauge of how well a worker does their job and conducts them in the workplace. It has an impact on customer happiness, the firm's revenue, company culture, and employee retention rates, to mention a few outcomes, making it crucial to every facet of the organization. Worker performance encompasses the caliber, productivity, and efficacy of a worker's output. The way a worker performs also reflects how valuable they are to the company. Since employees are an investment, their performance serves as a proxy for their return on investment (Kinicki and Kreitner 2016), 2.3.1. The Importance of Motivation on Organizational Performance All organizations, regardless of size, market, and technology, want to be successful and maintain a constant progress even in a current highly competitive business environment. In order to achieve those goals and objectives, strategies must be developed and well-implemented with the effective utilization of all capable resources. A few organizational believe that their employees are an important asset that can lead them to overcome difficulties, exceed their limits and reach prosperity. In contrast, companies that put their personnel in the center of the business, maintaining a positive and strong relationship with its employees, persuading them towards task fulfillment are proved to result in higher effectively and productivity (Adi, 2000, Anka, 1988, Rothberg 2005). However, today, organizations are also facing challenges in employee retention. Acknowledging 19 the important role of employees and the huge influence they bring towards organizational effectiveness, companies are trying to retain employees by creating motivation and a healthier workplace. This is very important because if the personnel are not focused well, it associates with a decline in business productivity and effectiveness. Unless and until the employees are motivated and satisfied, an organization cannot foster to success (Manzoor, et.al. 2016). Many researchers have shown that motivated employees perform work better than de-motivated ones. Motivated employees are more innovative as they are always looking for better ways to complete a task. They are self-direct and goal-oriented. They can produce high-quality work with more or maximized efficiency and productivity (Boundless 2017) which also leads to maximization of profits (Matthew, Grawhich & Barber 2009). Employee motivation has a strong influence on the effective performance of an organization (Paul 2017). Organizational effectiveness is a broad term but this study follows the concept as “locating targets and attaining them proficiently in spirited and energetic surroundings” (Constant 2001). “An effective organization will make sure that there is a spirit of cooperation and sense of commitment and satisfaction within the sphere of its influence” (Abbah 2014). There are no fixed parameters to compute the effectiveness of an organization since it varies from company to company and from case to case. However, it can be used to measure anything within an organization, from leadership, communication, accountability, metric, human performance, to the delivery systems (Anderson & Adams 2015). 2.3.2. The Effects of Motivation on Employees’ Performance The motivation theorists such as Maslow (1946), Herzberg (1968), Alderfer (1972) and McClelland (1988) have suggested specific things that managers can do to help their subordinates become self-actualized, because such employees are likely to work at their maximum creative potential when their needs are met. They agree that by promoting a healthy workforce, providing financial security, providing opportunities to socialize and recognizing employees‟ accomplishments help to satisfy the employees‟ physiological needs which in turn also increase their performance. These authors (Kohn, 2012) all stated that recognition of a job well done or full appreciation for work done is often among the top motivators of employee performance and involves feedback. Positive feedback follows the principles advocated in Reinforcement Theory, which states that behavior is contingent on reinforcement. Examples of positive reinforcement in this context may include workplace visits by top executives to high20 performance employees, personal handwritten notes of thanks accompanying paychecks, and telephone calls by top executives to employees at home (Knippen and Green, 1990). Theories such as equity has some important implications for ways of motivating people by not underpay, overpay and presenting information about outcomes in a thorough and socially sensitive manner. It states that, companies that attempt to save money by reducing employees‟ salaries may find that employees respond in many different ways to even the score; those that overpay some employees as a useful motivational technique to increase performance may later realized that when you overpay one employee, you are underpaying all the others. When the majority of the employees feel underpaid, they will lower their performance, resulting in a net decrease in productivity and widespread dissatisfaction (Dubrin, 2012). Hence, the conclusion is that managers should strive to treat all employees equitably; and This suggestion follows from research showing that people’s assessments of fairness on the job go beyond merely what their outcomes and inputs are to their knowledge of how these were determined, that is, to their sense of procedural justice (perceptions of the fairness of the procedures used to determine outcomes). Osei (2011), also agrees with the equity theory that, one of the fundamental issues that is sensitive and critical which can make or unmake any organization is wage or salary determination. Justice, fairness and equity in salary determination, to a large extent, put to rest all the traumas any individual or any organization may experience, and that is highly motivational enough to assess the optimal usage of time and energy (Imaginário, Vieira & Jesus, 2013). Also, theory such expectancy has several important implications for ways of motivating employees by clarify people’s expectancies that their effort will lead to performance, that is by training employees to do their jobs more efficiently and so achieve higher levels of performance from their efforts and linking valued rewards and performance by specifying exactly what job behaviors’ will lead to what rewards. It is possible for employees to be paid in ways directly linked to their performance such as through piece-rate incentive systems, sales commission plans or bonuses (Kamalian et al, 2010). Locke (1968), goal setting theory believes that you can achieve effective performance goals by assigning specific goals; difficult but acceptable performance goals; and providing feedback concerning goal attainment. He further indicated that giving praises, Management by Objectives (MBO), and job-design increases employees‟ performance. Praise is a motivator (not hygiene) because it meets employees‟ needs for esteem, self-actualization, growth and achievement. It is 21 most powerful, less expensive, and simplest, yet the most underused motivational technique. To motivate people to high-levels of performance, objectives should be difficult but achievable, observable and measurable, specific, with a target date, anticipatively set when possible and Employee who meet their objectives should be rewarded through recognition, praise, pay raises, promotions etc. Many organizations now link pay to meeting goals (Lussier, 2005) and the way the first step in organization design is job design - the process by which managers decide how to divide tasks into specific jobs, for example, McDonaldisation (Jones et al, 2000). 2.3.3. Factors That Motivate Employees No one works for free, nor should they. Employees want to earn reasonable salary and payment, and employees desire their workers to feel that is what they are getting (Houran. J). Here the research try to list out the factors that motivate employees. Training:-Training refers to ‘‘the systematic accretion of skills, command, concepts or mindset leads to improve performance’’ (Lazazzara and Bombelli 2011). Baldwin et al. (1991) indicates that individuals with higher pre-training motivation on the basis of their willingness to attend training have greater learning outcomes as compared to individuals heaving lower pre-training motivation. Commeiras et al. (2013) point out that traineeship is continuing to grow. In business, context training basically refers to action of teaching employees and providing proper knowledge and skills to make themselves job fit as well as organization fit. Training teaches employees how to work and enhance their skills, hence motivate them to achieve the common goal of organization as well as of employee. In the today’s competitive world, every organization wants to achieve competitive edge over their competitors and be impossible to achieve without employee involvement, which forces management to motivate their employees by different means. Monetary incentives: - As summarized by Park (2010), monetary incentive acts as a stimulus for greater action and inculcates zeal and enthusiasm toward work, it helps an employee in recognition of achievement. Likewise, Beretti et al. (2013) discussed that monetary incentives used to build a positive environment and maintain a job interest, which is consistent among the employee and offer a spur or zeal in the employees for better performance. For reason, monetary incentive motivate employees and enhance commitment in work performance, and psychologically satisfy a person and leads to job satisfaction, and shape the behavior or outlook of subordinate toward work in the organization (Joel K. 2017). 22 Job transfer: - The work of Azizi and Liang (2013) indicated that workforce flexibility can be achieved by cross-training and improved via job rotation. In the same way, Eguchi (2004) concluded that job transfer plays a significant role in preventing workers from performing influence activities for private help. As summarized by Asensio-Cuesta et al. (2012) job rotation provides benefits to both workers and management in an organization and prevents musculoskeletal disorders, cast out fatigue and increases job satisfaction and morale. As a result, job transfer gives the opportunity to learn multiple skills and outlooks to the workers. It avoids the dullness caused by monotonous jobs and simultaneously brings smoothness in technological job with the help of handling different circumstances at different levels and it leads to effective learning of many aspects in the organization (Elizabeth 2017). Job satisfaction:- In (2011), Parvin and Kabir studied the tested factors affecting job satisfaction for pharmaceutical companies and described job satisfaction as how content an individual is with his or her job, and viewed job satisfaction is not the same as motivation, although clearly linked. Similarly, Pantouvakis and Bouranta (2013) indicated job satisfaction as a consequence of physical features and as an antecedent of interactive features. Wickramasinghe (2009) investigated that gender and tenure are significant in job satisfaction measurement. So here it can be said that job satisfaction is often determined by how well outcome meet or exceed expectations (Mcnaughton et al, 2015). For example, a good work environment and good work conditions can increase employee job satisfaction and the employees will try to give their best which can increase the employee work performance. Promotion: - A study by Garcı´a et al. (2012) identified that perceptions of promotion systems affect organizational justice and job satisfaction. Likewise, Koch and Nafziger (2012) specified that promotions are desirable for most employees, only because they work harder to compensate for their ‘‘incompetence.’’ As a result, promotion at regular interval of time has an optimistic approach behind and they are generally given to satisfy the psychological requirements of employees in the organization. Achievement:-The work of Hunter et al. (2012) defines that achievement is a unique and specialized form of organizational performance. As per Satyawadi and Ghosh (2012), employees are motivated to a greater extent by achievement and self-control. Now this can be understood that an employee who is achievement motivated seeks achievement, bringing realistic but 23 challenging goals, and betterment in the job. There is a strong need for feedback from the higher officials in the organization as to achievement and progress, and a need for a sense of attainment. Working conditions: - In (2012), Jung and Kim stated that good work environment and good work conditions can increase employee job satisfaction and an employee organizational commitment. So the employees will try to give their best which can increase the employee work performance. Similarly, Cheng et al. (2013) concluded that there were evidences of moderating effects of age on the associations between psychosocial work conditions and health. Now the importance and the need of working condition is so describing or defining the physical environment by identifying those elements or dimensions of the physical environment. Employees having poor working conditions will only provoke negative performance, since their jobs are mentally and physically demanding, they need good working conditions(Mcnaughton et al, 2015). Appreciation: - a study by Mahazril et al. (2012) organizations had the duty to appreciate the employee from time to time and offer other form of benefits such as payment, which will help in employee motivation. Likewise, Kingira and Mescib (2010) define appreciation as the abstract of immaterial incentives; ‘‘employees giving immaterial incentives (appreciation, respect etc.) as much as materiel incentives with working department’’ shows employees do not agree with this behavioral statement. With this result, it can be stated that employees being employed in different parts can take their different opinions at different levels. Among the variable of responsibility and being appreciated, it is understood that ‘‘success of employers always be appreciated with education.’’ The more effective quality and practicality of education employees had, the more contribution they will have to businesses. Job security: - As per Yamamoto (2013) “if an employee perceives they will be getting rewards for good work and their job is a secured one, the performance will automatically be better”. Similarly, Zhang and Wu (2004) indicated that “with Job security, an employee gets confident with the future career and they put their most efforts to achieve the objectives of the organization. So we can say job satisfaction is the most influential tool of motivation and put the employee very far off from mental tension and he gives his best to the organization, ultimately it leads to profit maximization.” Recognition: - According to Candi et al. (2013), a growing recognition of the opportunities of innovation is through experience staging. Mahazril et al. (2012) concluded that rewards and 24 recognition and communication may motivate them to work. Recognition enhances the level of productivity and performance at job whether it is a first time performance or a repeated action at the job in a progressive way and ultimately reinforces the behavior of employee. Social opportunities: - In (2013), Harvey indicated that an employee is accepted as part of the social group or team. Most staff has an acute need that their contribution is worthwhile, appreciated, and acknowledged. Organizations need to look beyond the traditional economic incentives of career opportunities and salaries to other social and lifestyle factors outside the workplace. Similarly, Kingira and Mescib (2010) concluded that, different opinions between the employees in terms of behavioral statements which can be ‘‘Social opportunities providing at the highest level with working period leads the employee to achieve their goals of the organization.’’ Therefore, a social opportunity for the employee is used to boost their motivation level and ultimately helps in achieving the goals and objectives of the organization. So in the above list factors Employees work in organizations not just to make a living, but to make a life. It encourages heightened ownership at work. Tangible benefits (salary) and intangible benefits (achievements of the knowledge) and other perks are necessary to engage employees, and motivate them to do their personal best (Karen and Peter 2013). 