Effect of Motivation on Employee Performance: Case of Bank of

Abyssinia West Addis District Branch’s

A Thesis Submitted to the School of Graduate Studies of Maryland

International College in Partial Fulfillment of the Requirements for the
Award of the Degree of Master of Business Administration (MBA)

By

Rahel Mekuria

MARYLAND INTERNATIONAL COLLEGE

SCHOOL OF GRADUATE STUDIES
MBA PROGRAM

July 2023

Addis Ababa, ETHIOPIA

i
Effect of Motivation on Employee Performance: Case of Bank of
Abyssinia West Addis District Branch’s

By

Rahel Mekuria

Under the Guidance of Dr. Girmaw Assemie

A Thesis Submitted to the School of Graduate Studies of Maryland

International College in Partial Fulfillment of the Requirements for the
Award of the Degree of Master of Business Administration (MBA)

MARYLAND INTERNATIONAL COLLEGE

SCHOOL OF GRADUATE STUDIES
MBA PROGRAM

July 2023

Addis Ababa, ETHIOPIA

ii
 DECELERATION
I hereby declare that this thesis entitled “Effect of Motivation on Employee Performance: Case
of Bank of Abyssinia West Addis District Branches”, has been carried out by me under the
guidance and supervision of Dr. Girmaw Assemie. The thesis is original and has not been
submitted for the award of any degree or diploma to any university or institutions.

Researchers name Date Signature

___________________ _________________ __________________

iii
 CERTIFICATE
This is to certify that the thesis entitles “Effect of Motivation on Employee Performance: Case of
Bank of Abyssinia West Addis District Branch’s”, submitted to Maryland International College
for the award of the Degree of Master of Business Administration (MBA) and is a record of
bonafide research work carried out by Mrs. Rahel Mekuria, under our guidance and supervision.

Therefore, we hereby declare that no part of this thesis has been submitted to any other
university or institutions for the award of any degree or diploma.

Main Advisor Name Date Signature

___________________ _________________ __________________

iv
 Maryland International College

School of Graduate Studies

MBA Program

Approval of Thesis after Defense

As members of the board of examiners, we examined this thesis entitled Effect of Motivation on
Employee Performance: Case of Bank of Abyssinia West Addis District Branch’s ' by Mrs.
Rahel Mekuria. We hereby certify that the thesis is accepted for fulfilling the requirements for
the award of the degree of “Masters of Business Administration”.

Board of Examiners

Main Advisor Name Date Signature

___________________ _________________ __________________

External Examiner Name Date Signature

___________________ _________________ __________________

Internal Examiner Name Date Signature

___________________ _________________ __________________

v
 ACKNOWLEDGMENT
I would like to express my sincere gratitude and appreciation to all those who have supported me
throughout the process of conducting this research and preparing this final paper. First and
foremost, I am deeply grateful to my supervisor, Dr. Girmaw Assemie for their invaluable
guidance, expertise, and unwavering support.

I am indebted to the participants of this study, whose willingness to share their time, experiences,
and perspectives made this research possible. Their valuable contributions have enriched the
findings and enhanced the overall quality of this paper.

vi
 LIST OF FIGURE
Figure 1 A diagrammatic representation of Maslow’s hierarchy of needs ................................... 12
Figure 2 Expectancy Theory ......................................................................................................... 16
Figure 3 Conceptual Framework .................................................................................................. 20
Figure 4 Normal P-P Plots of Regression .................................................................................... 35
Figure 5 Histogram ....................................................................................................................... 36

vii
 LIST OF TABLE

Table 1 Sample Respondent.......................................................................................................... 25

Table 2 Cronbach‟s Alpha Reliability Test ................................................................................. 27
Table 3 Response Rate .................................................................................................................. 28
Table 4 Demographic Characteristic of Respondent .................................................................... 28
Table 5 Descriptive Analysis of Salary ........................................................................................ 30
Table 6 Descriptive Analysis of Work Promotion ........................................................................ 31
Table 7 Descriptive Analysis of Training ..................................................................................... 32
Table 8 Descriptive Analysis of Bonus ........................................................................................ 33
Table 9 Descriptive Analysis of Employee Performance ............................................................. 34
Table 10 Correlation Analysis ...................................................................................................... 38
Table 11 Model Summary ............................................................................................................ 39
Table 12 Coefficients .................................................................................................................... 39
Table 13 Hypothesis Testing ........................................................................................................ 41

viii
 ABRIVATIONS
BOA: Bank of Abyssinia

JO: Junior Officer

BBO: Branch Busines Officer

ix
 TABLE OF CONTENTS
DECELERATION ....................................................................................................................................... iii
CERTIFICATE ............................................................................................................................................ iv
Approval of Thesis after Defense ................................................................................................................. v
ACKNOWLEDGMENT.............................................................................................................................. vi
LIST OF FIGURE....................................................................................................................................... vii
LIST OF TABLE ....................................................................................................................................... viii
ABRIVATIONS .......................................................................................................................................... ix
Abstract ......................................................................................................................................................... 1
CHAPTER ONE ........................................................................................................................................... 2
1. INTRODUCTION ............................................................................................................................ 2
1.1. Background of the Study........................................................................................................... 2
1.2. Background of the Organization ............................................................................................... 4
1.3. Statement of the Problem .......................................................................................................... 4
1.4. Research Objective ................................................................................................................... 5
1.5. Research Hypothesis ................................................................................................................. 6
1.6. Significant of the Study............................................................................................................. 6
1.7. Scope of the Study .................................................................................................................... 6
1.8. Limitation of the Study ............................................................................................................. 7
1.9. Organization of the Study ......................................................................................................... 7
CHAPTER TWO .......................................................................................................................................... 8
2. REVIEWS OF RELATED LITERATURE ...................................................................................... 8
2.1. Motivation Definition ............................................................................................................... 8
2.2. The Role of Motivation ............................................................................................................. 9
2.3. Source of Motivation ................................................................................................................ 9
2.4. Motivational Theories ............................................................................................................. 11
2.5. Employee Performance ........................................................................................................... 17
2.6. Motivational Strategy .............................................................................................................. 18
2.7. Empirical Review.................................................................................................................... 19
2.8. Conceptual Framework ........................................................................................................... 20
CHAPTER THREE .................................................................................................................................... 22
3. RESEARCH DESIGN AND METHODOLOGY .......................................................................... 22
3.1. Introduction ................................................................................................................................. 22

x
 3.2. Description of the Study Area ................................................................................................. 22
3.3. Research Design...................................................................................................................... 22
3.4. Research Approach ................................................................................................................. 23
3.5. Type and Source of Data ......................................................................................................... 23
3.6. Study Population ..................................................................................................................... 23
3.7. Sampling Design and Sample Size ......................................................................................... 24
3.8. Method of Data Collection ...................................................................................................... 25
3.9. Method of Data Analysis ........................................................................................................ 25
3.10. Reliability and Validity ....................................................................................................... 25
3.11. Ethical Considerations ........................................................................................................ 27
CHAPTER FOUR ....................................................................................................................................... 28
4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION............................................. 28
4.1. Introduction ............................................................................................................................. 28
4.2. Response Rate ......................................................................................................................... 28
4.3. Demographic Characteristic of Respondent............................................................................ 28
4.4. Data Presentation and Analysis............................................................................................... 30
4.5. Linearity Test .......................................................................................................................... 34
4.6. Normality Test ........................................................................................................................ 35
4.7. Multicoliniarity Test ............................................................................................................... 36
4.8. Inferential Statistics................................................................................................................. 37
4.9. Regression Analysis ................................................................................................................ 38
4.10. Hypothesis Testing and Interpretation of Results ............................................................... 40
4.11. Analysis on Open Ended Questions .................................................................................... 42
CHAPTER FIVE ........................................................................................................................................ 43
5. SUMMARY, CONCLUSION AND RECOMMENDATION ....................................................... 43
5.1. Summary ................................................................................................................................. 43
5.2. Conclusion .............................................................................................................................. 44
5.3. Recommendation .................................................................................................................... 44
5.4. Limitation of the Study ........................................................................................................... 45
Reference ............................................................................................................................................ 47
APPENDIXES ............................................................................................................................................ 52
APPENDEX II NORMALITY TEST......................................................................................................... 57
APPENDEX III RELIABILITY TEST ...................................................................................................... 58

xi
APPENDEX IV REGRESSION ................................................................................................................. 58

xii
 Abstract
Employee’s motivation is crucial for any business to survive and prosper in today’s
competitive business world. Realizing this, the main aim of this research was to analyze
the effect of motivation on employee performance Case of Bank of Abyssinia West Addis
District Branches. The study purpose is to assess motivational strategies’ at the work
place of BOA and tries to come up with substantial findings that would support the
service sectors as well as BOA. The study used primary and secondary data sources.
Simple random sampling technique and purposive samplings were employed.
Questionnaire was designed to collect relevant data from the selected 207 respondents
206 questionnaires were completed and analyzed. Both descriptive and explanatory
analytical techniques were used. Statistical Programme of Social Science (SPSS) tool
was used to generate data that was presented in tables as was necessary. Correlation
analysis indicates that independent variables have positive and significant relationship
with dependent variables. The regression result showed that the independent variables
used in the study explain 58.3% variability on employee performance. The study
concluded that out of the independent variables such as work promotion and bonus have
a positive relation and significant effect on employee performance. While the remaining
independent variables, salary and training have insignificant effect on employee
performance. The researcher recommended to improve motivation, BOA should focus on
providing excellent performance to promote and grow employees. Bonus schemes can
significantly impact performance, and BOA should prioritize sound employee incentive
schemes to maximize efficiency.

