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Impact of work motivation on employee performance



Working on this research has been a great source of learning, but this would have been high difficult without proper support and guidance. Therefore, I would like to thank my supervisor for the valuable suggestion and guidance provided to me throughout my thesis. Whenever, I needed help, my supervisor came up with the solution which helped me in writing my report and assist me whenever I needed the help and provided the sources of valuable literature regarding my thesis. I would like to thank all the respondents for helping me in the questionnaires. Without their help I would have not been able to complete my thesis on time. I am thankful to my family for their support and all friends who helped me in my report and gave valuable suggestions whenever I needed. I would sincerely thank my friends, who helped me conducting the survey for the analysis. Without them the data collection would have been impossible 


This dissertation aimed to identify and develop an effective incentive mechanism for the medium and small-sized technology-based companies in China through comparing different incentive theories and factors. The required data of this research is obtained using various sources, mainly primary and secondary data signifies the type of data. In order to test the assumptions made in this research, questionnaire has been used as the quantitative data collection tool. For qualitative data, interview method has been used. Moreover, a number of secondary data sources have been used in this research such as, EMERALD, EBESCO Host, and Google Scholars. For this study, all medium and small-sized technology-based companies are said to be the population and every company operating under this specification has been considered as the population. However, the sample has been selected by narrowing down the topic even further. As in this study, Science and Innovation Center in Suzhou, China has been selected as the case organization and the sample is selected from the employees who work in the companies located in this area. The sample size decided for questionnaire survey is 260 employees, whereas interviews will be conducted from 20 employees. To analyze the gathered discourses analysis is used especially for the qualitative data. Furthermore, since this research also comprises of quantitative data, hence separate analysis methods have been used to analyze numeric data obtained as a result of questionnaire. After the collection of data, analysis methods like descriptive analysis, correlation analysis, variance analysis and regression analysis will be used to analyze the data. The overall analysis of the data concludes that work motivation significantly impacts the employee performance in small and medium sized organizations that are operating in the information technology business sector of China. In addition, the analysis of data also highlights that, compensation, rewards/ recognition and medical benefits impacts the work motivation of the employees that are working below the managerial level. On the other hand, the interview analysis concludes that, employees that works at supervisory level feels more motivated, when the organization provide them training programs, career growth opportunities and work life balance.


1.1 Introduction

The chapter of introduction in this research focused on some important elements of the research such as, background or overview of the research, the problem of the research, aims and objectives of the research. This chapter is highly crucial, because if the research work is introduced effectively; it creates the interest among the readers to read out the whole research work. The chapter of introduction also highlights the research hypotheses and the significance of the research. Overall, this chapter provides a brief overview to the readers about, what issues this research is going to address and the significance of conducting this research work.

1.2 The overview of research

Recently, with the increasingly fierce competition in almost all of the business areas, it is important for companies to develop their competitive advantage. Moreover, one crucial part encompassed in the competitive advantage is the human resource management. Effective human resource management can’t only help the company reduce costs and increase the source of service and product, but also help the company attract new talented workers and retain the existing ones (Lengnick-hall, 1988). It is significant for companies to attract and retain talented workers, especially for the medium and small-sized companies. It is undeniable that every worker expects the rewards, so the company needs to focus on developing motivation and incentives to attract the new talented workers and improve the effectiveness and productivity of the current workers (Hong et al., 1995). However, for some medium and small-sized companies in China, there are some problems and defects in their incentive mechanism of talents, so most of them face the problems about high bankruptcy rate and the shortage of talented workers (He and Chen, 2012). Accordingly, an effective incentive mechanism and system is eagerly needed.