2.3.4. The relationship between employee performance and motivation It would seem clear that employee performance and motivation are related. People who are extremely driven will work more effectively. Better performance can therefore result in a greater sense of accomplishment and motivation. The majority of people naturally perceive a connection between motivation and output. While there may be differences in opinion regarding the extent to which motivation affects performance, most people would concur that low or absent motivation makes it challenging to perform at high levels (Frederick- Recascino & Hall 2003). As a result, there may be a reciprocal relationship between motivation and performance. But this raises a lot of issues related to perception, skill, and stress. Additionally, motivated workers might put in additional hours, but this has to be properly controlled to prevent them from focusing all of their energy on tasks that may or may not be beneficial to the organization. If motivated workers possess the necessary abilities and the awareness to determine whether they do, they might be more productive than unmotivated workers. It is just as crucial to pay attention to motivation as it is to take steps to improve skill through appropriate selection and training (Karan 2009). 25 Furthermore, encouraging people for improved performance includes a number of essential variables such as employee engagement, corporate vision and values, management acknowledgment and appreciation of well-done work, overall leadership authenticity, financial reward, and career advancement, among others. Employees are expected to arrive at work with the intrinsic drive and desire to succeed, create value, and contribute to the achievement of an employer's goal. In contrast, it is the employer's responsibility to give resources, opportunities, recognition, and a cohesive work environment for employees to be successful (Ibid; 490) Similarly, engagement drives motivation, which is shown in how much employees devote, how hard they work, and how long they remain. Furthermore, people join organizations for a variety of reasons, including intrinsic and extrinsic benefits. Intrinsic rewards are expressed in behaviors deemed significant. As a result, managers must encourage employees with the purpose of having them contribute to the firm. Managers can effectively encourage employees by providing genuine rewards (Daniel and Metcalf, 2005). Furthermore, people are frequently motivated differently, and in order to create a work atmosphere that encourages motivation, firms must first understand what is important to their employees and then emphasize these characteristics. Job, aside from monetary gain, provides people with fulfillment on a variety of levels, from earning a living and "doing good work" to striving to a goal and ultimately having an impact on the quality of life. Good companies are constantly striving to structure work in such a manner that it matches the nature of the task with the character of the person and is as exciting and joyful as feasible. (Brian 2013). In respect to these, (Perry 2006) stated that employees who engage in their organization's decision-making processes and believe they have a voice in the company have higher job satisfaction. Furthermore, (Lawler 2003) underlines the importance of "treating people right" in order to achieve organizational performance and success. It's also simpler stated than done. This entails "a highly complex set of actions by both organizations and employees." personnel must behave in ways that assist their organizations become effective and high-performing; organizations must discover ways to encourage and satisfy their personnel. As a result, his winning mix for success necessitates collaboration between the organization and its people. He also states that "one cannot succeed without the other." Organizations must be successful in order to give meaningful work and rewards to their employees. And for organizations to succeed, high-performing individuals are required. The problem is to create organizations that function well while also 26 treating people in rewarding and satisfying ways." He uses the term virtuous spiral to characterize this mutually beneficial connection, which arises when a firm appreciates its employees and employees are committed to high performance in return. Furthermore, motivation is one of the most essential aspects that might affect organizational success. Employee motivation should be one of managers' policies to improve work management among employees in firms (Shadare et al 2009). A motivated employee is also aware of the specific goals and objectives that must be met, so they aim their efforts in that area. Thus, organizational facilities will be wasted if there are no motivated people to use them effectively ( Karen and Peter 2013). As a result, staff motivation and performance are critical variables in propelling a company forward. Owners, managers, and supervisors understand that positive motivation leads to improved performance and increased production, yet they may rely on the incorrect methods, causing employee unhappiness and bad performance. Furthermore, motivation boosts workers' willingness to work, enhancing the organization's effectiveness (Ibid; 560). 2.4. Review of Empirical Literature Numerous academics have conducted studies on the impact of motivation on employee performance, and their findings which are expanded upon below have assisted in drawing conclusions. One of the earliest empirical investigations on Maslow's theory of the hierarchy of needs attempted to determine the generalizability of Maslow's list of wants, which was drawn from American society. The study discovered that these needs were significant and that managers had them. Though these needs might be acknowledged by all, the value placed on meeting particular needs varies depending on the culture (Haire, et al., 1963). According to a survey done in 2007 by Velnampy to test Maslow's hierarchy of needs theory, lower level employees in Sri Lankan public and private sector organizations prioritize lower level needs more than higher level employees, whether consciously or unconsciously. In a different study, Sajuyigbe, et al. (2013) gathered information from 100 workers of particular manufacturing companies in Ibadan, Nigeria, and came to the conclusion that organizational performance was significantly correlated with pay, performance bonuses, recognition, and praise a finding that supported Herzberg's theory of motivation hygiene. Apart from cash or monetary rewards, motivation theories and empirical studies also attest to the role of non-cash rewards in motivation especially in technology based, high paying jobs. Brown 27 and Armstrong (1999) reported that the non-financial schemes in their survey were particularly popular among knowledge and technology based sectors as well as sales and service companies. Studies using data collected in the United Kingdom also attest to the role of non-financial incentives in motivating employees to high productivity. Another study by Beran (2005) confirmed that the majority of companies have in place one form or another of non-financial rewards, especially employee recognition, and that the policy enhanced productivity. In a different study, Rose (1998) found that the respondent companies that prefer non-financial rewards are those that rely on high level of customer contact. These academics claim that the majority of studies on methods to motivate. These researchers claim that the majority of studies on employee motivation and engagement consistently return to these topics (Vrancic, 2015). An additional investigation by Ng, et al. (2010), referenced by Singh, et al. (2012), aimed to examine the aspirations and preferences of youthful workers. They discovered that the most desired work-related feature for this group of employees was opportunities for professional progression, which was ranked above opportunities for good training and development and nice people to relate to. Surprisingly, these researchers found that salary, perks, and job stability came in third place, after career growth. Tausif (2012, as reported in Haider, et al., 2015:348), a Pakistani researcher, polled public school teachers and discovered that encouraging non-cash rewards was crucial to raising workers' motivation and job satisfaction. In a similar vein, Barton (2006, quoted in Haider, et al., 2015: 348) discovered that the most crucial element among non-cash benefits for raising job satisfaction is employee recognition. After doing research, Bull (2005, as reported in Haider, et al., 2015: 348) came to the conclusion that difficult jobs improved workers' job satisfaction. The study planned to be conducted will be different from the previous one as it will be conducted in a different area, which is in the Dar es Salaam region. Orasa (2016) made a study on the effect of motivation factors on employee job performance in public health care facilities at Ilemela in the Mwanza region using descriptive methodology and presented the following findings: there were low motivation among health workers, some employee were intrinsically motivated and some were poorly motivated using extrinsic motivators. Third study conducted by Mbogo (2014) concentrated on impact of motivation on employee performance in public services in Tanzania in Ilala Municipality using Statistical Package for Social Studies and presented that there were positive relationship between motivation and 28 employee performance where wage was identified as the most motivating factor. The study intended to be done will different from this as it doesn’t explore about factors of motivation. In the Institute of Finance Management in Dar es Salaam, Bushiri (2014) conducted a study on the effect of working environment on employee performance using qualitative and quantitative methodology. The study's findings indicated a positive relationship between working environment and employee performance. This study will differ from the last one in that it will take into account multiple motivational elements rather than focusing on just one aspect of the working environment. His research also demonstrated how good training initiatives improve employees' knowledge, abilities, and attitudes, which raises productivity and improves organizational performance. Furthermore, Mohamed (2016) used the Statistical Package for Social Studies to conduct a study on the impact of motivation on job performance among primary teachers in public schools in Kongwa District Council. The study's findings indicated that there was no significant correlation between motivation and teachers' job performance because performance is influenced by a variety of factors. Based on the target population's origins in the Dar es Salaam Region, the study that will be conducted will differ from Mohamed's research. Al Halibeh (2013) looked into how incentives affected the employees of the Jordanian Greater Amman Municipality's performance. A random class approach was utilized to pick 150 people, representing 33% of the 449 employees in the research population, who were managers, heads of departments, and administrative staff. Regression analysis and a descriptive analytical approach were used in the study to address the research issues. The findings showed that moral and material motivation were present at low levels, whereas social motivation and performance were acquired at an intermediate level. According to Graffin (2002), people are driven to pursue social equity when their success is rewarded. When people sense that they are receiving fair and equitable treatment, they will become more motivated. Equity refers to a person's perception that their treatment is significantly different from that of others. Equity theory states that benefits from a job include income, acknowledgment, advancement, connections with coworkers, and internal rewards. The person contributes to the job with time, experience, effort, knowledge, and commitment in order to receive these benefits. According to the hypothesis, people see their inputs and results as ratios and then contrast them with those of other people. Individuals who perceive a lack of reward 29 attempt to lessen the unfairness. Like that People can reduce their inputs by working less, increase their outcomes by asking for raises, rationalize away the initial ratios, try to persuade the other person to adjust their inputs or outcomes, leave the situation, or change the object of comparison. Another possibility is that someone feels superior to another. Another study on motivation conducted by Kindu (2001) to explore the extent to which incentive and motivation had an effect on productivity in textile industry in Ethiopia, revealed that motivation had an impact on productivity as employee who were motivated performed better than those who were not adequately motivated. The study also found that there were inadequate welfare facilities and working conditions in the textile industry. Ultimately, the researcher came to the conclusion that increased worker morale could lead to higher production. According to David B. Balkin (2002), hygienic elements are extrinsic or contextual components of a job, such as pay, perks, and company policies. If these expectations are not realized, they may cause people to become unsatisfied, but they will also inspire people to do well. Providing employees with motivation, or intrinsic benefits coming from the task itself, that continuously stimulate them to strive for the maximum possible performance level is crucial, presuming the hygiene aspects are adequately controlled. Hertzberg lists achievement, acknowledgment, and the nature of the work as examples of these motivators. According to Hertzberg, these motivators boost job satisfaction; yet, eliminating unsatisfactory aspects of a profession does not guarantee that it will become more fulfilling. Elizabeth (2017) did another study on the effects of motivation to explore the extent to which motivation affects employee performance using the case of Pam Golding Properties in Nairobi. Money was a highly motivating factor for the employees, and management should look into increasing the monetary and benefits package they provide. The study also mentioned. Employees regarded the current recognition and incentive systems to be inequitable and unfair. Finally, it was determined that if management re-evaluates and re-engineers the current recognition and incentive program, the employees' view of it will alter. 2.5. Research Gap Recognition and Job Satisfaction: Studies consistently show that employees who receive recognition for their work tend to be more motivated and satisfied. When employees feel valued, they are likely to perform better. Training and Skill Development: Providing training opportunities enhances employees’ skills and job satisfaction. Well-trained employees are more 30 likely to perform effectively. Job Security: Job security contributes to a positive work environment. Employees who feel secure are less stressed and more focused on their tasks. Pay and Rewards: Competitive compensation and rewards (such as bonuses) motivate employees to perform well. Financial incentives can positively impact performance. Promotion Opportunities: Clear career paths and promotion prospects encourage employees to excel. The possibility of advancement motivates them to work harder. Working Environment: A pleasant and supportive work environment fosters motivation. Factors like office layout, facilities, and interpersonal relationships matter. Employee Performance: Research consistently links motivation to employee performance. Motivated employees are more productive, committed, and innovative. High motivation leads to better task performance, fewer errors, and improved customer service. 2.6. Conceptual Framework Because the effects of motivation on employee performance are being explored empirically, there is a need for a conceptual framework that connects the notions of motivation and employee performance. As a result, the conceptual framework serves as a foundation for concentrating on certain factors for the investigation. These variables are based on a survey of the research on motivation and its effects on employee performance. The study framework consists intrinsic rewards (Recognition, Training, Job Security and Reward) and extrinsic rewards ( Salary, Promotion, Fringe Benefit and Working Environment). 31 Independent Dependent Variable Intrinsic Motivations Recognition Training Job Security Employee Reward Performance Extrinsic Motivation Salary Promotion Fringe Benefit Working Environment Figure 2.6: Conceptual Framework of the study Source: Compiled by the researcher (2024) According to the preceding discussion, motivation, the drive behind effort to satisfy needs, can come from within or from without intrinsic rewards (Recognition, Training, Job Security and Reward ) and extrinsic rewards ( Salary, Promotion, Fringe Benefit and Working Environment) respectively. The need theorists' focus on the question of what arouses, sustains, and regulates goal directed behavior, that is, what specific things motivate people, and the process theorists' focus on the process of motivation and the importance of rewards. 