Keyword: Motivation, Bonus, Training, Salary, Performance, Work promotion

1
 CHAPTER ONE
1. INTRODUCTION
1.1. Background of the Study
Organizations of any kind whether manufacturing or service, regard human beings as an
important factor in the quality of the role they play. In other words, organizations over
years have come to the understanding that human beings are the most valuable factors at
their disposal. Therefore, human beings’ significant role in the achievement of
organizational goals can’t be disregarded. Accordingly, any effort to sublimate
organizations without human empathy is almost doomed to failure to the extent that the
success of the majority of the managers can be attributed to the optimal use of human’s
potential abilities (Armstrong, 2009).

The success of any business depends mostly on the motivation of the employees. Human
resource is essential to prosperity, productivity and performance of any company.
Motivation is the key to creating an environment where optimal performance is possible.
The development and growth of the business organization in a competitive business
environment depend on the efficient utilization of the resource. The performance of the
organization is affected by different factors such as motivation, working condition, and
job security. Taking this in to account motivating employees helps the organization to get
a competitive advantage (Shane 2004).

Motivation as defined by Nelson and Quick (2013) “is the process of arousing and
sustaining goal-oriented behavior.” The authors posit that “the word motivation comes
from the Latin root word ‘movere’ which means “to move” (ibid). Wesson et al., (2010)
posit that formally, motivation can be defined as the energetic forces which originate
from within and outside the employee and which initiate an effort related to work hence
determining the intensity, persistence and direction to be taken, and is therefore very
important because job performance is believed to be related strongly to both motivation
and ability. Wesson et al. (2010) go on to say that motivation determines what an
employee does at any given time and where their efforts will be channeled.

2
The rapidly changing business environment, including increasingly fierce competition,
requires companies to carry out various strategies to survive. One of the strategies is
related to active employee engagement to achieve the best performance. Today
organizations face the formidable challenge of how to manage the labor turnover that will
be caused by the migration of many industrial workers. Several previous studies have
shown that such massive competitive pressure, high company demands, and work
situations have caused a decrease in the motivation of system developers to stay in the
company; this is due to a lack of motivation and employee commitment to the
organization (Varma, 2017).

Theories of job performance offer that motivation is a key determinant of performance

the role of motivation in the work context has been studied to understand what causes
employees to try hard to do well, or more specifically what causes the arousal, direction,
and persistence of voluntary actions that are goal directed (Mitchell and Linden, 2012). It
is therefore imperative that managers understand what motivates employees and also how
to motivate them effectively (Deci, 2013)

On the other hand, employee performance is an evaluation of the results of a person’s

behavior. It involves determining how well or poorly a person has accomplished a task or
done a job. Motivation is only one factor among many that contributes to an employee’s
job performance. But all thing being equal, one would expect a highly motivated
employee would deliver high-quality output or service than those poorly motivated
employees. (Lussier, 2005).

As a consequence, like any other organization one of the major factors that determine the
success of any banks is the readiness, commitment, efficiency and effectiveness of its
employees. For that matter any organization to achieve its objectives needs to have staff
that are motivated to work and committed to the organizational objectives.

Bearing this in mind, the study tries to assess motivational strategies at the work place of
BOA and tries to come up with substantial findings that would support the service sectors
as well as BOA.

3
1.2. Background of the Organization
The present-day Bank of Abyssinia was established on February 15, 1996 (90 years to the
day after the first but defunct private bank was established in 1906 during Emperor
Menelik II). In two decades since its establishment Bank of Abyssinia has registered a
significant growth in paid up capital and total asset. BoA started its operation with an
authorized and paid up capital of Birr 50 million, and Birr 17.8 million respectively, and
with only 131 shareholders and 32 staff. The headquarters located in Addis Ababa
Legehar area in front of Ethiopian Insurance Corporation with five additional districts,
two in Addis west and east and the other in Bahirdar, Mekelle and Awassa, It also
attracted many professional staff members, valuable shareholders and large customers
from all walks of life. This performance indicates public confidence in the Bank and
reliability and satisfaction in its services.

The bank started banking services with only one branch in 1996, currently has 229
domestic branch networks, of which 150 branches are in Addis Ababa and the remaining
79 are established in bankable towns all over the country. All City and Outlying branches
are interconnected with state-of-the art ICT. All branches offer both domestic and
international banking services.

The Bank of Abyssinia has 710 branches, 6 million active customers, and 1300 ATMs.
The Bank of Abyssinia (BoA) has different products and services for its local and
diaspora audience. These services are in 5 categories: local deposit accounts, loan
services, E-commerce services, international banking services, and interest-free banking
(IFB).

1.3. Statement of the Problem

Effective employee motivation has long been one of management most difficult and
important duties. Success in this endeavor is becoming more challenging in light of
organizational trends to downsize and in relation to the demands associated with
managing a diverse workforce (Kreitner and Kinicki 1992). Employee motivation is a
complex process as individuals are complex, diverse and often difficult to predict.

4
Motivation is one of the best essential elements in the area of Human Resources
Management. Most employers nowadays would like to have their employees motivated
and prepared to work, but do not know about what truthfully motivates a person. There
are essential needs come across for a person, particularly an employee, to be successful in
the workplace. The most important theories include: Maslow‟s hierarchy of needs,
Herzberg‟s two factor theory, and the different theories of factors affecting employee
motivation. (Gebrelibanos, 2020)

In the view of Hailegebriel (2018) conducted research to assess the impact of motivation
on employee performance at Bank of Abyssinia and the study concludes that the level of
staff motivation at BOA is generally low and will have implication on staff commitment
and performance. Another study by Muogbo (2013) conducted study to investigate the
Impact of Employee Motivation on Organizational Performance of 17 selected
manufacturing firms in Anambra State. The study reveals that extrinsic motivation given
to workers in an organization has a significant influence on the workers performance.

Solomon (2022) studies on Berhan bank states that all motivational factors have
significance on employee performance. Some organizations have been known to
experience a high staff turnover despite offering above average salaries (Aguinis, 2012).
This tells us that money is not the only way to motivate employees. Additionally,
different people are motivated by different factors. It is important for managers and
supervisors to understand what motivates individual employees, and not assume a one-
size-fits-all approach (George and Jones, 2013).

Therefore, the purpose of the study was to investigate the effect of motivation on
employee’s performance the case of BOA and also after completion of this study, the
study will improve motivation practice in the bank sector so as to improve employees and
organization performance.

1.4. Research Objective

1.4.1. Major Objective
The main aim of this research is to investigate the effect of motivation on employee
performance in BOA, West Addis District.

5
 1.4.2. Specific Objective
• To describe the current level of employee performance
• To identify the relationship between employee motivation and employee
performance
• To examine the effect of salary, work promotion, training and bonus on employee
performance

1.5. Research Hypothesis

H1: Salary has a positive and significant effect on employee job performance
H2: Work promotion has a positive and significant effect on employee job performance
H3: Training has a positive and significant effect on employee job performance
H4: Bonus has a positive and significant effect on employee job performance

1.6. Significant of the Study

This study will be of immense benefit to the employees of BOA, management of BOA,
students and academicians in the field of the study in that it will highlight how the
concept of motivation and job performance are valued and understood and the need for
all to pay attention to a variety of motivation issues. It helps the researcher in combining
the theoretical concept with the real work environment hence gaining experience. The
findings of this study would help the management at BOA West Addis District Branch’s
to identify areas that need to be improved as far as motivating their employees is
concerned and the factors that they can identify and use in giving them a competitive
edge over other players in the industry.

1.7. Scope of the Study

This research has assessed the motivation strategies implemented on BOA on selected
Customer service officers (Junior officers and Branch Business Officers) of West Addis
District Branch’s in addition the research used both descriptive and explanatory statistical
techniques. The study also used both primary and secondary data. The motivational
factors used in this research as independent variable are Salary, Work promotion,
Training and Bonus.

6
1.8. Limitation of the Study
Due to the limited finance and time the research needs to gather information from
employees of BOA and employee of BOA will not be willing to respond to the questioner
due to their work overload and leisure time limitation. The study is delimited to BOA
West Addis District Branch’s and which may not be possible to generalize the result of
their study to all BOA found in another region.

1.9. Organization of the Study

The study has five chapters. The first chapter will present the introductory part. It
includes statement of the problem, basic research questions, objectives of the study,
definition of key terms, and significance of the study and scope of the study. The second
chapter will focus on related literature reviews. The third chapter deals with the source of
data, the data collection instrument, the procedures of data collection, the method of data
analysis, ethical consideration and validity and reliability analysis. The fourth chapter
presents results and discussion of the study and finally the fifth chapter presents
summary, conclusion and recommendation.

7
 CHAPTER TWO
2. REVIEWS OF RELATED LITERATURE
This section will describe and explain the concepts, models and theories that are relevant
in the field of motivation and necessary to facilitate a comprehensive analysis and
understanding of the research question.

2.1. Motivation Definition

‘Motive’ means literally the mainspring, the impetus, the rationale behind any action. (It
can also mean the distinctive idea of a work of art, but this meaning is not relevant to our
study.)

The term "motivation" is derived from the word "motive." The original definition of the
word motive is concerned with motion. The importance of movement in motivation
cannot be overstated (Tanner, 2021) Motivation is derived from the word 'motive,' which
denotes a person's needs, desires, wants, or urges. It is the process of motivating
individuals to act to achieve a goal.

