Effect of Job Satisfaction and Motivation towards Employee's Performance in XYZ

Shipping Company

Job satisfaction is defined as the extent to which an employee feels self-motivated,

content & satisfied with his/her job. Job satisfaction happens when an employee feels he
or she is having job stability, career growth and a comfortable work life balance. This
implies that the employee is having satisfaction at job as the work meets the expectations
of the individual.

Job Satisfaction Factors

Job satisfaction is related to the psychology of an employee. A happy & content employee
at a job is always motivated to contribute more. On the other hand, a dissatisfied
employee is lethargic, makes mistakes & becomes a burden to the company. The
elements & factors which contribute to job satisfaction are:

1.1 Compensation & Working conditions: One of the biggest factors of job satisfaction are
the compensation and benefits given to an employee. An employee with a good salary,
incentives, bonuses, healthcare options etc is happier with their job as compared to
someone who doesn’t have the same. A healthy workplace environment also adds value
to an employee.

1.2 Work life balance: Every individual wants to have a good workplace which allow them
time to spend with their family & friends. Job satisfaction for employees is often due a
good work life balance policy, which ensures that an employee spends quality time with
their family along with doing their work. This improves the employee's quality of work life.

1.3 Respect & Recognition: Any individual appreciates and feels motivated if they are
respected at their workplace. Also, if they are awarded for their hard work, it further
motivates employees. Hence recognition is one of the job satisfaction factor.

1.4 Job security: If an employee is assured that the company would retain them even if
the market is turbulent, it gives them immense confidence. Job security is one of the main
reasons for job satisfaction for employees.
1.5 Challenges: Monotonous work activities can lead to dissatisfied employees. Hence,
things like job rotation, job enrichment etc can help in job satisfaction of employees as
well.

1.6 Career Growth: Employees always keep their career growth part as a high priority in
their life. Hence, if a company helps groom employees and gives them newer job roles, it
enhances the job satisfaction as they know they would get a boost in their career. Quality
human resource is a resource that is needed by the company. These resources have
advantages in smart thinking, have brilliant idea to apply the plan in the company, have
the skills and expertise in the work, has the ability to solve problems, discipline of time in
completing the work and have the innovation or creativity in developing the company.
(http://www.inc.com/encyclopedia/human-resource-management.html) In the digital and
globalization era which are demanding progress technologically.

There are several theories given which help in evaluating & measuring job satisfaction of
employees at workplace. Some of them are:

Hierarchy of Needs Maslow

Hierarchy of Needs by Maslow is the theory of psychology which categorizes the need of
human into five types. It was developed by Abraham Maslow in 1943. Maslow proposed
that all human beings have a certain number of needs, some being more basic than
others. These needs are arranged in 5 levels in a hierarchy in a pyramid with basic or
primitive needs at the bottom and complex needs like self-esteem and self-actualization
towards the upper level of the pyramid.

Hygiene Theory

Herzberg proposed a dual factor theory to study the satisfaction levels of the employees
in an organization. The theory is also referred to as motivation-hygiene theory. The theory
proposes that there are two different sets of factors which cause job satisfaction and job
dissatisfaction.

Hygiene Factors
Hygiene factors refer to those motivation factors for an employee which if not present in
an organization, can demotivate the individual & reduce their performance. Hygiene
factors include a good salary, job profile, benefits, company sponsored vacations etc.

Importance of Hygiene Factors

Hygiene factors are 'good to have' factors of motivation in an organization, which further
motivate the employee if they are given to the employee. Lack of presence of hygiene
factors, will leave the employee dissatisfied, and will reduce his/her morale to perform
well. Employees or individuals seek a good place to work in. If basic things at workplace
are well taken care of then they are more comfortable and can concentrate of work. This
is where basic factors or hygiene factors are important from an organization point of view.