1.2 Problem Statement

It has been identified that, even though the organizations in the current competitive business environment have been giving due priority to enhance the performance of the organization through investing huge amount in human resource development, yet the organization is facing lots of issues in managing employee performance effectively. It has also been found out that, in small and medium sized organizations, the employees working at supervisory level failed to maintain adequate level of motivation, satisfaction and job performance of the employees. Nevertheless, in regard to overcome the issues related to employee motivation and the job performance, lots of research studies have been conducted in context of large organizations and  in developed countries. Moreover, very limited findings available that highlights the factors that motivate the employees in small and medium sized organizations that positively impacts the performance of employees particularly, in the small and medium sized technology based companies of China. Thus, the identified issues have provided a reason to conduct a study to find out;

“The impact of work motivation on employee performance; a comparative study of Chinese small-medium enterprise”

1.3 Aims and Objectives

This dissertation aims to identify and develop an effective incentive mechanism for the medium and small-sized technology-based companies in China through comparing different incentive theories and factors. According to the aim, the specific objectives are listed as following:

·       Critically review the previous research relating to incentive mechanism and system.

·       Compare the incentive factors put forward by the previous research, and identify how these incentives affect employee motivation.

·       Collect data relating to the effectiveness of different kinds of incentive factors in for medium and small-sized technology-based companies in China.

·       Critically analyze the collected data through empirical analysis.

·       Make suggestions about how to develop an effective incentive mechanism for the medium and small-sized technology-based companies in China.

1.4 Hypotheses

To provide the empirical evidence, the following hypotheses are tested while executing this study;


H1: Compensation exert stronger influence on employee motivation

H2: There is a positive relationship between employee motivation and rewards/recognition

H3: Medical benefits provided by the organization positively impact the employee motivation

H4: Highly level of work motivation positively impacts the employee performance

1.5 Significance of the Study

Conducting this research has been significant due to number of reasons. Such as, the findings of this research define the role of different factors like compensation, rewards or recognition and medical benefits offered by the small and medium sized organization in influencing the work motivation among the employees in China. Apart from this, the study results and findings of this research also clarified the impact of work motivation on the employee performance in the small and medium sized organizations of China, particularly in context of information technology business sector. In addition, to effectively study the impact work motivation on employee performance, the current motivation level of the employees of small and medium sized organizations in China is measured, which helps the organizations to develop the strategies accordingly in order to sustain or increase the employee motivation level effectively. Furthermore, the findings of this research not only contributes in existing literature, but it also provides an avenue to the future researchers to explore more ideas that might play a crucial role in  enhancing work motivation and the job performance of the employees in small or medium sized organizations in China.  


2.1 Employee Motivation

Motivation is defined as a psychological feature, which drives people to accomplish personal and organization goals (Lindner, 1998). In the area of human resource management, it is regarded as the incentives that induce the employees to get better job performance and contribute larger efforts. The motivation can be classified as intrinsic motivation and extrinsic one. The latter is in terms of the interest of employees themselves into the tasks or job, while the extrinsic motivation stems from the external pressure or rewards. The author will take it as an instance that if the employees believe they can get more autonomy in a company, they are more likely to be intrinsically motivated. In comparison, the extrinsic motivation mainly includes payment, rewards and so on (Weightman, 2008; Schacter, 2011).

Motivational theories such as Maslow’s hierarchy of needs, Herzberg’s two-factor theory and Vroom’s expectancy theory are often referenced to support the importance of the relationship between motivation and employee performance. The reason why HR managers generally focus on motivating their employee is to improve their productivity, which in turn increases the overall performance of the company, because the quality and efficiency of the workforce is the foundation of a company, especially for SMEs.

2.2 Strategic Human Resources Management

As well as this, Lengnick-Hall (1988) reviewed three approaches related to human resources management and business strategy. These approaches are matching with human resources management and personnel activities with corporations’ business strategies, forecasting manpower requirements in the condition of certain strategic objectives or environments, and presenting the means of incorporating human resources management into the business’s strategy and structure. Lengnick-Hall (1988) summarised the difficulties in the process of integrating human resources management and business’ strategic choice and the ways to deal with these difficulties.

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