Running head: EMPLOYEE MOTIVATION

Employee Motivation
Randall S. Jobski
Siena Heights University
December 18, 2015

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Abstract

This literature review seeks to understand to what extent intrinsic and extrinsic factors play a part
in overall employee motivation. To accomplish this goal, this paper looks at this question from
three different angles. First, this paper covers various motivational theories such as Maslows
hierarchy of needs, Herzbergs motivation-hygiene theory, and self-determination theory.
Second, the paper will look at factors that influence employee motivation such as how leadership
can affect employee motivation, as well as what factors motivate employees in the public and
non-profit sectors and Millennials. Finally, this paper reviews to what degree employee
motivation is affected by intrinsic and extrinsic factors. The research shows that both intrinsic
and extrinsic factors play a role in motivating employees, but leadership must decide which is
most effective for a given task. Intrinsic factors tends to be more effective for cognitive tasks,
whereas extrinsic factors tend to be more effective for algorithmic and repetitive tasks.
However, the research seems to agree that, regardless of the task an employee is performing, the
more intrinsically motivated the better.
Keywords: motivation theories, intrinsic motivation, extrinsic motivation

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Employee Motivation

This literature review seeks to understand to what extent intrinsic and extrinsic factors
play a part in overall employee motivation. In working to answer this question, three related
questions will be addressed each proving more insight into this larger, overarching question.
What motivates people has been formally studied since at least the early 1940s. The first related
question to be addressed will be what theories exist on motivation. This will provide a
foundation of understanding of how people are motivated. Next, this paper will review factors
that influence employee motivation. Here we will look at how leadership can affect employee
motivation, as well as what factors motivate employees in the public and non-profit sectors and
Millennials. Finally, we will review to what degree employee motivation is affected by intrinsic
and extrinsic factors they may experience while on the job.
Literature Review
Theories on Motivation
Hierarchy of needs. Maslow introduced this theory in 1943 (Ismail & El Nakkache,
2014). Thielke et al. (2012) provides that Maslow constructed a model as a basis of his theory
consisting of five levels of human needs, each one relying on the other as a foundation a
foundation that must be satisfied before moving higher up the stack. These five level of human
needs, in order of lowest to highest, consist of physiological, safety, love/belonging, esteem, and
self- actualization. People will move up and down this stack as needs and circumstances change
in their lives. Gigliotti (2015) reports that Unsatisfied needs serve as a catalyst for human
motivation (p. 42). Given a similar amount of stimulus, people will be more motivated on
achieving the lower levels of the model than the higher ones (Thielke et al., 2012). Finally,
Maslows theory indicates that people will not carry out activities to accomplish a goal . . . if

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they are consumed with needs that are higher or lower than those met by the goal (Thielke et al.,
2012, p. 475).
Achievement motivation theory. Minor (2005) indicates that this theory was introduced
by McClelland in the early 1950s and has undergone, over time, a series of substantive
branching and even a bit of revision. The achievement motivation theory focuses not only on the
hope of success, but also fear of failure and even fear of success (p. 47). In addition, it has
also evolved to include power and affiliation motives as well. Atkinson and McClelland (as cited
in Minor, 2005) relay that the theory has its roots in the study of to what degree the thoughts of a
person deprived of food are consumed when shown images of food. Minor (2005) further states
that McClelland believed that all motives are learned (p.48). Over time, as people go through
life, they will associate good and bad feelings to their experiences with the positive ones
inspiring them to a point of high motivation to reach this point again. Moreover, it takes only
minimal stimulus to trigger these thoughts, and hence, to be motivated to endeavor to achieve
this again. These stronger motivational feelings dominate other weaker motivational feelings
brought on by other stimuli, and hence, people are motivated to work to achieving that which is
providing the stronger feeling (Minor, 2005).
Motivation-hygiene theory. Herzberg, with assistance from colleagues, introduced the
initial concepts of the theory in the late 1950s and Herzberg refined and evolved the theory over
time. Today, many refer to this theory as the two-factor theory, but Herzberg preferred the name
motivation-hygiene theory (Minor, 2005). The theory contends that there are intrinsic job factors
that contribute to job satisfaction, called motivation factors, and extrinsic job factors that
contribute to job dissatisfaction if they are not met, called hygiene factors. Furthermore, the
theory states that employers must meet hygiene factors in order to prevent job dissatisfaction by

