Impact of Extrinsic Motivation on Employee Performance

3963 words (16 pages) Business Assignment

27th Apr 2020 Business Assignment Reference this

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Research Question

How extrinsic motivation impact on male and female employee performance.

Theoretical and Strategic Rationale

In the 21st century due to globalization, modernization in technology and variations in the market circumstances turned the business setting into dynamic and competitive. To survive in this competitive market organizations has chosen competency-based management approach, which permits organizations to focus more for developing employee’s proficiency. In order to achieve employee performance and employee’s job satisfaction at workplace organization requires vastly pleased management practices. Motivation is one of the practices organization adopt for better employee performance and organizational effectiveness (Ishaque et al., 2017). Since employees are the most influential resource of any organization and if they are motivated then organizational is performing much better to achieve their required goals easily. It is not difficult to stimulate motivation for better performance and is considered as decisive feature for employee productivity (Tampu, 2015). Motivation can be defined as Intrinsic and extrinsic. Extrinsic motivation that arises from outside in the form of financial rewards whereas Intrinsic motivation are non-financial rewards such as promotion and appreciation (Gungor, 2011).

The extent to which monetary incentives are used to gauge employee performance and the level of motivation and satisfaction gained have been the subject of considerable debate (Zhang et al., 2016). Furthermore, many researchers have recommended that extrinsic rewards are important to motivate employee productivity, performance and employee’s dedication (Shaw and Gupta,2015). Consistently finding of monetary incentives at workplace to motivate employee is because of the fact that most employees’ goals directly related to earn more money for better living purpose (Zhang et al. 2016).As a result, extrinsic motivation is more closely related to employee performance as compared  to intrinsic and thus more practically implemented in the today’s organization. Comparatively many researchers agree on the opinion that intrinsic motivation plays an important role among individual, but there are some job roles and social requirements that cannot be accomplished by individual and have reduced the independence to be intrinsically motivated (Huei et al., 2014).

Although there is considerable amount of literature showing the impact of monetary incentive on employee performance. But there is gap in literature when looking at how extrinsic motivation impact on employee performance by gender difference (Ko and kim,2018). This research project will find out the mentioned factor practically by carrying out in depth inspection of Maven Solutions, Software Development Company in Pakistan. This company work is based on different software projects that needs to deliver in different countries all over the world within the defined deadline. The project moves from management, development and Quality Assurance departments and there is dependency of work from one department to other where team is working on each individual task. To achieve sufficient employee performance company uses different motivational strategies in order to achieve deadline of the projects, but still there is issue of less motivation in employees which is affecting company future growth. I am aware about this issue because I worked there and looking at company it’s not growing and going down day by day and employees there are not happy.

Existing literature has given much information about the comparison between intrinsic and extrinsic motivation impact on performance. But has given limited discussion about the extrinsic motivation impact on employee performance with respect to gender difference. For this research project, views of employees that are working with the company will be used to find out the research question objectives.

Research Objectives:

  1. How monetary incentives as a form of extrinsic motivation positively impact on female and male employee performance.
  2. The views of employees on how monetary incentives negatively impact on employee performance.
  3. To find out what can be the best motivational strategy management should adopt to bring out employee performance.
  4. The views of employees and managers to inspect the factors that causes hinders in motivating employees’ performance.
  5. To provide recommendation on how practice of continuous motivational environment keep better employee performance in software development company on the research findings.

Literature Review

In research, motivation was observed as the eagerness to show great struggle in order to achieve organizational goals, using ability to satisfy wishes and wants. Herzberg Two Factor Motivation theory or Herzberg’s Motivation-Hygiene Theory explains that lack of extrinsic motivation can lead to job dissatisfaction and link with low performance. Adding monetary incentives as a form of extrinsic motivation give the chances for real motivation to expose. (Worthley, 2009). Since gender is considered as an important in the zone of work motivation. Dynamic triangle of motivation model shows that individual characteristics help shaping the motivation perspective (Osteraker, 1999).