According to Greenberg and Baron (2003) motivation definition could be divided into
three main parts. The first part looks at arousal that deals with the drive, or energy behind
individual (s) action. People turn to be guided by their interest in making a good
impression on others, doing interesting work and being successful in what they do. The
second part referring to the choice people make and the direction their behavior takes.
The last part deals with maintaining behavior clearly defining how long people have to
persist at attempting to meet their goals.

Motivation is the energy to do something (Quratul, 2012). The definition of various

authors suggest that there is an unforeseen force that drive people to take action and
shows that motivated workforce in organization will create comfortable environment that
leads to high level of motivation which maintains the challenges for the management
today. Each person has motives, needs and reservoirs of energy that represent potential
motivators. The task of the managers is to determine employees motivations and help
unleash their energy. Then they can direct their energy into productive work. It is also

8
critically vital for managers to understand more about your own sources of motivation
(Quratual, 2012).

According to Quratul (2012), said that motivation is a set of courses concerned with a
kind of strength that boosts performance and directs towards accomplishing some certain
targets. It is also an addition of diverse routs which operate and express our activities to
attain some certain ambitions.

According to Hoy and Miskel (1987), employees’ motivation is the complex forces
drives, needs, tension states or other mechanism that starts and maintains voluntary
activity directed towards the achievement of personal goals. According to Tanner, (2020),
motivating employees is essential for good management and leadership. When employees
are not driven to achieve the organization's goals, organizational productivity suffers.

2.2. The Role of Motivation

Why do we need motivated employees? The answer is survival (Smith, 1994). Motivated
employees are needed in our rapidly changing workplaces. Motivated employees help
organizations survive. Motivated employees are more productive. To be effective,
managers need to understand what motivates employees within the context of the roles
they perform. Of all the functions a manager performs, motivating employees is arguably
the most complex.

Motivated employees are needed in our rapidly changing workplaces. Motivated

employees help organizations survive. Motivated employees are more productive. To be
effective, managers need to understand what motivates employees within the context of
the roles they perform. Of all the functions a manager performs, motivating employees is
arguably the most complex. Motivation is crucial for organizations to function; without
motivation employees will not put up their best and the company’s performance would be
less efficient. (Seniwoliba A. J and Nchorbono A. D, 2013)

2.3. Source of Motivation

2.3.1. Intrinsic Motivation
Intrinsic motivation refers to self-driven motives that influence people to behave in a
particular way or to move in particular directions. Intrinsic motivation is defined as the

9
doing of an activity for its inherent satisfaction rather than for some separable
consequence. When intrinsically motivated, a person is moved to act for the fun or
challenge entailed rather than because of external products, pressures, or rewards. Those
motives include responsibility (feeling that the work is important and having control over
one’s own resources), autonomy (freedom to act), scope to use and develop skills and
abilities, interesting and challenging work and opportunities for advancement. Intrinsic
motivation (IM) can be both interesting and enjoyable leading to an increased desire to do
work (Ryan, 2000).

Intrinsic motivation comes from the inside of the individuals. The individuals who are
curious about doing the things and interested in the points which lead them to learn and
tackle the factitious shreds of evidence suggested by the environment (Giger, 2020)
;(Ryan, 2000). Moreover, (Ryan, 2000) stated that intrinsic motivation (IM) can be
defined as individuals do any task for their satisfaction rather than any external forces.
Another study conducted by the academicians from Hong Kong investigated that
enhancing the interest and desire to do work in individuals can promote in-depth
knowledge sharing behavior among the employees’ attitude (Law, 2017).

2.3.2. Extrinsic motivation

Extrinsic motivation refers to behavior that is driven by external rewards. These rewards
can be tangible, such as money or grades, or intangible, such as praise or fame. Unlike
intrinsic motivation, which arises from within the individual, extrinsic motivation is
focused purely on outside rewards. This includes rewards, such as increased pay, praise,
or promotion, and punishments, such as disciplinary action, withholding pay, or criticism.
The employees’ behavior changes when they are charged with separable outcomes (Law,
2017).

Extrinsic motivation kicks in when autonomous rewards get activated to charge them
after the outcomes. When motivation is only centered on the payments, rewards, bonuses,
prestige, development of the career or the factors that are linked to achieving the rewards
are considered extrinsic motivation (Hjort, 2015).

10
2.4. Motivational Theories
There are many theories explaining how motivation is created and how managers could
take the best advantage of the literature they have about motivation. Still one of the
hardest issues managers are facing is how to keep the employees motivated. Motivation
theories are said to be complementary and the theories can support each other’s and if
one theory is found to be valid it does not mean that the other would not be valid.
(Robbins, 2003)

Four major approaches that have led to our understanding of motivation are Need theory,
Cognitive theory, Reinforcement theory, Hack man and Oldham’s theory. Ones and
summarized them here. I looked up several resources for each and created a short
description, as well as practical implications on the work floor.

2.4.1. Maslow’s Pyramid Hierarchy of Needs

Maslow’s Hierarchy of needs must be one of the best-known motivation theories in the
world. Maslow is a good starting point to start examining the different motivation
theories. Maslow’s theory states that people have a pyramid hierarchy of needs that they
will satisfy from bottom to top. There are deficiency needs, that will stifle any other
movement if they’re not satisfied, and growth needs, that can be progressively satisfied
once the basics have been covered. (Benjamin, 2012).

Maslow’s Pyramid Hierarchy of Needs classifies the human needs into an ascending
hierarchy of physiological, safety, social, self-esteem and ultimately self-actualization
(Maslow, 1943). The main assumption of this theory is that humans strive to satisfy the
needs in each level before ascending onto the next, and once a particular need is fulfilled
it is no longer seen as a motivator.

Maslow starts with the idea that people always tend to want something and what they
want depends on what they already have. Maslow proposed that there are five different
levels of needs people have to seek for satisfaction of their basic needs.

11
 Figure 1 A diagrammatic representation of Maslow’s hierarchy of needs

Source: Oved (2017)

(Mullins, 2007) The first or lowest level is Physiological needs. Before these needs
which include for example food, water, shelter and clothing are fulfilled a person doesn’t
have any other needs. When people don’t feel hunger, thirst or cold, their needs are go to
a second level. The second lowest level is Security needs. In that level a person needs to
feel secure in his/her family and in a society, and feel protected against violence. The
need for safety is manifested with job security, savings and for insurances of health,
mental health, old age and disability. Love and belonging needs is the third level of
Maslow’s hierarchy. After feeling secure, people need to feel that they receive and give
love, they are appreciated and they have good friendships. The fourth level is Esteem
needs. It is the need to be unique with self-respect and to enjoy esteem from other
individuals. People want to evaluate themselves highly and based on their achievement
receive appreciation from other people. Lack of these needs may cause inferiority,
helplessness and weakness. Highest level of Maslow’s hierarchy of needs is need of Self-
actualization. The development of this need is based on the satisfaction at the other four
lower levels. It refers to the need of self-fulfillment and to the tendency to become
actualized in what a person has potential.

12
 2.4.2. Herzberg Motivation
Herzberg’s motivation/hygiene theory is also known as the two-factor theory. Herzberg
started the study of job satisfaction in the 1950’s in Pittsburg. The basis of Herzberg’s
work is in the Maslow’s Hierarchy of Needs. He started with the idea that what causes
the job satisfaction are the opposite of those things that cause job dissatisfaction. Based
on these findings Herzberg created his theory of Motivators and Hygiene factors. Both
factors can motivate workers but they work for different reasons. Hygiene factors tend to
cause only short-term satisfaction to the workers while motivators most probably cause
longer-term job satisfaction. (Mohammad Faizul Haque, Mohammad Aminul Haque &
Md. Shamimul Islam, 2014)

2.4.2.1. Motivators
Motivators, or satisfiers, are those factors that cause feelings of satisfaction at work.
These factors motivate by changing the nature of the work. They challenge a person to
develop their talents and fulfill their potential. According to Herzberg an individual feels
the potential for satisfaction if he or she is able to marshal momentous work motivation.
These are intrinsic and unique to every individual. Job challenge, responsibility,
opportunity for growth and recognition provide feelings of satisfaction. (Mohammad
Faizul Haque, Mohammad Aminul Haque & Md. Shamimul Islam, 2014)

2.4.2.2. Hygiene
Herzberg blended the two premises into the dual factor explanation of motivation and
referred to them as Hygiene factors: These are the basic factors surrounding the job and
can trigger dissatisfaction when not adequate. The factors include, job security, working
condition, quality of supervision, interpersonal relationships, adequacy of pay and fringe
benefits. (Akalu Wondimu, 2015)

2.4.3. Alderfer’s ERG Model

Alderfer (1972), influenced by Allport (1960, 1964) was an American psychologist who
simplified Maslow‘s hierarch of needs into three categories: existence, which included
Maslow‘s physiological and safety needs; relatedness, which included love and esteem;
and growth, which included self-actualization. Abbreviated simply as ERG, Alderfer saw
his three categories more as a continuum rather than a strict hierarchy (Alderfer, 1969).

