Table of Contents

ACKNOWLEDGEMENTS ..................................................................................................... IIII List of

Abbreviation /Acronyms ............................................................................................ IVV List of
Tables ............................................................................................................................. V ABSTRACT
.............................................................................................................................. VI CHAPTER
ONE:INTRODUCTION .......................................................................................... 1 1.1 Background
of the Study....................................................................................................... 1 1.2 Statement of
the Problem ...................................................................................................... 3 1.3 Basic Research
Questions ..................................................................................................... 4 1.4. Objectives of the
Study ........................................................................................................ 4 1.4.1. General Objective
............................................................................................................. 4 1.4.2. Specific
Objectives ........................................................................................................... 4 1.5 Significance
of the Study ...................................................................................................... 5 1.6 Scope of the
Study ................................................................................................................ 5 1.7 Definition of
Terms (Conceptual)......................................................................................... 5 1.8. Organization of
the Study .................................................................................................... 6 CHAPTER
TWO:REVIEW OF RELATED LITRATURE ....................................................... 7 2.1 Motivation: An
Overview ..................................................................................................... 7 2.2 Historical
Development of the Employee Motivation Concept............................................ 8 2.3
Characteristics of motivation ................................................................................................ 8 2.3.1
Importance of motivation................................................................................................... 9 2.4.
Types of motivation ........................................................................................................... 10 2.5.
Non-financial factors of motivation that affect employees’ performance ......................... 10
2.5.1. Financial factors of motivation that affect employees’ performance ............................. 11
2.6 Theories of Motivation........................................................................................................ 12
2.7 Motivational Factors ........................................................................................................... 21
2.8 Empirical Evidence ............................................................................................................. 23
CHAPTER THREE:RESEARCH DESIGN AND METHODOLOGY ................................... 25 3.1 Research
Design.................................................................................................................. 25 3.2. Approaches
of the Study .................................................................................................... 25 3.3 Data
Sources ....................................................................................................................... 28 3.4 Data
Collection Instrument ................................................................................................. 28 3.5 Validity
and Reliability of Measures .................................................................................. 28 3.6 Ethical
Considerations ........................................................................................................ 29 3.7 Methods
of Data Analysis................................................................................................... 30

List of Abbreviation /Acronyms

DB: Dashen Bank
HRM: Human Resources Management E.C: Ethiopian Calendar
G. C: Gregorian calendar WC: Working Conditions, PM: Promotion Practice, WC: Work ontent,
List of Tables
Table 3.2 List of Sample Branches ............................................................................................. 277
Table 3.3.Cronbach`s Alpha Reliability Test of the Questionnaire....................................29 Table
4.2 Demographic Characteristics of Respondents .............................................................. 31
Table 4.3.1 Current Working Condition .................................................................................. 3333
Table 4.3.2 Promotion................................................................................................................... 35
Table 4.3.3 View on the Work Content ....................................................................................... 37
Table 4.3.4 Benefit........................................................................................................................ 39
Table 4.3.5 Payment ..................................................................................................................... 40
Table 4.3.6 View on Recognition ................................................................................................. 41
Table 4.3.6 Descriptive Statistics (Mean and Std. Deviation) of Motivational Practices ............ 42
CHAPTER ONE
INTRODUCTION
This chapter gives the basis of the study. It is divided into ten clear sections. The first two sections
give background information while three outlines the statement of the problem. The fourth
section outlines the question of study and the objectives of the study. The significance of the
study is stipulated in the sixth section. The seventh and eighth sections outline the scope of the
study and define the main key terms, respectively. The chapter then wraps up with an indication
of how the research report has been laid out.
1.1 Background of the Studying
With this in mind, many organizations are concerned with what should be done to achieve a
sustained high level of performance through people. This means giving close attention to how
individuals may best be motivated through such means as incentives, rewards, leadership, and
importantly the work they do, and the organization context within which they carry out that
work. How to motivate employees has been one of the central concerns for many researchers
and practitioners for decades. In order to stay in today's competitive environment, organizations
should give attention to their employees as stated by Armstrong (2009). Motivating employees
cannot be treated as a static approach to management. It is a continuous process of the
management. There are different kinds of motivational practices and challenges that affect the
organizational effectiveness. Motivation is among the factors that greatly affect the performance
of employees. It is employees who hold the key to productivity, creativity, and profit.
The sad thing is, many organizations want to see employees motivated and willing to go to work,
but they do not grasp the concept of what exactly motivates an employee. If an organization
hires diverse talented workers, it will be useless for the organization's performance unless the
employee is motivated enough to give their all on the job.
Employee productivity can be ascertained by knowing their productivity increases, more about
employees and what motivates them. The effective channelization of the human resource can be
attained through designing, implementing and proper practices of motivational techniques. An
organization with highly motivated employees are more effective compared with organizations
having a less number of motivated employees.employees. Poor motivation may lead to
grievance, employee turnover, absenteeism and tardiness. On the contrary, high performance is
achieved by well-motivated employees who are prepared to exercise discretionary effort
(Armstrong, 2009).
In modern times, in all countries, banks are financial intermediaries in the business of earning
profits, and the bank industry is considered an engine and plays a major role in the development
of the economy. Employees are closest to being trusted sources for the delivery of good service
to customers. Therefore, the services that are provided and accessible by employees can
generate a positive perception and good images in the eyes of bank customers. In this respect,
motivation of employees makes great contribution to achieve the bank objectives in the bank
industry.