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their employees, but that by meeting hygiene factors alone will not raise employee job
satisfaction. The theory further states that only motivation factors can bring long-term job
satisfaction for employees (Kuo, Li-An, Ya-Jung, & Chien-Ting, 2010).
Path-goal theory. This goal focuses how on how leaders can motivate their employees
to accomplish goals. Employee motivation is leveraged to improve both employee satisfaction
and performance. This theory operates under the premise that employees will be motivated if
they embrace the following three concepts: (a) the work they are performing is within their
ability, (b) their effort put forward will yield an expected outcome, and (c) appropriate incentives
are provided for achieving the goal. The leader, understanding their employees needs, must
select a leadership style that is most appropriate for motivating them. This theory provides four
leadership styles for the leader to choose from, namely (a) directive, (b) supportive, (c)
participative, and (d) achievement oriented. Finally, under path-goal theory, the leader is
responsible for the following actions: (a) defining goals in conjunction with the employee, (b)
clarifying the path to those goals, (c) removing obstacles in reaching those goals, and (d)
providing the necessary leadership support to the employee to ultimately reach the goal
(Northouse, 2013).
Self-determination theory. Gagn and Deci (2014) state that this theory of motivation,
originated by Deci and Ryan, has evolved over the past 40 years with scholars contributing from
all over the world. The theory was born out of an interest in the study of intrinsic motivation,
defined as doing something for its own sake, out of interest and enjoyment (Gagn & Deci, 2014,
p. 1). Interestingly when self-determination theory was coming into being, Hull (as cited in
Gagn & Deci, 2014) had a popular theory called drive theory, and studies at the time tried to
show that intrinsic motivation to accomplish a goal were attributed to Hulls theory. However,

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Gagn and Deci (2014) indicate that it became apparent that Hulls drive theory did not explain
the outcomes of some of the research being conducted. Deci (as cited in Gagn & Deci, 2014)
wanted to see what would happen if people were rewarded for something they already wanted to
do, i.e. they were intrinsically motivated to do. After running his experiment, he found that those
being rewarded in this case would actually see a decline in intrinsic motivation. Their focus
seemed to shift from the intrinsic motivation to the reward itself. Lepper & Greene (as cited in
Gagn & Deci, 2014) noted that, with the addition of the reward to perform the task, there
appeared to be a shift from something that was fun to what felt like work. Deci (as cited in
Gagn & Deci, 2014) noted other factors [in addition to rewards] were examined and found to
decrease intrinsic motivation, because they also diminished how autonomous people feel: threats,
deadlines, imposed goals, surveillance, evaluations, and competition (p. 2). On the contrary,
Zuckerman, Porac, Lathin, Smith, and Deci (as cited in Gagn & Deci, 2014) found that allowing
people to make their own choices improved intrinsic motivation. Finally, Vallerand and Reid (as
cited in Gagn & Deci, 2014) note that people become highly intrinsically motivated when they
work to become experts in a given task.
Factors that Influence Employee Motivation
Leadership. Park and Word (2012) provide that, from a management perspective, the
success of an organization is directly related to the motivation on the job of both the employees
and their leadership. The outright success of an organization is inextricably tied to the level of
motivation of its employees, which consequently, is impacted by how well the employees are
managed by their leadership. Moreover, per the path-goal theory of leadership, leaders motivate
by ensuring the path is cleared for an employee to reach their goals. The leader must look ahead
and work to remove issues, knock down walls, and lower hurdles along the way such that the

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employee is able to achieve their goal, and in doing so, find the work they are performing
fulfilling (Northouse & Lee, 2016).
Public and non-profit. Paarlberg, Perry, and Hondeghem (as cited in Park & Word,
2012) indicate that in the public sector, employees are influenced to raise their own motivation
when their managers and supervisors exhibit motivation to excel in their own tasks. Park and
Word (2012) found that, beyond the negative ramifications to the reputation of the organization
itself, an organizations ethical breach could negatively affect the motivation and morale of
public and non-profit employees. Ban, Drahnak-Faller, and Towers (as cited in Park & Word,
2012) note that non-profits tend to be small to very-small organizations with few employees.
This size helps reduce bureaucracy and allow the organization to be more nimble. These two
factors combined may contribute to improved employee motivation in this sector. However,
Light (as cited in Park & Word, 2012) found that a significant number (24%) of nonprofit sector
employees expressed frustration with a limited ability to advance within their organization (p.
713).
Millennials. Millennials are motivated by assignments that are interesting, moderately
but suitably challenging, will allow them to grow, and are different from what they have worked
on in the past. Millennials are also motivated by flexibility, an engaging work community, and a
healthy balance between time spent in and out of work. Moreover, Millennials, in addition to
being demotivated by the opposite conditions noted above, are not interested in work that is too
time consuming, and they are demotivated by being stuck in the same position for too long and
for receiving lack of respect. Finally, for Millennials, a supervisors influence showed up in the
area of employee demotivation, but it was found to not positively affect motivation (Kultalahti &
Viitala, 2014).