13
The ERG theory allows for different people to pursue their needs in a subjective order
and possibly simultaneously.

Another important principle of Alderfer’s ERG theory is the notion that if a higher-level
need goes unsatisfied, due to the difficulty in achieving it, then the individual may regress
into a lower-level need that is easier to satisfy. This is known as the frustration-regression
principle and can be seen in organizations where a worker meets frustration in growth
opportunities, they may then regress towards meeting a lower level need like
socialization with coworkers. (Seniwoliba A. J and Nchorbono A. D, 2013)

2.4.4. McClelland’s Achievement Motivation Theory

McClelland’s acquired needs theory states that an individual’s specific needs are acquired
over time according to one’s life experiences. He described three types of motivational
need: achievement motivation (n‐ach), authority/power motivation (n‐pow) and
affiliation motivation (n‐affil). (Benjamin, 2012)

These reflect that employee of institutions should be recognized and not motivated by
only money and as such motivated with the necessary power to carry out the institution’s
activities. There is the need to encourage good relationship among staff. All individuals
possess a combination of these needs and the dominant needs are thought to drive
employee behaviour. A worker with high achievement needs seeks to excel in their work
and appreciates recognition of their efforts. They tend to avoid situations where there is
only a small gain while also avoiding high risk situations where failure is a possibility.
High affiliation need workers are more concerned about social relationships. They would
rather fit in than stand out. Finally, high power need individuals desire to control others
for the achievement of goals. They are less concerned with recognition or approval from
others. . (Seniwoliba A. J and Nchorbono A. D, 2013)

2.4.5. Vroom’s Expectancy Theory

Vrooms’s expectancy theory stipulates that behavior is a product of choices that are
available for to be prioritized. The idea is to derive satisfaction and minimize
dissatisfaction in employees. Individual factors such as personality and skills determine
performance (Wagner and Hollenburg, 2007). This theory also explains that performance,
motivation, and effort are within an individual’s motivation and variables such as

14
valence, instrumentality, and expectancy verifies this. The higher the effort in work
relates to the higher the performance.

2.4.6. McGregor’s X and Y Theories

McGregor's (1960) Theory X and Y models categorize employees as belonging to one of
two groups based on two sets of assumptions. Theory X assumptions take a negative
perspective of people: People can have “an inherent dislike for work and avoid it if
possible; because of this, they must be coerced, controlled, directed and threatened with
punishment to make them work. They prefer to be directed, avoid responsibility, have
little ambition, and want security" (Saif et al., 2012).

Theory Y assumptions take the opposite view: the mental and physical inputs expended
at the workplace are equated and par with those rest or play. External factors or any
threats from outside may not be the sole influence for exerting effort. Workers or people
can exercise caution and discipline to have objectives achieved, but the hunger in their
desire to commit to objectives is dependent on how big are the rewards as assigned to that
kind of achievement. Under normal circumstances, people can adapt to seek
responsibility and not only accept it (Saif et al., 2012, p.1357).

2.4.7. The Equity Theory

Process theories explain ‘how’ satisfaction comes about, as opposed to ‘what’ causes
motivation. The equity theory postulates that employees will weigh their input into a job
against the output they receive from it – the more the rewards, the greater their
satisfaction. (Reuben M., 2017)

Regarding this theory, employees who perceive that they receive more output from their
jobs than what they put into them will experience job satisfaction. Certain aspects of the
job itself also shape how an employee perceives it. Tasks that are clarified bring a better
job satisfaction since a clear role breeds a work force that is happy, committed and shows
much involvement in work that is done. Authors identified five major job characteristics
that impact on the psychological state of an employee and influence their motivation and
job satisfaction, as well as their levels of absenteeism, namely the variety of skills
involved in a task, the identity and significance of the task, autonomy, and feedback.

15
Employees compare their input-outcome ratio with that of other employees and if they
perceive it to be fair, employees will experience satisfaction (Robbins, 2007).

2.4.8. Expectancy Theory

The concept of expectancy was originally formulated by Vroom and it stands for the
probability that action or effort will lead to an outcome. The concept of expectancy
was defined in more detail by Vroom as follows: “Where an individual chooses
between alternatives which involve uncertain outcomes, it seems clear that his behavior
is affected not only by his preferences among these outcomes but also by the degree
to which he believes these outcomes to be possible. Expectancy is defined as
momentary belief concerning the likelihood that a particular act will be followed by a
particular outcome. Expectancies may be described in terms of their strength. Maximal
strength is indicated by subjective certainty that the act will be followed by
outcome, while minimal strength is indicated by the subjective certainty that the act will
not be followed by the outcome.” (Vroom, 1964)

Figure 2 Expectancy Theory

Source: Mohammad Faizul Haque, Mohammad Aminul Haque & Md. Shamimul Islam, 2014

2.4.9. Attribution Theory

According to Brooks (2006), Attribution is the ken reason for both our behavior and
others behavior and it can be internal and external attribution. The internal attribution
comes from our personal attributes and we have some control over it whereas, the
external attribution comes from external factors in the organization.

16
 2.4.10. Goal Theory
It is one of the basic functions of the management to support the employees in order to
achieve their goals and to give the required guidance and/or assistance in order to ensure
that the employee’s goals are compatible with the organizational goals (kinicki, et al.
2014)

2.5. Employee Performance

The best way to make the staff hard worker and enjoying the job is motivation.
Companies in this dynamic and competitive world are attempting to consistently develop
and motivate their staffs to assist in achieving high performance with various
motivational packages. (Shahzadi, Javed, Pirzada, Nasreen, & Khanam, 2014). Even
though, employees with specific, measurable, attainable, realistic and time bounded what
we called smart objectives, the required skills and experience they are not perform their
best without adequate motivation.

Performance comes from the word job performance or actual performance which
means work performance or actual achievement achieved by someone. Definition of
performance (work performance) is the work quality and quantity achieved by an
employee in carrying out his function in accordance with the responsibilities given to
him. (Utin Nina Hermina and Sri Yanthy Yosepha, 2019)

According to Shmailan, 2016, employee performance is an action what employees do

in carrying out the work done by the company. Performance in carrying out its
functions is not independent, but always relates to employee job satisfaction and the level
of reward given, and influenced by individual skills, abilities, and traits.

According to (Al Mehrzi and Singh, 2016) Performance is the result or level of success of
a person as a whole during a certain period in carrying out tasks compared to various
possibilities, such as work standards, targets or targets or predetermined criteria that have
been mutually agreed upon. Furthermore (Yang et al.,2016) state that performance is
basically what employees do or do not do. Performance management is the entire activity
carried out to improve the performance of a company or organization, including the
performance of each individual and work group in the company.

17
Employee performance is closely related to the results of one's work in an organization or
company. The results of the work can involve quality, quantity, and timeliness, but
performance evaluation in a company's organization is key in employee development.
Performance evaluation is in principle a manifestation of an employee's performance
appraisal form (Irfansyah, 2020). Good motivation can strengthen commitment (Sohail et
al., 2014; Burns and Alexander, 2020) and lead to improved performance (Joseph, 2015),
while good performance can improve organizational performance (Bashaer and Singh,
2017) and lead to on satisfaction (Karyono, 2016).

2.6. Motivational Strategy

Motivation is a strategy adopted by organizational managers to improve performance
(Gyamfi, 2020). The overall philosophy of rewards (extrinsic motivation) and recognition
(intrinsic motivation) is to motivate the employee and to let the employee stand out.

Reward strategy sets out what the organization intends to do in the longer term to develop
and implement reward policies, practices and processes that will further the achievement
of its business goals (Loosemore, 2003).Effective reward strategies have to have clearly
defined goals and a well-defined link to business objectives.

Movement within an organization to a position in which responsibilities and presumably

prestige is increased is ordinarily labeled as promotion. Promotion possibilities influence
the behavior of employees in the organization and stimulate employees to greater abilities
to move ahead (Prasad, 2001)

Training is one of the most used techniques in development of human resource

management. Training and development are defined as a process of developing work-
related knowledge and skills in employees for the purpose of improving performance
systematically. Training, personal development and knowledge creation lie at the very
heart of achieving a motivated workforce and an efficient, effective, creative and
innovative industry which has a positive public image (Armstrong, 2009).

18
2.7. Empirical Review
Omollo (2015) conducted a research on effects of motivation on employee performance.
The main purpose of the research was to evaluate the impact of motivation had on the
performance of employees of the Kenya Commercial Bank in Migori County. The
research also interested on the demotivating variables such as lack of promotion,
irrational over load, unfair working hours and absence of recognition. The researcher
revealed that monetary incentives highly affect the staff performance and also job
enrichment as well as conveniences working environment with a fair and rational work
load would significantly affects the motivation level of employees.

Loretta Sarpong (2016), conducted a research on the effect of motivation on the

performance of employees of Ecobank Limited, Knust Branch and Stadium branch. The
main purpose of the study is to examining motivation and its impact on employee
performance. The research find out that truly there is a clear relationship between
motivation and performance and money is the most key motivational variable to
employees and employees are becoming interested to the intrinsic motivation in stepwise.
The research also find out that, management can use various motivational variables such
as house loan, car loan, enhanced salary and fringe benefits and promotion to motivate
employees and enhance their performance. The researcher advises that it’s necessary to
give opportunity to staffs to participate in decision making and concluded that 86.7% of
the respondents confirmed that they are enjoying their job because of different
motivational packages available for them.

Muluken Feleke (2019) assessed the effect of motivation on employee performance using
primary and secondary data. The study used Simple random sampling technique and
purposive samplings, 120 questionnaires were completed and analyzed. Both descriptive
and inferential analytical techniques were used. The study concluded that all the
independent variables such as enhanced salary, mortgage loan, car loan, fringe benefits,
promotion, recognition, and working environment had positive relation and significant
effect on employee performance.