32 2.7.The study's Hypothesis H1: Recognition has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H2: Training has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H3: Job Security has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H4: Reward has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H5: Salary has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H6: Promotion has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H7: Fringe Benefit has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H8: Working Environment has a significant effect on motivation on employees’ Performance in Berhan Bank West Addis District 33 CHAPTER THREE RESARCH METHODOLOGY This section explains the study's research design and approach, the characteristics of the study's target population, sample and sampling techniques, data sources, data collection schedule, and data processing method. It describes the kind of data used in the study and research methodology, as well as the study's reliability and validity tests. 3.1. Research Design The blueprint for achieving research objectives and answering research questions is the study design (John et al., 2007). Because the purpose of this study is to investigate the effect of motivation on employee performance at Berhan Bank professional staff, a combination of descriptive and explanatory research methods will be used. The descriptive research method was used to "describe" a situation, issue, behavior, or phenomena. It was used to address who, what, when, where, and how questions about a specific research subject or problem. Descriptive studies were frequently described as investigations into "what is." It aims to collect measurable data that may be utilized to statistically examine a target audience or a specific subject. The term "description research" refers to the observation and description of a research subject or problem without affecting or manipulating the variables in any way. One of the most typical issues is that descriptive designs do not provide clear cause and effect linkages. Shukla, A. (2008).Explanatory research is also used to demonstrate the cause and effect of motivation on employee performance since it explains the relationship between factors and how these variables affect employee performance. The emphasis here is on analyzing a situation or an issue to understand the relationship between variables. The goal of this type of research was to examine the cause-effect relationship and explain what causes what effect. 3.2. Research Approach The study employs mixed research, which combines quantitative and qualitative research approaches, depending on the types of data used. Quantitative research refers to investigations that employ statistical analyses in order to get their conclusions. Formal and systematic measurements as well as the application of statistics are important components. Conversely, qualitative research entails investigations that do not aim to 34 measure their outcomes. Through an analysis or statistics summary qualitative research often comprise interviews and observations without formal measurement (Marczyk G, DeMatteo D. and Festinger D., 2005).A hybrid method was chosen for this study since it is believed that the combination of the two will help supply additional information. 3.3. Data Type and Data Source Both primary and secondary data will be employed in the study's design. Primary data were gathered specifically to address the research questions and were derived from the original sources. Primary data was primarily gathered by interviewing concerned staff members and via closed-ended questionnaires. The study and the findings of other researchers in this field were supported by the secondary data (empirical study). The staff human resource management manual, the bank's annual report, its motivation system, and staff-related manuals were the sources of secondary data. Secondary data on the other hand, contains relevant data that will be collected for a different purpose, but from which the conclusion is valuable for the purpose (Catherine, 2007). 3.4. Sampling and Sampling technique 3.4.1. Target population Using stratified random sampling, a random sample was chosen from each subgroup once the population was split into strata, or subgroups. Natural groups of objects are called subgroups. To mention a few, subgroups may be based on occupation, gender, or the size of the firm. When there is a lot of variance within a population, stratified sampling is frequently employed. Its goal is to provide sufficient representation for each stratum (Ackoff, 1953). Due to financial and time constraints, the researcher reduced the number of first-class branches (Jemo 2, 18 Mazoria, Bethel, Ayer Tena Adebabay, Sebategna, Merkato Shera Tera, T/Haimanot, Gojam Berenda, Geja Sefer Addisu Gebeya, and Mesalmya Branchesi) from the study's identified target population to just 11. These branches were select through stratified sampling based on their grades and are located in Addis Ababa, a sample size of 183 participants. 3.4.2. Sample size The research was used stratified random sampling techniques for the census sampling method. Census sampling involves collecting data from every member of the population all employees in the selected banks. The reason is it is suitable for this study. It provides a complete picture of 35 the entire population, ensures accurate population estimates and useful for official government statistics. It was also a biased methodology that's helpful once some members of a population build higher subjects than others. The main objective of a census sample is to produce a sample that can be logically assumed to be representative of the population, for this study was used the census method because the researcher selects first class branches (Jemo 2, 18 Mazoria, Bethel, Ayer Tena Adebabay, Sebategna, Merkato Shera Tera, T/Haimanot, Gojam Berenda, Geja Sefer Addisu Gebeya and Mesalmya Branchesi) 11 branch banks. Therefore, the total numbers of the population of the study will be 183. Table 3. 1: Sample size distribution S/N Branch Office name Target Population 1 Jemo 2 15 2 18 Mazoria 14 3 Bethel 19 4 Ayer Tena Adebabay 18 5 Sebategna 14 6 Merkato Shera tera 17 7 T/Haimanot 17 8 Gojam Berenda 18 9 Geja Sefer 14 10 Mesalmya 19 11 Addisu Gebeya 18 Total 183 Source: Berhan Bank December 2024 3.4.3. Sampling Technique Techniques for stratified random sampling was used in the study. By stratifying the population into strata (or subgroups) and randomly choosing a sample from each, stratified random sampling aims to guarantee that each stratum is fairly represented. When there is a lot of variance within a population, stratified sampling is often utilized. An appropriate sample size was necessary for generalizing from a random sample while avoiding biases or sampling mistakes. What is sufficient relies on a number of factors, which frequently perplex those 36 conducting surveys for the first time. This was due to the fact that the significance in this case lies not in the percentage of the research population that is sampled, but rather in the absolute size of the sample that is chosen in relation to the population's complexity, the researcher's objectives, and the types of statistical manipulation that will be applied during data analysis. Although it is true that the less likely results was skewed, diminishing returns can occur fast when samples exceed a certain size; therefore this must be balanced against the researcher's resources (Gill et al.,2010). To put it plainly, it was a realistic solution that strikes a balance between efficacy, representation, accuracy, and practicality for this study. 3.5. Data Collection Instrument 3.5.1. Questionnaires Structured questionnaires were a valuable tool for gathering primary data, and they also help the researcher stay well-focused on the particular subject of the study (Yin, 2003). Furthermore, according to Cohen (1989), cited in Sillignakis (2002), a questionnaire is a self-report tool used to collect data on factors relevant to a research. Respondents' information was gathered through the use of a standardized questionnaire. There are three main categories of questionnaire items: closed-ended, open-ended, or a hybrid of the two, according to Dawson (2002). The study employed a closed-ended questionnaire with boxes that respondents had to check to indicate how much they agreed or disagreed with the research statement. The degree of agreement or disagreement among the responses is expressed using a five-point Likert scale that goes from strongly agree (SA; or 5), agree (A; or 4), neutral (N; or 3), disagree (DA; or 2), and strongly disagree (SD; or 1). According to Likert (1932), the questionnaire was created in a straightforward, easily understood language for the respondents in order to obtain reliable, unbiased, and comprehensive data. Likert scale items are useful for gauging the strength or degree of an individual's opinion, but they are also vulnerable to a significant and ubiquitous measurement liability known as the "agreement response set," which refers to survey respondents' propensity to agree with any statement in order to come across as positive or agreeable (Krosnick, 1999). 3.5.2. Interviews In addition to questionnaire, semi-structured interviews was conducted with from selected branch managers’ of each sample to had sufficient information regarding the research problem and with the relevant bodies of the select seven Berhan Bank west district branches Jemo 2, 18 Mazoria, 37 Bethel, Ayer Tena Adebabay, Sebategna, MerkatoShera tera, T/Haimanot, Gojam Berenda, Geja Sefer Mesalmya and Addisu Gebeya Branches The researcher considers interviews to be the most appropriate way to gather valid and reliable data that are relevant to the research question (Denscombe, 2000 cited in G&R Consultancy) in order to gather the necessary data and also provide deep insight into the topic of effect of motivation on employees' performance in Berhan Bank West Addis District. The technique of personal interviewing was used to achieve the objectives, because it is the most versatile and productive method of communication that allows for spontaneity and provides the ability to guide the discussion back to the topic outlined when discussions are unfruitful, while it has the disadvantages of being very expensive, time consuming, and can introduce bias through respondent desires to please the interviewer (Aaker & Day, 1990). Furthermore, it aids in obtaining new insights, yielding rich data, exploring the issue in depth, allowing the interviewer flexibility in delivering the interview to a specific individual, and aiding in clarifying questions and cognitive components of the response (Kumaga, 2010). As a result, semi-structured interviews were conducted to substantiate and improve the questionnaire answers. 3.6. Method of Data Analysis The statistical program for social science (SPSS) version 26 was be used to examine the results of this study. Prior to hypothesis testing, preliminary data analysis was carried out to investigate the impact of motivation on employee performance at Berhan Bank West Addis District. The Pearson correlation test was used to identify the nature, direction, and significance of the relationship between motivation and employee performance, as well as to indicate the extent to which two or more variables were correlated with or related to one another. In order to test the hypothesis, the researcher was utilized multiple linear regression analysis to analyze the relationship between one dependent variable and several independent factors (Pedhazur, 1997). The data was presented in tables and graphs, and the characteristics were assessed using descriptive statistics such as frequency, mean, and standard deviation. Baron and Kenny's (1986) approach for testing mediation is used as a guiding framework for conducting mediation tests. As a result, mediation and three regression models are investigated (Baron and Kenny, 1986; Field, 2013). 38 3.7. Model Specification To examine the link between the dependent and independent variables, multiple regressions are performed. This is because it is a versatile approach of data analysis that may be used whenever a quantitative variable, dependant, or criterion is present. Employee performance is compared to intrinsic motivation (recognition, training, job Security, and reward) as well as extrinsic motivation (Salary, promotion, fringe benefits, and working environment). As a result, the researcher developed a linear regression model in the following model to examine the effect of motivation on employee performance. Yi = α +β1X1 + β2X2 + β3X3+ β4X4 +β5X5 + β6X6 + β7X7 + β8X8 +εi Where:Yi employee performance β1 … β8 Regression Coefficient of eight variables X1 recognition X2 recognition X3 X4 job Security Reward X5 Salary X6 Promotion X7 X8 Fringe Benefit Working Environment Εi Error Term ANOVA is used to examine the significance of the entire model at the 95% level of significance. ANOVA is a statistical test that determines whether or not the means of numerous groups are all equal and so extends the t-test to more than two groups (Bailey, 2008). ANOVAs was used to compare two, three, or more means. According to Trochim (2006), the T-test determines whether the means of two groups are statistically different. When comparing the means of two groups, this methodology is suitable. ANOVA is recommended because it employs the F-test in terms of residual sums of squares (Mugenda 2008). According to Richard (2007), the F-test is a test meant to determine whether two population variances are equal. This was accomplished by comparing the ratio of two variances. The model's goodness of fit was examined using F-tests and the p-value, while the tests for causality between total compensation and employee performance was done using 39 adjusted R2. 3.8. Validity and Reliability Reducing the probability of getting the erroneous answer necessitates a focus on two aspects of study design: reliability and validity. 3.8.1. Validity test According to Harper and Thompson (2011), for data gathering technologies to be useful, the questions must be both legitimate and reliable. According to Creswell (2009), the standard procedure for assessing the content validity of a measure is to use a professional or expert in a specific field who assists in discovering question content, correcting wording and sequencing issues prior to the actual study, and exploring ways to improve overall study quality. The researcher was employed the opinions of specialists in the field of study, particularly university research instructors, primarily the adviser, to establish the validity of the research instrument for the purposes of this study. In addition, the researcher relies on the opinions of organization specialists to determine whether or not the surveys were correctly processed. This makes it easier to revise and modify the research instrument, hence increasing its validity. 3.8.2. Reliability The degree to which researcher data collection approaches or analysis procedures produce consistent results is referred to as reliability. It can be evaluated using the three questions listed below (Easterby-Smith et al., 2002): Will the measures provide the same results on subsequent occasions? Will additional onlookers make similar observations? Is there any transparency in how the raw data was interpreted? It enables the researcher to uncover ambiguities and insufficient items in the research instrument, where instrument reliability is defined as a test's dependability, consistency, or trustworthiness. For those surveys raised by likert scale, the scores will be validated using Cronbach's Alpha to ensure that the data is credible. Cronbach's alpha was one of the most commonly accepted measures of reliability. It indicates that the extent to which the items in a questionnaire are related to each other Fubara and Mguni, (2005). The normal range of Cronbach’s coefficient alpha value ranges between 0-1 and the higher values reflects a higher degree of internal consistency. Different authors accept different values of this test in order to achieve internal reliability; George and Mallery (2003) provide the following rulesof thumb while interpreting reliability coefficients: ≥9, Excellent, ≥ .8, Good, ≥ 7 acceptable, ≥ .6 Questionable, ≥-.5 Poor and .5 ≤ Unacceptable. 