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Intrinsic and Extrinsic Factors Impact on Employee Motivation

Intrinsic motivation.
Definition. Bogardus (as cited in Nadim, Muhammad, Masood, & Riaz, 2012) reports
that intrinsic motivating factors are ones that invoke positive feelings and gratification about the
work one is performing. They change the focus from external to internal and have individuals
strive to become the best they can be by enhancing their skills and talent. Interestingly, the
absence of intrinsic motivating factors does not dissatisfy the employee, but motivation will
grow when focus is shifted in this direction. Cerasoli, Nicklin, and Ford (2014) provide that
intrinsically motivated behaviors are engaged for their very own sake (e.g., task enjoyment), not
being instrumental toward some other outcome (p. 980).
Intrinsic factors. Tilekar and Pachpande (2014) found intrinsic job factors that lead to
improved motivation are (a) leadership recognition of the work completed by the employee and
(b) the employee performing interesting work. Ryan et al. (as cited in Roche & Haar, 2013)
indicate that Intrinsic aspirations are positively related to positive physical and health behaviors,
enhanced relationships, greater psychological wellbeing and positive adjustment (p. 517). In
addition, Herzberg (as cited in Stringer, Didham, & Theivananthampillai, 2011) provides
employee achievement as another example of an intrinsic motivator. Finally, Cachon, Codina,
Eccius-Wellmann, McGraw, Myers (2013) state intrinsic motivators in three stages from an
entrepreneurial perspective of basic (i.e. motivation for business creation), secure (i.e. motivation
for a long-term, viable business), and perennial (i.e. motivation for business viability after death
or retirement). In the basic stage, the intrinsic motivator is Take control of ones life, do
something you enjoy, and prove yourself to others (p. 53). In the secure stage, the intrinsic
motivator shifts to Provide for yourself and . . . for your family in the longer term (p. 53).

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And, in the perennial state, the intrinsic motivator becomes Pass the business on to others (p.
53).
Extrinsic motivation.
Definition. Herzberg, Mausner and Snyderman (as cited in Nadim et al., 2012) declare
that extrinsic motivating factors are associated with a jobs context or environment. When these
factors are missing, are negative, or are subpar, they will lead to demotivation. Intriguingly,
however, the presence of adequate extrinsic motivational factors in an organization does not lead
to motivation (Nadim et al., 2012). Cerasoli et al. (2014) provide that Extrinsically motivated
behaviors are governed by the prospect of instrumental gain and loss (e.g., incentives) (p. 980).
Extrinsic factors. Tilekar and Pachpande (2014) found extrinsic job factors that need to
be present to support employee motivation are (a) sound compensation structure (b) equitable
employee pay, (c) effective company policies that supports employees, and (d) a decent work
culture with a comfortable company atmosphere where the employees and leadership all get
along well together. Kasser and Ryan (as cited in Roche & Haar, 2013) note that three extrinsic
factors that affect motivation are (a) wealth, (b) fame, and (c) image. Furthermore, Frey (as cited
in Stringer et al., 2011) points out two of the negative extrinsic factors that will affect an
employees motivation, namely the threat of wage cuts or outright dismissal. Lastly, looking at
Cachon et al. (2013) three stages of extrinsic motivators from an entrepreneurial perspective, in
the basic stage, the extrinsic motivator is Improve or secure income; secure business
ownership (p.53). In the secure stage, the extrinsic motivator becomes Secure long term cash
flows; secure long term business viability (p.53). Finally, in the perennial state, the extrinsic
motivator becomes Business growth and profits; equity building (p. 53).