Yonatan Tilahun (2019) the purpose of the study paper was to examine the effect of
motivation on employee’s performance at Development Bank of Ethiopia head office.

19
The study used inferential statistics (correlation and multiple regression) analyses to
measure the effect of independent variable on the dependent variable. The ANOVA test
result also confirmed that, the prediction power of motivation is found to be statistically
significant. From the beta coefficient analyses result the researcher obtained that, non-
financial factors are the most important and significant variable in predicting the
dependent variable employee performance followed by direct financial factors. Therefore
the researcher concludes that non-financial and direct financial factors have a positive
and significant effect on employee performance.

Solomon Motuma (2022) the purpose of the study was to investigate the effect of
motivation on employees` performance in Bank sector, focusing particularly at Berhan
bank S.C, In the study motivation was seen as an independent variables while employee
performance as a dependent variable. The study employed descriptive and explanatory
research design and quantitative research method was used. The findings revealed that all
motivational factors have a significant positive relationship with employee performance
in Berhan bank in the study setting. There was a positive correlation between all
motivational factor describe in this research and employee performance in Berhan bank
In descriptive statics frequency shown that motivation is directly proportional to
employee performance.

2.8. Conceptual Framework

Independent Variables Dependent Variable

Figure 3 Conceptual Framework

SALARY

WORK
PROMOTION
EMPLOYEE
PERFORMANCE
TRAINING

BONUS
20
Source: Own Computation

In Figure 3 the dependent variable is employee performance. The independent variables

are those variables listed under the motivational strategies which are the source of
employee motivation that affects employee performance.

21
 CHAPTER THREE
3. RESEARCH DESIGN AND METHODOLOGY

3.1. Introduction
This chapter describes the methodology that has been used for this study. The main issues
discussed here are the research approach, research design, research population, sample
and sampling technique, source of data and type, data collection methods, ethical
consideration and method of data analysis.

3.2. Description of the Study Area

Bank of Abyssinia (BOA), one of the private commercial banks, was established on
February 15, 1996 in accordance with the 1960 Ethiopian commercial code and licensing
and supervision of banking business proclamation No.84/1994 by 131 shareholders, at
that time the total number of staffs was 32 (Corporate Annual Report of BOA, 2022).
Now a days the bank become among the leading private banks operating in Ethiopia with
more than 748 branches and more than 9000 employees concentrating at various
locations(ibid). Among the total branches 321 branches were situated at the capital Addis
Ababa almost in all sub cities with division of three Districts namely West, Central and
East District. A researcher of this study concentrates on west Addis district in order to
assess BOA motivational strategy.

3.3. Research Design

The research design is the overall plan for obtaining answers to the questions being
studied and for handling some of the difficulties encountered during the research process
(Polat, 2004). The research design for this study used both descriptive and explanatory
research design to evaluate the relationship between the effect of motivational strategies
and employee performance. The reason behind using descriptive study design is the
researcher had no control the variables rather than only report what is happened in the
area where the research will be conducted. According to Kothari (1990), the major
purpose of descriptive research is to describe the state of affairs as it exists at present.

22
The study also employed explanatory research design, to explain understand, predict and
control the cause and effect relationships between variables.

3.4. Research Approach

There are two types of research approaches namely, ‘quantitative research’ and
‘qualitative research’. Data may take the form of narrative information (qualitative data)
or numerical values (quantitative data), (Polat, 2004). Depending on the type of data that
are used the study used mixed research, which includes quantitative and qualitative
research methods. Quantitative research involves studies that make use of statistical
analyses to obtain their findings. Key features include formal and systematic
measurement and the use of statistics. On the other hand, qualitative research involves
studies that do not attempt to quantify their results through statistical summary or
analysis. Qualitative studies typically involve interviews and observations without formal
measurement (Marczyk G, DeMatteo D. and Festinger D., 2005). This research chose a
mixed approach because the combination of the two was thought to help provide more
information.

3.5. Type and Source of Data

The Researcher employed both primary and secondary sources data however priority was
given for the primary data. Primary data was collected mainly through questioners and
observation, whereas secondary sources of the study was gathered from different
documents, reports, previous researches and other published as well as unpublished
written materials.

3.6. Study Population

As per BOA corporate report (2022) the total number of branches reached to 748 in
Addis Ababa, out of this 107 of branches located in West Addis Ababa district, while the
total employee number of West Addis Ababa district is 1216. In terms of composition out
of this number 17% are managerial, 52% clerical/professional staffs while remaining
30% are non-clerical. This shows more than half of the total man power of the bank is
customer service officers or professionals. This fact drives the researchers of this study to
have Customer Service Officers working in the selected branches of bank of Abyssinia
west Addis district as the study population. For the purpose of this research the researcher

23
will focus on customer service officers (Junior officer and Branch Business Officer) in
the selected branches of BOA West Addis district.

3.7. Sampling Design and Sample Size

A sample is a representative segment of a larger population (Bryman, 2012). Researcher
of this study have employed non probability, purposive sampling in order to concentrate
on west Addis district which the focal point of the study for the purpose of its
manageability in terms of time, cost and geographic locations of branches.

West Addis district have 107 branches with 1216 employees, 30 branches are purposively
selected based on geographical proximity to the researcher. As the research is study
population is customer service officers the sample size of West Addis district customer
service officers are 428 employees.

Simple random sampling will be used for collecting survey questioner data. Simple
random sampling is the simplest way to get random samples. It involves selecting the
desired sample size and also Method of data collection.

Sample size is calculated using Slovin's Formula

Where, n= is the required sample size

N= is the population size
e = the acceptable sampling error; therefore,
margin of error is 0.05 for 95% confidence level

n= 428/1+428*0.0025=207

Sample size is 207

The distributed sample is calculated based on the below formula

JO= 301/428*100%=70.3% 207*70.3%= 145.5

BBO= 127/428*100%= 29.6% 207*29.6%= 61.2

24
Table 1 Sample Respondent

No. Job Grade Total Population Sample Size

1 Junior Officer 301 146
2 Branch Business Officer 127 61
Total 207
Source: Own formulation 2023

3.8. Method of Data Collection

Data collection is the process of gathering and measuring information on variables of
interest, in an established systematic fashion that enables one to answer the stated
research question, test hypotheses, and evaluate the outcomes. The main data gathering
instrument is a questionnaire and document analysis. This study adopted self-
administered questionnaires, whereby list of questions was given to a number of persons
for them to answer and give their opinions accordingly. Questioners contains 5 scaled
Likert questions for all dependents as well as independent variable and were all typed
with English since it is working language for the population under study, therefore the
researcher believes that there is no need of translation of questioners to other languages.
Questionnaires will be distributed as well as collected with the aid of internet, i.e
distributed through the banks outlook mail and the questionnaires were created using
Google form. Researcher believes that these methods will help to balance loose of
objectivity and emotional bias of data collected through direct observation.

3.9. Method of Data Analysis

Data analyzing will be performed with the help of statistical package for the social
sciences (SPSS) for quantitative data. Both descriptive and explanatory statistical
techniques have been employed for analyzing the quantitative data. The descriptive
statistics (including percentiles, and mean scores) are used, explanatory statics includes
regression models.

3.10. Reliability and Validity

Reliability is the degree of consistency between two measures of the same thing
(Mehrens and Lehman, 1987). The research used Cronbach‟s Alpha as a measure of
internal consistency. Cronbach‟s Alpha is a reliability coefficient that indicates how well

25
items in a set are correlated to one another (Sekaran, et al. 2006). Validity indicates the
soundness or extent to which an instrument measures the construct that it is aiming to
measure Goodwin (1995).

3.10.1. Validity
In order to ensure the validity of this study and data collection instrument, a pilot survey
was conducted on randomly selected 15 employees by making use of the questionnaire
developed for this study in order to ensure that the questionnaire is appropriate and
statements are generally understandable. Besides, proper detection by an advisor was also
taken to ensure validity of the instruments. Finally, the improved version of the
questionnaires was inserted in Google form and the link distributed via email.

The instruments selected can help to show motivational factors that affect performance of
employees. It can clearly address how these factors affect the performance of employees
in BOA west Addis district branches. The relevant data was collected on the motivational
factors that affect the job performance of individuals which can better indicate the
relationship between factors and the performance of employees. Moreover, to have valid
conclusion, explanatory statistical model was used to test the relationship between the
variables.
3.10.2. Reliability

As Cronbach‟s alpha reliability test was run on the data collected to determine the
reliability of the data. Results showed that all the values were above 0.70 indicating
acceptable reliability (Table 2). According to Hair (2006), if α is greater than 0.7, it
means that it has high reliability and if α is smaller than 0.3, then it implies that there is
low reliability.

The purpose of deriving a scale score by having multiple items is to obtain a more
reliable measure of the construct than is possible from a single item. Therefore,
Cronbach‟s alpha gives the proportion of the total variation of the scale scores that is not
attributable to random error. This study used more than .70 test results as considered as
excellent. There variables of this study were more than 0.70 and the data collection
instrument is reliable

26
Table 2 Cronbach‟s Alpha Reliability Test

Details Cornbach’s Alpha Item

Salary .774
Work Promotion .724
Training .809
Bonus .792
Employee Performance .737
Source: Own formulation 2023

3.11. Ethical Considerations

According to Resnik (2015), many of the ethical norms help to ensure that researchers
can be held accountable to the public. Therefore, this research takes this into account &
be responsible to keep the interests of the public it dealt with. Participants have been
asked if they could voluntarily participate in the study. Besides, the Anonymity of
individuals who participated in the filling of the questionnaires remained anonymous
throughout the study. Information collected from the respondent have been kept
confidential and not to be used for any other purposes than this study.