Work motivation "is a set of energetic forces that originate both within as well as beyond
an individual's being, to initiate work-related behavior, and to determine its form, direction,
intensity, and duration" Understanding what motivates an organization's employees is
central to the study of I–O psychology. Motivation is a person's internal disposition to be
concerned with and approach positive incentives and avoid negative incentives. To
further this, an incentive is the anticipated reward or aversive event available in the
environment. While motivation can often be used as a tool to help predict behavior, it
varies greatly among individuals and must often be combined with ability and
environmental factors to actually influence behavior and performance. Results from a
2012 study, which examined age-related differences in work motivation, suggest a "shift
in people's motives" rather than a general decline in motivation with age. That is, it
seemed that older employees were less motivated by extrinsically related features of a
job, but more by intrinsically rewarding job features. Work motivation is strongly
influenced by certain cultural characteristics. Between countries with comparable levels
of economic development, collectivist countries tend to have higher levels of work
motivation than do countries that tend toward individualism. Similarly measured, higher
levels of work motivation can be found in countries that exhibit a long versus a short-term
orientation. Also, while national income is not itself a strong predictor of work motivation,
indicators that describe a nation’s economic strength and stability, such as life
expectancy, are. Work motivation decreases as a nation’s long-term economic strength
increases. Currently work motivation research has explored motivation that may not be
consciously driven. This method goal setting is referred to as goal priming. Effects of
primed subconscious goals in addition to goals that are consciously set related to job
performance have been studied by Stajkovic, Latham, Sergent, and Peterson, who
conducted research on a CEO of a for-profit business organization using goal priming to
motivate job performance. Goal priming refers to the achievement of a goal by external
cues given. These cues can affect information processing and behaviour the pursuit of
this goal. In this study, the goal was primed by the CEO using achievement related words
strategy placed in emails to employees. This seemingly small gesture alone not only cost
the CEO very little money, but it increased objectively measured performance efficiency
by 35% and effectiveness by 15% over the course of a 5-day work week. There has been
controversy about the true efficacy of this work as to date, only four goal priming
experiments have been conducted. However, the results of these studies found support
for the hypothesis that primed goals do enhance performance in a for-profit business
organization setting.

The It is important for organizations to understand and to structure the work environment
to encourage productive behaviors and discourage those that are unproductive given
work motivation's role in influencing workplace behavior and performance. Motivational
systems are at the center of behavioral organization.[10] Emmons states, “Behavior is a
discrepancy-reduction process, whereby individuals act to minimize the discrepancy
between their present condition and a desired standard or goal” (1999, p. 28). If we look
at this from the standpoint of how leaders can motivate their followers to enhance their
performance, participation in any organization involves exercising choice; a person
chooses among alternatives, responding to the motivation to perform or ignore what is
offered. This suggests that a follower’s consideration of personal interests and the desire
to expand knowledge and skill has significant motivational impact, requiring the leader to
consider motivating strategies to enhance performance. There is general consensus that
motivation involves three psychological processes: arousal, direction, and intensity.
Arousal is what initiates action. It is fueled by a person's need or desire for something that
is missing from their lives at a given moment, either totally or partially. Direction refers to
the path employees take in accomplishing the goals they set for themselves. Finally,
intensity is the vigor and amount of energy employees put into this goal-directed work
performance. The level of intensity is based on the importance and difficulty of the goal.
These psychological processes result in four outcomes. First, motivation serves to direct
attention, focusing on particular issues, people, tasks, etc. It also serves to stimulate an
employee to put forth effort. Next, motivation results in persistence, preventing one from
deviating from the goal-seeking behavior. Finally, motivation results in task strategies,
which as defined by Mitchell & Daniels, are "patterns of behavior produced to reach a
particular goal.

The two-factor theory

(also known as Herzberg's motivation-hygiene theory and dual-factor theory) states that
there are certain factors in the workplace that cause job satisfaction while a separate set
of factors cause dissatisfaction, all of which act independently of each other. It was
developed by psychologist Frederick Herzberg.

Fundamentals

Feelings, attitudes and their connection when industrial mental health are related to
Abraham Maslow's theory of motivation. His findings have had a considerable theoretical,
as well as a practical, influence on attitudes toward administration. According to Herzberg,
individuals are not content with the satisfaction of lower order needs at work; for example,
those needs associated with minimum salary levels or safe and pleasant working
conditions. Rather, individuals look for the gratification of higher-level psychological
needs having to do with achievement, recognition, responsibility, advancement, and the
nature of the work itself. This appears to parallel Maslow's theory of a need hierarchy.
However, Herzberg added a new dimension to this theory by proposing a two-factor
model of motivation, based on the notion that the presence of one set of job
characteristics or incentives leads to worker satisfaction at work, while another and
separate set of job characteristics leads to dissatisfaction at work. Thus, satisfaction and
dissatisfaction are not on a continuum with one increasing as the other diminishes but are
independent phenomena. This theory suggests that to improve job attitudes and
productivity, administrators must recognize and attend to both sets of characteristics and
not assume that an increase in satisfaction leads to decrease in dissatisfaction.