Dashen Bank S.C. was founded on September 20, 1995 as a Share Company in accordance with
the "Commercial Code of Ethiopia, 1960" and "Licensing and Supervision of a banking business
proclamation no.84/1994". Dashen came into being with an authorized and subscribed capital of
Birr 50 Million on paid-up capital of Birr 14.9 million. First founding members included 11
businessman and professionals who agreed to merge their financial resources and expertise. At
the moment, as per the status at the end of June 2018, it has authorized a capital of Birr 2.38
Billion with a paid-up capital of Birr 1.2 Billion. Shareholders' equity consisted of share capital,
legal and general reserves, and retained earnings per share amount to birr 589, and the number
of shareholders has reached 185. -Annual Report, JUNE 30, 2018
According to the annual report of Dashen Bank for the year ended on June 30th, 2018 the paid
up capital of the bank reached 1,490,000,000 and its primary capital raised to over birr
2,000,000,000.
Fully aware that bank success highly depends on the quality of its human resources, the bank has
continued to strengthen the capability of the staff through various trainings and motivation. In
the fiscal year of, 2% of the recurrent expenditure was invested in staff training and development.
Since establishment, the bank has gone through many stages and developments. Dashen Bank is
the second private bank in the country in both profitability and technological advancement.
Strong Compensation and Benefit Schemes achieved this. Currently, the bank has more than
5500 employees and above 350 branches available. Annual Report June, 2018Therefore, the
main purpose of the study is to evaluate the motivational practices adopted by Ashen Bank.
Accordingly, the motivational factors taken into consideration to evaluate the motivational
practices of the organization are categorized as working condition, promotion, work content,
employee benefits, payment, and reward. As a result, the researcher recommends some points
regarding employee motivations.
The general assessment was that the research focused on the practices of employee motivation
in Dashen Bank S.C.
1.2 Statement of the Problem
Human resource is one of the resources which determine the success and failure of the
organization. Organizations with motivated and talented employees offering outstanding service
to customers are likely ahead of the competition it. Achieving organizational objectives by
implementing motivational techniques is a great challenge for the managers, because it cannot
be observed directly; it can only inferred from observed behavior (John, 2007). It may be tough
for the organization to know what motivates its employees because different employees have a
variety of perceptions, aspirations and needs. Something which motivates any one person may
not motivate others. Motivating employees require profound understanding of individual
differences, human nature and perceptions. Therefore, satisfying people's need by implementing
motivational techniques is very challenging for managers.
Many organizations are not willing to create and implement effective motivational practices. Poor
motivation may lead to absenteeism, turnover, and reduction in productivity, disobedience of
their employees. Neglecting to apply proper motivational techniques can lead to poor
organizational performance Langton & Robbins, 2006.
From the researcher's point of view, Dashen Bank is not exercising formal and appropriate
motivational techniques that enable the bank to enhance employee performance. Moreover,
according to the Human resource annual report, which states the employee's level of motivation
is low, this is evident by low productivity and low work morale. Annual report JUN, 2018. To be
able to retain its employees, the bank needs to motivate them appropriately using the proper
motivational collective practices.The interest of the researcher was aroused during those visits to
assess the organization motivational practice; the researcher usually observed employees
complaining on the motivational practices of the organization such as salary, promotion,
payment, work content, recognition, and working condition. Hence, from this perspective, the
researcher presumed that the organization lacks motivational techniques. Thus, the study was
initiated to assess the current motivational practices that exist in Dashen bank.
1.3 Basic Research Questions
• What motivational schemes are currently being put in place by the Bank?
• To what extent do the motivational practices of Bank make the employees satisfied?
• What type of motivational packages do the Dashen Bank employees like?
1.4. Objectives of the Study
1.4.1. General Objective
The main objective of the study is to assess employee motivation practice of in Dashen Bank S.C.
1.4.2. Specific Objectives
Specifically, the objectives of study include the following;
• To identify motivational practices currently being implemented by the bank;
• To what extent Dashen bank's employees are satisfied with the motivational
schemes implemented by bank focusing in the six motivational schemes; and
• Which motivational packages satisfy employees at Dashen Bank?
1.5 Significance of the Study
This study aims to assess and build a good understanding of the motivational practices presently
practiced in Dashenbank. The results of this study could be of potential value to many
organizations in terms of achieving a good understanding of what really motivates employees and
how management could strategically maximize the available human resources to the fullest. It
will add to the contribution by serving as a source of documentation, as it provides useful
information to researchers that may be interested in conducting further studies on the area
under investigation. The most important objective is, however, providing a significant result
about motivational practices of Dashen bank and give recommendations to take remedial action.
1.6Scope of the Study
Both geographic and conceptual delimitations are considered in this research. Geographically, the
Bank has many branches both in Addis Ababa and outside of the city. The research addresses ten
(10) branches because, aside from its geographical scope and homogeneity, branches are
selected from the four different districts under Addis Ababa City due to time and resource
constraints, as it is difficult to include all branches in this study. The total number of the
employees in the selected ten branches is 274, and the research has been conducted by selecting
162 employees from those 10 branches. Thus, the number of respondents is delimited to 162.
The motivational factors studied include promotion, recognition, work environment, payment,
work content, and employ benefit.
1.7 Definition of Terms (Conceptual)
Motivation: is the willingness to do something conditioned up on the action’s ability to satisfy
some need for the individual (Robbins, 2003)
Work Motivation: is a set of energetic forces that originate both within as well as beyond an
individual’s being, to initiate work-related behavior, and to determine its form, direction,
intensity, and duration (Lopes, Lagoa, &Calapez, 2014).
Benefit: leave medical, life insurance and vacation (Lopes, Lagoa, &Calapez, 2014).
Employee Benefits: financial and nonfinancial other than base pay one receive for services
rendered to employers (Robbins, 2003)
Work content: task identity, task variety, task significance, autonomy and feedback(Luthans,
1995).