27
 CHAPTER FOUR
4. DATA PRESENTATION, ANALYSIS AND
INTERPRETATION
4.1. Introduction
This chapter deals with data presentation and analysis. The first section discusses with
demographic characteristics of the respondents. The second section discusses the main
part of the study which is employee motivation variables; the analysis, and interpretation
of the data that is gathered through questionnaire.

4.2. Response Rate

According to Table 3 a total of 207 employees were the targeted to represent the whole
employee of BOA. Unfortunately, out of those 207 employees given the questionnaires
206 employees who returned answered questionnaires and 1 employee did not return
questionnaires complete.
Table 3 Response Rate

Details Numbers Percentage

Total Questionnaire Distributed 207 100
Returned Questionnaire 206 99.6
Non-Returned Questionnaire 1 0.48
Analyzed Questionnaire 206 99.6
Source: own source survey 2023

4.3. Demographic Characteristic of Respondent

Table 4 Demographic Characteristic of Respondent

No Variable Class Frequency %

1 Gender Male 120 58.3
Female 86 41.7
Total 206 100
2 Age 18-24 138 67
24-34 62 30.1
35-44 6 2.9

28
 46-55 0 0
56 and above 0 0
Total 206 100
3 Level of education Diploma 0 0
Degree 134 65
Masters 72 35
PhD 0 0
Total 206 100
4 Service Year ≤ 3 years 72 35
3-5 years 134 65
6-10 years 0 0
10 years and above 0 0
Total 206 100
5 Job Title Junior Officer 144 69.9
Brach Business Officer 62 30.1
Total 206 100
6 Monthly Income Below 4999 0 0
5000 – 9999 0 0
10000- 14999 104 50.5
Above 15000 102 49.5
Total 206 100
Source: own source survey 2023

As illustrated in the above table, with regard to the gender distribution 58.3% of them are
male and 41.7% of them are female respondents. Here, it is so vital in research that, it
should clearly demonstrate a relative balance of both genders and this is definitely a fair
representation of both genders. From the respondents, 67% of the employees are between
18-24 age groups, the second highest respondent at 30.1% lays from 24-34 age groups
from randomly selected respondents and the remaining falls for the age group of 25-44 at
2.9%. This shows the company is providing employment opportunity to the younger
generation. The majority of the respondents 65% are Degree holder and 35% are master’s
holders. Depending on respondents’ response, one can conclude that the organization is

29
run by educated personnel. From the response 65% of respondents have work experience
from 3-5 years and 35% are from <3 years, 50.5% of the respondents fall in the income
range of 10000- 14999 birr and the remaining 49.5.% fall under above 15000 birr
monthly income.

4.4. Data Presentation and Analysis

The research aims to examine the effect of motivation on employee performance in West
Addis District Branch’s. Employees are the main source of data. Questionnaires were
used as data gathering tools. Based on this, 207 questionnaires were distributed to
respondents, 99.6% usable questionnaires were returned.

4.4.1. Descriptive Analysis of Salary

The study used Likert scale questionnaire in order to gather information. The Five point
Likert scale is considered an interval scale. From 1 to 1.8, it means strongly disagree.
From 1.81 to 2.60, it means to disagree. From 2.61 to 3.40, it means neutral; from 3.41 to
4.20, it means agree; from 4.21 to 5, it means strongly agree.

Table 5 Descriptive Analysis of Salary

Salary N M SD
The salary scale of BOA is rational 206 3.62 0.785
The current salary enables employee to cover their 206 3.38 0.928
basic needs so they can concentrate on their job
There is periodical increase in salary at BOA 206 4.00 0.000
The periodical increase in salary is considering to the 206 3.35 1.075
industry
BOA pays salary based on employee experience, 206 3.61 0.869
responsibility and qualification
Average 206 3.59 0.731
Source: own source survey 2023

The respondent’s level of disagreement on the salary is shown in table 4 The result
ranged from the lowest mean of 3.35 to the highest mean of 4. As a result, the average
degree of disagreement scored 3.59 on the scale of 3.41 to 4.2 (Agree) with the standard

30
deviation of 0.73, this shows that the respondent have agreed to the salary questions
raised. Since the standard deviation is not above two, the values tend to be close to the
mean showing true value. This indicates that the majority of respondents are satisfied by
the salary BOA is providing.

4.4.2. Descriptive Analysis of Work Promotion

The study used Likert scale questionnaire in order to gather information. The Five-point
Likert scale is considered an interval scale. From 1 to 1.8, it means strongly disagree.
From 1.81 to 2.60, it means to disagree. From 2.61 to 3.40, it means neutral; from 3.41 to
4.20, it means agree; from 4.21 to 5, it means strongly agree.

Table 6 Descriptive Analysis of Work Promotion

Work Promotion N M SD
There is adequate opportunity to promotion 206 3.75 0.755
The promotion is through effective performance 206 4.17 0.762
appraisal system
Working hard in BOA awards in promotion 206 3.35 1.075
My job allows me to learn new skills for career 206 3.60 0.882
promotion
Average 206 3.17 0.868
Source: own source survey 2023

The respondent’s level of disagreement on the work promotion is shown in table 5 the
result ranged from the lowest mean of 3.35 to the highest mean of 4.17. As a result, the
average degree of disagreement scored 3.17 on the scale of 2.61 to 3.4 (neutral) with the
standard deviation of 0.86, this shows that the respondent are in neutral position to the
work promotion questions raised. Since the standard deviation is not above two, the
values tend to be close to the mean showing true value. This indicates that the majority of
respondents are in neutral feeling towards work promotion.

4.4.3. Descriptive Analysis of Training

The study used Likert scale questionnaire in order to gather information. The Five-point
Likert scale is considered an interval scale. From 1 to 1.8, it means strongly disagree.

31
From 1.81 to 2.60, it means to disagree. From 2.61 to 3.40, it means neutral; from 3.41 to
4.20, it means agree; from 4.21 to 5, it means strongly agree.

Table 7 Descriptive Analysis of Training

Training N M SD
It is possible to increase performance simply because 206 3.75 0.755
of training
Employees are satisfied with training activities of 206 4.16 0.777
BOA
BOA gives training-based employee skill gab 206 3.36 1.072
BOA arranges continuous training and development 206 3.62 0.868
programs to enable professional growth
Average 206 3.72 0.868
Source: own source survey 2023

The respondent’s level of disagreement on the work promotion is shown in table 6 the
result ranged from the lowest mean of 3.36 to the highest mean of 4.16. As a result, the
average degree of disagreement scored 3.72 on the scale of 3.41 to 4.20 (agree) with the
standard deviation of 0.86, this shows that the respondent agree position to the training
questions raised. Since the standard deviation is not above two, the values tend to be
close to the mean showing true value. This indicates that the majority of respondents
agree that training has effect on performance.

4.4.4. Descriptive Analysis of Bonus

The study used Likert scale questionnaire in order to gather information. The Five-point
Likert scale is considered an interval scale. From 1 to 1.8, it means strongly disagree.
From 1.81 to 2.60, it means to disagree. From 2.61 to 3.40, it means neutral; from 3.41 to
4.20, it means agree; from 4.21 to 5, it means strongly agree.

32
Table 8 Descriptive Analysis of Bonus

Bonus N M SD
BOA employees are pleased with the fair bonus given 206 3.61 0.911
In addition to monthly salary BOA provides bonus 206 3.18 0.879
during achieving organizational goal
BOA awards bonus for best performing employee 206 3.77 0.829
BOA performance bonus structure is fairly rewards 206 3.42 0.856
employee effort
Average 206 3.49 0.868
Source: own source survey 2023

The respondent’s level of disagreement on the bonus is shown in table 7 the result ranged
from the lowest mean of 3.18 to the highest mean of 3.77. As a result, the average degree
of disagreement scored 3.49 on the scale of 3.41 to 4.20 (agree) with the standard
deviation of 0.86, this shows that the respondent agree position to the bonus questions
raised. Since the standard deviation is not above two, the values tend to be close to the
mean showing true value. This indicates that the majority of respondents agree that bonus
has effect on performance.

4.4.5. Descriptive Analysis of Employee Performance

The study used Likert scale questionnaire in order to gather information. The Five point
Likert scale is considered an interval scale. From 1 to 1.8, it means strongly disagree.
From 1.81 to 2.60, it means to disagree. From 2.61 to 3.40, it means neutral; from 3.41 to
4.20, it means agree; from 4.21 to 5, it means strongly agree.

33
Table 9 Descriptive Analysis of Employee Performance

Employee Performance N M SD
Motivation has a strong effect on employee 206 3.80 0.696
performance
I am always committed and loyal to BOA 206 3.64 0.977
I am always early report to work 206 3.17 0.872
I always perform my best to delight the customer 206 3.76 0.824
I always perform my job by respecting my colleagues 206 3.43 0.862
Average 206 3.56 0.842
Source: own source survey 2023

The respondent’s level of disagreement on the employee performance is shown in table 8

the result ranged from the lowest mean of 3.17 to the highest mean of 3.80. As a result,
the average degree of disagreement scored 3.56 on the scale of 3.41 to 4.20 (agree) with
the standard deviation of 0.84, this shows that the respondent agree position to the bonus
questions raised. Since the standard deviation is not above two, the values tend to be
close to the mean showing true value. This indicates that the majority of respondents
agree that performance is affected by motivation and the respondent are motivated to
work at BOA.