The two-factor theory developed from data collected by Herzberg from interviews with
203 engineers and accountants in the Pittsburgh area, chosen because of their
professions' growing importance in the business world. Regarding the collection process:

“Briefly, we asked our respondents to describe periods in their lives when they were
exceedingly happy and unhappy with their jobs. Each respondent gave as many
"sequences of events" as he could that met certain criteria— including a marked change
in feeling, a beginning, and an end, and contained some substantive description other
than feelings and interpretations...

The proposed hypothesis appears verified. The factors on the right that led to satisfaction
(achievement, intrinsic interest in the work, responsibility, and advancement) are mostly
unipolar; that is, they contribute very little to job dissatisfaction. Conversely, the dis-
satisfiers (company policy and administrative practices, supervision, interpersonal
relationships, working conditions, and salary) contribute very little to job satisfaction”

— Herzberg, 1964

From analyzing these interviews, he found that job characteristics related to what an
individual does — that is, to the nature of the work one performs — apparently have the
capacity to gratify such needs as achievement, competency, status, personal worth, and
self-realization, thus making him happy and satisfied. However, the absence of such
gratifying job characteristics does not appear to lead to unhappiness and dissatisfaction.
Instead, dissatisfaction results from unfavorable assessments of such job-related factors
as company policies, supervision, technical problems, salary, interpersonal relations on
the job, and working conditions. Thus, if management wishes to increase satisfaction on
the job, it should be concerned with the nature of the work itself — the opportunities it
presents for gaining status, assuming responsibility, and for achieving self-realization. If,
on the other hand, management wishes to reduce dissatisfaction, then it must focus on
the workplace environment — policies, procedures, supervision, and working conditions.
If management is equally concerned with both, then managers must give attention to both
sets of job factors.

Two-factor theory distinguishes between:

 Motivators (e.g. challenging work, recognition for one's achievement,

responsibility, opportunity to do something meaningful, involvement in decision
making, sense of importance to an organization) that give positive satisfaction,
arising from intrinsic conditions of the job itself, such as recognition, achievement,
or personal growth.
 Hygiene factors (e.g. status, job security, salary, fringe benefits, work conditions,
good pay, paid insurance, vacations) that do not give positive satisfaction or lead
to higher motivation, though dissatisfaction results from their absence. The term
"hygiene" is used in the sense that these are maintenance factors. These are
extrinsic to the work itself, and include aspects such as company policies,
supervisory practices, or wages/salary.[4][5] Herzberg often referred to hygiene
factors as "KITA" factors, which is an acronym for "kick in the ass", the process of
providing incentives or threat of punishment to make someone do something.

According to Herzberg, hygiene factors are what causes dissatisfaction among

employees in the workplace. In order to remove dissatisfaction in a work environment,
these hygiene factors must be eliminated. There are several ways that this can be done
but some of the most important ways to decrease dissatisfaction would be to pay
reasonable wages, ensure employees job security, and to create a positive culture in the
workplace. Herzberg considered the following hygiene factors from highest to lowest
importance: company policy, supervision, employee's relationship with their boss, work
conditions, salary, and relationships with peers.[6] Eliminating dissatisfaction is only one
half of the task of the two-factor theory. The other half would be to increase satisfaction
in the workplace. This can be done by improving on motivating factors. Motivation factors
are needed to motivate an employee to higher performance. Herzberg also further
classified our actions and how and why we do them, for example, if you perform a work
related action because you have to then that is classed as "movement", but if you perform
a work related action because you want to then that is classed as "motivation". Herzberg
thought it was important to eliminate job dissatisfaction before going onto creating
conditions for job satisfaction because it would work against each other.

According to the Two-Factor Theory, there are four possible combinations:

High Hygiene + High Motivation: The ideal situation where employees are highly
motivated and have few complaints.

High Hygiene + Low Motivation: Employees have few complaints but are not highly
motivated. The job is viewed as a paycheck.

Low Hygiene + High Motivation: Employees are motivated but have a lot of complaints. A
situation where the job is exciting and challenging but salaries and work conditions are
not up to par.

Low Hygiene + Low Motivation: This is the worst situation where employees are not
motivated and have many complaints.