Since existing literature suggesting that motivation is one of the important factors in enhancing employee performance at workplace. Organizations find effective strategy of motivation in order to improve performance of their employee and for better business effectiveness (Imran et al,2014).It is argued that extrinsic motivation is more closely related to employee performance (Lazear,2000).organizations widely use monetary incentives as a form of motivation and successfully achieving desired goals(Zhang et al. 2016) where as the main purpose of monetary incentives to encourage employees towards to excel their job performance .However Herzberg’s also augmented that monetary incentives not truly encourage employees for better performance, but not giving consideration to this component may lead less dedication to individual’s work(Worthley,2009).

The self-determination theory, which focuses on “the significance of people’s advanced internal assets for identity advancement and social self-guideline,” differentiates between intrinsic and extrinsic motivations”. The self-determination theory has been utilized in different examinations identified with workers’ practices: work creating and its commitment to individual occupation fit (Tims et al., 2016), Other investigations found that people with progressively self-ruling outward inspiration are important on the grounds that such extrinsic inspiration could improve their mental prosperity, execution, and commitment. Remotely spurred individuals may wind up self-decided through the disguise and combination of remotely persuaded undertakings (Ryan and Deci, 2000b, p. 65). Similarly defined by (Berger and Berger, 2015) that for successful job achievement employees expect monetary incentives in the form of benefit. Also (Sajuyigbe et al., 2013) defined that it is the conceptual element in refining performance of the employee. Even after implementation of different motivational strategies, organizations still facing the challenges of how to make sure that employees are motivated (Waqas and Saleem, 2014).

Research also shows that organizations spending billions of dollars per year into monetary incentives programs, in order to gain acceptable level of employee performance. Which shows that there is positive impact of extrinsic motivation on employee performance (Waqas and Saleem, 2014). Although Some studies provide the evidence that monetary incentives increase individual’s behaviour towards the effort required for better performance (Wickramasinghe and Dabere, 2012), while other also showed evidences that monetary incentives create negative impact on employee performance and hence decreased belief and support by the employer (stone et al., 2010).It is also argued that monetary incentive approach work best when the current performance is not up to mark and when there is need to boost the interest, where the desired result is challenging but achievable( Wickramasinghe and Dabere, 2012).

Further (Rose and Manley, 2010) propose that money related motivating forces ought to have various objectives covering different tasks areas and adaptability to alter objectives and estimation methodology after certain time period. Additionally, specify the significance of employees having a clear insight of how monetary incentives related with complete objective of the task. Through the response of examination conducted in IBM corporation by (Hofstede, 2001) showed that males valued incomes and money related rewards at workplace more than when comparing with the females valued security of position and teamwork with colleagues. Comparatively some other scholars debated on the fact that if monetary incentives programs are designed in a reasonable manner than could have a dramatic optimistic impact on employee performance (Rose and Manley,2010).

In the research on gender analysis it was found that men were more worried about incomes and their accountability towards family living and more impact of extrinsic motivation on their work performance, whereas females concerned more about growth and environment in which they work and have less impact of monetary incentives on their work performance (Konrad et al, 2000). Although, different studies challenge the finding of gender differences impact on performance. Studies conducted on 205 Chinese supervisors by (Pearson and Chatterjee, 2002) showed result that gender similarity was the main topic, since merging and deviation were found in different task goals. Since sexual orientation generalizations are a lot of shared convictions and majority understandings which recommend contrasts among people in their frames of mind, values, interests, mental qualities, social relations, and occupations (Gunkel et al., 2007) and It is also found that psychological features differently linked with males and females. In different societies, the procedure of individual feeling related to gender related starts from early age with the perception and impersonation of gender connected common jobs. which creates diverse interest for boys and girls thus set their minds with the pre-planned behaviour with the predictable responsibilities and their expectation in their future job roles. (Konrad et al, 2000) mentioned the intersection and disguise of the inborn attributes and learned conduct cause male and female to display little yet measurably critical contrasts in necessities, qualities, and frames of mind.

It had been also argued that monetary Incentives may change the focus of individual from excellence towards achieving the incentives targets. It is also found that extrinsic motivation had considerably positive impact on burnout (Ko and kim,2018). Since monetary remunerations for employments can be utilized as a method for control and compulsion as opposed to the outcomes of people’s achievements. In the event that authoritative individuals see outer rewards as a method for intimidation and control, they would be less inspired by the assignment and see function as progressively distressing (Ko and Kim, 2018). At the point when individuals are controlled and directed by outside components, they will in general show less intrigue, esteem, and delight. In addition, they are tending to blame other outer variables for negative outcomes.