4.5. Linearity Test

Linearity refers to the degree to which the variation in the dependent variable is related to
the variation in the independent variables. To determine whether the relationship
between the dependent variable organization performance and the independent constructs
employee benefit, working environment, promotion, training and teamwork is linear, so,
plots of the regression residuals through SPSS software has been used.

34
 Figure 4 Normal P-P Plots of Regression

The scatter plot of residuals shows no more variation in the spread of the residuals as you
can see from left to right on figure 4 above. This result suggests the relationship we are
trying to predict is linear. As a result, the above figure shows the normal distribution of
residuals around its mean of zero. Hence the normality assumption is fulfilled as required
based on the above figure, it is possible to conclude that the inferences that the
researchers would made about the population parameter from the sample were valid.

4.6. Normality Test

Figure 4 shows the frequency distribution of the standardized residuals compared to a
normal distribution. As you can see, although there were some residuals (e.g., those
occurring around 0) that are relatively far away from the curve, many of the
residuals are fairly close. Moreover, the histogram is bell shaped which lead to deduce
that the residual (disturbance or errors) are normally distributed. Thus, there is no
violation of the assumption normally distributed error term

35
 Figure 5 Histogram

4.7. Multicoliniarity Test

Multicollinearity refers to situation in which two or more explanatory variables in a
multiple regression model are highly linearly related, meaning one can be linearly
predicated from the others with a substantial degree of accuracy. While it is good to have
a relationship between dependent and independent variables, it is not recommended to
have relationship between independent variables (Asthana & Bhushan, 2016).

Table 10 Collinearity Statistics

Collinearity Statistics

Tolerance VIF

Salary .373 2.683

Work Promotion .318 3.149

Training .678 1.475

Bonus .801 1.248

36
VIFs exceeding 10 are a sign of serious multicollinearity requiring correction and VIF
results exceeding 4 needs further investigation for further multicollinearity (Asthana &
Bhushan, 2016). The Multicollinearity tests in Table 10 above shows the variables with
their respective Variance Inflation Factors (VIF) values ranging from 1.7 to 3.0.
Therefore, regressions results were assumed to be free from the problem of
multicollinearity.

4.8. Inferential Statistics

4.8.1. Correlation Analysis
To determine the existence and level of association, the researcher used a bivariate
correlation. Pearson correlation coefficient with falls between -1.0 and +1.0 and indicates
the strength and direction of the association between the two variables (Field, 2005).
Pearson´s correlation coefficient (r) was used to conduct the correlation analysis to find
the level and direction of the relationships between motivation and employee
performance. The cataloguing of the correlation efficient (r) is as follows: 0.1 – 0.29 is
weak; 0.3 – 0.49 is moderate; and > 0.5 is strong.

As per the below Table, 10 indicated that all of the independent variable positively
related with the dependent variable but with three different status, the higher correlation
is signified by work promotion (r=0.600), followed by bonus (r=0.600) and the other two
correlate with positive moderate relation, salary r=0.472 and training r= 0.355.

The significant level of all variables is less than P=0.05 which shows suggests that the
correlation coefficient is unlikely to have occurred by chance, and therefore provides
evidence that there is a true relationship between the variables.

37
 Table 11 Correlation Analysis

Salary Work Training Bonus EP

Promotion
Salary Pearson 1
Correlation
Sig.
Work Pearson .769 1
Promotion Correlation
Sig. .000
Training Pearson .232 .206 1
Correlation
Sig. .000 .000
Bonus Pearson .338 .343 .361 1
Correlation
Sig. .000 .000 .000
Employee Pearson .472 .639 .355 .600 1
Performance Correlation
Sig. .000 .000 .000 .000
Source: own source survey 2023

4.9. Regression Analysis

4.9.1. Multiple Regressions of Motivation on Employee Performance
The multiple regression analysis was conducted to investigate the influence of
independent variable on the dependent variable and identify the relative significant
influencer; i.e., independent variable (Salary, Work Promotion, training and Bonus) to the
dependent variable; i.e. Employee Performance. The proposed hypotheses were tested
using multiple regression analysis. The result of regression analysis of the independent
variables (Salary, Work Promotion, training and Bonus) on the dependent variable
employee performance indicates the existence of the positive and statistically significant
effect.

38
The model summary table shows R-Square (R2) value, 0.583 showed that Salary, Work
Promotion, training and Bonus were predicted approximately by 58.3 percent of the
variations in employee performance. It indicates the contribution of Salary, Work
Promotion, training and Bonus in explaining the variance of employee performance is
58.3% and indicate that the model explains a large proportion of the variability in the
dependent variable.

Table 12 Model Summary

Model R R Square Adjusted R Squared Std. Error of the

Estimate
1 .763 .583 .575 .37645
Source: own source survey 2023

Table 13 Coefficients

Unstandardized Coefficients Standardized

Model Coefficients T Sig
B Std. Error Beta
Constant .711 .321 2.215 .028
Salary -.224 .108 -.154 -2.065 .040
Work .563 .072 .635 7.851 .000
Promotion
Training -.089 .065 -.075 -1.360 .175
Bonus .541 .060 .452 9.072 .000
Source: own source survey 2023

Table 11 presents the result of regression analysis which is based on the six independent
variables (Salary, Work Promotion, training and Bonus). The independent variables that
contribute to the variance of the dependent variable are explained by the standardized
Beta coefficient. The beta value on the coefficient table indicates the level of effect each
dimension has on the dependent variable which is consumer buying decision.

39
The strength of each predictor (independent variable) influencing the criterion (dependent
variable) can be investigated via a standardized Beta coefficient. The regression
coefficient explains
Table 4.10 above shows the constant, beta, and significance level of each variable. It
indicates that four variables which are; Salary, Work Promotion, training and Bonus
influence employee performance at a 95% confidence interval with a sig. level of 0.040,
0.000, 0.175, and respectively. As the constant and b values are known
Y = a + b1X1 + b2X2 + b3X3 + b4X4 + e
Where; Y: Consumer buying decision behavior
X1: Salary
X2: Work promotion
X3: Training
X4: Bonus
As per the model for this regression: Y= .711 + (-.154) X1 +.635X2 +(- .075) X3 -
.452X4 + e (error term)
beta (β) is a coefficient that represents the change in the dependent variable (Y) that is
associated with a one-unit change in the independent variable (X) while holding all other
independent variables constant. The model suggests that work promotion (0.635) and
Bonus (0.452) have the strongest effect on employee performance; therefore, H2 and H4
are supported. However, there was no significant relationship between salary and training
on employee performance.

4.10. Hypothesis Testing and Interpretation of Results

The decision criteria either to reject or accept the hypothesis is depend up on the value of
p, meaning that if p ≤ 0.05 reject the null hypothesis, but accepting the alternative
hypothesis and if p ≥ 0.05 reject the alternative hypothesis, but accepting the null
hypothesis.

40
Table 14 Hypothesis Testing

Hypothesis Result Reason

H1: Salary has a positive effect on Reject -.154
employee job performance P<0.05
H2: Work promotion has a positive effect Accept .635
on employee job performance P>0.05
H3: Training has a positive effect on Reject -.075
employee job performance P<0.05
H4: Bonus has a positive effect on Accept .452
employee job performance P>0.05
Source: own source survey 2023

H1: Salary has a positive effect on employee job performance

The result of multiple regression analysis of table 13 indicates that salary has no
significant influence on the employee performance BOA with the value of beta (β= -
0.154) demonstrates that the weak influence salary on employee performance.

H2: Work promotion has a positive effect on employee job performance

The result of multiple regression analysis of table 13 shows that work promotion has a
significant influence on the employee performance of BOA with the value of beta (β= -
0.635) demonstrates that the greater influence of work promotion on employee
performance. This implies that the one percent increase in work will increase 63.5%
positive increase in employee performance.

H3: Training has a positive effect on employee job performance

The result of multiple regression analysis of table 13 indicates that training has no
significant influence on the employee performance BOA with the value of beta (β= -0.75)
demonstrates that the weak influence bonus on employee performance.

41
H4: Bonus has a positive effect on employee job performance
The result of multiple regression analysis of table 13 shows that bonus has a significant
influence on the employee performance of BOA with the value of beta (β= 0.452)
demonstrates that the greater influence of bonus on employee performance. This implies
that the one percent increase in work will increase 45.2% positive increase in employee
performance.

4.11. Analysis on Open Ended Questions

What you recommend to the bank for further improvements?

Finally, respondents were asked to propose incentive elements for future progress.
Employers are always pushed to design wage policies and practices that will allow them
to recruit, motivate, retain, and satisfy their employees. A thorough incentive plan is
required in all aspects of a company since it functions directly proportionate to the
productivity of the personnel.

42
 CHAPTER FIVE
5. SUMMARY, CONCLUSION AND
RECOMMENDATION
5.1. Summary
This chapter covers data presentation and analysis of the study. From the data collected,
this chapter performed the descriptive analysis in order to determine the response rate and
data presentation. From the descriptive analysis in chapter four, it was observed that
majority of gender falls to the male with 120 respondent and remaining 86 are females
and majority of the age category falls to 18-24 and 24-34. Additionally, majority of the
respondent are educated and have a work experience in the range of 3-5 years. This
shows that the respondent are young and educated.

The descriptive result showed that all three of the independent variables Salary, Training
and Bonus are in agree stage while work promotion is neutral stage. Showing that
employees are happy with the motivation factors at BOA.