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Impact on motivation. Patall, Cooper, and Robinson (as cited in Cerasoli et al., 2014)
find a link between intrinsic motivation and individual choice. They note that people will fully
engage in and support tasks they enjoy or identify with. Benware and Deci (as cited in Cerasoli
et al., 2014) identified that student learning will vary depending on whether they are intrinsically
motivated or extrinsically motivated. Intrinsically motivated students were actively engaged and
extrinsically motivated students were more passive. Simons, Dewitte, and Lewis (as cited in
Cerasoli et al., 2014) found that nurses who find enjoyment in growing their skills correlates to
how much work they will put into learning those new skills which supports the importance of
intrinsic motivation as described in the self-determination theory.
Cerasoli et al. (2014) findings demonstrate that age has an impact on the level of intrinsic
motivation. They found that the older the worker, the higher the intrinsic motivation and, to a
lesser degree, the higher the level of overall performance. Their study also supported the lack of
a link between gender and intrinsic motivation. Furthermore, this study points out that extrinsic
motivations such as incentives and rewards may temporarily boost motivation and performance
at the expense of intrinsic motivation, but once that incentive ceases, the motivation to perform,
which was tied to that extrinsic motivator, will disappear as well.
Cerasoli et al. (2014) find that tasks that require a great deal of absorption, personal
investment, complexity, and overall quality should be less linked to incentives and much more
closely linked to intrinsic motivation (p.999). Furthermore, tasks that are straightforward,
highly repetitive, and perhaps even less inherently enjoyable, should be more closely linked to
extrinsic [motivation] (p. 998). Thus, motivation can be favorably impacted both by intrinsic
and extrinsic factors; neither is good or bad, but there are better times to use intrinsic verses

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extrinsic motivations, and vice versa, based on the types of behavior the leader is seeking and the
tasks being carried out by the employee. (Cerasoli et al., 2014)
Internal drive. Microsoft set out to produce a great encyclopedia available via CD-ROM
and later online. Microsoft had great extrinsic motivators behind them such as improved market
share and visibility, the managers, writers, and editors would all be compensated extremely well
for their professional articles on thousands of topics written for the encyclopedia, and so on.
However, a few years after Microsoft initiated this project, a completely online encyclopedia was
started. This encyclopedia was to be written based solely on intrinsic motivation. There would
be no pay for anyone as this would not be sold but rather made available to the world for free.
There would also be little to no recognition for his or her work which sometimes added up to 20
30 hours a week. Furthermore, you did not need to have special credentials to participate as
you certainly did in Microsofts project. Nevertheless, this free, online encyclopedia beat out
Microsoft, and it was called Wikipedia. After 16 years of development, Microsoft pulled the
plug on their MSN Encarta project, and Wikipedia, after eight years of existence, had over 13
million articles in about 260 languages. For the people participating in these projects, they are
not taking vows of poverty, but rather they participate in these projects for intrinsic reasons, such
as sharpening their skills, which will make them better in their chosen career. This, in turn, can
improve one of their extrinsic motivators, namely higher wages earned for higher skills. The
topic summary points out that extrinsic motivation doesnt work and often does harm (p. 204).
Instead, the intrinsic motivators of autonomy to choose how one completes their work, the
mastery of something that matters to the person, and purpose what we do in the service of
something larger than ourselves (p.204) is the better way forward (Pink, 2009).

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Higher Education Teachers. Nadim et al. (2012) studied the effects of intrinsic and
extrinsic motivation on teachers job satisfaction in Punjab, Pakistan. The research was
conducted at 60 public sector degree colleges randomly chosen out of 369. Five-hundred
surveys were distributed, half each to male and female teachers at these colleges. Three-hundred
and eighty questionnaires were ultimately admitted into the study with 197 coming from male
and 183 from female. They found a statistically significant relationship between both intrinsic
and extrinsic motivation factors and the satisfaction of their subjects. The researchers were
surprised to show any connection between extrinsic factors and job satisfaction as this challenges
Herzbergs two-factor theory which states that satisfaction is not derived from extrinsic factors.
However, this research did show a higher connection between intrinsic factors (39%) than
extrinsic factors (12%) with job satisfaction. Teachers job satisfaction increases due to intrinsic
factors such as when they are involved in decisions about academic matters of their college,
when they have sufficient promotion opportunities, and when they have sufficient opportunities
to acquire new skills at job (p. 29). Extrinsic factors that contributed to job satisfaction for
these subjects were salary, feedback, and rewards (Nadim et al., 2012).
Public and nonprofit employees. Park and Word (2012) studied the effect of intrinsic
and extrinsic factors on public and non-profit managers. The study collected survey information
from across Illinois and Georgia with a sample size of 61 public and 305 nonprofit organizations,
and an overall response rate of 39%. The survey instrument mostly utilized a 4-point Likert
scale and resulted in a Cronbach's Alpha score greater than .7 for all subscales included. Horton
and Hondeghem (as cited in Park & Word, 2012) provide that public sector employees, as
compared to private sector employees, are motivated less by extrinsic factors and more by
intrinsic factors. Furthermore, Park and Word (2012) state that intrinsic factors play a substantial