Few researches have addressed the monetary incentive impact on performance with respect to gender difference (ko and Kim,2018). From literation it is also found that most of research done were based on US and western sample, so more research is required to contributed in literature that how different impact on performance when using monetary incentives to motivate male and female on non-western culture (Yousaf et al., 2014).

Research Methodology

Research methodology is the way to solve the research problem in a systematic order (kothari, 2004). There are two main types of research layouts commonly used in business and management research project that is Qualitative and Quantitative method. The qualitative method used to get the data where meanings derived from words, results collection of data requiring sorting into groups and use of conceptualization to conduct analysis in a non-standardized way (Saunders et al,2009). For qualitative research the methods used to collect data are detailed interviews in the form of  semi-structured, structured and open ended. Where as quantitative method used to get data derived from numbers, results collection in standardized and numerical form, and use of diagram and statistics to conduct analysis (saunders et al., 2009).  The quantitative research to collect data using surveys, mathematical and statistical techniques.

The purpose of this research project is to investigate the impact of extrinsic motivation on male and female employee performance. To carry out the research project a qualitative method will be used to explore a detail hidden knowledge of research question.

Research Philosophy

An interpretivism thinking will be used to conduct this research project, as this is linked with qualitative approach. The aim of this research to cognise the subjective meaning behind collective act (Bryman and Bell, 2011). Research where to understand the difference between individuals in their social action, where diverse  meaning exist which will influence how people interpret and respond to situations (Gephart, 2004).Also to deeply understand the perception of employees have in their mind to see the world, because people behave differently in similar nature situations. In this research project quantitative method will not be used or appropriate because the aim to extract the information from their experiences and viewpoints rather collecting data through general survey and then applying statistical techniques on it. Also as defined by (Robson,2002) that quantitative research is not good for exploratory research and where there is large no. of open-ended questions. It works best with standardized questions where it is expected that all the respondents will be interpreted the same way. Subjective research is mainly essential in the social sciences where the idea is to find the hidden believe process of human behaviour. Through such exploration, cut down the different elements that make the individual like and dislike in a specific way. Thus, the essential aim of applied research is to uncover a solution for some specific practical problem(kothari,2004).

Research Method: Qualitative Data Collection

To find out the answer of research question, an empirical information will be collected through face to face semi-structured interview over skype with at least 20 employees of different levels and each interview will be approximately of 25 to 35 minutes long, so more information can be extracted. These interviews will not be standardized rather having each question explained based on some theme that will vary between interview (saunders et al., 2009). The idea of conducting semi-structured interviews is to gain more in-depth, comprehensive answers which resembles our purpose of getting a hidden understanding of topic chosen. These questions will be of an open-ended nature which will give some openness in the way interviewee choose to answer the questions in detail. As defined by (Bryman and Bell, 2011) the order of semi structured interview can be determined by the flow of conversation between interviewer and the interviewee but keeping the wordings and structure of the questions similar. The focus of the interviews will be on the point of views of the employees of the company being interview. Also as mentioned in(choy,2014) that it allows participants to raise the issues that matters them most.

The reason of not choosing quantitative research because this method involves numbers, but the topic chosen is very difficult to quantify in numbers. Another reason is not having good knowledge of statistical analysis techniques which can lead to irrelevant interpretation (Black,1999). Since the company is based out of UK and interviews will be conducted via skype, that is why focused group interview will not be possible because of all employee’s availability at same time and the possibility of required way of communication with all of them.

The problem that could arise in pursuing research objectives will be time management because of time difference between UK and Pakistan. Also, company is allowing to conduct interviews after their working hours and to deal with this issue maybe it is required to manage routine.


In the research process sampling is an important step (Bryman and Bell, 2011). Many researchers like (Henry ,1990 cited in Saunders et al.2009) said that with the use of sampling researcher can get overall higher accuracy than a census. Since the company being used to find out the research objective is average size with almost 120 employees. Hence according to research topic Quota sampling method will be best to use.

Time Table


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