Unlike Maslow, who offered little data to support his ideas, Herzberg and others have
presented considerable empirical evidence to confirm the motivation-hygiene theory,
although their work has been criticized on methodological grounds.
Background

Employees are the heart of any organization. For any organization to operate smoothly
and without any interruption, employee cooperation cannot be replaced with anything
else. It is of utmost importance that the employees of an organization not only have a
good relationship with the top management, but also, they maintain a healthy and
professional relationship with their coworkers. The following study is a self-conducted
research on how motivational tools impact the performance of employee for betterment.
The study also focused on de-motivation factors affecting employee performance
negatively. A sample of individuals was selected and was interviewed with self-
administrated questionnaire to obtain primary data. The data were analyzed using
descriptive statistical analysis methods. The results obtained indicate that if employees
are positively motivated, it improves both their effectiveness and efficiency drastically for
achieving organizational goals.

What makes the employees of any organization “go the extra mile” to provide excellent
service? The answer to this question lies in this self-conducted research paper. Motivation
is actually a combination of factors that operate within each individual and requires a
combination of approaches. In general sense, motivation can be referred as a
combination of motive and action. Vroom has suggested that performance can be thought
of a multiplicative function of motivation and ability. {P=F (M.A)}. The model of motivation
is based upon a definition of motivation as "a process governing choices made by persons
or lower organisms among alternative form of voluntary activity". Also, research reveals
that an employee's ability only partially determines his output or productivity. The other
major determinant is his motivation level. “Psychological forces that determine the
direction of a person's behavior in an organization, a person's level of effort and a person's
level of persistence". Jones and George from the book "Contemporary Management."
Employee motivation plays a vital role in the management field; both theoretically and
practically. It is said that one of the important functions of human resource manager is to
ensure job commitment at the workplace, which can only be achieved through motivation.
There is general agreement that people are motivated in situations where (1) they can
participate, (2) they can feel accomplishment and receive recognition for their work, (3)
where the communication is frequent and (4) there are opportunities for career and
knowledge growth. "A central concern of industrial relations is the identification and
measurement of factors associated with individual differences in employee job
performance.” And this identification and measurement are the basic function of
motivational factors or tools. Motivation is crucial for good performance and therefore it is
increasingly important to study what motivates employees for better performance, so the
author of this journal urges that more and more research should be conducted to find out
the factors that affects employee performance significantly.

Human resources should also have skills and expertise in technology, because virtually
all work activities using the power of technology. No doubt the sophistication of
information technology has become a daily necessity in carrying out the work. Utilizing
technology will save time, save money, save energy because the work can be done online
between branches and between different country(s) which have different time and also
the information can be connected with a short time, quick and precise. The sophistication
of information technology can also reduce the use of paper, the job of being practical and
can be done in a mobile because it does not have to be in the office to finish the job.
(http://www.globalization101.org/uploads/File/Technology/tech.pdf)

Employee motivation, i.e. methods for motivating employees, is an intrinsic and internal
drive to put forth the necessary effort and action towards work-related activities. It has
been broadly defined as the "psychological forces that determine the direction of a
person's behavior in an organization, a person's level of effort and a person's level of
persistence". Also, "Motivation can be thought of as the willingness to expend energy to
achieve a goal or a reward. Motivation at work has been defined as 'the sum of the
processes that influence the arousal, direction, and maintenance of behaviors relevant to
work settings'. "Motivated employees are essential to the success of an organization as
motivated employees are generally more productive at the workplace.

Motivation is the impulse that an individual has in a job or activity to reaching an end goal.
There are multiple theories of how best to motivate workers, but all agree that a well-
motivated work force means a more productive work force.
Taylorism

Fredrick Winslow Taylor was one of the first theorist to attempt to understand employee
motivation. His theory of scientific management, also referred to as Taylorism, analyzes
the productivity of the workforce. Taylor’s basic theory of motivation is that workers are
motivated by money. He viewed employees not as individuals, but as pieces of a larger
workforce; in doing so his theory stresses that giving employee's individual tasks,
supplying them with the best tools and paying them based on their productivity was the
best way to motivate them. Taylor's theory developed in the late 1890's and can still be
seen today in industrial engineering and manufacturing industries.

Employee Motivation

Hawthorne effect

In the mid 1920's another theorist, Elton Mayo, began studying the workforce. His study
of the Hawthorne Works lead him to his discovery of the Hawthorne effect. The Hawthorne
effect is the idea that people change their behavior as a reaction to being observed. Mayo
found that employee's productivity increased when they knew they were being watched.
He also found that employees were more motivated when they were allowed to give input
on their working conditions and that input was valued. Mayo's research and motivational
theories were the start of the Human Relations school of management.