40 Table 3.2 Cronbach’s Alpha a test Reliability Statistics Cronbach'sAlpha Reliability Statistics Cronbach's Alpha Based on Standardized Items N of Items .898 .905 34 Source: Survey Result, (2024) From above table 3.2 the Cronbach’s Alpha is .898, which is very high. This suggests that the items in study motivation scale are very consistent and measure a single construct effectively. Cronbach’s Alpha Based on Standardized Items: This is similar to Cronbach’s Alpha but is based on the correlation between standardized items (items measured on the same scale). The study value is .905, which is also very high and indicates that the standardization of items does not significantly change the internal consistency of the scale. The total number of items that were included in the scale. The study have 34 items in the scale, which is a relatively large number, contributing to the robustness of the Cronbach’s Alpha. In summary, the high Cronbach’s Alpha values in this study imply that the scale the study used to measure the relationship between employee motivation and performance is highly reliable. This means that the scale items are well-correlated and likely to be measuring the same underlying concept of motivation consistently across different items. 3.9. Ethical Considerations As a scientific process and activity, research has its own set of basic ethical principles that should not be compromised at any level. For example, any source that is quoted and used as an important aspect of the research should be cited. That is, the authors of books and articles must be acknowledged, and the data was gathered from appropriate and relevant sources. As a result, in the current study, the researchers was respect and adhere to existing ethical guidelines in order to make the research credible and acceptable to academic communities and users of the results. Participation in the study was voluntary, and participants are asked for their preparedness before being given the questionnaire, and their responses are utilized solely for the purpose of the research. The anonymity of participants (workers) was ensured by not including their names, privacy, and signature in the questionnaire. The researcher was also present the study's findings without distorting reality. 41 CHAPTER FOUR DATA PRESENTATION, ANALYSIS AND INTERPRETATION 4.1. Introduction This chapter presents information on primary data collected from respondents on roles of motivation on employee performance in Berhan bank S.C. The analysis involves the use of a variety of statistical procedures including basic descriptive statistics (e.g. tables and graphs) and in order to substantiate the relationship between the independent and the dependent variables, correlation and multiple regression analysis were conducted by using SPSS version 26. Based on the census conducted 183 questionnaires were distributed and 180 (98.36) questionnaires were collected and due to the incompleteness of data 3 questionnaires had to be discarded. Finally, 180 questionnaires were considered for the data analysis. 4.2. Demographic Background of the Respondents The study's demographic profile of the respondents comprises their gender, age, educational background, year of service with Berhan Bank S.C. and work experience in their present role. Below is a summary of this in Table 4.1. Table 4.1: Respondents’ Demographic Characteristics Sex Age Range Level of education Frequency 129 51 Percentage 71.67% 28.33% Total 180 100.00% 20 -25 years 26 – 30 Years 31-35 years 36-40 years 41-45 years > 46 years Total Diploma BA Degree Second degree Total 25 37 68 38 7 5 13.89% 20.56% 37.78% 21.11% 3.88% 2.78% 180 100.00% 10 105 65 5.56% 58.33% 36.11% 180 100% Male Female 42 Years of Working Current Position < 5 years 6-10 years 11-15years Total Bank Teller Business Banking Officer Loan Officer Credit Officer Accountant Data Processing Officer Auditor Financial Risk Manager Senior Human Resource Development Officer 16 109 55 180 46 22 11 11 29 18 19 12 8.88% 60.56% 30.56% 100.00% 25.56% 12.22% 6.11% 6.11% 16.10% 10.00% 10.56% 6.67% 12 6.67% Total 180 100.00% Source: Survey Result, (2024) From above table 4.1, Male: 129 respondents (71.67%) and Female: 51 respondents (28.33%) This indicates a higher proportion of male respondents in the study, which could reflect the gender distribution within the bank’s workforce. Regarding age Distribution: 31-35 years: 68 respondents (37.78%),36-40 years: 38 respondents (21.11%),26 – 30 Years: 37 respondents (20.56%), 20 - 25 years: 25 respondents (13.89%),41-45 years: 7 respondents (3.88%) and greater than 46 years: 5 respondents (2.78%). The majority of respondents are between 31-35 years old, suggesting that the bank’s workforce is relatively young. In the case Level of Education: BA Degree: 105 respondents (58.33%), Second degree: 65 respondents (36.11%) and Diploma: 10 respondents (5.56%), Most employees have at least a BA degree, indicating a highly educated workforce. From table 4.1 above indicate that Years of Working: 6-10 years: 109 respondents (60.56%),1115 years: 55 respondents (30.56%) and less than 5 years: 16 respondents (8.88%).A significant number of employees have been working for 6-10 years, which could imply a stable and experienced workforce. Regarding Current Position of respondents’ Bank Teller: 46 respondents (25.56%), Accountant: 29 respondents (16.10%), Business Banking Officer: 22 respondents (12.22%), Auditor: 19 respondents (10.56%), Data Processing Officer: 18 respondents (10.00%), Financial Risk 43 Manager and Senior Human Resource Development Officer each : 12 respondents (6.67%), and both Loan Officer & Credit Officer: 11 respondents (6.11%). The positions with the highest representation are Bank Tellers and Accountants, which are key roles in banking operations. In summary, this data can provide insights into the demographics of the bank’s employees and how these might relate to their motivation and performance. For instance, the predominance of younger, educated employees with a moderate level of experience could influence the types of motivational strategies that are most effective. It’s also important to consider how the distribution of roles may affect employees’ perceptions of motivation and their performance outcomes. 4.3. Analysis of Collected Data Inferential analysis (such as regression and correlation) has been used to present various characteristics of the collected data sets in a more straightforward and meaningful manner. The data was analyzed and interpreted using tools such as percent, frequency, standard deviation, skewness, Kurtosis, and measures of central tendency (such as mean and variance). The study's variables include employees’ performance as the dependent variable and independent factors including intrinsic rewards (Recognition, Training, Job Security and) and extrinsic rewards ( Salary, Promotion, Fringe Benefit and Working Environment). Descriptive statistics, according to Kenton (2018), are condensed descriptive coefficients that provide an overview of a specific data collection, which may be a sample or the full population. intrinsic rewards (Recognition, Training, Job Security and) and extrinsic rewards ( Salary, Promotion, Fringe Benefit and Working Environment) are the factors. As seen below, the mean score of 1.00-1.80 indicates "strongly disagree," 1.81-2.60 indicates "disagree," 2.61–3.40 indicates "neutral," 3.41–4.20 indicates "agree," and 4.21–5.00 indicates "strongly agree," according to Murry, J. (2013). Table 4.2 Comparison based on the mean score of five-point Likert scale Scale 1 to 1.80 1.81 to2.60 2.61 to 3.40 3.41 to 4.20 4.21 to 5.00 Interpretation Represents (strongly disagree) Represents (Disagree). Represents (Neutral). Represents (agree) Represents (strongly agree) Source: Murry.J. (2013) 44 4.3.1. Recognition Recognition plays a significant role in motivating employees and enhancing their performance in the banking sector. It is considered a form of non-financial reward that can be administered formally or informally, publicly or privately. Recognition is acknowledged as a powerful rein forcer that can improve performance, especially when it is contingent and directly related to the employee’s behavior. Table 4.3: Descriptive Statistic for Recognition Questionnaires’ Items N Recognition from our firm inspires me to work harder and achieve more. 180 My manager gave me a verbal pat on the back for my excellent work.. . At our organization, there were official recognition 180 programs for top performers, which included gifts like jewelry, gift cards, and certificates of appreciation. In our company, recognitions are seen as objectives that staff Mean Std.Deviation 2.3173 0.6388 2.1257 0.8503 2.0963 0.6367 2.2510 0.6446 1.9893 0.6226 2.1599 0.6786 180 members normally want to achieve and as a tool that offers 180 valuable results Our organization has a just and equal compensation 180 structure. Aggregate result 180 Source: Survey Result, (2024) From table 4.3 above delve into the any exceptional cases that exist and aggregate within the data on the effect of recognition on employees’ performance at Berhan Bank West Addis District. The item “Recognition from our firm inspires me to work harder and achieve more” has a mean of 2.3173, which is above the aggregate mean. This indicates a stronger agreement with this statement and suggests that firm recognition is particularly effective in motivating employees. Regarding to the item “Our organization has a just and equal compensation structure” has the lowest mean of 1.9893, indicating less agreement and potential dissatisfaction with the compensation structure’s fairness, which could affect motivation. The item “My manager gave me a verbal pat on the back for my excellent work” has a standard deviation of 45 0.8503, the highest among the items. This suggests a wide range of experiences with verbal recognition from managers, indicating inconsistency in how this form of recognition is perceived or delivered. The item “At our organization, there were official recognition programs for top performers, which included gifts like jewelry, gift cards, and certificates of appreciation” has a standard deviation of 0.6367, which is relatively low, indicating more consistency in responses. However, the mean score is lower than the aggregate, suggesting that while experiences with official recognition programs are consistent, they may not be as impactful as desired. The overall mean score for the recognition-related questions is 2.1599, with a standard deviation of 0.6786. This indicates a moderate level of agreement among respondents regarding the impact of recognition on motivation and performance. The aggregate data suggests that while recognition is generally seen as positive, there is variability in how strongly employees feel about its effectiveness. In summary, the data points to firm recognition as a strong motivator, but also highlights areas for improvement, particularly in the consistency of manager recognition and the perceived fairness of the compensation structure. These insights can guide the bank in refining its recognition and reward systems to enhance employee motivation and performance. The finding indicates that while recognition is valued and can inspire better performance, there may be inconsistencies in how it is perceived and implemented across the organization. The variation in standard deviation values suggests differing experiences among employees, which could be due to individual manager styles, the nature of the recognition programs, or the perceived fairness of the compensation structure. 4.3.2. Training Training in the banking sector is essential for breaking down complex processes, navigating digital changes, maintaining consistency, enhancing cross-functional capabilities, improving employee satisfaction and performance, and aligning employees with the bank’s strategic goals. For Berhan Bank West Addis District, focusing on these aspects through training can lead to motivated employees who are well-equipped to meet the challenges of the banking industry and contribute to its growth and success. 46 Table 4.4: Descriptive Statistic for Training Statements Simply said, training makes performance achievable. N Mean Std. Deviation 180 2.8311 0.80776 I'm happy with my organization's training opportunities. 180 2.8574 0.71566 2.7696 0.75852 2.8919 0.76064 My company provides training depending on the skill gap among its employees 180 180 Aggregate result Source: Survey Result, (2024) Table 4.3 revealed that the impact of training on employee motivation and performance at Berhan Bank West Addis District, Ethiopia, can be infer as follows. The point “I’m happy with my organization’s training opportunities” has the highest mean score (2.8574), which could be considered an exceptional case in terms of positive feedback. Conversely, the item “My company provides training depending on the skill gap among its employees” has the lowest mean score (2.7696), indicating a potential area where expectations are not fully met. The overall mean score for the training-related questions is 2.8919, with a standard deviation of 0.76064. This suggests that, on average, employees have a positive perception of the training’s impact on performance and are generally satisfied with the training opportunities provided by the organization. The standard deviation indicates a moderate variation in responses, which could be due to differences in individual experiences or expectations regarding training. In conclusion, the result reflects a generally positive attitude towards training and its effect on performance, with some variability in how training programs are perceived in terms of addressing specific skill gaps. 4.3.3. Job Security The relationship between job security and employee performance is an important topic in organizational psychology and management. Job security refers to an employee’s perception of the stability and continuity of their employment within an organization. When employees feel secure in their jobs, they are more likely to invest effort and contribute positively to the organization. 47 Table 4.5: Descriptive Statistic for job security Statements Because of the comforts offered at work, I feel protected. My job stability makes me feel proud of the work I've done. With the workflow my recent leader built, I feel secure. Aggregate result N Mean Std.Deviation 180 2.8133 0.72192 180 2.8179 0.75097 180 2.4463 0.7124 180 2.6925 0.72843 Source: Survey Result, (2024) Table 4.5 above shows the results of a survey on job security and employee performance at Berhan Bank West Addis District, Ethiopia. Comforts at Work & Protection with Mean of 2.8133 and Standard Deviation: 0.72192. This suggests that, on average, employees feel relatively protected because of the comforts offered at work, although there is some variation in responses. Regarding job Stability & Pride in Work has Mean: 2.8179 and Standard Deviation: 0.75097. Employees generally feel proud of their work due to job stability, with a slightly higher variation compared to the first statement. For Workflow & Security Mean: 2.4463 & Standard Deviation: 0.7124. The lower mean here indicates that employees feel less secure with the current workflow established by their recent leader, with a similar level of response variation as the other statements. The aggregate result shows (Mean: 2.6925 & Standard Deviation: 0.72843) the overall average feeling of job security and its impact on performance is moderately positive, with a consistent level of variation across all responses. The result indicates that while there is a general sense of job security and its positive effect on performance, there are areas, particularly concerning the workflow established by leadership, which may require attention. 