An Empirical Analysis of Employee Motivation and the Role of Demographics: The Banking Industry of Pakistan

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Employee motivation is one of the most important concepts in the fields of organizational behaviour and human resource management. Employee motivation is the key to organizational effectiveness and is a predictor of performance and job satisfaction (Ghafoor, 2011; Lather and Jain, 2005). Motivated employees are the cornerstones of any organization (Anderfuhren, et al., 2010) and help organizations to survive (Smith, 1994).

Furthermore, motivated employees possess an awareness of specific goals that must be achieved in particular ways, and they therefore direct their efforts towards achieving such goals (Nel et al., 2001). Oluseyi and Ayo (2009) assert that levels of employee performance rely not only on the employees' actual skills, but also on the level of motivation they exhibit. Therefore, productivity and retention of employees are considered as functions of employee motivation (Lord, 2002). Motivation sources also exert influence on factors such as employee turnover, as well as job satisfaction and organizational commitment (Mitchell et al., 2001).

Employee motivation is a major issue for any organization. Managers have always tried to motivate their staff to perform tasks and duties to a high standard (Al-Alawi, 2005). All employers want their people to perform to the best of their abilities and so take great pains in ensuring that they provide all the necessary resources and a good working environment to keep their employees motivated. Yet motivation remains a difficult factor to manage because employees' aspirations and targets do not always match what their employers can provide (Lather and Jain, 2005). According to MacMillan (2007, p. 207), "What motivates an individual is complex, and the biggest mistake we can make is underestimating the magnitude of the human mind".

An understanding of employee motivation has become even more critical due to the rapidly changing nature of organizations. Organizations are becoming global and are shifting from traditional hierarchical structures to decentralized structures, and adopting the concept of teams (Erez and Den, 2001). These changes, along with the trend of downsizing and a shift away from lifetime employment, have resulted in employees harbouring higher levels of anxiety (Reynolds, 1992). This has a great impact on a workplace and highlights the importance of understanding employee motivation at work today more than ever, particularly because motivation affects almost all major aspects of the organization, including satisfaction, organizational commitment, job design, benefit programmes and job involvement (Vroom and Deci, 1970).

A major function of management is to influence employees to work towards the accomplishment of organizational objectives, and motivation is an important and complex aspect of that function (Islam and Ismail, 2008). This is due, in part, to the fact that what motivates employees changes constantly (Bowen and Radhakrishna, 1991). A manager's ability to understand what motivates employees may help them to identify and solve many organizational issues (Schaefer, 1977).

Motivating employees is a dynamic process (MacMillan, 2007). Moreover, to get productivity up to an optimal level, it is critical to understand how and why people are motivated to work (Hahn and Kleiner, 2002; Westover, 2008). For this purpose, managers usually spend a considerable amount of time on developing various motivational techniques (Hise, 1993); however, generally speaking, they do not have clear picture of what really motivates their employees (Creech, 1995). This fact can be observed in a longitudinal study conducted by Kovach (1995), who attempted to figure out the changes that took place in the importance of various motivational factors to managers and their subordinates in the private sector over a period of 50 years. He found that managers kept the same ranking of ten motivational factors that they thought kept their employees motivated, while there was an immense change in the priorities of their subordinates during that time period. …