Rewards

Using rewards as motivators divides employee motivation into two categories: intrinsic
and extrinsic motivation. Intrinsic rewards are internal, psychological rewards such as a
sense of accomplishment or doing something because it makes one feel good. Extrinsic
rewards are rewarding that other people give to you such as a money, compliments,
bonuses, or trophies. This applies to Douglas McGregor's Scientific Theory that formed
Theory X, which applies to the extrinsic wants of employees. The basis for the motivation
is supervision structure and money. Scientific Theory is based on the grounds that
employees don't want to work so they have to be forced to do their job, and enticed with
monetary compensation.Theory Y, also derived from McGregor's theory, says that
employees are motivated by intrinsic or personal reward[9]. With this theory different
factors can be used to heighten the intrinsic benefit that employees are receiving at their
job."

Many studies have been conducted concerning how motivation is affected by rewards
resulting in conflicting and inconsistent outcomes. Pierce, Cameron, Banko, and So [10]
conducted a study to examine how extrinsic rewards affect people's intrinsic motivation
when the rewards are based on increasingly higher performance criteria. Pierce et al.
found that rewarding people for meeting a graded level of performance, which got
increasingly more difficult, spent more time on the study's activities and experienced an
increase in intrinsic motivation. Participants who were not rewarded at all or only
rewarded for maintaining a constant level of performance experienced less intrinsic
motivation. Another study that examined the effects of extrinsic rewards on intrinsic
motivation was conducted by Wiersma. Wiersma conducted a meta-analysis to
summarize the inconsistent results of past studies. The meta-analysis by Wiersma
concluded that when extrinsic rewards are given by chance, they reduce intrinsic
motivation. This result is supported when task behavior is measured during a free-time
period. However, it is not supported when task performance is measured when the
extrinsic reward is in effect. Wiersma also found that these results cannot be generalized
to all situations. A study conducted by Earn also examined the effects of extrinsic rewards
on intrinsic motivation. Earn wanted to know if extrinsic rewards affected a person's
intrinsic motivation based on the subject's locus of control. Earn found that pay increases
decreased intrinsic motivation for subjects with an external locus of control whereas pay
increases increased intrinsic motivation for subjects with an internal locus of control. The
study also found that when the controlling aspect of the extrinsic reward was made
pertinent by making pay dependent on a certain amount of performance, higher pay
undermined the intrinsic motivation of subjects and their locus of control was not relevant.

Quality-of-work-life programs

Work-life balance is an employee's perception of how a proper balance between personal

time, family care, and work are maintained with minimal conflict. Employers can use work-
life balance as a motivational technique by implementing quality-of-work-life programs.
Examples of such programs include flextime, workplace wellness, and family support.
Flexible work schedules can allow an employee to work whenever they can as long as a
certain number of hours are worked each week and some employers allow their
employees to work from home. Sometimes employers utilize flextime schedules that allow
employees to arrive to work when they choose within specified limits. A wellness program
can involve having an exercise facility, offering counseling, or even having programs set
up to help employees lose weight or stop smoking cigarettes.[20] Family support
programs involve help with parenting, childcare, and some programs allow employees to
leave for family purposes.

One study found that men often identify themselves with their career and work roles while
women often identified themselves with the roles of mother, wife, friend, and daughter.
The Sloan Foundation found that even though women enjoy working as much as men,
women prefer to work nights and weekends if time needs to be made up instead of cutting
their hours. A study conducted by the Alliance for Work-Life Progress surveyed
employees to find out the type of workplace flexibility employees say they would like to
use in the following year. Burrus et al. found that 71 percent of people want an occasional
opportunity to adjust their schedule, 57 percent want to work from a location other than
their office, 73 percent want to make their work-life flexibility arrangement official, and 12
percent want to work fewer hours.

Employee Engagement

A motivated employee becomes engaged in their workplace. Employee engagement is

an important part of an organization's success. Research has found that organizations
with engaged employees have three times higher profit margins compared to
organizations with disengaged employees. Shareholder returns, operating income, and
revenue growth have also had higher financial performance in employee engaged
organizations. In addition, employee engagement is linked to lower absenteeism within
an organization. Employers who practice employee motivation and engagement
techniques in their organization will likely see an increase in overall business
performance.