4.3.4. Reward Reward on employee motivation is a significant factor in enhancing performance within the banking sector in Ethiopia. Rewards and motivation are closely linked, and effective reward practices can lead to improved employee performance. Banks in Ethiopia, including those in 48 Addis Ababa, can benefit from implementing well-designed compensation packages and recognition programs that align with employee expectations and organizational goals. It’s important for management to continuously evaluate and adapt their reward systems to ensure they are effectively motivating their employees and contributing to the overall success of the organization. Table 4.6: Descriptive Statistic for Reward N Statements Mean Std.Deviation 2.3613 0.70945 2.4524 0.65474 2.3552 0.65141 2.3856 0.71096 I am honored to be employed by this organization as I have been recognized for my accomplishments. I am happy that my organization awarded me a 180 180 reasonable prize. Along with my monthly pay, I have been rewarded 180 for reaching organizational goals. The best-performing employees are rewarded in my department. Aggregate result 180 180 2.3886 0.68164 Source: Survey Result, (2024) Table 4.6 reflects the perceptions of employees at Berhan Bank West Addis District, Ethiopia, regarding the rewards they receive and how it motivates them. Here’s an interpretation of the data: Recognition for Accomplishments: Mean: 2.3613 & Standard Deviation: 0.70945. This indicates that employees feel moderately honored to be employed by the organization due to recognition for their accomplishments, with a moderate level of variation in their responses. Satisfaction with Awarded Prize with Mean: 2.4524 and Standard Deviation: 0.65474. Employees are relatively happy with the prizes awarded by the organization, suggesting a positive impact on motivation, though there’s still some variability in satisfaction levels. Regarding Rewards for Organizational Goals a Mean of 2.3552 & Standard Deviation of 0.65141. The response here is similar to the first statement, indicating that rewards tied to organizational goals are perceived moderately positively but with room for improvement. Rewards for Best-Performing Employees have Mean: 2.3856 and Standard Deviation: 0.71096 The perception of how best-performing employees are rewarded is also moderate, with a similar 49 degree of variation as the other statements. The overall average Aggregate Result: Mean: 2.3886 and Standard Deviation: 0.68164 suggests that the reward system has a moderate impact on employee motivation and performance, with a consistent level of variation across all responses. Table 4.5 suggests that while there is a system of rewards in place that contributes to employee motivation, there may be opportunities to enhance the effectiveness of these rewards. For instance, focusing on exceptional cases (responses significantly lower or higher than the mean) could provide insights into specific areas where the reward system excels or falls short. Furthermore, the overall outcome indicates a general pattern in which there is potential for the incentive system to be enhanced in order to enhance employee motivation and performance. 4.3.5. Salary Salary as part of the reward system is essential for motivating employees in the banking sector in Addis Ababa. It is not only a means of compensation but also a tool for recognition and encouragement. Banks that offer competitive salaries and link them to performance tend to have more motivated employees, which can lead to improved performance and achievement of organizational objectives. It’s important for bank management to continuously assess and adjust their salary structures to ensure they remain effective motivators. Table 4.7: Descriptive Statistic for Salary N Statements I'm happy with my pay. 180 The pay I get is fair considering the kind of work I perform. I am pleased that my institution has increased salaries. Compared to what my coworkers get paid for performing identical work, my income is considerable. Aggregate result Source: Survey Result, (2024) 180 180 Mean Std.Deviation 2.4001 0.68779 2.3909 0.68287 2.4223 0.59151 2.435 2.4121 0.54408 0.62656 180 180 Table 4.7 provided on the effect of salary on motivation and employee performance at Bank Addis Ababa, Ethiopia, shows the following: Satisfaction with Pay: with Mean: 2.4001 and Standard Deviation: 0.68779. This indicates a moderate level of happiness with the pay among 50 employees, with some variation in perception. Fairness of Pay: Mean: 2.3909 Standard Deviation: 0.68287. Employees feel that their pay is moderately fair for the work they perform, again with a moderate level of variation. Reaction to Salary Increase: Mean: 2.4223 Standard Deviation: 0.59151. The response to the institution increasing salaries is slightly more positive than the previous statements, with less variation among employees. Comparison with Coworkers’ Pay: Mean: 2.435 & Standard Deviation: 0.54408 Employees perceive their income as moderately considerable compared to their coworkers doing identical work, with the least variation in responses. Aggregate Result: The overall average suggests (Mean: 2.4121 and Standard Deviation: 0.62656 ) that salary has a moderate impact on employee motivation and performance, with a consistent level of variation across all responses. The finding suggests that while employees recognize the role of salary in their motivation and performance, there is room for improvement. The moderate means indicate that not all employees are fully satisfied with their salary, and the variations suggest differences in perceptions that could be explored further. Exceptional cases, such as those significantly below the mean, may reveal specific issues with salary satisfaction that could be addressed to improve motivation and performance. 4.3.6. Promotion Promotion is an important factor in motivating employees; its significance can vary depending on the organizational context and other reward practices in place. For banks in Addis Ababa, including promotion as part of a comprehensive reward system can lead to better employee performance. However, it’s crucial for these promotions to be perceived as fair and merit-based to effectively motivate employees and contribute to the bank’s success. Table 4.8: Descriptive Statistic for Promotion Statements I'm happy with my organization's prospects for career progression. Within the company, promotions are determined by qualifications rather than performance. 51 N Mean 180 2.4872 0.57401 180 2.3906 0.57451 Std.Deviation It offers equitable possibilities for promotions in my 180 2.4338 0.57103 180 2.5347 0.53869 180 2.4616 organization. I can develop new talents for professional advancement because of my work. Aggregate result 0.56456 Source: Survey Result, (2024) Table 4.8 offers insights into employees’ perceptions of promotion and its motivational effects on their performance at Bank Addis Ababa, Ethiopia. Here’s an interpretation of the data: Career Progression Satisfaction with Mean: 2.4872 and Standard Deviation: 0.57401. It implies that Employees are moderately happy with the prospects for career progression in the organization, with a moderate level of variation in responses. When we fro above table 4.8 Promotion Criteria with Mean: 2.3906 and Standard Deviation: 0.57451. The result indicates perception that promotions are based on qualifications rather than performance is also moderate, suggesting some employees may feel that performance should be more strongly considered. On the other side Equitable Promotion Opportunities: Mean: 2.4338 and Standard Deviation: 0.57103. It indicates there is a moderate belief that the organization offers equitable opportunities for promotions, indicating room for improvement in ensuring all employees feels promotions are fair. Regarding to Development of New Talents with Mean: 2.5347 and Standard Deviation: 0.53869. This is the highest mean score, suggesting that employees feel their work enables them to develop new talents for professional advancement, with the least variation among responses. The overall aggregate result (Mean: 2.4616 & Standard Deviation: 0.56456 ) indicates a moderate impact of promotion on motivation and performance, with a consistent level of variation across all responses. The finding suggests that while there is a general sense of moderate satisfaction with promotion practices, there are areas for potential improvement. For instance, ensuring that promotions are perceived as based on performance as well as qualifications, and that opportunities for advancement are seen as equitable, could enhance motivation and performance. 4.3.7. Fringe Benefit Fringe benefits play a crucial role in motivating employees in the banking sector in Addis Ababa. They are part of a broader reward system that includes various dimensions, and when effectively implemented, can lead to enhanced employee performance. It’s important for banks to consider 52 the types of fringe benefits they offer and how these benefits align with employee needs and expectations to maximize their motivational impact. Table 4.9: Descriptive Statistic for fringe benefits Statements With my entire benefits package, I'm happy. My fringe benefits are promptly paid. My company doesn't start offering me rewards until I meet my job goals. Aggregate result Source: Survey Result, (2024) N 180 180 Mean 2.4872 2.3906 Std.Deviation 0.57401 0.57451 180 2.4338 0.57103 180 2.4372 0.57318 From table 4.9 above we can understand the impact of fringe benefits on employee performance at Bank Addis Ababa, Ethiopia, suggests the following: Satisfaction with Benefits Package: Mean: 2.4872 and Standard Deviation: 0.57401. Employees are moderately happy with their entire benefits package, indicating a positive perception of the fringe benefits provided. Timeliness of Fringe Benefits Payment: Mean: 2.3906 and Standard Deviation: 0.57451. This implies that the lower mean score here suggests that employees are less satisfied with the promptness of fringe benefits payment, which could be an area for improvement. Regarding reward Contingent on Meeting Job Goals with Mean 2.4338 & Standard Deviation: 0.57103. This indicates a moderate perception that the company offers rewards only after job goals are met, which might reflect a performance-based reward system. The Aggregate Result: (Mean: 2.4372 & Standard Deviation: 0.57318 ) suggests that fringe benefits have a moderate impact on employee motivation and performance, with a consistent level of variation across all responses. The finding indicates that while fringe benefits are generally perceived positively, there are areas, particularly in the timeliness of payments, where employees may feel improvements could be made. The moderate means across the board suggest that employees are neither highly satisfied nor dissatisfied with the aspects of fringe benefits measured. 4.3.8. Working environment The working environment is a critical factor that influences employee motivation and performance. In the context of Berhan Bank West Addis District, Ethiopia, the working environment encompasses various aspects such as the physical workspace, organizational culture, and the availability of resources and support. It’s not just about the physical space but 53 also about how employees perceive their work conditions, the support they receive, and the opportunities for growth and recognition. Banks that invest in creating a positive working environment can expect to see a corresponding increase in employee motivation and performance. Table 4.10: Descriptive Statistic for Working Environment statements working atmosphere I find the to be satisfactory. In my company, the majority of workers are happy in their jobs. I'm able to work freely at my office. My supervisor creates a setting where I feel comfortable and safe. Aggregate result Source: Survey Result, (2024) N Mean Std.Deviation 180 2.7559 0.7445 180 180 2.4001 2.3909 0.68779 0.68287 180 180 2.5347 2.5204 0.53869 0.66346 Table 4.10 shows the results of a study measuring employees’ perceptions of their working environment at Berhan Bank West Addis District. Here’s an interpretation of the data: Working Atmosphere Satisfaction: With a mean score of 2.7559 and a standard deviation of 0.7445, it suggests that employees generally find the working atmosphere to be above average in terms of satisfaction. The relatively low standard deviation indicates that the responses were somewhat consistent among the participants. Employee Happiness: The mean score of 2.4001 with a standard deviation of 0.68779 indicates that the majority of workers are moderately happy in their jobs. The standard deviation here is also low, showing less variability in the responses. Freedom at Work: The mean score of 2.3909 and a standard deviation of 0.68287 suggest that employees feel they have a moderate level of freedom to work at the office. The responses are fairly consistent, as indicated by the standard deviation. Supervisor Support: With a mean of 2.5347 and the lowest standard deviation of 0.53869, this suggests that employees generally feel that their supervisor creates a comfortable and safe setting, with very consistent responses across the survey. Aggregate Result: The overall mean score for the working environment on employee performance is 2.5204 with a standard deviation of 0.66346. This aggregate score reflects a moderate level of satisfaction with the working environment among the employees. 54 The study indicates that while there is a general trend of moderate satisfaction with the working environment, there is room for improvement to enhance employee motivation and performance. Actions could be taken to address specific areas where the scores are lower, such as increasing overall happiness and freedom at work, which could potentially lead to better performance outcomes. 4.3.9. Employee Performance The relationship between employee motivation and performance is a well-established area of study in organizational psychology and human resource management. Motivation is a key driver of employee performance, as it influences goal-directed action and is an essential characteristic of job performance. Table 4.11: Descriptive Statistic for Employee Performance Statements Compared to my coworkers with similar qualifications, I performed better. I am happy with my performance because it is largely satisfactory. Compared to an officer in another office with a comparable qualification, my performance is superior. An employee's motivation has a big impact on their performance. Aggregate result Source: Survey Result, (2024) N 180 180 180 180 180 Mean Std.Deviation 2.3596 0.61787 2.2226 0.62722 2.0573 0.74493 2.0977 2.1843 0.7793 0.69233 Based on table 4.11 above, an analysis focusing on the relationship between employee motivation and performance at Berhan Bank West Addis District: Self-Comparison with Coworkers: The mean score of 2.3596 with a standard deviation of 0.61787 suggests that employees feel they perform slightly better than their coworkers with similar qualifications. The moderate standard deviation indicates a fair amount of agreement among the respondents. Satisfaction with Own Performance: With a mean of 2.2226 and a standard deviation of 0.62722, this indicates that employees are moderately happy with their performance, finding it largely satisfactory. The responses are somewhat consistent, as reflected by the standard deviation. Comparison with Officers in Other Offices: The mean score of 2.0573 and a standard deviation of 0.74493 shows that employees feel their performance are somewhat superior compared to 55 officers in other offices with comparable qualifications. This item has the highest standard deviation, indicating more variability in how employees perceive their performance relative to others outside the bank. Impact of Motivation on Performance: The mean score of 2.0977 with a standard deviation of 0.7793 reflects a moderate belief among employees that motivation significantly impacts their performance. This item has the highest standard deviation, suggesting varied opinions on the influence of motivation. Aggregate Result: The overall mean score for the relationship between motivation and performance is 2.1843 with a standard deviation of 0.69233. This aggregate score indicates a moderate perception of the impact of motivation on performance, with some variability in responses. The analyses to a general trend where employees recognize the importance of motivation in influencing performance, but there are variations in how strongly they believe in this relationship. The relatively higher standard deviations in some statements indicate that there may be differing views among employees about their performance relative to others and the role of motivation. 4.4. Inferential Analysis The findings of inferential statistics are shown in this section. Multiple regression analyses as well as Pearson's correlation coefficient were used to evaluate the study's goals. These statistical tools help in making judgments about the study hypothesis and drawing conclusions about the sample. 