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role in motivating both public and nonprofit employees. The factors tied to intrinsic motivation
for these groups are overall reputation of the organization, ability to serve the public, and a
desire for less bureaucratic red tape (p. 725).
Entrepreneurs. According to Cachon et al. (2013), entrepreneurial motives spanning
countries and differing cultures have been the focus of study since the beginning of the century.
The outcome of these studies shows that a strong contributing factor to become self-employed is
based on extrinsic economic factors. Benzing and McGee (as cited in Cachon et al., 2013) found
that, ethnic and cultural differences across Nigeria, Kenya, and Ghana aside, a key motivator was
consistently found to be the raising of the familys income. In Vietnam, a transitioning
communist country, Benzing, Chu, and Callanan (as cited in Cachon et al., 2013) noted that
entrepreneurs in the northern portion of the country, like Hanoi, were motivated by the extrinsic
factor of seeking to secure a safer income. However, in the southern portion of the country, like
Ho Chi Minh City, they were motivated by the pursuit of the intrinsic factor of achievement and
the growth of their business. Cunningham and Maloney (as cited in Cachon et al., 2013) point
out that in Mexican entrepreneurs were in business for themselves for primarily the following
intrinsic and extrinsic factors. The intrinsic factor was the pursuit of more independence. The
extrinsic factor was to achieve a higher income level. Kantis, Ishida, and Komori (as cited in
Cachon et al., 2013) conducted a study of more than 700 business people from Mexico,
Argentina, Brazil, and Peru on what motivated them to be entrepreneurs. This study found that
greater than 50% of the respondents reported extrinsic factors of contributing to society and
raising their personal income. Moreover, these same respondents also reported the intrinsic
factor of self-actualization at 89%. The research study conducted by Cachon et al. (2013)
included four possible factors of motivation, namely extrinsic/income, intrinsic, family/security,

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and independence. Their results show that the United States and Canada entrepreneurs
motivations ranked from highest to lowest were independence, extrinsic, intrinsic, and
family/security. However, for Mexico, extrinsic/income factors topped the list with intrinsic
factors coming in second, and independence and family motivators coming in third and fourth
place, respectively.
Millennials. In their study, Kultalahti and Viitala (2014) had their participants write short
stories in response to two fictitious scenarios that were connected to motivation. One story had a
positive slant to it, and the other story had a negative slant to it. The researchers decided to
utilize an electronic form via Facebook in order to capture this information. They had 309
people provide responses, and 252 of those were Millennials. The sample size utilized in the
analysis was from 62 respondents who responded to both questions of which 42 were women
and 20 were men. The study found that the Millennials chose to write about varying and
interesting tasks as opposed to such things as position status, formal titles, or promotion
opportunities. The researchers found many instances where the Millennials wrote about
characters in their stories who were working in the same job for long periods and this led to
boredom in their position. In addition, these participants did not find money to be a key topic to
discuss in their stories with the exception of when they felt that they were being asked to do
more work than they were justly being paid for; they found this practice of not being paid
demotivating. Millennials wanted to be involved in regularly learning and growing new skills
through the work they were assigned. The Millennials found this to be greatly motivating. In
contrast, the Millennials did not dwell on, or appear to put significance into, job security. The
researchers state that the results of the study show that Millennials wrote more often about
intrinsic than extrinsic motivators. For example, out of all of the stories submitted, participants

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who were full-time employees only wrote about salary as a demotivator a few times. Ryan and
Deci (as cited in Kultalahti & Viitala, 2014) spoke about human basic needs of autonomy,
competence, and relatedness, and this study supported these conclusions as it relates to
motivation factors. Millennials wrote about work locations and schedules that supported the
human need of autonomy. Millennials wrote about regular and consistent growth that supported
the human need of competency. Finally, Millennials wrote about building solid connections with
their teams and leadership. Millennials indicated that their motivation increases when these
basic human needs are met, and their motivation falls when they are not.
Conclusion
This literature reviews goal was to understand to what extent intrinsic and extrinsic
factors play a part in overall employee motivation. To accomplish this, this paper covered
various motivational theories, looked at factors that influence employee motivation, and
reviewed to what degree employee motivation is affected by intrinsic and extrinsic factors. The
research shows that both intrinsic and extrinsic factors play a role in motivating employees, but it
is up to leadership to decide which factors to apply in which situations to improve overall
employee motivation. Intrinsic factors tends to be better for motivating employees when
performing more cognitive tasks. Whereas tasks that employees undertake that are more
algorithmic and repetitive tend to be motivated more by extrinsic factors. However, much of the
research agrees that the more an employee relies on intrinsic motivation the better regardless of
the task they are performing.

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