Furthermore, correlation analysis was employed to identify what the relationship between
independent variables (Salary, work promotion, training and bonus) and the dependent
variable (employee performance). The correlation analysis was also adopted to test the
hypotheses of the study and regression analysis for identifying in what extent the
independent variables predict the dependent variable. The correlation result shows that
there was a positive and significant relationship between motivational factor (Salary,
work promotion, training and bonus) and employee performance.

To test the hypothesis, a multiple regression analysis was conducted on the dependent
variable employee performance. The overall model statistics box revealed a R value of R
=0.763, indicating a good connection between employee performance and the set of four
independent variables (motivational factors). The R square score of 0.583 indicates that
the model's independent variables explained 58.3% of the variance in the dependent
variable (employee performance). As a result, the total multiple regression statistic for
Employee performance (R2 = 0.583) supports the hypothesis that motivating factors have
a favorable impact on employee performance. This means that the independent variables

43
(Salary, work promotion, training and bonus) predict the dependent variable (employee
performance) by 58.3%, leaving 41.7% of the variables unexplained in this study.

Positive and significant relationships between four independent variables were found in
the Pearson correlation coefficient table 4.9 of the dependent variable (employee
performance): salary (= 0.472, p=.0.000), work promotion (=0.639, p=.000), training ( =
0.355, p=.000), and bonus ( = 0.600, p=.000). As a result, a change in the above-
mentioned variables will result in a change in the above-mentioned variables substantial
change on the dependent variable employee performance.

5.2. Conclusion
The paper is designed to contribute hypothetical (theoretical) understating of the effect of
motivation on employee performance in Bank of Abyssinia West Addis District
Branch’s., by examining four independent motivational factors.

Employees are most motivated by work promotion and bonus motivating factors,
according to the study's findings. Employees, on the other hand, are less motivated by
elements such as trainings and salary.

The above result supported Yonatan Tilahun (2019), non-financial factors are the most
important and significant variable in predicting the dependent variable employee
performance as work promotion is not a mean of financial incentive and salary is one
main financial incentive.

5.3. Recommendation
Based on the findings and conclusions of the study, the researcher forwards the following
recommendations.

• According to the findings of this study, motivation is one of the most important
aspects impacting employee performance; therefore, employees are unlikely to be
motivated solely by monetary incentives all of the time. So providing employees
with the best performance to be promoted and grow at the company will yield a
better motivation for the employees. Additionally, the managements of the
company need to motivate and encourage their staffs so as to advance their

44
 performance. It is important to work closely with HR departments to have
promotion opportunities and flexible career development which are highly
prioritized by crews as an important motivation factor.
• The study concluded that bonus has a significant effect on performance, BOA
should focuses on providing different bonus schemes that would motivate the
employees. Employees who work harder and perform well and meet their targets
should be motivated by their respective organizations by giving them a special
treatment in terms of incentives like bonus
• Finally, in BOA, motivation is a vital aspect of managing a team of highly
qualified and motivated people in order to achieve the organization's goals. As a
result, every concerned entity should make sound employee incentive schemes a
top priority in order to achieve optimum efficiency in achieving its objectives.
Aside from that, the researcher would like to recommend that any concerned and
interested party perform study in order to provide any relevant comments to the
topic.

5.4. Limitation of the Study

The findings of this study are based entirely upon the research conducted in west Addis
Ababa district city branches and hence may not be applicable to other districts and
regions. Lack of similar research done in the country was another limitation of the study.
Therefore, the research paves the way to other research opportunity in BOA or other
organization in our country to investigate the effect of motivation on employee
performance. Hence, the finding of this study may have significant practical value.

In an attempt to address the limitations of this research, it is recommended that further

research can be conducted to investigate the effect of motivation on employee
performance. Therefore, the researcher recommends the following for future researches:

• The approach of this paper can be extended by including other motivational

factors not used in this thesis, for future research Intrinsic motivation methods
should be included.

45
• The study was conducted in the bank sectors limiting its scope. The future
researches may examine the determinant factors on employees’ job performance
on other sectors.

46
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51
APPENDIXES
Maryland International College

School of Graduate Studies

Questionnaire for Employees of Bank of Abyssinia

Dear Respondents

You are kindly requested to respond to the statements in the following questionnaire.
This questionnaire is designed to collect information about the Effects of motivation on
employees‟ performance in in the bank of Abyssinia. Your responses have a great
importance for this survey study to assess the effect of employee motivation with the
performance in the bank of Abyssinia. The data or information collected in such a way
shall be used as primary data in my thesis, which I am conducting as a partial fulfillment
for the requirement of my study in MBA in Maryland International College.

Finally, I confirm you that the information that you share me will be kept confidential
and only used for the academic purpose. No individuals responses will be identified as
such and the identity of persons responding will not be published or released to anyone.
All information will be used for academic purposes only.

Your honest and thoughtful response is invaluable

Thank you for your participation

Kind regards,

Rahel Mekuria

52
Instruction

No need of writing your name

In all cases where answer options are available, please make tick mark (√) in the
appropriate box where the choice is appropriate for you.

Section I: Demographic Characteristic

1. Gender

Male Female

2. Age

18 - 24 Years 25 – 34 Years 35 – 44 Years 45 - 54 Years

>55 Years

3. Academic Qualification

Diploma Degree Masters PhD

4. Job Title

Junior Officer Branch Business Officer

5. How many years have you worked at BOA?

< 3 years 3 – 5 Years 6 – 10 Years > 10 Years

Section II: Effect of Motivation on Employee Performance

The following questions are presented on a five point Likert scale. If that aspect is much
better than you hoped it could be choose 5 (strongly agree), if that aspect is even better
than you expected it to be choose 4 (agree) if that aspect is what you would like it to be
choose 3 (fair), you would like choose 2 if it to be somewhat poor (disagree) and if that
aspect is much poorer that you would like it to be choose 1 (strongly disagree).

Please put (√) in the place where the choice is appropriate for you.

53
No Questions Strongly Agree Neutral Disagree Strongly
Agree Disagree
SALARY
1 The salary scale of BOA is rational
2 The current salary enables employee to
cover their basic needs so they can
concentrate on their job
3 There is periodical increase in salary at
BOA
4 The periodical increase in salary is
considering to the industry
5 BOA pays salary based on employee
experience, responsibility and qualification

No Questions Strongly Agree Neutral Disagree Strongly

Agree Disagree
WORK PROMOTION
1 There is adequate opportunity to
promotion
2 The promotion is through effective
performance appraisal system
3 Working hard in BOA awards in
promotion
4 My job allows me to learn new skills for
career promotion

54
No Questions Strongly Agree Neutral Disagree Strongly
Agree Disagree
TRAINING
1 It is possible to increase performance
simply because of training
2 Employees are satisfied with training
activities of BOA
3 BOA gives training based employee skill
gab
4 BOA arranges continuous training and
development programs to enable
professional growth

No Questions Strongly Agree Neutral Disagree Strongly

Agree Disagree
BONUS
1 BOA employees are pleased with the fair
bonus given
2 In addition to monthly salary BOA
provides bonus during achieving
organizational goal
3 BOA awards bonus for best performing
employee
4 BOA performance bonus structure is fairly
rewards employee effort

55
No Questions Strongly Agree Neutral Disagree Strongly
Agree Disagree
EMPLOYEE PERFORMANCE
1 Motivation has a strong effect on employee
Performance
2 I am always committed and loyal to BOA
3 I am always early report to work
4 I always perform my best to delight the
customer
5 I always perform my job by respecting my
colleagues

Open Ended Question

What you recommend to the bank for further improvements?

………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………

56
APPENDEX II NORMALITY TEST

57
APPENDEX III RELIABILITY TEST

Case Processing Summary

N %

Valid 206 100.0

Cases Excludeda 0 .0

Total 206 100.0

a. Listwise deletion based on all variables in the

procedure.

Reliability Statistics

Cronbach's Alpha N of Items

.808 5

Item-Total Statistics

Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha

Item Deleted Item Deleted Total Correlation if Item Deleted

Salary 14.4913 2.955 .613 .774

WorkPromotion 14.3675 2.127 .736 .724
Training 14.3614 2.945 .456 .809
Bonus 14.5896 2.840 .522 .792
EmployeePerformance 14.5243 2.378 .696 .737

APPENDEX IV REGRESSION

Model Summaryb

Model R R Square Adjusted R Std. Error of the

Square Estimate

1 .763a .583 .575 .37645

a. Predictors: (Constant), Bonus, Salary, Training, WorkPromotion

b. Dependent Variable: EmployeePerformance

ANOVAa

58
Model Sum of Squares df Mean Square F Sig.

Regression 39.812 4 9.953 70.231 .000b

1 Residual 28.485 201 .142

Total 68.297 205

a. Dependent Variable: EmployeePerformance

b. Predictors: (Constant), Bonus, Salary, Training, WorkPromotion

Coefficientsa

Model Unstandardized Coefficients Standardized t Sig. Collinearity Statistics

Coefficients
B Std. Error Beta Tolerance VIF

(Constant) .711 .321 2.215 .028

Salary -.224 .108 -.154 -2.065 .040 .373 2.683

1 WorkPromotion .563 .072 .635 7.851 .000 .318 3.149

Training -.089 .065 -.075 -1.360 .175 .678 1.475

Bonus .541 .060 .462 9.072 .000 .801 1.248

a. Dependent Variable: EmployeePerformance

59