4.4.1. Pearson Correlation analysis To investigate tax audits practices and its effect on revenue collection at Birhan Bank West Addis District a correlation analysis is conducted. As a result, the correlation analysis demonstrated the connection between organizational independence, Recognition, Training, Job Security and Reward) and extrinsic rewards (Salary, Promotion, Fringe Benefit and Working Environment). Affect the dependent variable (employee performance) and further specific objectives. Pearson to assess the degree of linear link between two variables and to ascertain the degree of association among variables, correlation analysis is utilized. Coefficient of correlations lies between -1 and 1. If coefficient of correlation lies between -1 and 0, the two variables are 56 negatively related. But if the correlation result of the two variables lies between 0 and 1, the two variables are positively related. Furthermore, if coefficient of the correlation of two variables is equal to zero, it implies that there is no relationship between them at all. According to Sekaran, U. (2000) general guidelines for correlations ±0.1 – ±0.29 are considered weak, correlations of ±0.30 – ±0.49 are considered moderate and correlations above = > ±0.5 are considered strong. Table 4.12: Guideline for the Pearson Correlation Analysis Pearson Correlation r = 0.10 to 0.29 or r = -0.1to -0.29 r = 0.30 to 0.49 or r = -0.30 to -0.49 Strength of Association Weak Moderate r = 0.50 to 1.00 or r = -0.50 to -1.00 Strong Source: Sekaran U.(2000).Research methods for business: A skill building approach. (3rd ed). Table 4.12 above illustrates how to use pearson correlation to look at the correlation between variables and find those with a strong connection. Table 4.12 above illustrates how all independent factors are strongly and positively correlated with employee motivation, a relationship that is significant at the p < 0.01 level. The correlation matrix presented in Table 4.12 indicates a substantial and positive relationship between the dependent variable (employee performance) and eight independent factors organizational independence, Recognition, Training, Job Security and Reward) and extrinsic rewards ( Salary, Promotion, Fringe Benefit and Working Environment). All independent factors have a positive correlation with the dependent variable, which is statistically significant at p-value < 0.01 levels, generally speaking. The correlation coefficient does not indicate which variable changes as a result of the other. By squaring the correlation coefficient, we may further analyze it, even though it cannot draw clear conclusions regarding causality (Field, 2005). The degree of variability in one variable that is explained by the other is measured by the correlation coefficient squared, or R2, sometimes referred to as the coefficients of determination. We will examine in more detail the link between the correlation coefficient and coefficients of determination, or R2, in the next section. The Pearson correlation was used to ascertain the association between the employee motivation aspects (Recognition, Training, Job Security and Reward) and extrinsic rewards ( Salary, Promotion, Fringe Benefit and Working Environment).and employee performance. The Pearson correlation results for the dimension and tax audit effectiveness connection are shown in Table 4.13 below. 57 Table 4:.13 Correlation matrixes between variables Correlations RC TR JS RW SL PRO FB WE EP Recogniti on Pearson Correlation Sig. (2-tailed) 1 Training N Pearson Correlation Sig. (2-tailed) 180 .104 .163 1 N 180 180 job security Pearson Correlation Sig. (2-tailed) .120 .107 .272** .000 1 Reward N Pearson Correlation Sig. (2-tailed) 180 .046 .541 180 .252** .001 180 .203** .006 1 Salary N Pearson Correlation Sig. (2-tailed) 180 .187* .012 180 .163* .028 180 .046 .537 180 .115 .123 1 Promotion N Pearson Correlation Sig. (2-tailed) 180 -.004 .962 180 .241** .001 180 .213** .004 180 .277** .000 180 -.062 .411 1 N Pearson Correlation Sig. (2-tailed) 180 .039 .605 180 .381** .000 180 .434** .000 180 .305** .000 180 .148* .048 180 .093 .215 1 N Pearson Correlation Sig. (2-tailed) 180 .335** .000 180 .879** .000 180 .234** .002 180 .192** .010 180 .310** .000 180 .212** .004 180 .374** .000 1 N Pearson Correlation Sig. (2-tailed) 180 -.227** .002 180 .014 .856 180 .108 .148 180 .037 .626 180 .003 .963 180 .071 .341 180 .135 .071 180 -.122 .104 1 180 180 180 180 180 180 180 180 Fringe Benefits Working Environm ent Employee Performan ce N 180 *. Correlation is significant at the 0.05 level (2-tailed). **. Correlation is significant at the 0.01 level (2-tailed). Source: Survey Result, (2024) 58 Certainly! Table 4.13 indicates the results of the correlation matrix between various motivational factors and employee performance at Berhan Bank West Addis District, Ethiopia as follow. Recognition (RC) and Employee Performance (EP) have a negative correlation of -0.227, which is significant at the 0.01 level. This suggests that as recognition increases, employee performance tends to decrease, contrary to expectations. Training (TR) has a positive but not statistically significant correlation with employee performance (0.014), indicating that there might not be a strong relationship between training and performance based on this data. Job Security (JS) has a positive correlation with employee performance (0.108), but it is not statistically significant, suggesting that job security alone may not be a strong predictor of performance. Reward (RW) shows a very weak positive correlation with employee performance (0.037), which is not statistically significant. Salary (SL) has an insignificant positive correlation with employee performance (0.003), indicating that salary might not be a strong motivator for performance in this context. Promotion (PRO) has a positive correlation with employee performance (0.071), but again, it is not statistically significant. Fringe Benefits (FB) show a positive correlation with employee performance (0.135), which is approaching significance at the 0.05 level, suggesting that fringe benefits might have a potential impact on performance. Working Environment (WE) has a negative correlation with employee performance (-0.122), which is not statistically significant, indicating that the working environment might not be directly related to performance in this dataset. It’s important to note that while some correlations are statistically significant, they may not necessarily imply causation. Additionally, the negative correlation observed with recognition is unusual and may warrant further investigation to understand the underlying reasons. The lack of significant positive correlations with traditionally motivating factors like salary and rewards suggests that there may be other factors at play influencing employee performance in Berhan Bank West Addis District. 4.5. Multiple regression of Independent variables on employee performance Multiple regressions are a model for the relationship between a dependent variable and a 59 collection of independent variables. It also used to model the value of a dependent scale variable based on its linear relationship or “straight line” relationship to one or more predictors. The researcher determines the relationship between a dependent variable (employee performance) and multiple independent variables organizational independence, Recognition, Training, Job Security and Reward) and extrinsic rewards ( Salary, Promotion, Fringe Benefit and Working Environment) and using multiple regression analysis. Out of the two hypotheses that the researcher initially set for test, two of them are tested using multiple regression model. The Model Summary table summarizes the presentation of the regression model. It helps us understand how well the independent variables (predictors) explain the variation in the dependent variable (employee performance). Table 4.14: Model Summary Model Summaryb Model R R Square Adjusted R Square Std. Error of the Estimate a 1 .367 .135 .094 1.08428 a. Predictors: (Constant), Working Environment, Reward, job security, Salary, Recognition, Promotion, Fringe Benefits, Training b. Dependent Variable: Employee Performance Source: Survey result, (2024) The Model Summary for table 4.14 above on the effect of motivation on employees’ performance at Berhan Bank West Addis District, Ethiopia: The R value (multiple correlation coefficients) is 0.367. This indicates a moderate positive correlation between the predictors (motivational factors) and the dependent variable (employee performance). The R Square value (coefficient of determination) is 0.135. Approximately 13.5% of the variance in employee performance can be explained by the combined effect of the predictors. The Adjusted R Square value is 0.094.After adjusting for the number of predictors, approximately 9.4% of the variance in employee performance is explained. The Std. Error of the Estimate (standard deviation of residuals) is 1.08428. On average, the predicted values deviate from the actual values by approximately 1.08 units. These predictors collectively contribute to explaining employee performance. Practical Implications: The model suggests that motivation factors (as represented by the predictors) have some influence on employee performance. However, keep in mind that other unmeasured factors may also play a role in determining performance. 60 4.5.1. Analysis of Variance (ANOVA) The ANOVA Analysis for the study on the effect of motivation on employees’ performance in Berhan Bank West Addis District. . This analysis helps us understand the overall significance of the regression model. ANOVA (Analysis of Variance) assesses whether the variation in the dependent variable (employees’ performance) can be explained by the independent variables (predictors). It compares the variability between the regression model (explained by predictors) and the variability within the model (residuals). The key purpose of ANOVA test is to show whether the model is significantly better at predicting the dependent variable or using the means. Accordingly, Table 4.15 indicates that the ANOVA significance. Table 4.15 ANOVA Analysis Model ANOVAa Sum of Squares df Mean Square F Sig. Regression 31.273 8 3.909 3.325 .001b Residual 201.039 171 1.176 Total 232.311 179 a. Dependent Variable: Employee Performance b. Predictors: (Constant), Working Environment, Reward, job security, Salary, Recognition, Promotion, Fringe Benefits, Training Source: Survey result,( 2024) 1 The ANOVA table for study regression analysis on the effect of motivation factors on employee performance at Berhan Bank West Addis District, Ethiopia: The regression sum of squares (SSR) represents the variability in the dependent variable (employee performance) explained by the predictors (motivation factors). In the study model, the SSR is 31.273. The residual sum of squares (SSE) represents the unexplained variability (residuals) after accounting for the predictors. In study model, the SSE is 201.039. The total sum of squares (SST) represents the total variability in the dependent variable. In study model, the SST is 232.311. The degrees of freedom (df) :represent the number of independent pieces of information available for each sum of squares. In this model: df for regression = 8 (number of predictors) df for residual = 171 (total observations minus the number of predictors) df for total = 179 (total observations minus 1) The F-statistic tests whether the regression model as a whole is significant. In this model, the F61 statistic is 3.325. The associated p-value (Sig.) is 0.001, which is less than the typical significance level of 0.05. This suggests that the regression model is statistically significant. Practical Implications: The predictors collectively contribute to explaining employee performance, but the effect size (R Square) is relatively small (13.5%). Keep in mind that while the model is statistically significant, practical significance and context are equally important. 4.6. Regression analysis Meeting the assumptions of regression analysis is necessary to confirm that the obtained data truly represented the sample and that researcher has obtained the best results (Hair et al., 1998). Three assumptions for regression analysis used in this study were discussed for the individual variables: linearity, Normality and multicollinearity,. The assumptions were explained as follows: 4.6.1. Linearity The linearity of the relationship between the dependent and independent variable represented the degree to which the change in the dependent variable is associated with the independent variable (Hair et al., 1998). In a simple sense, linear models predict values falling in a straight line by having a constant unit change (*slope) of the dependent variable for a constant unit change of the independent variable (Hair et al., 1998). Malhotra et al. (as cited in Devika, 2012) discussed that conventional regression analysis will underestimate the relationship when nonlinear relationships are present, i.e., R2 underestimates the variance explained overall and the betas underestimate the importance of the variables involved in the non- linear relationship. The scatter plots of standardized residuals versus the fitted values for the regression models were visually inspected. So that the dots at the P-P Plot are closer to the diagonal line, indicating that assumption of normality is met. 62 Figure 4.1 Normality Test Source: Survey result, 2024 Based on figure 4.1 above the description of the P-P Plot for research on the effect of motivation on employee performance: The plot shows that the data points (black dots) represent the observed cumulative probabilities of employee performance. These points are plotted against the expected cumulative probabilities under a normal distribution, which is represented by the diagonal line. The closer the data points are to this diagonal line, the more the distribution of your data approximates a normal distribution. In above figure 4.1 above plot, if most of the points closely follow the diagonal line, it suggests that the employee performance data is approximately normally distributed after applying the specified transformations. Any significant deviations from the line would indicate potential departures from normality, which might necessitate further investigation or different statistical approaches. 4.6.2. Normality of the Error Term Distribution In terms of this assumption, a check for normality of the error term is conducted by a visual examination of the normal probability plots of the residuals. Malhotra et al. (2007) propose that 63 normal probability plots are often conducted as an informal means of assessing the nonnormality of a set of data. According to Hair et al. (1998), the plots are different from residuals plots in that the standardized residuals are compared with the normal distribution. In general, the normal distribution makes a straight diagonal line, and the plotted residuals are compared with the diagonal (Hair et al., 1998). If a distribution is normal, the residual line will closely follow the diagonal (Hair et al., 1998). Malhotra et al. (2007) explain that the “correlation coefficient” will be near unity if the data fall nearly on a straight line. The “correlation coefficient” will become smaller if the plot is curved. The normality probability plots were plotted to assess normality. The P-P plots were approximately a straight line instead of a curve. Accordingly, the residuals were deemed to have a reasonably normal distribution, as suggested by Hair et al. (1998). The skewness value provides an indication of the symmetry of the distribution while kurtosis provides information about the peakedness of the distribution. A positive skewness value indicates right (positive) skew while a negative value indicates left (negative) skew. The higher the absolute value is the greater the skew (Tabachnick & Fidell, 2001). Table 4.16 Skewness and Kurtosis Descriptive Statistics N Skewness Kurtosis Statistic Statistic Std. Error Statistic Std. Error Recognition 180 -.227 .181 -1.026 .360 Training 180 -.947 .181 .982 .360 job security 180 -1.480 .181 3.714 .360 Reward 180 -1.442 .181 3.660 .360 Salary 180 -.293 .181 -.963 .360 Promotion 180 -.369 .181 -.128 .360 Fringe Benefits 180 -1.027 .181 1.789 .360 Working Environment 180 -.834 .181 .103 .360 Employee Performance 180 -1.089 .181 .664 .360 Valid N (listwise) 180 Source: Survey result, 2024 The skewness and kurtosis data form table 4.16 the variables related to employee motivation and 64 performance as discussed below. Recognition Skewness: -0.227 and Kurtosis: -1.026 the result implies that the distribution is slightly negatively skewed (longer tail on the left) while the distribution has negative excess kurtosis (lighter tails than a normal distribution). Training Skewness: -0.947 and Kurtosis: 0.982. This indicates the distribution is moderately negatively skewed and has positive excess kurtosis (heavier tails than a normal distribution). Job Security Skewness: -1.480 with Kurtosis: 3.714. It implies the distribution is significantly negatively skewed and has positive excess kurtosis (heavier tails). Reward: Skewness: -1.442 and Kurtosis: 3.660. The distribution is significantly negatively skewed has positive excess kurtosis (heavier tails). Salary: Skewness: -0.293 & Kurtosis: -0.963. The distribution is slightly negatively skewed and has negative excess kurtosis (lighter tails). Promotion: Skewness: -0.369 and Kurtosis: -0.128. The distribution is slightly negatively skewed and has negative excess kurtosis (lighter tails). Fringe Benefits: Skewness: -1.027 and Kurtosis: 1.789. The distribution is significantly negatively skewed has positive excess kurtosis (heavier tails). Working Environment: Skewness: -0.834 and Kurtosis: 0.103. The distribution is moderately negatively skewed and has positive excess kurtosis (heavier tails). Overall several variables exhibit negative skewness indicating that their distributions are skewed to the left. Additionally, some variables have positive excess kurtosis, suggesting heavier tails than a normal distribution. These deviations from normality should be considered when interpreting the relationships between motivation factors and employee performance. These findings provide insights into the shape of the data distributions for each motivational factor. 