1.8. Organization of the Study
Organization of the study report : The study report is organized in to these five chapters: Chapter
One deals with the general introduction of the study. It consists of 8 subtitles, namely:
background of the study; background of the organization; statement of the problem; basic
research questions; objectives of the study; definition of terms; significance of the study; and
scope of the study. Chapter Two presents the review of related literature that discussed some
concepts from the literatures as references for this study. It also provided theoretical and
empirical studies the research will be based upon, presented the basic ideas and concepts in
relation to the specific issue under study. Chapter Three presented research design &
methodology, which answers "how? " the research are done. The chapter, therefore, contains
design of the research, source of data, tools, and procedures of data collection and methods of
data analysis. Chapter Four of the research project presents results and discussion of the findings
of the research. Chapter Five of the research project summarized the findings of the study,
specifies the conclusions drawn from the findings, and recommendations given for improving
motivational practices and facing the motivational challenges of the Bank.
CHAPTER TWO
REVIEW OF RELATED LITRATURE
This section reviews and discusses the overall concepts of motivation, challenges affecting
motivation at the working environment, contemporary theories of motivation and various
theories, motivation through top management, and some empirical studies on employee's
motivation.
2.1 Motivation: An Overview
There are so many various definitions of motivation by so many authors. According to
Robbins,2003, defined motivation as the willingness to do something conditioned up on the
action's ability to satisfy some need for the individual where Pinder, 1998 has defined motivation
as a set of energetic forces which originates both within and beyond an individual's being, to
initiate work related behavior and to determine its form, direction intensity and duration. For
Berleson and Steiner, 1964 motivation is described as an inner state that energizes, activates, and
directs the behavior towards certain goals. According to V.G Kondalkar, 2007, motivation is the
inner burning passion caused by needs which propels an individual to exert physical and mental
energy to achieve desired objectives. Motivation can be defined as a driving force within a person
that stimulates the individual to do something up to the target level, in order to fulfill some need
or expectation.
Human resource is one of the factors which determine the success and failure of the
organization. Workers are very important for the efficiency, effectiveness, and sustainability of
the organization. One way to improve productivity is with the effective use of the organizations'
human capital. Employees in organizations can be rated among some of the most valued means
through which the realization of set objectives and attainment of sustainable competitive
advantage can be achieved. Motivation is one of the factors that affect the level of efficiency
among employees. It helps support organizations achieve goals and results in manpower stability.
The theories of motivation explain why individuals behave as they do in the workplace, and over
time, different theories have been developed.
2.2 Historical Development of the Employee Motivation Concept
Interest in motivational phenomena is dated back to Darwin and Freud, but it is probably true
that the form taken by the early dominant motivation questions stemmed largely from concepts
relating to Darwinian evolution. Freud and various others were influenced by these concepts.
However, most of notions in vogue have pre-Darwinian origins such as the conception of
evolution, instinct hedonism, reality and irrationality, unconscious process, active mental forces
and mechanism and determinism. (Cofer and Appley, 1968)
2.3 Characteristics of motivation
According to HabibA.(2011).motivation is characterized as follows.
• Motivation is always internal to the person: It is essentially a psychological phenomenon. In this
regard, Berelson and sterner (2003) said that a motive is an inner state that energizes, activates
or moves towards goals.
• Motivation of a person is in totality and not in part: Human behavior is caused by the various
needs. A worker works in a satisfactory because one needs money. Similarly, a thirsty man feels
the water to conquer his thirst. The feeling of needs is continues process and the satisfaction of
one-need leads to the creation of a new need. All needs are interrelated and motivation should
be in totality(Armstrong, 2009).
• Performance is the result of ability and motivation: if an employee s highly qualified but is very
poor, it can be due to the absence of motivation.
Performance=Ability*motivation
According to (Mullins, 2007), motivation is essential to the operation of organizations. No matter
how much machinery and equipment an organization has, these things cannot be put to use until
they are released and guided by people who have been so motivated. This is the most important
characteristics of motivation that this study tried to see the effect of motivation on employees’
performance.
Motivation can be positive or negative:Positive motivation means use of incentives may be
financial and non-financial pay revision; confirmation of job and the like are positive motivators.
Negative motivation refers to emphasizing penalties; demotion and termination from service are
some of the example of negative motivation(Mullins, 2007),
Frustrated person cannot be motivated:if a person does not have his basic needs satisfied, he
might be frustrated, mentally ill to some extent. Such a frustrated person cannot be motivated
unless his basic needs are satisfied (Mullins, 2007).
2.3.1 Importance of motivation
Motivation according to (Robinson and judge, 2013) is the process that influences people to act
and determine the organizational efficiency. He stated that all facilities may go wasted if
employees are not properly motivated. The same author describes as the importance of
motivation can be judged from the following factors (Robinson and judge, 2013).
➢ Need satisfaction: Motivation helps in satisfying individual as well as group need employees. It
results in the voluntary co-operation and co-ordination of employees. In addition the goal of the
organization can be easily achieved
➢ Job satisfaction: when employees are properly motivated, they use their skill and knowledge
up to their maximum ability to show better results to the management
➢ Productivity: Motivation results in increased productivity since its basic objective is to achieve
the goals to the enterprise and the being motivated workers give their best performance that
helps in increasing the productivity of the organization
➢ Acceptance of organizational changes: Technological changes taking place in the world have
brought about revolutionary changes on productivity. Generally, employees resist these changes
but with proper motivation, they accept these changes, thereby keeping the organization in line
with the other competing concerns
➢ Increasing all-round efficiency: The friction between the workers themselves and between the
management and worker is decreased, resulting in an all-round efficiency. It helps in decreasing
the wastages, accidents, complaints and grievances.
➢ Reduction in labor turnover and absenteeism: One of the most important contributions of
motivation is that employees prefer to stay in the organization there by bringing the labor
turnover to the minimum. Similarly, motivated employees tend to be regular and the problem of
absenteeism is minimized
➢ Basisofco-operation: Efficiency and output are increased through cooperation. The
cooperation could not be obtained without motivation; thus, motivation is a basic of cooperation.
2.4. Types of motivation
(Mullins, 2007), classified work place motivation in to two ways these are:
2.4.1 Intrinsic motivation: it is derived from the content of the job. It is a motivation created by
the worker itself in that what people do satisfy their need for achievement, recognition,
responsibility and personal growth (Mullins, 2007).
2.4.2 Extrinsic motivation: this is what is done for people to motivate them. It arises when
management provides such as awards, increased pay, praise or promotion. Extrinsic motivators
can have an immediate effect on performance, but this will not necessarily last. The intrinsic
motivators which are concerned with quality of working life, are likely to have deeper and longer-
term effect because they are inherent in people and not imposed from outside, although they
may be nurtured b the organization (Mullins, 2007).
2.5. Non-financial factors of motivation that affect employees’ performance
The followings are non-financial motivational factors:
1. A safety and healthy work Environment
The work environment is comprised of the physical location, equipment, materials processed or
used, and the activities of an employee while engaged in the performance of his work, whether
on or off the railroads property.Because motivation is an essential ingredient in the workplace,
understanding the way these elements affect each individual is a great way to boost motivation
and improve company morale. The work environment can either make people feel good or de
motivate them if it is not satisfactory. Mangers are in an aspiration to ensure safe working
Conditions and build up healthy environment.(Stephen R. Robbins, (2003)
2. Career Development
Employee development might be described as a continually process of improving employees so
that they make the fullest possible use of their abilities. This is done by encouraging self-
development and training. Clayton Alderfer (1969) Career development has strong implications
for both employees and employers in any company.
3. Employee Involvement
Employee involvement (EI) is the process of developing ‘a feeling of psychological ownership
among organizational members’ and has been implemented through the participation of
employees in information processing, decision-making and/or problem solvingClaytonAlderfer
(1969)
Participation is mental and emotional involvement of persons in group situations that encourage
them to contribute to group goals and share responsibly for them. One important benefit of
participation is it motivates. Employees are given opportunity to release their own sources
initiative and creatively toward the objective of the organization participation specially improve
motivation by helping employees understand and clarify their paths towards goals. The improved
understanding of path goals relationships produces a higher expecting of goal attainment. The
result is improved motivation Stephen R. Robbins, (2003),
2.5.1. Financial factors of motivation that affect employees’ performance
This type of motivation system can be in the form of rewards, bonuses, fringe benefits, salaries
and wages.
1 Rewards
Stephen R. Robbins, (2003),defines rewards as ‘all forms of financial return, tangible services and
benefits an employee receives as part of an employment relationship. It is without doubt that
every employee expects some level of reward after delivering a function or task. Employees
expect employers to deliver or execute designated duties to their satisfaction whilst employees
also expect their employers to assure them of adequate wages and salaries (rewards) after they
dutifully deliver what is expected of them. Organization distributes money and other benefits in
exchange for the employees’ availability, competencies, and behavior, rewards help to individual’s
contribution.
2. Fringe benefits
Such extra benefits, in addition to the normal wage or salary compensation, are referred to as
fringe benefits. Stephen R. Robbins, (2003), Employee fringe can be grouped into the following
groups.
These are:-Payment without work, Retirement benefits, Safety and health provision: and
Recreation and other benefits.
3. Bonus
Are essentially rewards for success and are paid out as lump sum. This is accomplished when the
organization, individual or team has achieved something out standing or when organizational
performance has exceeded what it has planned. Stephen R. Robbins, (2003),
4. Salaries
Salary is a form of periodic payment from an employer to an employee, which may be specified
in an employment contract. It is contrasted with piece wages, where each job, hour or other unit
is paid separately, rather than on a periodic basis. A wage is compensation, usually financial,
received by workers in exchange for their labor. Compensation in terms of wages is given
toworkersand compensation in terms ofsalaryis given toemployeesStephen R. Robbins, (2003),
2.6 Theories of Motivation
There are two types of motivation namely content theory and process theory. Content theory of
motivation concerned with ‘what’ motivate employees and process theory of motivation deals
with ‘how’ motivation occurs.
2.6.1 Content Theory of Motivation
Content theory of needs focus on the underlining human needs that shape motivational drives
(John, 2007). He adds that people will behave in ways that they think will satisfy some or all of
their needs. According to Armstrong (1999) content theory of motivation states that unsatisfied
needs create tension and disequilibrium. In order to restore the balance individuals identify goals
and behavioral path ways that make them to satisfy their needs. Content theories of motivation
are focus on the needs that people attempting to satisfy. It concerned with the needs that
motivate people. Content theory of motivation incorporate:
➢ Maslow’s hierarchy of needs ➢ Herzberg’s two-factor theory ➢ Alderfer’sERGtheory
➢ McClelland’s 3 needs theory
2.6.1.1 Maslow’s Hierarchy of Needs
Abraham Maslow in 1943 classified human needs in to five general categories. He classified
human needs according to hierarchy, namely, physiological needs, safety and security needs,
social needs, and self-actualization. He assumed the first three needs (physiological needs, safety
needs and social needs) as ‘lower order’ or deficiency and the second two needs(esteem and
self- actualization) as ‘higher or growth needs(Kondalkar ,2007).
Physiological needs: are consist basic needs such as food, air, water, shelter and so on. In the
organization settings, these needs are addressed by providing comfortable working
environments, salaries sufficient to buy food, shelter and so forth(Kondalkar ,2007).
Safety needs: consists of security, stability and freedom from threat. They relate to the need to
feel safe and secure, to be free from the threats of physical and emotional harm. Many
employers offer pension plans and job security to satisfy these needs at the workplace. Social
needs: includes relationship, acceptance and affection. In the organization, making friends at
work,good relationships with co-workers’ and Supervisors can help satisfy social
needs(Kondalkar,2007).