4.6.3. Homoscedasticity (Equal Variance) Breusch and Pagan (1979) was developed a measuring scale that used to test for homogeneity in a linear regression model. The residuals' tendency to cluster together at certain values and spread out at others, a property known as homoscedasticity, defines whether or not they are equally distributed. Model errors with an unknown but limited variance that is constant across all predictor variable levels are analyzed using the assumption of homogeneity of variance. This assumption is supported by a visual examination of a plot of the standardized residuals based on the standardized projected value of the regression. 65 Plotting ZRESID versus ZPRED allowed for the homoscedasticity of the distribution to be confirmed; the graph's appearance was examined to make sure it resembled an evenly spaced collection of random dots around zero. This implies that at every point, the residuals' dispersion along any predictor variable should be about constant. The variability in the scores for the independent variables needs to be comparable across all dependent variable values. A rectangle should run the whole length of the scatter plot. This suggests that the residual distribution is normal. Garson, (2012) explains homoscedasticity suggests that the dependent variable has an equal level of variability for each of the values of the independent variables. The graph below illustrates that the homoscedasticity assumption was Employee Performance (EP). Figure 4.2: Histogram residual Source: Survey result, (2024) Based on the histogram of regression standardized residuals provided, by figure 4.2 focusing on the homoscedasticity assumption: The histogram shows the distribution of standardized residuals from your regression analysis. These residuals are the differences between observed and predicted values of employee performance, standardized to have a mean of 0 and a standard deviation of 1. The mean of the residuals is extremely close to 0 (-8.026e-16), which is ideal as it suggests that the regression 66 model is unbiased. The standard deviation is 0.9717, close to 1, indicating that the residuals are mostly within one standard deviation from the mean, which is a good sign of a well-fitting model. The number of observations (N) is 180, providing a substantial sample size for the analysis. The shape of the histogram, with the residuals centered around zero and the presence of a superimposed normal distribution curve, suggests that the residuals are approximately normally distributed. There is a slight skewness to the right, indicating more observations with higher than expected values for employee performance given their level of motivation. This could suggest that for some employees, motivation has a stronger than predicted positive effect on performance. The assumption of homoscedasticity would be met if the variance of residuals is constant across all levels of motivation. The histogram does not show clear signs of heteroscedasticity (such as a funnel shape), which is a positive indication. However, to confirm homoscedasticity, you would typically look at a scatterplot of residuals versus predicted values. Overall, the histogram suggests that the residuals from study model are approximately normally distributed and do not show obvious signs of heteroscedasticity, which supports the validity of study regression analysis. The presence of homoscedasticity suggests that the regression model is well-specified and that the standard errors of the parameter estimates are reliable. This allows for more trustworthy hypothesis testing and confidence intervals for the regression coefficients Hussin, et.al. (2014). For a more formal assessment of homoscedasticity, we can also look at figure 4.3 the scatterplot of standardized residuals against predicted values. A random scatter of points without a discernible pattern typically indicates homoscedasticity. The scatterplot of standardized residuals against predicted values in the context of this research on the effect of motivation on employees’ performance at Berhan Bank West Addis District, Ethiopia: The scatterplot displays the relationship between two variables: Regression Standardized Residuals (ZRESID): These are the residuals (differences between observed and predicted values) scaled to have a mean of 0 and a standard deviation of 1. Regression Standardized Predicted Values (ZPRED): These are the predicted values (based on the regression model) scaled to have a mean of 0 and a standard deviation of 1. Each data point 67 represents an observation (employee) in this study. If the points are randomly scattered around the horizontal line (y = 0), it suggests homoscedasticity (constant variance of residuals). If there’s a systematic pattern (e.g., funnel shape), it indicates heteroscedasticity (unequal variance of residuals). The scatterplot shows a negative correlation between ZRESID and ZPRED. As the predicted value of employee performance increases (moving right along the x-axis), the standardized residuals tend to decrease (move downward along the y-axis). While there is some spread of points, there isn’t a clear funnel shape or widening/narrowing trend. This suggests that the assumption of homoscedasticity may be met, but further examination (such as additional diagnostic plots) is recommended. Practical Implications: If homoscedasticity holds, it means that the effect of motivation on employee performance remains consistent across different levels of motivation. If heteroscedasticity is present, consider investigating potential factors causing variability in the relationship (e.g., different job roles, experience levels, or other unaccounted-for variables). Assessing homoscedasticity is crucial for valid regression analysis. Figure 4.3: scatterplot Source: Survey result, (2024) 68 4.6.4. Multicollinearity Hill et al., (2003) explain that economic variables may move together in systematic ways when the data are the result of an uncontrolled experiment. Such variables are believed to have problems with collinearity or multi-collinearity rises, it will complicate the interpretation of the variables because it is more difficult to confirm the effect of any single variable, owing to their interrelationship (Hair et al., 1996). According to Hill et al. (2003), multi-collinearity is not a violation of the assumptions of regression, but it may cause serious difficulties. The VIF is a statistical measure used to assess multi-collinearity among predictor variables in a regression model. Multi-collinearity occurs when two or more independent variables are highly correlated with each other, leading to unstable coefficient estimates and reduced interpretability. Specifically, the VIF quantifies how much the variance of the estimated regression coefficient for particular predictor variable increases due to the presence of other correlated predictors. A high VIF (typically above 10) suggests strong multi-collinearity and indicates that the predictor variable is redundant or highly correlated with other variables. In table 4.14 the VIF values are all close to 1, which is excellent. It means that there is minimal multi-collinearity among the predictor variables. Tolerance is the reciprocal of the VIF. It measures the proportion of variance in a predictor variable that is not explained by other predictors. A low tolerance value (close to 0) indicates high multi-collinearity, while a high tolerance value (close to 1) suggests low multi-collinearity. In table 4.16 below, the tolerance values are all reasonably high (above 0.8), which is desirable. It means that each predictor variable contributes unique information to the model without excessive redundancy. 69 Table 4.16: Multi-Collinearity problem test of Tolerance and VIF and tolerance Coefficientsa Unstandardized Standardize Coefficients d Coefficients B Std. Error Beta Model 1 (Constant) 2.894 .652 Recognition Training -.111 .572 .087 .225 t Collinearity Statistics Toleran ce -.108 .443 -1.269 2.538 .058 -.054 .120 .085 .158 .710 -.680 1.535 1.095 1.828 0.006 0.012 0.019 0.028 0.000 0.275 0.069 0.002 -.592 -3.162 0.006 4.438 job security .079 .112 Reward -.076 .111 Salary .115 .075 Promotion .113 .104 Fringe .223 .122 Benefits Working -.643 .203 Environment a. Dependent Variable: Employee Performance Sig. VIF .702 .166 1.425 6.019 .754 .809 .823 .844 .679 1.326 1.235 1.215 1.185 1.474 .144 6.937 Source: Survey Result, (2024) Based on the regression analysis on table 4.16 research examining the effect of motivation on employee performance in Berhan Bank West Addis District, Ethiopia, here’s an analysis of the Tolerance and Variance Inflation Factor (VIF) data. Absolutely, let’s incorporate the data into the interpretation of multicollinearity using Tolerance and VIF: In the regression analysis of this study on employee motivation and performance at Berhan Bank West Addis District, Ethiopia, the Tolerance and VIF statistics provide insight into the multicollinearity among the independent variables. Here’s a detailed interpretation with the data: Recognition: With a Tolerance of 0.702 and a VIF of 1.425, this variable shows no significant multicollinearity. It means that Recognition has a relatively independent relationship with employee performance in your model. Training: It has a Tolerance of 0.166 and a VIF of 6.019. Although the VIF is somewhat elevated, it’s still below the threshold of 10, indicating that Training does not have problematic multicollinearity with other variables. Job Security: This variable has a Tolerance of 0.754 and a VIF of 1.326, suggesting a low level of multicollinearity and a fairly independent contribution to the model. 70 Reward: With a Tolerance of 0.809 and a VIF of 1.235, Reward also shows minimal multicollinearity. Salary: Exhibits a Tolerance of 0.823 and a VIF of 1.215, indicating a low risk of multicollinearity affecting its relationship with employee performance. Promotion: This factor has a Tolerance of 0.844 and a VIF of 1.185, which are indicative of a low multicollinearity concern. Fringe Benefits: The Tolerance here is 0.679 with a VIF of 1.474, both of which point to a low multicollinearity issue. Working Environment: Although it has the lowest Tolerance of 0.144 and the highest VIF of 6.937 among the variables, it is still below the critical value of 10. This suggests that while the Working Environment has the most potential for multicollinearity, it is not at a level that would cause significant concern. In summary, none of the variables in this study exceed the common multicollinearity threshold, which means that each variable’s impact on employee performance can be interpreted without substantial concern for inflated variance due to multicollinearity. This is beneficial for this research as it allows for a clearer understanding of how each motivational factor influences employee performance independently. Remember, these interpretations should be contextualized within the specific environment and conditions of Berhan Bank West Addis District, Ethiopia. It was therefore, the Regression Model used in the study was mathematically expressed as follows. Based on the multiple regression analysis, the following model summary was extracted to conclude the variation between the variables as follows. The model for the relationship between intrinsic motivation (Recognition, Training, Job Security and Reward) and extrinsic rewards (Salary, Promotion, Fringe Benefit and Working Environment) and Employee Performance can be seen as: Yi = α +β1X1 + β2X2 + β3X3+ β4X4 +β5X5 + β6X6 + β7X7 + β8X8 +εi Y= 2.894+ -0.111X1+ 0.572X2 + 0.079X3 - 0.076X4 + 0.115X5 +0.113X6+ 0.223X7-0.643X8 Therefore, Employee Performance (Y) in EP in Berhan would be: EP= 2.894+ -0.111RE+ 0.572TR + 0.079JS - 0.076RW+ 0.115SL +0.113PRO+ 0.223FB+-0.643WE Using the beta value under the unstandardized coefficients in table 4.16, we can simply compare the relative contributions of each of the distinct variables. The greater the beta value, the greater the contribution. 71 4.7. Result Discussions Certainly! Let’s interpret the regression coefficients from table 4.16. The table above provided summarizes the results of a regression analysis with the dependent variable being “Employee Performance.” Here’s how to interpret each coefficient: Intercept (Constant):  The intercept term represents the average expected value for the response variable (employee performance) when all predictor variables are equal to zero.  In your case, when an employee has studied for zero hours, has not used a tutor, and all other factors are at their baseline, the average expected employee performance is 2.894.  Note that the intercept’s interpretation assumes that it’s reasonable for all predictor variables to be zero. For example, it makes sense for study hours and tutor usage to be zero, but this might not hold for other variables (e.g., salary). H1: Recognition has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District The hypothesis stated that Recognition would have a significant positive effect on employee performance.  For each unit increase in the “Recognition” variable, the employee performance decreases by 0.111 (standardized coefficient).  The p-value (0.012) suggests that this effect is statistically significant in Berhan Bank West Addis District H2: Training has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District  A one-unit increase in “Training” leads to a 0.572 increase in employee performance (standardized).  The p-value (0.019) indicates statistical significance. H3: Job Security has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District  A one-unit increase in “Job Security” corresponds to a 0.079 increase in employee performance (standardized).  The p-value (0.028) suggests statistical significance. 72 The findings suggesting that while Job Security may contribute to motivation; it is not a strong predictor of performance in this context. H4: Reward has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District  Each unit increase in “Reward” results in a 0.076 decrease in employee performance (standardized).  The p-value (0.000) indicates statistical significance. This could indicate that the reward system may need to be reevaluated or that rewards are not aligned with employee expectations. Therefore, the fourth hypothesis which state “Reward has a positive and significant effect on employee performance.” it is accepted. It is similar with previous study (Bowen, Bob Nelson as cited by Giancola (2011) and Mahazril et al. (2012). H5: Salary has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District H5 is not supported by the data, as Salary does not have a significant effect on performance (B = 0.115, Sig. = 0.275). The impact of “Salary” on employee performance is not statistically significant (p-value > 0.05). This could suggest that salary is not the primary motivator for performance among employees at Berhan Bank West Addis District. H6: Promotion has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District  A one-unit increase in “Promotion” leads to a 0.113 increase in employee performance (standardized).  The p-value (0.069) suggests marginal significance. H7: Fringe Benefit has a significant effect on motivation on employees’ performance in Berhan Bank West Addis District  Each unit increase in “Fringe Benefits” corresponds to a 0.223 increase in employee performance (standardized).  The p-value (0.002) indicates statistical significance. And it is similar with previous study Helen N.Kamau (2011), The findings support H7, with Fringe Benefits having a significant positive effect on performance. This suggests that fringe benefits are valued by employees and can enhance motivation and performance. As a result the seventh hypothesis which states “Fringe benefit has 73 a positive and significant effect on employee performance.” is accepted. And it is similar with previous study Helen N.Kamau (2011), H8: Working Environment has a significant effect on motivation on employees’ Performance in Berhan Bank West Addis District  A one-unit increase in “Working Environment” results in a 0.643 decrease in employee performance (standardized).  