Esteem needs: consist self-respect and respect from others. They are made up of the need for
status and recognition as well as need for self-respect. Respected job titles, large offices,
acknowledgement for contributions to the organizations are examples of these needs in the
workplace (Kondalkar,2007).
Self-actualization: is a need of full utilization of one’s potential. They include the needs to grow
and develop one’s capabilities and to achieve new and meaningful goals (Kondalkar,2007).
Maslow states that the lower order needs should be satisfy before the higher order needs met.
Needs are hierarchal in nature and only one need dominates at one point of time. Once the
strongest need is satisfied then the second need emerges (Kondalkar, 2007). He classified human
needs by using a pyramid figure. Human needs are start from the bottom of the pyramid and
work to achieve the next level. When the lower needs met, it will shift to the next level of the
pyramid.
Maslow’s theory of motivation has been criticized by many authors. There is little evidence to
support the assumption that there is distinct, hierarchically ordered level of human needs. The
concept of prepotency is difficult to verify and has never been proven (John, 2007). He argues
that human behavior cannot be predicted and cannot categorize. Different people may have
different needs depending on their perception and situation. Some people may have high social
need and the other one may have high esteem need. People may have different priorities and it is
difficult to accept that people’s needs progress steadily up the hierarchy (Armstrong 2009). It is
difficult to generalize the human needs in five categories. It is possible to skip from one need
level to the other. John also argues that it is possible that people may be motivated to meet all
needs simultaneously. Several needs can be emerged at one time. However there is many critics
on Maslow’s need theory, it can aware the organizations to identify their employee’s needs. It
shows how much human needs can influence the behavior of individuals. From the above theory
it can be understood that understanding and addressing employees need is critical to
organization. Even if Maslow’s need theory has its own strong and weak side, the theory could
enhance the awareness of employers about the employee’s need.
2.6.1.2 Herzberg’s two-Factor Theory
In 1957 Frederic Herzberg develop Two-Factor theory namely, Hygiene factors and Motivators. He
suggested that all variables that make people either good or bad about their job can be grouped
in to one of the two categories (Robbins, 2003). The goal oriented factor as motivator includes
achievement, recognition, growth, responsibility, and the work itself. Motivators are things that
allow for psychological growth and development on the job. Those that prevent job
dissatisfaction as hygiene factors include working conditions, supervision, reward, administration
and company policy. Hygiene factors provide rewards originating outside the worker. The theory
suggests that two separate sets of factors influence the attitudes and behaviors of workers. He
considered hygiene factors as extrinsic factors and the motivators as intrinsic Factors. He
conducted his study on two hundred professional engineers and accountants. They were asked to
list their work experience that made them feel exceptionally good and exceptional bad about
their job. It was found that their good time is associated with the content of the job such as
achievement, recognition, advancement, responsibility and the work itself. On the other hand,
their bad time is associated with the context of the job such as salary, working condition,
supervision, company policy and administration (Armstrong, 1999). Herzberg states that the
presence of hygiene factors does not cause satisfaction but their absence cause dissatisfaction.
Hygiene factors are congruent with Maslow’s lower order needs. On the other hand, the
presence of motivator factors cause motivation but the absence of motivator factors does not
cause dissatisfaction rather any satisfaction. Motivator factors are congruent with Maslow’s
higher order needs.
According to Herzberg, satisfaction would happen as the result of motivator factors. Herzberg
argued that for an employee truly motivated, the employee’s job has to be fully enriched where
the employee has the opportunity for achievement and recognition, stimulation, responsibility
and advancement (Ramlall, 2004).
From the above theory it can be understood that both intrinsic and extrinsic motivators have a
great impact on employee’s performance. It is clear that both factors are equally important to
employees. Some employees are more intrinsically and others are more extrinsically Motivated
and it is important to the firms to consider both factors
2.6.1.3 Alderfer ERG Theory
Clayton Alderfer in 1972 condenses Maslow’s five human needs in to three. They are known as
Existence needs, relatedness needs and growth needs. Alderfer state that people are motivated
to act so as to achieve individual satisfaction. John Shield (2007) stated the three as follows;
➢ Existence needs, these needs are concerned with basic survival; they are a kin to Maslow’s
physiological needs and security needs such as food, air, water, shelter and so on.
➢ Relatedness needs, these needs are concerned with interpersonal and social affiliation; they
are similar to Maslow’s social needs and esteem needs such as relationship, acceptance and
affection.
➢ Growth needs, these relate to the need to make optimal use of one’s personal capacity, they
are parallel Maslow’s need for self-actualization.
Alderfer argue that several needs drivers might be activate at any time. A person may satisfy a
need depending on his perception and situation. According to John, James and Richard (2002),
ERG theory provides a more flexible approach about human needs than does Maslow’s strict
hierarchy. Some people might have higher relation need than growth need. According to John
Shield (2007), Alerfer state that an already satisfied lower-level need could be reactivated if the
individual was unable to satisfy a higher-order need and then the person will become frustrated.
Jennifer and Gareth (2007) adds that when an individual is motivated to satisfy a higher-level
need but has difficulty doing so, the person’s motivation to satisfy lower-level needs will increase.
From the above theory organization could understand that different employees have different
needs. The organizations should give attention to their employees. Employees need a well
relationship with supervisors and colleagues. And also they need advancement in dimensions.
2.6.1.4 McClelland’s 3 Needs Theory
McClelland believed that culture influences the manner in which people view their jobs and lives.
According to Robbins (2003) David McClelland proposed that there are three needs that are
major motives in work. It is propose that needs are learned through coping with one’s
environment these needs are need for affiliation, need for achievement and need for power.
People have different characteristics depending on their dominant motivator. McClelland state
we all have these motivating drivers and one of these will be our dominant motivating driver. A
person’s effectiveness in certain job is influenced by these three needs. John Shield (2007) state
these three needs as follows;
➢ Need for affiliation; the desire for friendly and close interpersonal relationships ➢ Need for
achievement; the desire for excel and succeed.
➢ Need for power; the desire to influence, control and direct.
According to McClelland, the individual needs vary depending on the individual’s positions in the
organizational hierarchy. Robbins (2003) state that a high-need affiliate is drawn to interpersonal
relationships and opportunities for communication they prefer a work that provides significance
personal interaction with others and have a desire to spend times in social relationships and
activities. A high-need achiever will prefer individual responsibilities, goals and performance
feedback. They like to solve problems and achieve goals. The high need-for- power type seeks
influence over others. McClelland suggest that top managers should have a high need for power
with a low need for affiliation (Kreitner, 1998). According to John Shield (2007), ordinary
employees are motivated mainly by the need for affiliation, middle and junior managers are
influenced by the needs for achievement and executives and senior managers are influenced by
the need for power.
Smart managers will look to all of these approaches to provide insights that can be applied to
specific challenges and problems (Ivancevich and Matteson, 2002). From the above theory it can
be understood that employees need achievement, closed relationship and power. The
organizations should craft a conducive working environment to satisfy these needs.
2.6.2 Process Theory
According to John Shield (2007) process theories of motivation seek to explain the cognitive
processes by which individuals decide to pursue particular pathways to reward attainment and
need satisfaction. Process theory state how employees select actions to meet needs and
determine their choices. There are many process theories of motivation and the following theory
has been selected for this paperJohn Shield (2007).
➢ Equity theory
➢ Goal setting theory ➢ Expectancy theory
2.6.2.1 Equity Theory
This theory suggests that motivation can be maintained through the concepts of distributive
justice, where pay is seen to be fairly distributed in line with employee’s worth and output.
Employees assess their level of effort against fellow workers and the reward they receive for their
effort. When people feel that they are treated fairly, they become motivated; when they feel
unfairly treated they become demotivated. People want to be treated fairly in all facets of
compensation, including base pay, incentives and benefits. Equity theory state that people
compare their inputs and outputs with others and if they feel there is unfair treatment, they
attempt to do something about it. Inputs are what an individual contributes to the work and
outputs are what an individual obtains in return(John Shield, 2007).
According to Armstrong (2006), Adam states that there are two types of equality namely
distributive equality and procedural equality. Distributive equality focuses on the fairness that
people feel they are rewarded according to their contribution and in comparison with others. On
other hand, procedural equity concerned with the perceptions employees have about the
fairness with which the procedure. Unfair treatment may lead to low productivity, absenteeism,
reduced quality of output, resignation and so on.
According Robbins (2003) individuals who feel that they are treated unfairly, will engage one or
more of the following activities;
➢ Change the work input
➢ Change the outcomes
➢ Take action to change the inputs and outputs of the comparison person
Equity theory suggested that managers should treat their employees on a fair and equitable
basis.
2.6.2.2 Goal Setting Theory
According to John R. Schermerhorn and his queliques (2010) goal setting is the process of
developing, negotiating and formalizing the objectives that a person is responsible for
accomplishing. In late the 1960s Locke and Latham develop goal setting theory and it focus on
the relationship between goals and task performance. This theory highlights mechanisms that
connect goals to performance outcomes: goals direct attention to priorities; stimulate effort; and
the more challenging the goal, the more people will draw on their full range of skills. An
individual’s conscious goals and intentions are the primary determinants of behavior. Goals can
enhance motivation if they are developed and handled appropriately. In addition, it is specified
by many authors and practitioners that specific goals can boost motivation and performance by
leading people to focus their attention on well-defined objectives, increase their effort to achieve
these objectives, persist in the face of setbacks, and finally develop new strategies to better deal
with complex challenges to goal attainment (Jone,2007).
Goal setting theory states that specific and challenging goals with appropriate feedback will result
a higher task performance. Challenging goals will lead to a higher performance if they are
accepted by the employees. Specific goals lead to better performance than vague goals. People
strive to attain goals in order to satisfy their desires. According John Shield (2007) Goal setting
theory has the following practical implications:
* Specific and clear goals are more motivating than the general ones.
* Challenging but attainable goals motivate more than those which are easily achievable.
* Employees should have knowledge, skill, abilities, equipment and material to achieve these
goals.
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* Goals must accepted by the employee and feedback on task performance enhance motivation.
Goal setting theory state that goals indicate to an employee about what needs to be done and
how much effort should be exerted. According to Michael Armstrong (2006), employee
participation in goal setting is important as a means of getting agreement to the setting of higher
goals. Goal- setting is an important management tool for enhancing work performance. It can be
a very powerful technique for motivating employees.
2.6.2.3 Expectancy Theory
Expectancy theory is one of process theory and it was developed by Victor Vroom in 1964.
Expectancy theory states that work behavior is determined by individual expectations of the
likely consequences of such behavior. It attempt to explain and predict worker motivation in
terms of anticipated actions and rewards (John, 2007). According to Stephen Robins et al 2007,
the amount of effort on a job depend on the expected return and may result in increase pleasure
and that people may perform their job and be satisfied if they believe that their efforts will be
rewarded. Expectancy theory identifies three factors that influence employee motivation:
expectancy, instrumentality and valence. Robbins (2003) states the three variables as follows:
Expectancy: which is the degree to which employees believe that, having achieved a goal will lead
to a secondary action, namely a reward.
Instrumentality: is the degree of an employee’s self-belief in their ability to achieve a goal.