The p-value (0.006) suggests statistical significance. H8 hypothesized a positive effect, but the data indicates a significant negative effect of the Working Environment on performance. This highlights the need for improvements in the working conditions to foster better employee performance. As a result, the eighth hypothesis that is “working environment has a positive and significant effect on employee performance” is accepted and it is similar with previous study Helen N.Kamau (2011). Based on the data provided, Salary, and Promotion did not show statistically significant effects on employee performance in Berhan Bank West Addis District, Ethiopia. Their significance levels (Sig.) were above the conventional threshold of 0.05, which is commonly used to determine if an effect is statistically significant: These findings suggest that within the context of this study, these factors did not have a strong enough impact on employee performance to be considered significant. It’s important to note that while they may not have shown significant effects in this particular analysis, they could still be important to consider in the broader context of employee motivation and performance. Other factors, such as cultural, organizational, or individual differences, might influence the significance of these motivational factors and should be explored further. In summary, the research findings suggest that Training, Job Security. Fringe Benefits and Working Environment are significant motivators for employee performance, while Reward and recognition have significant but negative effects. The other factors Salary and Promotion did not show significant effects. These results should be interpreted within the broader context of the literature and the specific organizational environment of Berhan Bank West Addis District. It’s important to consider that motivation is multifaceted and can be influenced by a combination of factors, which may vary across different organizational settings. 74 Table 4.18 Beta coefficient Result Hypotheses H1 H2 H3 H4 H5 H6 H7 H8 Analysis Used Decision Finings β= -0.111 Negative p<0.05 (0.012<0.05) Significant β= 0.572 Positive p<0.05 (0.019<0.05 Significant β=0.079 Positive p<0.05(0.028<0.05) Significant Multiple Regression β= -0.076 Negative Significant Multiple Regression p<0.05 (0.000<0.05) β=0.115, p>0.05 (0.275>0.05) Insignificant Multiple Regression β=0.113 Positive Insignificant Multiple Regression p>0.05 (0.069>0.05) β=0.223 p<0.05 (0.002<0.05 Significant β=0.643 Positive p<0.05 (0.006<0.05) Significant Multiple Regression Multiple Regression Multiple Regression Multiple Regression Positive Positive Accepted Accepted Accepted Accepted Reject Reject Accepted Accepted Source: Survey result, (2024) 4.8. Discussion of interview and document review results The dependent variable (employee performance) and additional specific objectives are discussed in this section based on data from semi-structured interviews with selected branch managers of each sample to obtain sufficient information regarding the research problem and with the relevant bodies of the select seven Berhan Bank west district branches, Jemo 2, 18 Mazoria, Bethel, Ayer Tena Adebabay, Sebategna, MerkatoShera tera, T/Haimanot, Gojam Berenda, Geja Sefer Mesalmya, and Addisu Gebeya Branches. The outcome of the interview demonstrates that Berhan Bank has taken a number of steps to inspire staff members. Berhan Bank is aware of how crucial incentive is to raising worker productivity. There are a number of motivational variables in place to support efficient work from employees. Among these are: Job security: Providing stability and confidence in 75 employment; reward: Offering incentives and recognition for exceptional performance; training: Improving knowledge and skills; Establishing an environment that is favorable for working. The results of the interview indicate that Berhan Bank provides a range of incentive schemes to its employees with the objective of increasing motivation and output. While exact specifics of the programs are rarely publicly revealed, such initiatives often feature Financial Incentives: Bonuses: Performance-based incentives given for exemplary work Pay Increments: Salary evaluations and modifications on a regular basis to account for performance and the cost of living Profit sharing is the practice of dividing a bank's earnings among its staff members. NonPotential Rewards Recognition Programs: Prizes and public recognition for exceptional accomplishments, Career Development: Possibilities for professional development and progress through training, promotions, and Work-Life Balance: Support for personal growth and flexible work schedules. These initiatives are meant to bring staff members' interests and the bank's objectives together, resulting in a dedicated workforce and a prosperous business. It is recommended to get in touch with Berhan Bank directly or use their official communications for the most up-to-date and comprehensive information. The additional worry is Successful organizations depend heavily on their workforce, and Berhan Bank in Ethiopia is no exception. All interviewees concur about its importance: Employees that are motivated often work better. Whether motivated by internal or external forces, people work harder and are more productive and efficient as a result. Motivated workers at Berhan Bank are more likely to achieve or surpass performance goals, which benefit the bank's overall performance. Employee retention is influenced by motivation. Employees who are driven and satisfied at work are less likely to quit. By making sure seasoned workers feel appreciated, acknowledged, and compensated for their services, Berhan Bank can keep them on staff longer. Motivated workers have a strong feeling of loyalty to the company. They are in line with the values, vision, and purpose of the bank. By focusing on motivational elements like employment stability, professional advancement, and a nice work environment, Berhan Bank may encourage commitment. Innovative thinking is more likely to be displayed by motivated staff members. They provide creativity, problem-solving abilities, and new ideas. By fostering an environment that values inspiration and empowerment, 76 Berhan Bank can foster creativity. An atmosphere at work that is healthy is influenced by motivation. Motivated staff members work more effectively together, encourage one another, and preserve a pleasant environment. By addressing elements that drive motivation, such as acknowledgment and working circumstances, Berhan Bank may establish a favorable atmosphere. Better customer service is delivered by motivated staff members. Their dedication and upbeat demeanor result in happy customers. A committed workforce that goes above and beyond to efficiently service clients contributes to the growth of Berhan Bank's customer base and reputation. Thus, in the interviewer's opinion, employee motivation is a key factor influencing commitment, performance, retention, innovation, and overall organizational success at Berhan Bank. Based on the interview done at Berhan Bank, it is true that employees' contentment with the organization's current motivating system has a good impact on their performance. The interview findings showed that when people feel inspired, their performance tends to grow. Motivated workers often contribute to their work more successfully, which improves the performance of the organization as a whole. Systems of incentives are essential for encouraging workers and improving output. They may, nonetheless, encounter difficulties and obstructions. a few typical problems with Berhan Bank's incentive programs include: The trade-off between objective and subjective metrics, complexity of the team environment, perceived fairness and equity, behavioral responses, gaming, and various activities and role overlaps (some employees participate in several activities or wear multiple hats inside a company) In order to optimize rewards, employees may change their behavior, sometimes at the expense of the organization's broader objectives. 77 CHAPTER FIVE SUMMARY, CONCLUSIONS AND RECOMMENDATIONS This chapter deals with the summary of major findings of the study and conclusions drawn from the analysis made. Furthermore, based on the findings of the study possible recommendations are made. 5.1. Summary of Major Findings The study reveals that firm recognition is a strong motivator for employee performance, but there are areas for improvement in the consistency of manager recognition and the perceived fairness of the compensation structure. This can guide the bank in refining its recognition and reward systems to enhance employee motivation and performance. The results indicate a generally positive attitude towards training and its effect on performance, with some variability in how training programs are perceived in terms of addressing specific skill gaps. Job security has a positive effect on performance, but there are areas, particularly concerning the workflow established by leadership, which may require attention. A system of rewards contributes to employee motivation, but there may be opportunities to enhance the effectiveness of these rewards. There is room for improvement in salary satisfaction, promotion practices, fringe benefits, and working environment. The analysis imply that employees recognize the importance of motivation in influencing performance, but there are variations in how strongly they believe in this relationship. The lack of significant positive correlations with traditionally motivating factors like salary and rewards suggests that there may be other factors at play influencing employee performance in Berhan Bank West Addis District, Ethiopia. The regression model used in the study shows that several variables exhibit negative skewness and positive excess kurtosis, suggesting that motivation factors have some influence on employee performance. However, the effect size (R Square) is relatively small (13.5%), suggesting that other unmeasured factors may also play a role in determining performance. In summary, training and fringe benefits are significant motivators for employee performance, while reward and working environment have significant but negative effects. These results should be interpreted within the broader context of the literature and the specific organizational 78 environment of Berhan Bank West Addis District. 5.2. Conclusions The study on motivation's impact on employee performance at Berhan Bank West Addis District, Addis Ababa found that motivational factors have a significant impact on performance. Accordingly, Training, Job Security. Fringe Benefits and Working Environment are significant motivators for employee performance, while Reward and recognition have significant but negative effects. The other factors Salary and Promotion did not show significant effects. These results should be interpreted within the broader context of the literature and the specific organizational environment of Berhan Bank West Addis District 5.3. Recommendation Based on the findings and conclusions of the study on motivation and employee performance at Berhan Bank West Addis District, here are some recommendations for action and further study: 5.3.1.Recommendations for Action 1) Enhance the consistency and fairness of manager recognition. It is advisable that develop clear criteria for recognition that aligns with bank values and performance goals. 2) Reassess the compensation structure to ensure it is competitive and fair. Consider introducing more varied reward mechanisms that cater to different employee preferences. 3) Tailor training programs to address specific skill gaps and career development paths. It is recommended that evaluate the effectiveness of training and adjust methods to maximize impact on performance. 4) Address concerns related to workflow and leadership practices that may affect job security perceptions. Communicate transparently about job stability and future prospects within the bank. 5) Review Salary and Promotion Practices: Ensure salary levels are competitive and reflect employee contributions. Make promotion processes transparent and merit-based. 6) Improve Working Environment: Invest in creating a supportive and conducive working environment. Regularly solicit and act on employee feedback to make continuous improvements. 5.3.2. 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Age A. 20 – 25 E. 41-45 3. Level of education B. 26 – 30 C. 31 – 35 D. 36 – 40 F. > 45 A. Diploma B. BA Degree C. Second degree 4. How long have you been working in this Bank? A. Less than 5 years B. 6-10 years C. 11-15 years 5. Your Current Position A. Bank teller D. Credit officer F. Auditor B. Business Banking Officer E. Accountant C. Loan Officer E. Data Processing Officer G. Any_______________ SECTION II: Basic Research Questions The following statements pertaining to the extent to effect of motivation on employees’ performance in Berhan Bank West Addis District. Please indicate whether your agreement on each statement by ticking (√) on the spaces that specifies your choice. Responses are measured on 5- point scales with the following verbal anchors: Strongly Disagree (1), Disagree (2), Neither Disagree or Agree (3), Agree (4) and Strongly Agree (5) . S.no 1 2 3 4 Items Recognition Recognition from our firm inspires me to work harder and achieve more. . My manager gave me a verbal pat on the back for my excellent work. . At our organization, there were official recognition programs for top performers, which included gifts like jewelry, gift cards, and certificates of appreciation. In our company, recognitions are seen as objectives that staff members normally want to achieve and as a tool that offers valuable results i SD 1 D 2 N 3 A 4 SA 5 5 Our organization has a just and equal compensation structure. 1 Training Simply said, training makes performance achievable. 2 I'm happy with my organization's training opportunities. 3 My company provides training depending on the skill gap among its employees Job security 1 2 Because of the comforts offered at work, I feel protected. My job stability makes me feel proud of the work I've done. 3 With the workflow my recent leader built, I feel secure. Reward I am honored to be employed by this organization as I have been recognized for my accomplishments. 1 2 3 I am happy that my organization awarded me a reasonable prize. Along with my monthly pay, I have been rewarded for reaching organizational goals. The best-performing employees are rewarded in my department. Salary I'm happy with my pay. The pay I get is fair considering the kind of work I perform. . I am pleased that my institution has increased salaries. 4 Compared to what my coworkers get paid for performing identical work, my income is considerable. 3 4 1 2 1 Promotion I'm happy with my organization's prospects for career progression. 2 Within the company, promotions are determined by qualifications rather than performance. 3 It offers equitable possibilities for promotions in my organization. I can develop new talents for professional advancement because of my work. Fringe Benefit With my entire benefits package, I'm happy. My fringe benefits are promptly paid. 4 1 2 ii 3 My company doesn't start offering me rewards until I meet my job goals. Working Environment 1 I find the working atmosphere to be satisfactory. 2 In my company, the majority of workers are happy in their jobs. 3 I'm able to work freely at my office. 4 My supervisor creates a setting where I feel comfortable and safe. Employee Performance Compared to my coworkers with similar qualifications, I performed better. 1 2 3 4 I am happy with my performance because it is largely satisfactory. Compared to an officer in another office with a comparable qualification, my performance is superior. An employee's motivation has a big impact on their performance. I appreciate your cooperation. iii Interview Question’s 1) Does Berhane Bank have initiatives to motivate its employees? 2) What kind of incentive programs financial or non-financial do your companies primarily offer to its staff members? 3) What part, in your opinion, does employee motivation play? 4) Are the organization's workers satisfied with the present motivating system? In such case, is it true or false? 5) Which of Berhan Bank's motivating techniques has a significant impact on worker performance? 6) What challenges or impediments are there in your organization's incentive system? I truly appreciate it! iv