Valiancy, which is the value they put on that reward
According to Robbins (2013), an employee is motivated due the following three reasons. First, if
the effort will yield acceptable performance second, if the performance will be rewarded and
finally if the value of the reward is highly positive. The combination of the three variables will
enhance employee’s motivation. Expectancy theory suggests that managers should identify and
influence work expectancies, instrumentalities and valences that support organizational
objectives.
2.7 Motivational Factors
Employees are the most important assets of an organization. The organizations with more
motivated employees tend to be more effective than organizations with fewer motivated
employees. There are many motivation factors that can be used to encourage employees to
work, for the purpose the study the following motivation factors are selected from Herzberg’s
Two Factors Theories:
2.7.1 Recognition
Recognition schemes enable appreciation to be shown to individuals for their achievements
either informally on a day-to-day basis or through formal recognition arrangements. They can
take place quietly between managers and individuals (Armstrong, 2009). Recognition of work is
the essence of securing good work. It is one of the most powerful motivators. Efficient people
would naturally like to get recognition for their skill and excellence in their work. Such recognition
can do many things that what a cash reward can do. Armstrong and Murlis (2005), underlined on
the point that, recognition is supposed to be given judiciously. That is, it must be related to real
achievements of employees. The recognition given will have a great impact if it is followed by
provision of achievement bonuses awards. Organization can also give other forms of recognitions
such as long service awards, status symbols of one kind or another, sabbaticals and work related
trips abroad.
2.7.2 Promotion
It involves a competitive selection process, and results in the employee’s movement in to a
different role in a higher pay band. If it is done fairly it enhance employee motivation and
competitiveness. Promotion contributes significantly to the dissatisfaction of
employees(Armstrong, 2006).
2.7.3 Benefit
From the above theories we can say that organizations should understand the needs of their
employees and create conducive working environment. Managers should understand what 18
motivate their employees. Organizations should develop and handle proper motivational
practices(Armstrong,2006).
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2.7.4 Working Condition

Good working condition consist healthy, safe and pleasant working environment. Working
conditions have a modest but lasting effect on job satisfaction. In Lam’s et al.(2000) work
environment emerged as an influential factor in predicting overall job satisfaction.
They add that focusing strategically on this factor would enhance managerial employee’s job
satisfaction level and improve their retention rate. According to Pearson (1991), jobs that are
both motivating and satisfying are said to be those that provide skill variety, task identity, task
significance, autonomy and feedback. The type of job individuals do influences their satisfaction.
He also adds that managers must make the work content as interesting as possible in order to
build strong level of motivation(Kondalkar, 2007).
The place should be should be neat and clean with necessary facilities. Light, ventilation,
cleanliness, enough space for work, immediate availability of supervision, adequate latest tools
and generally good surrounding will definitely add to job satisfaction(Kondalkar, 2007).
2.7.5 Payment
Salary and wage plays decisive part in employee motivation. Employee wages and salary must
ensure him the social status and should be able to fulfill the expectations. According to Herzberg
theory, it is identified that in order to prevent dissatisfaction, management needs to continue to
observe competitors salaries and keep their staff’s salaries in line with competitors(Kondalkar,
2007).
2.7.6 Work content
Content of the work itself is a major source of satisfaction. The content of the work should be
encouraging and interesting and have variety inbuilt in it so that it is not boring. Positive feedback
from the job and autonomy has been considered to be important for motivation of employees
(Kondalkar, 2007). He also adds that too tough or job having two little challenge brings frustration
and feeling of failure hence the job should be moderately tough so that the individual has to
stretch his ability, imagination and skills. In Lam’s et al.(2000) work environment emerged as an
influential factor in predicting overall job satisfaction. They add that focusing strategically on this
factor would enhance managerial employee’s job satisfaction level
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and improve their retention rate. The job itself is an influential factor in predicting overall job
satisfaction. The job should have variety, autonomy, identity and feedback.
2.8 Empirical Evidence
The theoretical part of the thesis showed that a nature of motivation is very complex and there
are no simple answers to the question what motivate employees more. Something that motivates
someone might not motivate others.
Mahlet (2012) has conducted a study entitled reward and motivation for health care
professionals in Addis Ababa. Her study focused on two governmental hospitals which found in
Addis Ababa namely Tikuranbesa hospital and Alert hospital. She has examined the influence of
intrinsic and extrinsic rewards such as promotion, acknowledgment, task autonomy, work hour
and so on. There was a significant and positive relationship between these variables and work
motivation. The study highlighted the various dimensions necessary for motivating employees to
improve the quality of care in health sector which is the concern of all.
Patcharak (2002) has conducted a study on employees of Saint Paul hotel. The title of the study
was assessment of motivation. The motivating factors such as salary, job security, flexible hour,
advancement, work environment and benefit were used to execute the study. The result
indicated that these factors had significance and positive relationship with work motivation.
Especially salary and work content had strong relationship with work motivation. Kahn (2010) has
examined the influence of on payment, recognition, promotion on employee work motivation.
The statistical analysis result shows that there is strong relationship between reward and
employee motivation. This study has greatly contributed in revealing the fact that different tactics
and policies would have different motivational impact on diverse people.
Tamene (2015) conducted a study with the title of”the relationship between Reward practices
and Motivation: (The Case of Co-operative Bank of Oromia S.C). The study examines the
association between rewards and employee motivation in Co-operative Bank of Oromia S.C. The
result showed that promotion is much important factor for employee motivation as compared to
other variable factors like Working condition, work content and benefits.
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Kahn (2010) has examined the influence of on payment, recognition, promotion on employee
work motivation. The statistical analysis result shows that there is strong relationship between
reward and employee motivation. This study has greatly contributed in revealing the fact that
different tactics and policies would have different motivational impact on diverse people.
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
The following chapter covers research design, study population and sampling, the source of data,
the instrument of data collection, the procedure for data collection, data analysis method, the
validity and reliability of instruments, and ethical issues.
3.1 Research Design
It is in this premise that this paper assesses the motivational practices of Dashen Bank S.C. A
descriptive research design has been used in describing what motivational practices look like at
the moment. The researcher chose this design because the major purpose of descriptive research
is to describe the state of affairs as it exists at present, and reports what has happened or what is
happening.
A descriptive research design is undertaken to comprehend and report the motivational practices
of the case organization in a methodical manner, as it is utilized to acquire information regarding
the existing state of the phenomenon and describe 'what exists" in regard to the situations and
conditions and aims at gathering the primary and secondary data to analyze and then draw valid
conclusions based on the meanings derived from data.
3.2. Approaches of the Study
3.2.1 Target Population of the Study
There are many branches, functional units and departments in the organization. For this research
paper, employees’ of ten (10) selected branches(Africa Avenue, Bole Medhanialem, Piassa,
Gullele, Gerji, Tana, Amest Kilo, Taitu, Mesalemiya, Megenagna) of Dashen bank Addis Ababa
area in the four districts were considered as population of the study. The ten branches are
selected due to time constraint face by the research to cover the whole population. It is difficult
to involve the whole population in a research study because it consumes time, resource
andpurposely decided to exclude employees working under outlining branches as well as head
office organs. This is due to the impossibility of data collection and the homogeneity of
respondents. So, select a representative sample out of the population was important. The ten
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branches consist of 274 employees and it was consider as a research population. The
representative sample was taken out of this population
3.2.2 Sample Size and Sampling Techniques
The sample size of this research was containing 162 respondents. It is taken from the target
population target at 95 % confidence interval and 5% margin of error. Ten branches of the bank
were included in this sample size. The representative samples were drawn from (Africa Avenue,
Bole Medhanialem, Piassa, Gullele, Gerji, Tana, Amest Kilo, Taitu, Mesalamiya, Meganagha) of
Dashen bank Addis Ababa area in the four districts. The study was use stratified sampling to
select representatives from the population.
The sample was divided in to four strata, namely Supervisor, Maker/checker, Customer service
assistance manager and Customer manager. To determine the sample size the researcher used
the formula for estimating the sample size provided by Taro Yamane (1969) which was cited in
Obasi and Ekwueme (2011) and cited again on Belaynewasrie, Electronic commerce (2012). Out
of 274 employees of DB the researcher were select 162-employees.
3.3 Data Sources
The process of data collection was administered by using primary data and secondary data
sources. The primary data are amassed by the use of a questionnaire, and it is the core method
for the collection of data. It contains close-ended questionnaires with 5 likert-scale-from strongly
Disagree (1) to strongly agree (5)-and will be distributed to the respondents. The questionnaire is
selected because it is less time-consuming, less expensive, and simple to administer.
These are secondary data collected from the website of the company, internal brochures and
publications, and annual reports. It was used to gain understanding about the organization.
Books, articles, journals, and scholarly websites were utilized in compiling information relevant to
conducting the study and answering the research questions.
3.4 Data Collection Instrument
Data was constructed with the use of standard questionnaire, Minnesota Satisfaction
Questionnaire, designed for extracting information to measure practices by the organization.
Interviewers asked questions on the key dimensions of the study, which include working
condition, promotion, work content, benefit, payment, and recognition.
3.5 Validity and Reliability of Measures
3.5.1 Validity
Sound measurement must meet the tests of validity and reliability. In fact, these are the major
considerations one should use in evaluating a measurement tool. “Validity refers to the extent to
which a test measures what we actually wish to measure. Reliability has to do with the accuracy
and precision of a measurement procedure”. Robert (1977)
Validity refers to the extent to which a measurement instrument actually measures what is
intended to measure. Validity is concerned with the degree to which the designed questionnaire
items fairly and accurately represented the main variables.A soon as the researcher get appraisal,
the survey questionnaire were distributed to the sample population.
3.5.2 Reliability
In order to ensure reliability, statistical analysis was implemented to examine the internal
consistency of the instruments utilized. Cronbach’s alpha reliability test was used as an
examination indicator to determine the reliability of the measurement scale. As stated by
Nunnaly (1978) the closer the
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reliability coefficient to 1.00 is the better. In general, reliabilities less than 0.60 are considered
poor; those in the range of 0.60 to 0.80 are considered good and acceptable. In the current study,
all variables' scale were independently measured and acceptable results found with an aggregate
result of 82.1% as shown below
3.6 Ethical Considerations
Protection for the participants was ample throughout the data collection process. Involving
human subjects necessitates that researchers having to obtain all required approvals prior to
collecting any data in this respect (Tamariz, Palacio, Robert, & Marcus, 2013).
Therefore, I obtained informed consent from the Dashen Bank Human Resource director on the
continuation of the investigation and data collection.
This explains, according to Montalvo and Larson (2014), why an informed consent form gives
prospective participants the opportunity to be aware of their rights and benefits to engage in
research. The first open page of the questionnaire was the informed consent form. Only those
who informedly agreed to the informed consent completed the rest of the questionnaire
voluntarily and confidentially. No participant was given incentives for the study.
The respondents who were participating in the study had the right to privacy and dignity of
treatment. Information obtained from the respondents is handled confidentially. The
questionnaires did not require them to include their name and identification number. This
situation helps them to express their idea and opinion freely. Willingness is the prerequisite to
participate in the process of gathering data for the study. Data that was obtained from
participants will not be used for other purposes. The source of data is properly cited.
3.7 Methods of Data Analysis
Data analysis was done based on the data gathered through the questionnaire. After the
collection of raw data, it was edited, classified and tabulated using different techniques.
Descriptive statistic such as, standard deviation, mean, frequency and percentage was used to
analyze the data. According to Goodwin 2004, descriptive statistic provides a summary of the
main features of a set of data collected from a sample of participant.